BMOM5203 Assignment Part1 (8Nov10) Draft

Master of Project Management

Faculty of Science & Technology

13th November 2010

Organization

and

Business

Management [BMOM5203]

Assignment (Part 1)

Name : Neoh Wen Wan

Student ID : CGS00528817

BMOM5203 Organizationa and Business Management

Neoh Wen Wan CGS00528817 Page 1 of 29

Table of Contents

PART 1

Question 1 ....................................................................................................2 - 7

Question 2 ..................................................................................................8 - 18

Question 3 ............................................................................................... 19 - 29



PART 1 (Total 25 Marks)

Question 1

In a short essay, describe the three main types of managerial skills identified by Robert

Katz. Which skills are most important to each level of management, and why?

[6 marks]

There are three main types if skills as identified by Robert Katz, they are technical

skills, human skills and conceptual skills. There is a need for the right combination of

skills at the required management level so that managers can discharge the function of

management necessary to their job effectively, perform their roles correctly and become

more managerial self-efficacious [Peterson and Fleet, 2004]. Gary [2005] also states that

from his experience most managers do not behave rationally nor do members of

organizations all the time respond or behave rationally. These reflect the uniqueness and

complexity of people / human and the dosage of skills required to manage them are

different at different level. Different industry, organization needs, behaviour, etc do have

impact to the major activities that relates to task, people and change that a manager

perform at their level.

In general, technical skills are the specialised skills or knowledge in a specified

field such as engineering design and construction methodology. Whereas human skills

involve interpersonal skills such as abilities to communicate with people effectively,

positive attitudes and behaviour and ability to interact and influence others to achieve the

required objective. Conceptual skills are the abilities to understand the whole organization

and interact with the external environment, generate vision, mission, goals and



organization culture, and able to understands and determine how the organization progress

in long term. These skills are further discussed in detail by Peterson and Fleet [2004].

Two perspective of views can be used to explain this, one is at different

management levels within the same organization (top management such as chairman and

managing director; middle management such as operation manager and departmental

heads; and line management such as managers or assistance managers) while the other is at

same position but different level of organization (i.e. project manager for developers, main

contractors and sub-contractors), for both the degree of needs for each skills (technical,

human and conceptual) varies at different level. These variations of skills requirement in

different management level is further supported by Kraut, et al. [2005] and Qiao and Wang

[2008].

In top management such as chairman or managing director of an organization, their

primary functions involve mostly on planning and organising at high level. They do not

spend most of their time merely solving problems, rather they create the platform or

platforms that set the rules, behavioural expectations, quality control, tone, and customer

service ethic as well as the overall identity of the organization [Rubenstein, 2005]. In short

they have to set the mission, generate vision and goals for their organization. Therefore

they need to be very strong in conceptual skills, followed by human skills to handle

external parties and middle management. Approach in human skills towards external

parties and internally are different. A balance of firm and soft approach together

influencing power are required to handle external parties whereas the ability in

commanding and leadership qualities are required in handling its own organization.



Technical skills are stills required at the level by not to the extend of detailing. Some

successful top management may not even have their technical education related to the

current business they are involve in. Sometimes their decisions are base on commercial

context point of view such as ‘guanxi-driven’ or ‘market-driven’ [Liu, 2006].

A middle management such and departmental heads will need a balance of the

conceptual, human and technical skills as their main function is to implement the mission,

vision and goals set by the top management. Here they need to ensure that all their

managers in the respective departments are aligned with the mission, vision and goals of

the organization. With this they need to have a balance of strength in all the skills in order

to blend and transfer them to implementation stage by their respective line management.

In a line management such as managers or assistant managers, where their primary

function is directing [Plachy, 2009] and controlling the daily operations of the

organization, they need to be strong in technical skills with human skills in order to

communicate and manage their subordinate. They need to be strong in technical skills so

that they can resolve technical problems arising from their daily production activities and

their strength in technical skills will help in making a more accurate technical decision and

judgement. This is because in the line management level their focus would mainly be on

the output of the services and/or products. Conceptual skills are the least required here as

their ability to understand and be aligned with the organization mission and goals are

sufficient at this level.



There are various sizes of organization from huge to small organization. Malaysia

as a country can be also considered an organization what have different levels of

management such as Prime Minister, respective Ministers at national levels and Chief

Ministers at state level. Another perspective example is that in construction and

development industry for a same position (i.e. Project Manager) but in different level of

organization, the needs of each skills are different.

A project manager in a development company may be in this case considered top

level where there is a need for more conceptual skills followed and human skills with less

technical skills. This is because to develop a new township there is a need to generate

ideas, concept and vision for that township. Here again conceptual skills is highly required.

Whereas a project manager in a main contractor will need a balance of technical,

conceptual and human skills. This is because can be considered the middle management

and will be managing their sub contractors to move towards the direction of the concept

for the said township. There are quite an extend of co-ordinating works among the

respective specialised trades.

However when it comes to a project manager for a sub contractor, he would highly

be dependent on his technical skills and human skills to complete their respective scope of

work which relates to his specialised trades. This is because he will be focusing on

directing their supervisors and skill workers to complete their trades in the required

schedule and quality. At this level his involvement shall be to the context of his trades and

achieving the objective at this level.



`

According to Peterson and Fleet [2004], the skills identified by Robert Katz still

appear in 80% of the management text books. This reflects the recognition of skills

identified by Robert Katz eventhough there are other skills identified by various authors in

the modern management context. Karp and Helgo [2009] also supported Robert Kartz’s by

stating that top level management and middle level management have different point of

view on ‘çhange’. They [Karp and Helgo,2009] states that ‘change’ to top level

management is seen as opportunity to strengthen, innovate and renew organization while

to middle management it is a neither sought nor welcome matter as it disrupt and upset the

organization balance. It can be concluded that there are needs of different degree and

combination of skills to different level of management.

1150 words



Reference

Gary, H. [2005], The dark side of organizations : forensic management – an emerging

theoretical perspective. ; Development and Learning in Organizations, Vol. 19, No.

5, pp. 4-6.

Karp, T. and Helgo, T. I. T. [2009], Reality revisited : leading people in chaotic change. ;

Journal of Management Development, Vol. 28, No. 2, pp. 81-93.

Kraut, A.I., Pedigo, P.R., McKenna, D.D. and Dunnette, M.D. [2005], The role of the

manager: What’s really important in different management jobs. ; Academy of

Management Executive, Vol. 19, No. 4, pp. 122-129 (Reprinted from 1989, Vol.3

No 4).

Liu, H. [2006], Managing strategic planning paradigms in China. ; Marketing Intelligence

& Planning. ; Vol. 24, No. 5, pp. 432-445.

Peterson, T.O. and Fleet, D.D.V. [2004], The ongoing legacy of R.L. Katz : An Update

typology of management skills. ; Management Decision, Vol. 42, No. 10, pp. 1297 –

1308.

Plachy, R.J. [2009], When to lead? When to manage? ; T+D, Dec, 63,12,pp.52.

Qiao, J.X. and Wang, W. [2009], Managerial competencies for middle managers : some

empirical findings from China ; Journal of European Industrial Training, Vol. 33,

No. 1, pp. 69-80.

Rubenstein, H. [2005], Handbook of business strategy. ; Emerald Group publishing

Limited, pp. 189-192.



Question 2

Describe FOUR (4) popular variables established by the contingency approach. Explain

how each variable might affect management approaches in different organizations.

Provide an example of each.

[9 marks]

INTRODUCTION

Contingency approach to management as define in Certo and Certo [2009] as an

approach base on premise that, although there is probably no one best way to solve a

management problem in all organizations, there probably is one best way to solve any

given management problem in any one organization. This is because every organization, is

affected by the input of variables such as monetary, people, external environment and

technology.

These variables can be divided into two categories, that is uncontrollable variables

and variables within controlling circumstances. Uncontrollable variables are variables that

is beyond any person control such as external environment factor which involves global

crisis, government policies etc. Variables within controlling circumstances to certain

extend are technology used and it is also in different in every organization. Both monetary

and people have their distribution in both control and uncontrolled variables as the degree

of exposure very much depends on the industry and trade they are involve in.

All variables will have certain degree of effect to management approaches in

different organization. It may ranges from minor to major effect depending on the

organization behaviour, planning, influencing and controlling factor. Therefore these



variables must be considered, address and blended in management approaches to be able to

suite the organization in order to be effective. In short the planning, organizing,

influencing and controlling approaches need to be blended together with variables inputs.

MONETARY VARIABLES

Money is an important factor that have affect on every part of an organization such

as culture, planning, human resources management, motivation benefits and technology

expansion. There are many types of organization ranging from quality orientated

organization to quantity orientated organization in monetary perspective. Quality oriented

organization such as clean room contractors will normally have a higher percentage of

profits while quantity oriented organization such as budget hotel and electronic industry

depends on volume to achieve the organization’s goal.

There are three areas to look at for monetary factor that is limitation of money,

constant input of money and inconsistent input of money.

Dell [1994] empower their employees to make fixes and do special things for their

customer to address customer’s satisfaction and by doing so it will help the employees to

understand the company’s agenda and are energized about helping customers which is a

huge competitive advantage in the competitive business environment. This empowerment

will involve extra money and time to be spend and if an organization have limitation of

such extra spending, it will affect the organization as a whole because customer

satisfaction is essential to ensure continuity business in the competitive environment.

Other advantages with such empowerment are it provides indirect training to the



employees in making better judgement and decision, it motivates employees as the

organization trust them and promote a healthy culture within the organization.

Dell [Lowther, 2006] introduces flexible working and a women’s network to help

retain key employees. For flexible working there is a need of extensive Information

Technology facilities such as notebook for its employees, while have a women’s network

it need to have good benefits and maternity benefits. All these involve money of which any

limitation and inconsistency will affect its implementation.

Budget hotel (i.e. Tune Hotel) will have a constant monetary input as their client

consist of various people such as constant budget business travellers, budget travellers and

family travellers. Therefore their planning, forecasting, and scheduling in all aspect are

more on standardized level or daily routine.

However a clean room contractor will depends on factories requiring these services

as there are limitation of demand since not many factories in Malaysia do have clean room

facilities. Therefore the monetary input for this category of contractors are usually

unstable, hence they required high profit to survive the inconsistency of monetary input

due to limitation of demand. This type of organization will normally keep their overhead

low by outsourcing, adopt partnering and supply chain approaches and may diversify their

business during economic downturn. Normally this type of organization will maintain a

strong core team that have multi tasking abilities ranging from management to technical

expertise. Hence they are able to expand immediately when required by recruiting

seconded employees for supporting roles from other organization such as their partnered

organization.



If a company’s mission essentially is to make a lot of money, then run away, not

many employees will be inspired, rather they may stay because they need their jobs but

they will not be confident that they are doing the right thing [Dell,1994]. This type of

organization will not promote a good culture and motivation to its employees as the

fundamental is just to make money and show no other consideration.

HUMAN VARIABLES

Human factor is another factor where sometimes can be control but mostly is

beyond control. Each individual are unique itself, ranging from different education

background, culture, behaviour, race, age, country, etc. Gary [2005] stress that an

important factor in “good management” is the ability to recognize the dark side (human

behaviour : interdependent, self-contained, commitment, loyalty and essential pathology)

and deal with it. Kraut [2005] regards managers at all levels as the ambassador, as their

leadership qualities will influence the motivation of employees, organization culture and

productivity. Zeffane [1994] further shows that there are significant relation between

people / employees and organization structure / culture and management style.

Within an organization, human factor can be control to certain extend by having in

place the procedures such as adopting a standard operating procedure and/or quality

assurance procedure. However it needs training, monitoring, coaching, inspection and

motivation to ensure the control are in place and meets the required objective. There also

corporate decision that may sometimes be beyond the context of standard procedures such

are commercial decisions. Among example are the elements of ‘Guanxi’ such as mutual

obligations and mutual trust in China’s business environment [Liu, 2006]. ‘Guanxi’ do



have significant impact and liabilities to an organization [Liu, 2006] as it affects the

organization culture, controlling, authority and delegation of authorization. ‘Guanxi’ in

certain places cannot be avoided as it do have its advantages and disadvantages but it will

be very unhealthy to the organization culture if the organization are over expose to it. Say

for example in the process of tendering, where certain bidder do have better opportunity

due to their strong ‘guanxi’ elements, it will affect the employees in the organization (both

sides) in terms of motivation and improvements as on one side employees may not be

satisfied as lack of transparency and fairness while the other side employees may act

arrogant, believing the strong support they have. If an organization is highly involve in

‘guanxi’ is many levels, there will be limitation to their expansion as there will be concern

on the delegation of authority by the stake holders. However ‘guanxi’’ are very much

useful in emergencies where time are limited such as supplies of food to a disaster affected

area.

Gray [2005] states that all organizations have problems that are inherently a

combination of collective behaviour and the individual psychological dispositions people

bring with them. In labour intensive industry such as the construction industry where it

still relies mainly on labourers for works, human factor is one of the factors that is difficult

to control. Managing the cultural differences of varies nationality in the same construction

site is also crucial as any slight racial sentiments will spark quarrels among them and affect

the productivity. In this context and level the a flat organization structure according their

nationality with narrow span of management will help in the management approaches.



EXTERNAL ENVIONMENT VARIABLES

External environment do have impact on planning of an organization. The planning

approach need to be able to accommodate changes, hence its best for plans to be divided

into three categories, short term (say achieve objective in a year), intermediate term (say

achieve objective between one to five years) and long term (say achieve objective of more

than five years).

Take for example, development of a new township may range from easily five to

ten year depending on the size. Here the main objective is to complete the new township

within the required period, however there are external environment factors such as market

demand, government policies, trend etc., that may affect the development. Therefore the

development is developed in phases in order to achieve the main objective. Development

in phases (e.g. Phase 1, Phase 2 and Phase 3) can be considered intermediate term planning

with the ability to address external factors such as new government policies, authority

requirement, market demand and design trend. Short term planning will involve

availability of the material supply, resources, sourcing of long lead/delivery equipments

and achieving the required progress in a specific period of time.

In the construction industry, there is no one construction fragmentation is exactly

the same as the other even though the exterior design is the same but other factors such as

soil conditions, location and traffic access or congestion are different. In this type of

organization where it involves constant changing of site the organization structure are

more towards decentralization and more delegation of authority to individual projects.

Tesco’s strategy of entering the Northern Ireland market is influenced by the

external environment of the organization that is the pressure from Irish government that



Tesco must undertake contracts with local suppliers and the sensitive market culture as

Irish customer are sensitive to change and loyal to what they use to[Vignali, 2001]. This

situation does not only leads to the initial high cost and risk of acquiring Quinnsworth,

Crazy and Stewart’s stores in Ireland but it also mark a complex entry into Ireland as it

consists of varies entity of organizations. These indeed is the birth Tesco Ireland which is

not associated with Tesco UK, hence they are separate entity with different control,

marketing and organization structure as Tesco Ireland consist numbers different

organizations while Tesco UK consist of one standard organization.

TECHNOLOGY VARIABLES

Incorporating the advance technology available will helps to reduce the

dependency on labour intensive industry. As an example our government is currently

providing incentives for those construction projects that adopted prefabricated or precast

approach towards construction. The prefabricated or precast approached towards

construction does not only increase speed but also improves its control of quality and

reduce the massive requirement of labours. This shift will reduce the massive labour

requirement and indirectly reduce the organization size, structure and complexity.

Organization size, structures and complexity varies from one to another, the more

involvement of people the more complex the organization. This will leads to increases of

levels and policies involve. In short, size and structure increases along with the

complexity, fragmentation and involvement of people, while it is in contrast to control. As

an example for a large organization there are procedures for approval expenditure. When

the approval procedures is centralise, much more time are spend through various levels of



approval. With the various levels of approval in both branches and head office, the risk of

a single person or party in control are reduce, hence it is more transparent. However when

the approval procedures are decentralise, the approval process would be much faster but

there will be more risk involve as less control from the central organization, more

dependent on branches level to monitor and control the expenditure and more authority to

the branches.

According to Cartwright [2003], organizations are increasingly reconsidering their

approaches to organizing and embracing the potential offered by modern technology to

change the work environment such as enabling people to work at times and in places of

their own choosing or required. Technology also create an environment where it increases

team work among its members and within its organization the wide usage video

conferencing, emails, networking etc for communication and sharing for information.

Technology can also be perceived as intrusive and controlling in providing organizations

with capability to more closely monitor employee performance [Cartwright, 2003]. An

extensive application of technology and networking can be use to monitor accounting

matters of branches in other countries. This can increase the controlling factor for a

decentralized organization and may reduce the fall of the Barings Bank of which one of the

factor involves control [Drummond, 2002].

Dell Corporation as an example of company that uses extensive technology for its

organization. Dell [1994] states the Dell Corporation adopted and grown their strategy

based on the evolution of the business and industry’s technologies, of which they uses

technology to focus on its customer service and support with high extreme level of

responsiveness in both timeliness and quality replies to customers and feedback system in

every area of the business such as manufacturing, finance, products, sales and customers.



Dell also utilized advance technology such as notebook with fully integrated 3.5G

technology that allows remote video messaging and conferencing in order to introduce

flexible working and to embrace and manage diversity [Lowther, 2006].

CONCLUSION

The notion of a contingency approach to management is not novel as it have

become a popular discussion topic for contemporary management thinkers [Certo and

Certo, 2009]. This may be because in the fragmentation of the business world and much

extend of variables for consideration; hence there are fix approaches but the best

approaches for success for that specific situation and period of time. Some of the

application of contingency approached are identified by Svensson [2005] for Leadership in

performance in Total Quality Management, Raymond [2005] for operation management

and advanced manufacturing technologies in small to medium enterprise and Kiem and

Zeithaml [1986] for corporate political strategy and legislative decision making.

2180 words



Reference

Cartwright, S. [2003], New forms of work organization : issues and challenges. ;

Leadeship & Organization Development Journal, Vol. 24, No. 3, pp. 121-122.

Certo, S. C. and Certo, S. T. [2009], Modern Management : Concepts and Skills. ; 11th

Edition, Pearson Prentice Hall.

Dell, M. S.[1994], Making the Right Choices for the New Consumer. ; Managing Service

Quality, Vol. 4. No. 2, pp. 22-25.

Drummond, H.[2002], Living in a fool’s paradise : the collapse of Barings’Bank. ;

Management Decision, 40/3, pp. 232-238.

Gary, H. [2005], The dark side of organizations : forensic management – an emerging

theoretical perspective. ; Development and Learning in Organizations, Vol. 19, No.

5, pp. 4-6.

Keim, G. D. and Zeithaml, C. P. [1986], Corporate Political Strategy and Legislative

Decision Making : A review and Contingency Approach. ; Academy of Management

Review, Vol. 11, No. 4, pp. 828-843.

Kraut, A.I., Pedigo, P.R., McKenna, D.D. and Dunnette, M.D. [2005], The role of the

manager: What’s really important in different management jobs. ; Academy of

Management Executive, Vol. 19, No. 4, pp. 122-129 (Reprinted from 1989, Vol.3

No 4).

Liu, H. [2006], Managing strategic planning paradigms in China. ; Marketing Intelligence

& Planning. ; Vol. 24, No. 5, pp. 432-445.

Lowther, R. [2006], Embracing and managing diversity at Dell. ; Strategic HR Review,

Vol. 5, Issue 6, Septerber/October, pp. 16-19.



Raymond, L. [2005], Operation management and advanced manufacturing technologies in

SMEs ; Journal of Manufacturing Technology Management, Vol. 16, No. 8, pp. 936-

955.

Svensson, G. [2005], Leadership performance in TQM : a contingency approach. ; The

TQM Magazine, Vol. 17, No. 6, pp. 527-536.

Vignali, C. [2001], Tesco’s adaptation to the Irish market. ; British Food Jounal, Vol. 103,

No.2, pp146-163.

Zeffane, R.M. [1994], Understanding Employee Turnove : The Need for a Contingency

Approach. ; International Hournal of Manpower, Vo.15, No.9/10, pp. 22-37.



Question 3

Please read the following article – ‘The High-Intensity Entrepreneur’ and discuss how

entrepreneurs can effectively plan when the external environment is continually

changing.

[10 marks]

Certo and Certo [2009] define entrepreneurs as those individual who identify,

evaluate and exploit opportunities. There are three steps of process that an entrepreneurs

take for establish an entrepreneurship that is opportunity identification, opportunity

evaluation and opportunity exploitation.

In today’s business world, opportunities are available every places throughout the

world and can be categorized into five categories such as new products (i.e. new car

model), new geographical markets (i.e. small to medium scale new housing developments

is outskirt location such as Jitra, Kedah and Qanawat a telecommunication company

serving rural areas in Saudi Arania [Habiby and Coyle, 2010]), new materials (i.e. light

weight concrete), new production technology (i.e. advance filtering technology for

drinking water) and new organizing (i.e. social internet platform such as facebook for

networking, promotion and selling products). The ability to establish a good opportunity

identification relies upon the entrepreneurial alertness such as individual capabilities to

identify potential opportunities that an individual may acquire via vast exposure; ability to

source for fast and reliable information e.g. market demand; extend of social networks

with influencing abilities; and ability to understand customers’ needs. The identification

of opportunity is important as it is the platform to create the Visibility Economics.



According to Habiby and Coyle [2010] this visibility can give high potential companies

many of the benefits of going public and without it they will stall out in small size.

Once these are identified then a direction can be establish to proceed further to

evaluate the opportunity. The process to evaluate the opportunity is an important process

to decide if this opportunity is good to proceed or not. This process may either be a simple

straight forward process or using a combination of various tools such as feasibility study,

risk evaluation, data collection survey, cost plan, decision tree, probability theory,

conceptual tools to address change and conceptual strategic planning to derive the

decision.

The opportunity exploitation stage involve activities to gain returns from the new

product or services and are affected by factors such as customer value of product or

service, level of stake holders’ support and abilities of existing management team. In

today’s business world where distance is not a boundary, there will be ongoing external

environment that affects the product in either advantages or disadvantages environment.

Therefore there is a need for the opportunity exploitation to be ongoing until the end of the

lifecycle of the product with careful strategic planning and change management to address

the constant changing external environment. The extend of such process requirement

varies and depending on factors such as type of product, industry, market force,

technology. For example in the medical environment, new products may take a longer time

to be available in the market as it involves heavily in research, testing and certification

process before it can be available to the public, whereas the mobile technology such as

mobile phone have new models being constantly introduced to the market in short period

of time (i.e. every half yearly) even though there are research, testing and certification.



Strategic planning and management will assist the entrepreneur to establish a

direction to reach its objective in long term. While tactical planning can be used to address

the ongoing changing and influences of external environment such as market demand,

crisis and political policies.

For a start towards strategic planning and management, Critical Question Analysis

can be use to assist and generate the vision, mission and objective of the organization or

product. This process will provide a conceptual view of the overall organization or its

product and the direction. Brainstorming can be a tool associated to the Critical Question

Analysis.

Environmental analysis will enable the entrepreneur to formulate contingency

approach in the process of reaching its objective in view of the ongoing changes of

external environment. Environmental analysis is actually dividing the environment factors

into three parts. The general environment (i.e. political, social economic, technology and

legal) shall form the outer ring while the operation environment (i.e. supplier, international

environment, labour, customer and competition) is the middle ring and the smallest ring

shall be the internal environment (i.e. internal aspects of planning, organizing, influencing

and controlling). The environmental analysis will help the entrepreneur to achieve better

understanding on how the various environments will have impact on their product and

organization. For example the world is moving towards green technology and inventing of

new non-biodegradable disposal product may be for short term only as people are

becoming environmental conscious; inventing of new biodegradable disposal product may

strategically be more beneficial in return in consideration of the investment made. In

support of this Lagrosen [2003] states that companies cannot develop an organization



culture that differs substantially from the prevailing culture factors of the country in which

it operates.

The Five Forces Model by Porter [1980] can be used by entrepreneur to analyse the

industry environment and helps them in their planning and adaptable to the changing

global economy. The five forces are :

1) Treat of New Entrants : this refers to the ability of new firm or product entering

the market and the timing it takes for the new firm or product to emerge. As an

example the ‘Windows’ operating system in computer which is still taking the

leading roles as new entrants are still not that successful to be a stive

competitor. Sometimes government policies to have influence over the

emergence of new entrants (e.g. Astro is currently the only organization that

hold the license to operate satellite channel hence their competitor of new

entrants will only the there if the government allows another operating licence).

The more opportunity the of a new entrants especially in a short period of time

will decrease the attractiveness.

2) Buyer Power : this refers to the buying power that customer have over the firm

or product. For example mobile phones may be only a luxury gadget ten years

ago but it is now a necessity for everyone included to the extend that some

primary school children do own one. This involves around the demand factors

where people made their decision base on good to have or a must have item.

The more people need the product the more attractive the product is.

3) Suppliers Powers : this refers to the suppliers power that the supplier have over

the firm or product. For example the in festive seasons, raw food such as

vegetable, meat and fish are scare; the price usually increases due to shortage



however the demand is still there as people still requires it. However in cases

where it involves raw material such copper or steel; when it increases those

manufacturers or contractors have no other alternative but to bare with the

situation. This situation is disadvantages to both the manufacturer and

customer. Business that involves in high suppliers powers will normally be less

attractive as most situation are normally beyond their control. Here supply

chain, partnering, own production and ‘Guanxi’ may help to reduce the impact

on attractiveness. Eye 2 Eye Optical (from article in question 3) new venture

into lens-manufacturing plant do helps in reducing their reliability to lens

manufacturing and therefore increases the attractiveness to its optical business.

4) Threat of substitute products : this refers to the availability of substitutional

products in the market. For example when the electronic clock was invented it

actually have massive impact on mechanical clock. Today electronic clock are

available in every places capturing the market while mechanical clock only

concentrate of it being a luxury piece for its competitive edge.

5) Intensity of rivalry : this refers to the intensity of competition among the firm

or products. For example the intense promotion of budget airline such as

‘Airasia’, ‘Firefly’ and ‘Jetstar’ do have significant impact to other normal

airlines such as ‘Malaysian Airline - MAS’, ‘Singapore Airline - SIA’ and

‘Australia Airline - Quantas’. Here people with cost perspective being majority

of the people will be more attracted to the budget airline, hence having the

attractiveness of being able to capture the market share of the aerospace

industry. Before the emergence of budget airline, normal airlines are competing

each other on quality of service and some extend only on cost. However with



the emergence of budget airline it have significant impact on the normal

airlines as even businessman, professional and managers travel on budget

airlines to reduce the expenditure of their organization in view of the

competitiveness of business world.

SWOT analysis (Strength, Weaknesses, Opportunity and Threats) can be use by

entrepreneur to analyse its internal strength and weakness in facing the external

environment. The more understanding that one have on its organization and product the

more prepared they are in facing the market. As an example (from the article in question 3)

SecuTronic have a flat management structure comprising of many entrepreneurs working

together and have no boss; these type of organization is of high risk as they are all working

in silos. There must be a common understanding of vision, mission and direction by all the

entrepreneurs as it would be a disaster if some are having their own ideas or direction.

Here the strength would the having the energy of many managers to perform their duties,

however these managers must be united. The challenge here is the ability of its

organization to function and excel without a leader to all the entrepreneurs in facing the

changing environment. Therefore the organization need to be strong, motivated, have good

internal communication, understanding and teamwork to excel.

Business portfolio analysis can be used by entrepreneurs to analyse the market and

investment portfolios. This analysis also helps the entrepreneurs to make certain degree of

financial planning if they do required to source for additional funds and their focus on high

growth and return area. There are two popular tools that is the BCG Growth-Share Matrix

which analyse base on the market share and growth of business with the aim of generating

future business or revenue; and GE Multifactor Portfolio Matrix which analyse base on

market attractiveness and business strength. The two models may only be part and parcel



of a complete analysis system. They need to work together with other tools addressing

factors that are not considered in this tool. For example the BCG Growth-Share Matrix

does not consider risk associated to product development, risk of inflations, future

economic condition and external environment pressures; while GE Multifactor Portfolio

Matrix requires sound managerial judgement, exposure and experience.

Quality Function Development (QFD) can also be used as a strategic planning tool

as it involves two key steps that is development of customer strategies and development of

enabling strategies. Strategic QFD systematically translate vision into action in a series of

logical steps such as researching customers outcomes, analysing segments, targeting

opportunities and creating innovative strategies that are stable in fast – changing

environments [Killen et al, 2005]. By providing a comprehensive understanding of the

customer and stakeholders, it will be able to tap into previous unknown segments and

targets critical opportunity.

Upon establishment of the long term strategic plan there need a short term plan that

is the Tactical Plans to complements its Strategic Plan. Both Strategic Plan and Tactical

Plans needs to be interrelated and closely coordinated to ensure successful results. The

reason Tactical Plans are required because the ongoing change of environment and factors.

Tactical Plans may be of numerous single use plan designed specifically to the needs of a

particular change environment or crisis.

Combination of tools and skills such as the Program Evaluation and Review

Technique (PERT), Functional Analysis [see Green and Connaughton, 1996 and Seeley,

1997], Function Analysis System Technique (FAST) Diagram [see Haji Che Mat, 2002],

SWOT, Porter’s model of competitiveness, Maslow’s hierarchy of needs [see Dye, et al,



2005], Pareto Law [see Craft and Leake 2002], Quality Function Deployment analysis,

ability to sense and adapt change at early stage, ability of reliable market information,

experience, advance information technology and understanding of cultural differences will

help in generating a good Tactical Plan to address the continuity changing of external

environment. These combinations do indeed address some of the concerns highlight by

Helms and Nixon [2010] as SWOT tool alone may be an oversimplification of a business

situation that is in reality more complex, hence does not represent the complete analysis

that may lead to inaccurate results.

Even though an entrepreneur can be well verse with the above tools, one also need

to be equipped basic skills [see Addis, 2003]; networking power to draw the reliable

market information [Uzzi and Dunlap, 2005]; business sense to make judgement or

commercial decision; continuous learning to have the required exposure; and leadership

skills to lead, have the visionary ability to foresee and the determination power to make to

overcome and address obstacles from changes of external environment. Therefore in view

of the complexity and fragmentation of the business world today there is no one straight

forward successful solution for effective planning as a plan may be effective in a particular

situation and time but ineffective at another situation or time. Here time or timely is

another factor for consideration [Hui, 2004].

The twenty-first century is more and more competitive as knowledge as a resource

has no natural home base and can be transferred easily in comparison to natural resources

[Pillania, 2009]. Therefore ability to address and monitor ongoing change is an important

factor for an entrepreneur to succeed.

2180 words



References

Addis, M. [2003], Basic skills and small business competitiveness : some conceptual

considerations. ; Education + Training, Vol . 45, No. 3, pp. 152 – 161.

Craft, R. C. and Leake, C. [2002], The Pareto principle in organizational decision making.

; Management Decision, Vol. 40, No. 8, pp. 729-733.

Certo, S. C. and Certo, S. T. [2009], Modern Management : Concepts and Skills. ; 11th

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1395

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Lagrosen, S. [2003], Exploring the impact of culture on quality management. ;

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Dec, pp. 53 – 60.

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