Strategic Management: HR, Innovation, and Commerce

Posted on Jan 12, 2025 in Business Administration and Management (BAM)

Management by Objectives: Location of Targets

This approach motivates individuals with high-level needs. It consists of three phases:

  1. The superior and subordinate meet to establish objectives for the upcoming period.
  2. Regular meetings are held to review progress.
  3. At the end of the period, a meeting is held to assess the results.

Whenever possible, objectives should be expressed numerically. Once goals are established, it is the subordinate’s responsibility to achieve them. If they are not successful, they must take steps to improve in the next period.

The main advantages of this approach are:

  1. Motivates individuals through their participation.
  2. Individuals know not only what needs to be done but also the specific targets to meet.
  3. Provides individuals with more autonomy.
  4. Increases regular communication between subordinates and superiors.
  5. Helps individuals understand and direct their efforts effectively.
  6. Provides useful information for decisions on pay and promotion.

Many multinational companies use this method to manage their subsidiaries.

The Commercial Function: Purchases and Sales

The commercial function encompasses both purchases and sales. The company is positioned between two markets:

  1. Goods and services required for the production process.
  2. Sales.

Role of Purchasing

The supply department must acquire raw materials in sufficient quantities and conditions to ensure uninterrupted production, synchronized with the pace of production.

Procurement must be carried out in the most cost-effective way possible, requiring a well-organized purchasing section.

This service or purchasing section must have timely information on the raw materials market to obtain better prices and reduce expenses.

Its mission is limited to making purchases, not determining the needs for them.

The purchasing section acts as an intermediary between the market and the factory’s needs. Therefore, it should always be closely linked to research and manufacturing services.

  • It must also provide information on new materials and modern methods.
  • The aim of this purchasing section is to identify the most profitable suppliers and the highest quality products.

The order is a legal act, and it is necessary that it stipulates the relevant parts.

Innovation, Leadership, and Strategic Attitude

Change

Any modification in the structure, process, or organizational performance.

Invention

An idea reflected in a change that is new to all organizations.

Creativity

The process that facilitates the emergence of new ideas and consequently develops inventiveness.

Innovation

A change that is new to the organization.

Innovation is the consequence of R&D: a set of new scientific and technological knowledge and their implementation.

There are three types of innovation:

  • Technological innovation: product innovation and process innovation.
  • Innovation in management methods.
  • Social innovation.

Leadership

The attitude to influence people to willingly strive towards achieving the objectives of the group or organization, designing a vision of what the company should be.

It takes into account the following attitudes (Bennis):

  1. Control of meaning.
  2. Control of attention.
  3. Control of trust.
  4. Control of self.

Proper leadership can be perceived through four aspects (Bennis):

  1. People feel useful.
  2. Learning and competition are important to people.
  3. People feel part of a team.
  4. Work is stimulating, exciting, and even fun.

Current business strategy function:

Strategic Attitude

The will of the employer to carry out the organization.

Strategic Posture

The way the employer confronts the challenges and threats that arise.

Human Resources Activities

Human Resources (HR) activities are directed towards achieving and maintaining the human resources needed by the organization.

  • a) Planning is used to estimate future human resources needs.
  • b) The right people are recruited, requiring a selection process.
  • c) People often do not conform exactly to needs, so orientation and training activities are conducted.
  • d) Development activities are conducted to ensure that people have the necessary skills.
  • e) Placement activities involve transferring people from some tasks to others.
  • f) Performance evaluation and monitoring.
  • g) Compensation activities.
  • h) Some compensation is mandated by regulations.