Business Management System

Blueprint for Enterprise Competitiveness

By Anji B. Resurreccion
12 March 2010
Business Management System
Beyond Fad & Fashion:
The Structure of a Business
Dr. O. A. ATA,
Chief, Enterprise Management Development Section (EMDS)
International Trade Centre UNCTADWTO (Retired)
What do we do to be competitive?

Which way to go?

 The Gurus: How many of them do you know?
Karl Albrecht William N. Isaacs Henry R Sims, Jr. Marvin R. Weisbord
Sumantra Ghoshal C.K. Prahalad Stephen R. Covey Thomas R Flarmery
David E Norton Adam M. Daniel Kim James E Moore
Christopher Argyris R Robert Jacobs Douglas K. Smith Etienne Wengur
Thomas E Gilbert Edgar H. Schein Aubrey C. Daniels Jay W. Forrester
James O'Toole Brandenburger John R Kotter Linda Moran
K.W. (Ken) Bamforth Laurie Beth Jones John R (lack) Stack Margaret J. Wheatley
Robert K. Greenleaf Peter R. Scholtes Terrence E. Deal Timothy I. Galpin
Glenn M. Parker Jill Carpenter Edward E. Lawler III Ed Musselwhite
Christopher A. Bartlett M. Patricia Kane Paul Strebel Fred Wiersema
Gary R Hamel Donald A. Schtn Max DePree Howard Gardner
William A. Pasmore John Case Charles C. Manz Barry J. Nalebuff
Warren Bennis Robert S. Kaplan Noel M. Tichy John H. Zenger
Michael Hammer Jay R. Schuster Peter E Drucker John W. Gardner
Thomas J. (Tom) Peters James Champy Henry Mintzberg Burt Nanas
Warren Blank Jon R. Katzenbach Michael Treacy Patricia K. Zingheim
Charles Handy John E Schuster Fred Emery
Paul E. Platten Jay A. Conger Allan M. Mohrman, Jr.
Lee G. Bolman Manfred E R. Kets Eric Trist
David A. Hofrichter Peter M. Senge Richard Farson
Michael E. Porter Daryl Conner de Vries Susan AIbers Mohrman
Juana Bordas
 Success rate of implementation

1980 1990

$32B spent on reengineering

$20B reported wasted.
A Harsh Assessment

Few people are easier to ridicule than

management gurus. Irrepressible self publicist
and slavish fashion merchants, they make a
splendid living out of recycling other peoples
ideas (chaos management), coining euphemisms
(downsizing), and labouring the obvious
(managing by wandering around or the customer
is king). Their books draw heavily on particular
case studies - often out of date once that have a
nasty knack of collapsing later. And their ideas
change quickly.
The Economist
The Real Guru

They are called gurus

because charlatan is too
difficult to write and
pronounce.

Peter F. Drucker
The Reality Check: SME Profitability

Prices are pulled down by international buyers who contract directly

with manufacturers
George brand jeans retail price !! fell from $26.67 to $7.85 in
England and Germany.

Basic T-Shirt Prices

YEAR Price ($/DOZEN)
1995 $24.00
1998 $17.25
2003 $10.60
 Rice
Health rice, farm store P36
Supermarket P120
COMPETITIVENESS

Serving the market

you choose to serve
 Competitiveness
Degree of ability
to dictate terms
Quantity
Quality
Time
Cost
to buyers
& supplier
 Back to Basics
Define business
Identify business functions
Set objectives of business functions
Manage the business
Back to Basics: Simplicity is Beauty
1. Businesses are
managed ventures to
make money
2. Businesses make money
by exchanging with their
buyers (and suppliers)
3. Businesses deplete
resources to create the
things to be exchanged
and for the exchange
itself.
Step 1: Forget Mission-Vision Statements

Business mission : To make as much money as possible!

MANAGEMENT

Business

National Environment

International Environment
Step 2: Forget Complicated Organograms
To make money from exchanges with their buyers
(and suppliers), then they must have something to
exchange and somebody to exchange it with..

MANAGEMENT

PRODUCTION MARKETING

Enterprise

National Environment

International Environment
Step 3: Dont waste time on unneeded info

Businesses deplete resources to create the things to be

exchanged and for the exchange itself.

Financial Physical Human

Assets Assets Resources

MANAGEMENT

PRODUCTION MARKETING

Enterprise

Information Networks
National Environment

International Environment
Step 4: Do not Waste Time Sell more & often to
Writing Objectives present buyers

Convert non-buyers

Sell more & often to

Deliver goods at right competitors buyers
Quantity
Quality
Time At a profit
Cost

PRODUCTION MARKETING

Enterprise

National Environment

International Environment
Step 5: Dont waste time on defining concepts
A Competitive Enterprise

Sells more and more frequently to

Converts nonusers into users and present buyers and avoids present
avoids users becoming nonusers
buyers to buy less or less frequently

Suppliers Buyers
Quantity Quantity

Time Time
Enterprise

Cost Cost

Quality Quality

Induces brand switching into the

markets of the competitors and Secures medium to long term
avoids its users to switch to profitability
competitors
Step 6: Dont Waste Time on Job Descriptions

Analysis & Planning Controlling & Coordinating Monitoring & Improving

PLANNING EXECUTING CONTROLLING

Resources to be Managed

Information Human Financial & Networks &

Physical Relationships
Managing for Competitiveness

How job is to
BMS as The job will
be performed
framework be defined
will be clear
 SEGMENTATION
POSITIONING
Analysis & Planning
PLANNING
Information
EXAMPLE ACTIVITIES THAT ENTERPRISES UNDERTAKE TO PLAN, EXECUTE AND CONTROL
Human Resources
Developing Organizational
Plans
Describing and Evaluating Jobs
Installing Activities
Preparing Wage and Salary
Administration Plans
Work Force Forecasting
Arbitrating
Collective Bargaining.
Counseling Personnel
Employee Information
Exchange
Management Development
Programs
Employee Services
Recruiting
Securing Teamwork
Testing Personnel
Training
Appraising Personnel
Merit Rating
Mission
MARKETINGPRODUCTION
Quality Selling More..Quantity
Needs Inducing SwitchingQuality
Quantity Converting..Cost
Outcomes Profitability..Time
Cost (price)
Habits & Occasions
Time Production
Balancing Production or Line Systems
Designing and Installing Plant
Designing Product Service Departments
Marketing Determining Inventory Requirements
Controlling & Coordinating Monitoring & Improving Developing Maintenance Systems
Developing Quality Standards
Developing Quality Control Procedures
EXECUTING CONTROLLING Preparing Specifications and Negotiating
Preparing Sales Literature Dispatching Work
Pricing and Quoting Engineering Production Processes
Programming Promotions Estimating Production Costs
Resources Programming Advertising Fulfilling Freight Operations
Handling Materials
Prompting and Responding to Sales Inquiries
Financial & Networks & Setting Up the Channels of Distribution Improving Methods
Human Relationships
Installing Cost Reduction Programs
Locating and Evaluating Plant Site
Physical Purchasing and Expediting
Scheduling Work and Routing
Stock Keeping
Information Financial & Physical Assets Networks & Relationships Tooling
Analyzing Business Designing General Accounting Seeking Strategic Partnerships
Management Requirements System Establishing Association and
Designing General Accounting Designing Cost Accounting Society Relations
Systems System Participating in Civic Affairs
Designing Cost Accounting Determining Policies Reviewing Business
Systems Developing Systems and Capabilities
Appraisal of Reactions Procedures Production Capabilities
Calculation and Use of Standard Maintaining an Adequate Level of To Produce the Quantities
Costs Working Capital Designing and Installing Plant
Development Experiments Preparing Functional Plans Engineering Production Processes
Market Potential Studies Preparing Long Range Plans Locating and Evaluating Plant Site
Conducting Audits Budgetary Control Tooling
Economic Studies Management Controls
Market Evaluation Reviewing Product Development
Sales Forecasts Processes To Produce on Time
Determining Inventory Requirements
Internal Publications and
Handling Materials
Handbooks Purchasing and Expediting
Feasibility Studies Stock Keeping
Basic Research
Communicating
Marketing Capabilities
To Produce at Acceptable Cost To Communicate
Balancing Production or Line Systems Programming Promotions
Developing Maintenance Systems Programming Advertising
Improving Methods
Installing Cost Reduction Programs To Distribute
Setting Up the Channels of Distribution
To Produce at Desired Quality
Developing Quality Standards
Developing Quality Control Procedures
Designing Product Service Departments
The BMS world is simple

Undesirable Results

In the BMS, so far as an The business fails to

enterprise is concerned,
there are no business
1. Sell more and more frequently to present
problems but buyers and cannot avoid present buyers to
undesirable results. buy less or less frequently
2. Convert nonusers into users and cannot stop
users becoming nonusers
Undesirable business results 3. Induce brand switching into the markets of
are either the competitors and cannot avoid its buyers
switching to competitive businesses
1. Cannot sell, or
4. Secure medium to long term profitability
2. Cannot make money or
3. both
The BMS world is simple

Behind the Undesirable Results

A business cannot sell, or
The business is unable to deliver the
cannot make money or
goods and services
both because it
1. cannot produce what it In the desired quantities with planned
is supposed to produce physical features,
At the quality desired ,
or
On time, and
2. cannot market what it At an acceptable cost
produces or
and
3. both
It cannot communicate its offer to its buyers
It cannot distribute its offers.
 The BMS world is simple
A business cannot produce
what it is supposed to
produce or cannot
market what it produces
or both because
1. It cannot calculate the
quality and quantity of
resources needed
2. It cannot access, acquire Physical Assests and
Infrastructure
and allocate the
resources to its business
3. It cannot control the use
of its resources or
4. All any combination of
the above
Undesirable Results
Lack of Competence in Managing
Lack of Resources Resources
Human Strategic and Operational Planning
Resources Deficiency: Managers do not know
how to calculate the quantity and
quality of the needed resources.
Financial
resources
Execution Deficiency: Managers
cannot access, acquire and
allocate the needed resources to
build production and marketing
Information and Know- capabilities and manage sales
how transactions.
Networks and
Relationships Control Deficiency: Managers
cannot monitor the use of
resources to assess effectiveness
and improve efficiency.
What does a competent manager do ?

MANAGEMENT MIXES THE PRODUCTION DIMENSIONS TO

MEET BUYER NEEDS AND WANTS (STRATEGY)

TO PRIORITIZE THE ACTIVITIES FOR PLANNING, ACQUISITION,

ALLOCATION AND MONITORING THE RESOURCES (ACTIVITIES).

FOR BUILDING THE BUSINESS (MARKETING &

PRODUCTION) CAPABILITIES (CAPABILITIES)

FOR THE BUSINESS TO ACHIEVE ITS MARKETING

OBJECTIVES (OBJECTIVES)

TO GET AND FULFILL ORDERS

(TRANSACTIONS)

WITH BARGAINING POWER WITH ITS BUYERS OVER ITS

PRODUCTION OBJECTIVES (BARGAINING POWER)

TO ACCOMPLISH ITS MISSION (MISSION) OF

MAXIMIZING RETURNS.
COMPETITIVENESS
ATIFTAP
end