Management of Uncertainties...

Management of Uncertainties  Donald Rumsfield, US defence secretary at a press briefing during 2002 has stated “There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know”. Uncertainties are the things that are unknown unknowns. Uncertainty can be defined as unpredictable events in manufacturing environment that disturb operations and performance of an organization. Presently organizations are functioning in environments which combine known knowns, known unknowns and unknown unknowns. The growth of the last category presents organizational management with a new and little charted management challenge. The fast changing and uncertain environments these days brings a lot of uncertainties for the organization. These uncertainties require management to be agile and responsive for facing the conditions of change and uncertainty. The timing of uncertainty often causes a greater challenge response from the management than the uncertainty itself. “All of management’s value is derived from managing uncertainty.” Sometimes risks are equated with uncertainties. But uncertainty is much more than risk and it encompasses risk in it as shown in Fig 1. Fig 1 Risk and uncertainty  Every organization has to pass through several periods or many situations of uncertainties. Periods of uncertainties are an inevitable aspect of most organizations, but even the most proficient managements have difficulty in handling these periods. They use decision milestones to anticipate outcomes, risk management to prevent disasters and sequential iteration to make sure everyone is making the desired product, yet the organization still ends up the periods of uncertainties with unfulfilled plans, overflowing budgets and compromised outcomes. Uncertainties may exist in practically all decision making situations....

Policy and Strategy

Policy and Strategy  The success of an organization is strongly linked to how the management perceives the goals to be achieved and the ways devised to achieve those goals. These are two different but interrelated concepts of policy and strategy. Organizational success or failure is largely dependent on how the various functional areas in the organization are combined to produce and deliver value to different stakeholders. This integration of functions is taking place in a continuously changing and complex environment. The formulation and implementation of policies and strategies is an important issue as the organization strives to remain successful and grow in an increasingly complex, competitive and globalised world. It is therefore interdisciplinary by nature and requires an understanding of all functional areas. Organizational policy refers to the roles and responsibilities of top level management, the significant issues affecting organization wide performance and the decisions affecting organization in the long run. Organizational strategy is the strategy developed and implemented to the goals set by the organizational policy. More specifically, organizational strategy can be defined as the way a company creates value through the configuration and coordination of its various multi activities. Organizational policies and strategy provide guidelines for action. Unfavorable and ambiguous policies or strategy may affect the functioning of the employees adversely and they may experience stress. Organization wide policies are designed to achieve major organizational objectives. If an organization think about achieving something as involving ways, means and ends – policy is often engaged with the ‘ways’; strategy is concerned with the ‘means’; and finally planning is focused on the delivery of the ‘ends’. Fig 1 shows relationship of policy and strategy as compared with vision and mission. Fig 1 Relationship of policy and strategy with vision and mission  Policy Policy is a...

Strategic Management

Strategic Management Strategy is the term used for integration of the organizational activities and utilization and allocation of the scarce resources within the organizational environment so as to meet the present objectives. While planning a strategy it is essential to consider that decisions are not taken in a vacuum and that any act taken by an organization is likely to be met by a reaction from those affected, competitors, customers, employees, suppliers or other stakeholders. Strategy is an action that managers take to attain one or more of the organization’s goals. Strategy can also be defined as ‘A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process’. Strategic planning Strategic plan is a document which is used to communicate with the organization the goals of the organization, the actions needed to achieve these goals and all of the other critical elements developed during the planning exercise. Strategic planning is a management activity that is used to set priorities, to focus on energy and resources, to strengthen operations, to ensure that employees and other stakeholders are working toward common goals, to establish agreement around intended outcomes/results, and to assess and adjust the organization’s direction in response to a changing environment. It is a disciplined effort that produces fundamental decisions and actions that shape and guide what the organization is, who it serves, what it does, and why it does it, with a focus on the future. Effective strategic planning articulates not only where the organization is going and the actions needed to make progress, but also how it will know if it is successful. The Association for Strategic Planning (ASP), a U.S.-based, non-profit professional association has developed the following criteria for strategic planning and management. Uses...