04 - Business structure and PM.

Information needs in Functional* organisations:

Data aggregated at the highest level before feedback given.

Information needs in Divisional* organisations:

Information needs to be available lower down organisation due to the high level of autonomy.

Advantages for PM in Functional organisations:

Path of career defined and sense of belonging for specialists. | Standardisation and control better. The IS should aid this communication. | Lower costs since roles are not duplicated.

Advantages for PM in Divisional* organisations:

Local needs tailoring of PM| Assessment of divisional performance easier*. | Growing and diversifying of organisation easier.

Problems for PM in Functional organisations:

Dysfunctional behaviour of managers. | Individual products or market performance difficult to assess. | Growing and diversifying harder. | Slow decision making.

Problems for PM in Divisional organisations:

Transfer pricing.| Duplication of functions.| Goal congruence lacking.

Network organisation - Information needs.

Feedback of own performance for each party. | Establishing of shared goals agreements. | Decision making information for those responsible for regulating performance.

Network organisation - Advantages for PM:

Larger organisation competition enabling. | Infrastructure costs lower. | Flexibility to meet project needs. | Exploitation of market opportunities.

Network organisation - Disadvantages for PM.

Competitive advantage loss if partner works for competitors. | Agreeing of the common goals. | Planning. | ISs not compatible. | Employees monitoring difficult.

Reasons for creating Joint venture structures:

Costs and risks sharing. | Resources of partner tapping. | Expertise of partner tapping. | Markets and products expanding.

Join venture - difficulties:

Decisions about items* sharing.| ISs incompatible.| Accountability attributing. | Legal requirements. | Opinions different**. | Goals. | Security of information. | Culture, language, time or currency differences.

Strategic alliance - reason for establishing:

Similar to joint venture* but a separate business entity is not formed, allowing greater flexibility.

Strategic alliance - difficulties:

Independence is retained, making it difficult to put common performance measures in place and to collect and analyse management information. | Plus many of the difficulties of Joint ventures (DIALOGS-C)...

Problems of multinational organisations:

Co-ordination of subsidiaries. | Exchange rates and other uncertainties. | Measuring of performance difficult if common systems don't exist.

Business integration definition:

All aspects of the business aligned to secure the most efficient use of the entity's resources so that it can achievable its objectives effectively. | Processes are viewed as complete entities from initial order to final delivery.

Value chain analysis

Inbound logistics. | Operations. | Outbound logistics. | Marketing and sales. | Service.

McKinsey's 7s model:

Shared valueS. | SystemS. | SkillS. | StructurE. | StylE. | Staff. | Strategy.

Business process re-engineering (BPR) definition:

The fundamental rethinking | and radical redesign | of business processes.

BPR cuts across traditional departmental lines:

Change to process view will require change in culture with a move to process teams and not functional departments. | Employees will need to retrain. | Communication and leadership from senior management essential. | Results in more use of IT.

BPR may result in improved organisational performance:

Core processes adapted to achieve corporate goals. | Resolves around customer needs - key to competitive advantage. | Allows workers more autonomy. | Can help eliminate unnecessary activities. Process should be made cheaper.

Practical problems of BPR:

Additional costs.*| Perception that BPR is all about cost cutting.| Staff may feel devaluated if role changes.| Less of control if middle managers removed.| May utilise outsourcing.**| May result in automation of processes but not redesign.

BPR - Changes to PM system:

Systems redesignated to capture new PM data in real time. | Reward system aligned to new measures.

BPR is intended to achieve dramatic improvements in critical, contemporary measures of performance such as:

quality* | costs, | and speed.