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This assignment is based on Global corporate strategy. It identifies the concepts of entrepreneurship, strategic leadership and contrast and comparison of corporate entrepreneurship. It identifies the concepts of Porter's value analyse, Corporate governance, corporate social responsibilities, organisational structures like functional, corporate and it also identifies the leadership skills which can be applied into the organisation to improve the productivity in the staff.
First part of the assignment is based on the entrepreneurship in a organization and how these concept will enhanced the productivity by using strategic leadership.
Second part of this assignment is based on Value analysis theory. Porter's value analysis tool is applied to improve the productivity. Then this analysis tool will be applied to analyse the real world tire production company. We observed that how Continental AG has used this technique to improve their productivity and survive from the most terrible period in gulf war.
Third part of this assignment has discussed the company structure and the leadership skills. We need a suitable company structure to use good leaders in the company and get the maximum productivity from these people to get the maximum output of the organisation. These leadership skills can use to improve the leader qualities in the team leaders and company management.
Corporate entrepreneurship is the process which enhances the innovative abilities of the employees by creating of new products, services, channels, brands and so on to meet the corporate success. Entrepreneurship will help to sustain growth of the organisation. Corporate entrepreneurship will not only limit to the new product creation .It can be defined that a person or a company that takes the responsibility of the innovation of the business projects and manage the required resources which are related to the particular project . Organisational and external environmental factors can influence to the entrepreneurship of the organisation.
Source: Based on Carol Moore's model, presented in "Understanding Entrepreneurial Behavior," in J. A. Pearce II and R. B. Robinson, Jr., eds., Academy of Management Best Papers Proceedings, Forty sixth Annual Meeting of the Academy of Management, Chicago, 1986.
Barriers to the entrepreneurship
Lack of viable concepts, lack of market knowledge, lack of technical skill and sometimes hard to attract the people with the best information are some knowledge base obstacles which is putting Barrier to the entrepreneurship.
Capital of the business can cause to the entrepreneurship, and it may limit the new innovation or projects.
Stiffed competition will also affect to the entrepreneurship
Lack of business know- how
Legal constrains and regulations
Job "Lock ins", Golden handcuffs
Time pressures, Distraction
Strategic leadership is the way of achievingÂ the direction, vision, the purpose for growth, and context for the success of the corporation. Strategic leaders are generally in huge or multinational organizations. Strategic leadership helps to motivate workers to improve their productive inputs. Strategic Leaders are always planning the future of the organization and they are adaptable and growth oriented. Strategic leaders should use to empower and motivate employees. Strategic leaders are not only to direct workers and he/she should have higher level management authority in the company to align the workgroup to achieve his/her implemented changes. Making decisions and leadership trainings are general key factors in the strategic leadership. Strategic leaders are taking the future responsibilities in the organization and as well as today's activities in an organization. Ability to anticipate, prepare, and get positioned for the future is another way of expressing strategic leadership.
Lack of knowledge or skills
Train the staff
Innovating of new products
Planning the future of the organization
Organisational and external environmental factors can influence to the entrepreneurship
achievingÂ the direction, vision, the purpose for growth, and context for the success of the corporation
Motivate and empower the staff
Critically evaluate Continental's agenda for strategic change at the beginning of the 1990s
In 1990 continental AG faced a terrible decline in sales which was faced same situation in other tire companies. At that time Continental AG was in 4th in the world market and their shares of the global market was 8.1%. They faced a 59% drop in net income. Net income of the year 1989 is DM million 227.8 and in 1990 that figure goes to DM 93.4. They increased the investment of the business by 23% than 1989. They invested DM Trillion 689.5 in 1990 and DM Trillion 532.4 in 1989. They have expanded the staff by 7% in 1990. They have done several strategic changes to overcome the decline in sales. Most of the tire manufacturing companies faced an overcapacities problem and decrease of the vehicle registration due to Gulf war.
They optimized their logistics and they found a new market place in Eastern Europe. Germany was the main target market in europium country. They enhanced their several aspects to overcome the present situation in the tire market. They found the dealers and distributors from their target places, such as America, Europe and East Asia. They made the proper supply chain whole over the world to reduce the instability of that period. They studied the marketing places in the world. They found the effective marketing places in the world. They found good market demand in Germany and less demand in America. They merged with the largest supply chains corporations in europium countries such as NTC. Price of the raw materials had increased in that period, therefore Continental AG decide to find the raw material suppliers in East Asia. Because 80% of world's rubber manufacturing countries located on these regions. They improve effective procurement system to achieve their objectives. Improvement in strategic position was another successive approach to acquiring companies to increase the capital of the company. Quality requirement was one of the key factor which was considered in their entrepreneurship plan and maintain the quality and the customer oriented product to the world market.
Research and development is one of the important departments in a organisation to lead to future requirements and expectations. Research and development department will research innovation of new products, marketing, and feasibility of a new project. Continental AG had established a research and development to meet the future plans in an organisation. They had innovated of new products like high performance low profile tires for high speed cars and manufacturing of industrial and agricultural tires. They had restructured their company by two highly skilled North American executives. They studied the current organisation structure and did the changes.
Poter's Value theory
Product passing through each activity will gain some value for the final price. Each Activity should be identified to drive the cost and value. Supporting activities will increase the effectiveness of the each primary activity. There are five primary activities and four other supporting activities which help to create and delivery a product or service.
Inbound logistic - includes receiving, storing of raw materials, and their inventory control and distribution.
Operations - activities that transform raw materials (inputs) into final finished product. It includes and not limit to the, machining, assembling, packaging, equip maintenance, testing.
Outbound logistic- required getting the finished product to the customer. Storing, order fulfilment, transportation, distribution management
Marketing and sales - including channel selection, advertising, promotion, selling, pricing, retail management.
Service - Activities which enhance the product's value, Maintain, repair servicing, customer support, installing, service and operator training, spare parts management and upgrading.
Procurement - purchasing of raw materials and other relevant inputs which is used such as services, spares, machineries, buildings etc.
Human resource management - recruiting, training, retention and compensation of employees, hiring.
Technology Development - R&D, Process automation, designing, redesigning and support the value chain activities.
Infrastructure - General management, planning management, legal, finance, accounting, public affaires, quality management.
Continental AG has invested for the new machineries, plants, buildings, etc to increase the productivity of the tire products. These aspects are categorised into technological developments involved in the company under supporting activities in Poter's chain analysis.
Increasing of productivity can be enhanced by studding Poter's chain analysis. Improving of Primary activities and supporting activities can help to gain the productivity of the product. Inbound logistics will help to receiving, storing and control of inventory and distributions to improve the productivity of the final product. Receiving of raw material in an on time will help to finish the final product in an on time. Storing in a good required condition is important to maintain the quality of the product and reduce the defectiveness of the final products.
Effectiveness of the operation will help to deliver the final product on time. Quality assurance of the product will enhance final quality of the product and it will automatically reduce the defectiveness. Quality of the press machines in tire industry helps to increase the productivity.
Outbound logistics is described how the finished goods stored in a proper manner. Order fulfilment is related to both two primary activities which described in above paragraphs. Logistics of final product should be done in a proper manner. Tire distribution is required lot of space rather than the quantity of the tires. If do not pack in a proper order in the distribution, it will increase the transportation requirement to deliver the finished tires.
If the manufacturing is not done due to and specific order, we have to find a market to sell these finished goods. Therefore it may need to do proper marketing and sales. There are lot of other competitive tire manufactures in the market and we have to compete them.
Customer should be having a warranty of certain mileage of use and the product will be replaced with a new one. Therefore good service should be supplied to the customer for the customer satisfaction.
Supporting activities will help to maintain the quality, purchasing of raw materials, human resource to manage the staff, new technology development like process automation, research and development, designing, redesigning and finally the infrastructure.
From 1995 to 1999 Continental AG was expedited the company capital and huge improvement in 1991. Percentage of Capital expenditure was 40% in 1999, 48% in 1998,-6.7% in 1997. In 1996 and 1995 the improvement of expenditure was level. In 1991 to 1994 the value of capital expenditure was declined. But in 1991 Continental AG was invested high capital expenditure compared with sales. It can be argue that productivity in 1991 was higher than the other years. Company had invested Capital expenditure to increase the growth of the productivity. Company may be invested money during that period due to the gulf war period and decline of the tire industry. Company had comparatively survived from that period by improving productivity. From 1991 to 1992 the company had been increased the cash flow but 1992 to 1993 it was again decreased. 1994 to 1999 cash flow had been increased.1994 to 1999 capital expenditure has been averagely increased. Sales were also increased during that period. We can conclude that from 1994 to 1999 continental AG had increased the productivity. It can be analyzed by studding the figures of sales and capital expenditure. Debt ratio is decreased 1991 to 1997 and it is increased 1997 to 1998, but it again decreased 1998 to 1999. We can see that Continental AG has done huge effort to improve the productivity by experimenting various management theories.
Corporate Governance is directing, administrating or controlling of set of processes, customs, policies, laws and institutions affecting the company. Financial stability is treating as elements of corporative governance. It has relationship among many stakeholders who involved with corporation and the governing goals in a corporation. Corporate governance has two major categories. Outsider model and insider model are the two corporative governance models. In outsider model it priority to the market regulations and absence of close relation ship between shareholders and managements. In insider model it priority to stakeholders control, relationship between shareholders and management are close and stable, the existence of formal rights for the employee to influence key managerial decision. Employee involved increasing the labour motivation in corporate governance. Corporate governance will improve the corporate culture, make stronger the human resources.
Continental AG is focusing on value creation German Corporative Governance Code and their basics have been governed by the executive board and the supervisor board. It is more transparent and understandable the confidence of employee, stakeholders, shareholders and the customers.
Corporate social responsibilities
Form of corporate self regulations is integrating into business models is mention as corporate responsibilities. Environment, consumers, employees, communities,Â stakeholdersÂ and all other members of theÂ public sphere are the activities which encourage by the organisation corporate social responsibilities due to company's actions.
Corporate social responsibilities and global governance are helping to increase the financial stability. Corporate governance and corporate are related topics in management. Corporate governance has been made with corporate social responsibilities. Environment, Community and employees have been considering in corporative governance. Management of continental AG has considered the corporate social responsibilities to make the corporative governance. Good governance is a part of their responsibilities. Good governance is a part of the corporate social responsibility. Corporate governance and corporate social responsibilities are related each other and act as a more responsible and transparent entity.
Functional structure is a vertical hierarchical structure in an organisation which based on the subdivision of disciplines into separate departments. It is a traditional organisation structure. It has some both advantages and disadvantages. It is a home for technical expertise which provides technical support and continuing development. It can achieve high degree of flexibility, because people can share their work with each other. Functional departments are centralised around the functional manager which is relating to the specific expertise area only. Functional manager or staffs is not responsible on other functional area of work. Understanding of staff each other among functional areas are limited. Very less effective in the organisation.
Every organisation has a specific organisation structure. Organisation structure can be structured in many different ways like functional or projectized or matrix or corporate structure should essential for a company to achieve the company aims. It consists of several activities of task allocation, coordination and supervision. Wrong organisation structure may hamper the corporation.
Corporate structure is a grouping of different department in a company which all have separate task but work together to operate as a one company. Hierarchy of job positions are also the part of the corporate structure. It has traditional organisation departments like finance, Human resource, Purchasing or procurement, technical, IT, internal audit.
These three company structures are seems to be same but they have some slightly changes. Functional and corporate structure both is having hierarchical organisation structure but these two are slightly differing from each other. Corporate structure is a functional structure but it stands to achieve corporate goals. Corporate structure stands for the corporate objectives.
Continental AG has been a corporate organisation structure. They stand for the common aim of the organisation.
Alan Keith of Genentech defined the leadership as "Leadership is ultimately about creating a way for people to contribute to making something extraordinary happen." Leadership is a most important characteristic of a leader in a company. Lot of leadership evaluating techniques has developed in today. Leadership is organizing of group of people to achieve a common objectives or goal. Good leadership qualities in leaders are motivate the group of the people.
Know yourself and seek self-improvement
Evaluating self-improvement means continually strengthening your attributes. Self study, formal classes, reflection and interaction can be used to improve the knowledge.
Understanding Group Needs and Characteristics
Should have a better understand of job profiles and the requirement of achieving company goals
Seek responsibility and take responsibility for your actions
If the things go wrong, do the corrective actions sooner and do not blame others and move on the next challenge
Make sound and timely decisions
Good problem solving, planning toss and decision making
Set the example
Should present a good role model for your employees. They must not hear what they are expected to do but also see the real successive results.
Know your people and look out for their well-beingÂ
Understand the human nature and the importance of the sincerely caring for you worker
Keep your workers informed
Ability to communicate with the staff under you and as well as with the senior management and other key people
Develop a sense of responsibility in your workers
Professional responsibilities can be carried out to help to develop good character traits.
Ensure that tasks are understood, supervised, and accomplishedÂ
Communication is the key to the responsibilities
Train as a team
Most of the companies have departments, sections and division, etc. people should be trained as a team to increase the better understanding among people who worked in an organisational
Use the full capabilities of your organization
Using of fullest capabilities in the organisation to make the team spirit among team members who employed in the different departments, sections, division in the organisation.
This study covered wide area of management concepts and theories and how these concepts and theories apply to the real world applications. It covered entrepreneurship, Strategic leadership, Porter's value analyze, corporate social responsibilities, corporate governance, Leadership skills, Functional, Organisational and corporate structures in the organisation.
First we studied the contrast and comparison of company entrepreneurship and strategic leadership. These two areas very closely engaged with each other but it has major differences. We studied the drawbacks in the organization and how these drawbacks overcome by applying management concepts like entrepreneurship and strategic leadership.
In the second question in this case study it has based on the Porter's value analysis. In this section it has described and applies how the Porter's value theory will apply on real world application like Continental AG which is one of the leading tire manufactures in the world. Porter's value analyze can be applied to increase the productivity of the production by considering its primary and supporting activities.
Corporate governance will describes controlling, administrating and directing the company members in frame of legal, customer policies, and set of process. Corporate social responsibilities are integrated form of self corporate regulation in a company. It also goes very close with corporate governance, because corporate social responsibilities has established in a company with the corporate governance body.
Organisational structure has been described in the final question and it has observed that how the suitable organisational structures select and apply to the company to get the maximum productivity from the company staff. Continental AG has been using corporate organisation structure since from 1992. They have gain the maximum productivity by using corporate organisation structure. Then finally leadership skills have studied to apply these concepts to the real world scenarios. We deeply observed the leadership skills in dealing with the company's strategic challenges in 2001.
By using of different appropriate management strategies, theories and other tools which have been discussed in the above sections can be concluded that effectiveness and productivity can be easily raised by following these concepts.