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Passing the May 2016 strategic

integrated case study exam


Adrian Sims
9 September 2012

adrian@adriansims.com
Passing the SCS Exam

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5 Stage Approach to each section
1. Read the task to identify subsections
- bullet with single sentence = 1 requirement
- bullet with single sentence containing and = 2 requirements
- bullet with two sentences = 2 requirements
- mark allocation and time allocation

2. Type tasks and key words as bold headings into your document
- marks are allocated under headings
- separate key terms to help generate thoughts (investors and staff not investors and staff)
- remember your strategic subject knowledge (P3, E3, F3)

3. Read the reference materials


- relate information to the tasks and headings
- identify any particular emphasis: what is it that is giving concern?
- identify how information affects concerns of CFO

4. Type your key points under the headings


- keep it to a few simple words
- try to find 5 things to say under each heading

5. Expand your answer for the time available


- make points into sentences
- relate to the firm and industry by (eg application to pre-seen/unseen, examples)

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Technical Business People Leadership
Financial External forces on Consider Identifying good
statements (profit, business (PEST, 5 stakeholders leaders
cashflow, assets, forces, Diamond) affected (ICE) Roles of leaders
liabs) Stakeholders How to manage Commenting on
Investments (NPV, (Mendelow, Mission) them leadership style
IRR, Payback) Strategic options Organisational Impact of good/bad
Business (Porter, Ansoff, BCG, culture Handy, leadership
valuations Value Chain) Cultural web, Building and
Financial Rational, Organisational motivating a team
reporting (incl. Emergent, structure matrix, Collaboration and
integrated Freewheeling, functional, network teamworking
reporting) Incremental Negotiation and (Tuckman, Belbin)
Disclosures Impact of IT influence Work/life balance
Financing Human resource Consider peoples Managing change
debt/equity management motivations Change theory
Risk cycle Quality (Maslow, Herzberg) (Lewin, Balogun,
(appetite, mapping, management Ethics and CSR Kotter &
TARA) (TQM) Schlesinger)
Corporate Balanced Recommended
governance scorecard actions to lead
Internal controls SVA change
Internal audit Traditional control
Fraud (ratios, variances)

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Business Skills = BESTO
1. Business
- fit with goals of firm
- fit with the firms business model & strategic position
- responses of competitors, suppliers, government
2. Economic
- financial feasibility
- impact on profits, cash flows and share price
3. Social
- fit with social trends and culture
- impact on CSR
4. Technological & timing
- impact of modern technology developments
- how soon impact will come
5. Organizational & operational
- effect on job roles, teams, departments and divisions
- disruptive effects on immediate operations

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Three Groups of Stakeholders
Internal stakeholders External stakeholders

Directors & managers


Government

Employees
Local community
Connected stakeholders
Interest groups
Investors

Customers & clients

Suppliers

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Interest and Power

Stakeholder Interest Power

Employees Job security Support management


Pay and conditions Strike/disrupt
Involvement Leave

Managers Autonomy/challenge Make decisions


Pay and profit share Lead their teams
Career progression Take responsibility

Investors Financial return Appoint board


Security of investment Buy/sell shares

Suppliers Revenues (price and quantity) R&D support/investment


Consultation Decline to supply

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Interest and Power

Stakeholder Interest Power

Customers & Quality Purchase


clients Fair price Not purchase
Service Publicity and comment

Government Tax revenues Legislation


bodies Employment Licenses
Contribution to the economy and Taxation
life of the country Buying the product
Local community Quiet life and clean air Influence politicians
Employment and jobs Direct action

Interest groups Promoting and protecting the Influencing public


things they believe are important debate
Direct action

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Stakeholder Mapping

Direction Education
Instruction Communication

Intervention
Negotiation Participation
Consultation

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Ethical frameworks
Professional & Accounting Ethics

IESBA/CIMA/CGMA Code of Ethics

Professional behavior: comply with laws/regulations and not discredit


profession

Integrity: straightforward and honest

Professional competence and due care: maintain professional


knowledge and be diligent

Confidentiality: dont disclose business information without authorisation


nor use to benefit yourself

Objectivity: no bias, conflict of interest, or undue influence

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Principles of Business Ethics Exam examples of unethical behaviour

Fair/unfair treatment Unfair discrimination between staff


Exploitative pay and work conditions
Bullying and oppressive behaviour

Just/unjust treatment Prejudice


Not considering evidence
Excessive punishment

Honest/corrupt Stealing from employer or customer


Offering or taking bribes

Duty/breach of duty Ignoring fiduciary duty to shareholders


Ignoring duty of care to staff or customers

Privacy/intrusion Unauthorised surveillance of staff or customers


Inappropriate questions to staff or customers

Truthful/untruthful Deliberate false claims about product or CSR


Lying when asked for account of something

Responsible/irresponsible Dangerous product


Pollution of the environment

Diligent/negligent Not doing job to best of ability


Failure to supervise situation properly
Not responding to a clear risk

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Approach to ethics tasks
State main ethical issues
use key concepts/principles
show how action or proposal of management conforms to/conflicts with the
principles

Describe the consequences of complying/not complying


business or brand reputation
trust and commitment of stakeholders
legal challenges
attitudes of regulators
organizational culture or motivation

State any counter arguments


ethical duties to others that may be harmed by treating one group ethically
business issues/impact on competitiveness and profits

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Leadership Skills
1. Personal leadership qualities
- vision
- inspiration/motivation
- helicopter factor (big picture + zoom on detail)
- political and personal sensitivity
- self discipline and emotional resilience

2. Leadership team
- balance of skills/styles (Belbin)
- mutually supportive/united/shared vision
- open communication
- provide direction to teams and business
- succession planning needed

3. Team building
- careful selection process (compatible, shared backgrounds)
- clear goals/objectives
- clear role allocations
- leadership and feedback
- celebrate success

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Leadership Skills
5. Motivation
- payments and rewards
- mentoring and coaching
- encourage competition
- recognition
- address de-motivators (supervision, rules, insecurity, conflict, resources)

6. Change Leadership
- Kotter and Schlesinger
Education and communication
Participation and involvement
Facilitation and support
Negotiation and agreement
Manipulation and co-optation
Explicit and implicit coercion

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Business/share valuation methods
Method Comments

Net assets Based on notion of value = liquidated value of its assets


Uses book value of assets
Distorted by basis of valuation
Ignores liquidation costs and some other contingent
liabilities
Overlooks goodwill (brands, know-how, people)

Dividend valuation Assesses the income value to the shareholder


Dividends must be sustainable
Distorted by changes in dividend policy
Overlooks capital growth potential
Acquiring company gains 100% of earnings
Earnings method Post tax earnings x appropriate P/E ratio
Valuation impaired by differences between target and
sector/predator
Distorted by window-dressed earnings that cant be
sustained
Ignores contingent liabilities
PV of cash flows Closest to efficient market valuation
Difficulty in obtaining cash flow forecasts
Difficulty in obtaining cost of equity

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Acquisitions
Benefits of acquisitions Drawbacks of acquisitions

Gain access to new market quickly Pay too much for a bad firm

Synergies High costs of integration


Higher joint revenues Closures/dismissals
Lower joint costs Integration of systems
Better management
Reduce risks Financial strain on business
Greater control of
market/industry
Spread across business sectors

Defence against market entry Lack of management competences

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Identifying risks
Strategic Managerial Operational
Hazard

Operating

Financial

Commercial

Litigation

Reputation

Compliance

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Risk mapping/risk scaling

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Internal controls
Division of responsibilities
Arithmetic and accounting
Management
Personnel

Supervision
Organizational (structure, procedures, processes)
Authorization and responsibility
Physical (custody, protection)

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Risk management
Information systems to monitor risks
Preventative steps to reduce risks
Contingent steps to respond to risks that crystallise

Transfer
Avoid
Reduce
Accept/absorb

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Negotiation
1. Prenegotiation
- establish negotiation team
- establish desired timescale for negotiation/resolution
- assess likely aims/position of counterparty
- identify own aims and position (must-haves, nice-to-haves)
- develop support for position (arguments, data, stakeholders)
- plan structure of proposals
- frame negotiation issues with counterparty
- agree negotiation mechanism with counterparty (location, participants,
aims, rounds & pathways)
2. Negotiation
- identify areas of agreement and disagreement
- establish aims and argument/justification of counterparty
- probe counterparty for areas of concession, weakness & poor logic
- identify blockages to disagreement and seek to resolve
3. Post-negotiation
- resolve formal written statement of agreement
- plan implementation
- agree follow up meetings/communication to maintain relationship

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Performance evaluation of teams
1. Identify & communicate objectives for team
- Specific, Measurable, Attainable (Agreed), Relevant (Resourced),
Time bound
2. Assess deliverables
- Extant: has it been done?
- Effectiveness: KPIs for outcomes:
- Efficiency: time, resources, waste
- Economy: cost, earnings, profitability
3. Assess enabling steps for performance
- team membership: recruitment, training, development of roles
- establishment of processes and procedures
4. Qualitative aspects
- emotional health of team (turnover, morale, complaints)
- attitudes of stakeholders to team (surveys on satisfaction)
5. Decide evaluation methods
- use of Internal Audit department
- set up information gathering approach (management reports, web
questionnaires, staff appraisal system, user group meetings)

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Business Strategy
Models

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Characteristics of strategic decisions

Impacts on the future prosperity and survival of the organisation

Concerns the fit the organisation achieves with its environment


satisfaction of owners, investors, and other stakeholders
the products it makes and the markets it works in
the risks the business is exposed to

Outcome sometimes not obvious at the time and may not be clear
for some years

Subject to high degrees of uncertainty

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Building a Strategy

Stakeholder expectations
Resources and capabilities
Strategic The business environment
Analysis

Strategic
Choice
Plan and allocate resources
Strategy Leadership
Implementation Organisational structure and design
Identifying strategic options Managing change
Evaluating options
Selecting strategy

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Tools for Strategy Development

Things the business does well Things competitors may do


Good products better
Low costs Strengths Weaknesses Superior production
Unique technologies methods
Better motivated staff
SWOT Improved management
Analysis information
Developments the business can
benefit from
Events that could harm the
Emerging markets
Opportunities Threats business
New technologies
Competitor action
Changes in government
Economic downturns
policies
New legislation

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Tools for Strategy Development

Increase sales and market


share Launch new products
Greater promotion Complements for existing
Expand capacity products
More distribution channels Something the customer
buys from another
business
A breakthrough technology
Expand the firm into new markets
New customer segments Enter new industries
New uses for product Vertical integration
New countries Technology extension
Risk avoidance

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Tools for Strategy Development

Lowest cost in industry


Superior product positioning
Survive by undercutting
Survive by charging high
competition Overall Cost
Differentiation
Leadership price
Low cost production
High brand value
locations
Superior product/service
Mid-market product/service
Porter
Generic
Strategies
Focus on exclusive premium
customers/clients
Focus on very budget-conscious Niche distribution
customers/clients Low Cost Focus Differentiation Focus Low volume/customised
Limited distribution product
Stripped-down
product/service

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PEST Analysis

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Porters Five Forces

Long run threat Affects level of


long run profit in
industry

Pressure on
prices
Pressure on
costs

Pressure on
prices and sales
volumes

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Assessing market/industry
1. Assessing effective demand
- present and forecast spending
- present and forecast prices
- desired features/qualities
- trends (fashion, lifestyles, government support, demographics)

2. Assessing competition
- competitive strengths (quality, resources)
- forecast competitive behavior (goals for market, past behavior)
- forecast prices (costs, technology)
- potential for market entry by rivals

3. Forecast business environment


- Political. Economic, Social, Technological

4. Forecast costs of joining market


- capital expenditure
- operating costs
- impact of growth on costs and investment

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Assessing market/industry
1. Assess results of firms already in the market
- segmental accounts
- visit their operations (ethical issue of snooping)
- trade media
- investment reports
- former managers (ethical issues of confidentiality and manipulation)
2. Country analysis and sector reports
- professional consultancies in-country
- marketing research reports (Mintel, AC Neilson)
- economic assessments (eg World Bank, Dunn and Bradstreet)
- risk assessments (eg Ease of Doing Business Index World Bank)
3. Government and trade group sources
- departments/ministries for trade
- trade agencies
- in-country trade groups and federations
4. Project costing and feasibility studies
- investment costs in non-current assets
- costs of systems development
- recruitment and training

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Competitor analysis

Financial strength
Resources and capabilities
Likely costs and therefore prices
Methods of production and operation
Product quality and performance and strength of brands
Customers: satisfaction, needs, likely spending power
Organisation and management
Differentiation: what they distinguish themselves by

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Information on Competitors and Markets

Trade media for the industry


Trade associations
Financial statements of competitors
Investor analysis of competitors
Observation
Former managers and staff
Competitor accounting
Published marketing research

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Big Data and Analytics

Sources of data
Social media postings
Web browsing
Television viewing
Emails and messages
Conversations
GPS
Customer spending data
Inventory data
News feeds

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Big Data and analytics
Characteristics of Big Data Uses of Analytics

Volume Descriptive
Vast amounts too large to be stored and analysed by conventional data bases. Associations
Need for distributed processing (eg cloud) Clusters

Variety Predictive
Unstructured eg messages, social media postings, photos, sensor data, video Sequences
and voice recordings Trends
Velocity Internal applications
Constantly generated and rapidly changing. Requires real-time capture and Monitor operational efficiency
analytics Identify waste/cost & fraud

Plus External applications


Veracity: may be more true due to large numbers Customer segments, tastes, and
Value: can provide huge business benefits satisfaction
Market trends
Competitor activity
Supplier monitoring

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Leadership &
Management

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Differences between leadership and
management
Leadership Management
Develops and changes things Operates within existing systems

Authority is given by followers Authority is given by superiors


Exercised over people May be exercised over things
May not be official or formal Always formal and official

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Management Effectiveness
Good management Bad management

Team gets the tasks done well Tasks left undone or done badly

High team morale/low turnover Low team morale/high turnover

Team takes responsibility for the tasks Team only works when it is told to

Clarity over the roles of each team Confusion and conflict over roles and
member and procedures procedures

Team will work without the manager Team only functions if the manager is
present present

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Management/Leadership Style
Style Telling/ Autocratic Selling/ Participative/ Delegating/ free-rein
Communication Consultative

Managerial behaviour Takes decision and Presents decision and Presents problem, gets Allows team to decide
announces it invites questions suggestions, makes action within limits
decision

Extent of task focus Exclusively about getting High Some balance with Low
job done impact on team

Speed of decision Very swift Very swift Reduced High or Low


making

Extent of Very low Limited to gaining Some trust of team High reliance on team
relationship/team focus obedience

Impact on team Loyalty to manager Better understanding Greater engagement High motivation and
or Greater engagement or responsibility
Resentment and Some loss of or
demotivation confidence in manager Frustration at lack of
direction

Hersey and Blanchard


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Factors Influencing Effective Style
Nature of the task
Structured tasks allow Telling style.
Unstructured tasks require Participative style

Nature of the subordinates


Participative style requires that subordinates are willing to assist and
have the ability/knowledge to offer assistance

Task environment
Risky environments, or where quick decisions are needed, tend to
require Telling style from a manager

Managers preferred style


Some managers find Participation more difficult. Other find Autocratic
styles are against their personal nature

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Corporate Governance
Responsibility of Board of Directors Board level

o appointed by shareholders to run the business


o responsible to shareholders for how they run the business
Divisional Divisional

Must ensure effective systems of control


o financial controls (transactions systems and budgetary
control Departmental Departmental Departmental

o adequate management in each position


o controls to reduce risks

Provide direction and strategy for the business

Effective corporate board


o Balance of Executive Directors (do) and Non-Executive
Directors (advise and monitor)
o Division of responsibility between Chairman (manages
board) and CEO (manages the firm)
o Open participation and discussion

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Management of Risk
Definition of Risk
The possibility that business performance and outcomes may be different from that intended

Sources of risk
Hazard: climate/weather, fire, dangerous product
Financial: cash flow problem, bad debts, losses due to foreign exchange movements
Operating: technology fails, loss of key team members, supply chain disruption
Litigation: sued for breach of law or regulations or injury to others
Reputation: loss of respect from public due to a scandal
Commercial: competitor is better, failure of new product or line of business
Managerial: arises from failure of management to control business
Strategic: wrong markets/industries, failure to adapt to change, killer applications

Managing risk
Information: monitor potential risks and evaluate exposure of firm
Prevention: take action to minimise likelihood or impact of the risk
Response: have plans in place to respond to the risk occurring

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Groups and
Teambuilding

44
Features of Groups
Good features Bad features
Higher productivity than an Pressure on members to conform to
individual group norms or be ejected
Share knowledge and skills Groupthink failure to challenge
bad ideas
Creative solutions to problems Conflict members waste time
fighting for power and position
Meet social needs of members Risky shift group will take risky
decisions because individuals not
responsible anymore
Support for members Cautious need for agreement and
consensus means no new thinking

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Team Development - Tuckman

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Nine Team Roles - Belbin

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Building Effective Teams
Appoint a good team leader

Define team objectives, roles and procedures

Recruit appropriate members

Train and develop staff for their roles

Establish communication amongst the team

Give feedback and praise success

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Performance evaluation of teams
1. Identify & communicate objectives for team
- Specific, Measurable, Attainable (Agreed), Relevant (Resourced),
Time bound
2. Assess deliverables
- Extant: has it been done?
- Effectiveness: KPIs for outcomes:
- Efficiency: time, resources, waste
- Economy: cost, earnings, profitability
3. Assess enabling steps for performance
- team membership: recruitment, training, development of roles
- establishment of processes and procedures
4. Qualitative aspects
- emotional health of team (turnover, morale, complaints)
- attitudes of stakeholders to team (surveys on satisfaction)
5. Decide evaluation methods
- use of Internal Audit department
- set up information gathering approach (management reports, web
questionnaires, staff appraisal system, user group meetings)

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Motivating and Driving
Performance

50
Theories of Individual Motivation
Maslow - The Hierarchy of Needs

Personal
Progression

51
Theories of Individual Motivation

52
Improving Individual Motivation
Supervision and Leadership
o Appoint and train good manager/supervisor
o Appropriate management style

Job Design
o Job rotation: allow individual to switch tasks
o Job enlargement: give the individual more tasks
o Job enrichment: increase the responsibility and skills in the job

Payments systems
o Tie aspects of pay to role performance (output, attendance, punctuality)
o Provide pay progression on basis of performance
o Remove unfairness in pay systems

Personal progression and career management


o Regular performance reviews and progression
o Training in new skills
o Coaching and mentoring

53
Improving Team Motivation
Identify and communicate objectives for team
Set performance measures
- budget targets
- times for delivery of activities (response to calls, time to process applications)
- service quality targets (customer satisfaction, error rate)
Payments and rewards systems
- mixture of individual and group bonuses
- non-financial benefits (flexible working, additional vacation, health and pension benefits)
Give recognition for effort
- to individuals
- to the team (parties, time off)
Address factors leading to low motivation
- poor supervision
- unnecessary rules
- job insecurity
- conflict

54
Coaching and Mentoring
Seeks to improve personal performance and progression

Coaching
o One to one meetings of person with a coach
o Encourages reflection and self-discipline of individual to removal of
blockages to better performance

Mentoring
o Periodic meetings with more senior person from same function/career
o Individual shares work problems and mentor makes constructive
suggestions on how to overcome them
o Motivational because mentor acts as a role model
o Mentor encourages reflection on experiences and personal learning

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Organizational Culture
and Change

56
Organizational Iceberg

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Impacts of Culture
Affects behaviour of the individual
o Willingness to accept responsibility
o Effort to change or improve things
o How loyal and bonded they are to the organisation
o Attitude and obedience to management
o How customers and suppliers are perceived

Affects behaviour of the organization


o Willingness and ability to change
o Attitudes to growth and international expansion
o How it perceives threats and opportunities

58
Types of Culture
Handy/Harrison model
Culture influences the patterns of behaviour and decision making

Task culture: emphasis on getting job done

Role culture: emphasis on obeying the rules, not taking


responsibility

Person culture: each member of staff out for themselves

Power culture: loyalty to certain key individuals

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Cultural Web
The culture is created and maintained by 6 factors The way things
are done and
what is
acceptable

Johnson and
Scholes

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McKinsey: 7 S Model
The culture (or shared values) are created and maintained by 6 factors
The way things
are done and
what is
acceptable

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Key Relationship Skills

62
Communication

Schramm 1957

63
Communication
The Media
The Message
Personal conversations
Instructions
Email
Good/Bad news
Social media/messaging
Technical data
Group meetings
Promotion/Advertising
Teleconferences
Calls to action/motivation
Public address
Discipline/criticism
Letters
Requests for help
Reports

Press announcements

64
Meetings
Types Steps for an effective meeting

Internal team meetings Decide purpose of meeting

Supplier meetings Establish and invite who needs to


attend
Customer meetings
Decide/agree agenda in advance
Budget meetings
Arrange location and time
Project meetings
Facilitate communication/discussion

Decide action points and persons


responsible

Publish results/minutes

65
Improving Meetings
Problem Solution

Meeting Chairman stronger


uncontrolled - sets down rules for meeting at start
chatting - limits discussion if it is not helpful
- conflict - clear agenda with time limits for each topic

Disengaged Rethink who is invited


participants - only bring in people with an interest in the agenda
- invite people to join and leave according to topic
- insist on prior preparation
- ensure meetings do lead to action

Poor behaviour by Better meeting etiquette


participants - train/coach participants in appropriate behaviour
- aggressive - better chairing
- talk too long - invite others to lead discussions
- sulking
- late/unprepared

66
Influence and Persuasion
Approach

Be clear about the outcome you want to


achieve

Consider the position of the other party


o Their likely reaction
o Their likely objections
o The concerns they will have Listen to the other person and probe their
position
Plan ahead for any meetings o Have they misunderstood
o What impact do you want to make o Is there something in particular that is
o How will you open the discussion stopping them from agreeing
o How will you sell your proposal
o What boundaries are there to the Be focused but flexible
discussion (what will you concede, o Stick to what you want
what behaviour would end the o Concede some things that are not vital
meeting) to you

Aim for a win-win

67
Six Weapons of Influence - Cialdini

Reciprocity Authority
If we supported or given to someone in the We are more influenced by people in authority
past they will feel the need help us now due to respect and trust in their role

Commitment/Consistency Scarcity
People who have supported something in People will want something more if they are
the past will find it hard to stop supporting afraid to miss out
it now

Social proof
The opinion of other people affect and
influence us

Liking
We are more influenced by people that we
personal like

68
Negotiation
1. Prenegotiation
- establish negotiation team
- establish desired timescale for negotiation/resolution
- assess likely aims/position of counterparty
- identify own aims and position (must-haves, nice-to-haves)
- develop support for position (arguments, data, stakeholders)
- plan structure of proposals
- frame negotiation issues with counterparty
- agree negotiation mechanism with counterparty (location, participants, aims, rounds & pathways)
2. Negotiation
- identify areas of agreement and disagreement
- establish aims and argument/justification of counterparty
- probe counterparty for areas of concession, weakness & poor logic
- identify blockages to disagreement and seek to resolve
3. Post-negotiation
- resolve formal written statement of agreement
- plan implementation
- agree follow up meetings/communication to maintain relationship

69
Types of Conflict

Vertical HQ
Power and status: ones
at bottom jealous of ones Finance
at top
Function
Ideology: different
values eg bottom focus
on customer but top Division Division Division
focus on profit A B C
Distance: ones at
bottom feel isolated in
big organisation
Scare resources: ones
Horizontal
at bottom think the top is Goal incompatibility: want different things or competing for
a waste of resources same thing
Task interdependence: one feels let down by the other
Reward system: one can only benefit at the expense of the
other
Environment: all are under pressure
Group loyalty/differentiation: group needs to have an
enemy
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Managing Conflict

Conflict reduction
o Build on areas of agreement
o Negotiation
o Have third-party mediators

Conflict resolution
o Eliminate root causes of conflict
o Find benefits for both sides in collaboration

Conflict suppression (less effective)


o Use authority or force to stop the conflict
o Pretend it does not happen or matter

Conflict stimulation (dangerous)


o Encourage conflict to motivate teams
o Stimulate change
o Avoid challenges to the top of the organisation

71
Change Management

72
Impacts of Change
Changes to job roles Disagreement with change
o Less jobs/more jobs o Not necessary
o New duties and skills o Wrong reasons
o Different hours of work o Will not work
o Less/greater responsibility
Conflict
Changes to teams o Fight for available jobs
o Loss of workmates o Fight for status and power
o New leaders o Attempts to disrupt the change
o New team members

New skills
o Old skills may be unwanted
o New skills needed

Change to personal status


o Loss of previous authority
o Resentment at not being consulted

73
Resistance to Change

Parochial self interest

Misunderstanding

Low tolerance of change

Different assessments of the situation

74
Types of change

Transformation: fundamental
change in culture and beliefs

Re-alignment: slight adjustment


that does not challenge
fundamental culture and beliefs

Incremental: one step at a time

Big bang: all done at once

Balogun and Hope-Hailey

75
Ice Cube Model (3 step model)
Stages in a planned approach to change The way
things are
done and
Announce change
what is
Explain reasons
Set timetable acceptable
Show effects/benefits
Give training Explain process and steps
Change job roles
Introduce new Staff learn to live with
systems/procedures change
Procedures/systems
Team grow to like changed modified following feedback
situation
Team wants to make the Change fully implemented
change a success
Changed system now
business as usual
Kurt Lewin Payments based on it
Recruitment based on it

76
Further Approaches

Beer and Nohria


Theory E: change to achieve improved profits
Theory O: make fundamental organisational changes

Kotter and Schlesinger


Education and communication
Participation and involvement
Facilitation and support
Negotiation and agreement
Manipulation and co-optation
Explicit and implicit coercion

77
Change Management

78
Projects
Characteristics of a project

A unique undertaking

Defined beginning and end dates

Particular dedicated resources

A project manager and project team

Relationships within team and in immediate environment

Specific stakeholders with an interest in the final result

79
Project Constraints

The Iron Triangle


Quality of the final result is
affected by three things

Reducing one element


demand a reduction in the
others

Greater scope inevitably


requires more time and
resources

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Project Life Cycle

81
Stage 1 Project Initiation

1. Identification/realisation of a need

2. Feasibility study/assessment

3. Risk assessment

4. Creation of Project Team

5. Development of Project Initiation Document (PID)

82
Feasibility Assessment
Business feasibility Technological feasibility

Cost/benefit analysis Does robust technology exist

Affordability Impact on remaining technologies

Environmental feasibility Organisational feasibility

Impact on suppliers and clients Extent of senior management support

Impact on natural environment Impact on jobs and culture

Social feasibility

Stakeholder support/reaction

Fit with social trends

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Feasibility Assessment
Steps in Project Risk Assessment

1. Identify potential risks 3. Prioritise/scale risks

Multi-disciplinary team approach High impact x high likelihood = high risk

Previous experience of similar projects Low impact x low likelihood = low risk

2. Analyse risks 4. Manage risks (see next slide)

Identify potential impact of each risk 5. Set up ways to monitor risk during project

Identify the likelihood/probability of them Budgetary control

happening Work schedules

Incident logs

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Risk Management
Transfer risk
Likelihood
Low High Insure

Make contractors liable for risk penalties

Avoid risk

Accept Reduce Abandon project

Redesign project to remove the specific risk

Reduce risk

Transfer Avoid
Improve controls

Invest in better techniques and expertise

Accept/absorb risk

Risk is inevitable and not catastrophic

85
Project Team

86
Skills of a Project Manager

Stakeholder awareness
Team leadership
Persuasion Expert knowledge
Communication Time management
Negotiation Personal resilience
Conflict management Problem solving

Project management software


Project tools
Project methodologies
Risk management

87

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