BBA-3

EVEN SEMESTER
F010603TA Strategic Management
UNIT-2

Marshalling Resources

The process of assessing, assembling, evaluating, and applying the materials and supports needed to
create an effective learning or collaboration experience.
Marshalling Resources to Support the Strategy Execution Effort

1. Early in the process of implementing and executing a new or different strategy, managers need to
determine what resources will be needed and then consider whether the current budgets of
organizational units are suitable.

2. A company’s ability to marshal the resources needed to support new strategic initiatives and steer
them to the appropriate organizational units has a major impact on the strategy execution process.

CORE CONCEPT: The funding requirements of a new strategy must drive how capital allocations
are made and the size of each unit’s operating budgets. Under funding organizational units and
activities pivotal to strategic success impedes execution and the drive for operating excellence.

3. A change in strategy nearly always calls for budget reallocations.

4. Visible actions to relocate operating funds and move people into new organizational units signal a
determined commitment to strategic change and frequently are needed to catalyse the implementation
process and give it credibility.

5. Just fine-tuning the execution of a company’s existing strategy, however, seldom requires big
movements of people and money from one area to another.

Linking Budgets to Strategy

Strategy is concerned with the implementation of projects (which we will call initiatives) designed to
improve the way the business operates. With this in mind, budget scan be split into:
a. Business as usual’-
i.e. the resources that will be expended within departments based on their current day-to-day activities.

b. Initiatives’ -
i.e. those resources that are targeted at projects and other activities not currently being done that are considered by
management as being of strategic importance.
In order to monitor the impact of both types of budgets we can add two extra sets of measures (if not
already present):

Instituting Policies and Procedures,

What is a policy?
A policy is a set of rules or guidelines for your organization and employees to follow in order to achieve
a specific goal (i.e. compliance). Effective policies answer questions about what employees do (such
as directions, limits, principles, and decision-making guidance) and why they do it.

What is a procedure?

Routine steps to carry out activities in an organization are known as Procedures.

A procedure is the counterpart to a policy; it is the instruction on how a policy is followed. It is the
step-by-step instruction for how, when, and where the policies outlined above will be achieved.

The main takeaway: a policy defines a rule, and the procedure defines who is expected to do it and
how they are expected to do it.

Difference between Policies and Procedures:

Basis Policies Procedures

Procedures are routine steps to carry out

Policies are general statements that
activities in an
Meaning guide thinking and channel energy
organization.
toward a particular direction.

They are needed for achieving They are needed for implementing
Need
objectives. policies.

They are flexible, and managers

They are rigid, and managers have
Scope have discretion as per the
relatively less discretion.
organizational limit.

Expression They are expressed as general

They are expressed in specific terms.
statements.

Application The area of application is broad in The area of application is limited in the
Area the case of policies. case of procedures.

Recruitment policy of an Procedures for importing and exporting

Example
organization. goods.
https://blog.airmason.com/a-guide-to-successful-implementation-of-policies-and-procedures/

Adopting Best Practices for Continuous Improvement

Meaning of continuous improvement

Continuous improvement is the process of making small incremental changes that add up to
significant results based on deliberate observation of current processes.

Also known as Kaizen, the continuous improvement method originated in Japan. Today, it’s been
adopted by businesses across the globe as a way to achieve operational excellence.

The main idea behind continuous improvement is that no process is perfect and there is
always room for improvement. The goal is to squeeze out waste, optimize resources,
and empower employees to make changes that improve the company's bottom line.

Process improvement consultant Brian Ragone says it is "system thinking where we build
feedback loops so we get information from current processes and reflect on how to improve
them."

Ragone says the focus of continuous improvement is three-fold:

 • Improving tools and materials
• Improving people and relationships
• Improving the work environment

That often means removing bloated tools. Other times, it's improving documentation about how
you work, so anyone can come in and get started immediately. It’s also upskilling your people.
Finally, it's removing barriers from communication or just friction in work relationships.

Finally, it’s improving the physical, and psychological safety of your people at work.

The 4 Stages of Continuous Improvement

Continuous improvement is sometimes called the PDCA cycle, which stands for Plan-Do-Check-
Act. And those are the four stages of continuous improvement .

Plan: Brainstorming and planning

Identify an opportunity for improvement and put together an action plan for management. For
example, you notice that your conversion rates are below average for your industry. So you
determine that you'll send a nurture email sequence in addition to calling your leads.

Do: Testing solutions

Once you've identified an opportunity and determined how best to address it through change,
implement that change on a small scale. We do this to objectively measure its effectiveness. For
the email sequence example above, that may mean only emailing a small percentage of leads
(20% for example).

Check: Verifying the effectiveness

Did the change work? We need to know before we can apply it organization-wide. If our test
20% of leads convert better than the other 80% who don't receive nurture emails, for example,
we can conclude that the change was effective.
Act: Implementing the solution

Once you confirm that your solution is effective, it's time to deploy it organization-wide to reap
the benefits.

Continuous Improvement methods

There are several methods for continuous improvement. Here are five of them:

• The Lean Method

• The Kanban Method
• Kaizan
• Six Sigma
• Total Quality Management
• Agile Methodology.

1. Total Quality Management

In order to understand “Total quality management”, first we have to understand what does ‘Quality’
actually mean?
‘Quality’ is generally referred to a parameter which decides the inferiority or superiority of a product
or service. It is a measure of goodness to understand how a product meets its specifications. Usually,
when the expression “quality” is used, we think in the terms of an excellent product or service that
meets or even exceeds our expectations. These expectations are based on the price and the intended
use of the goods or services. In simple words, when a product or service exceeds our expectations, we
consider it to be of good quality.
W. Edwards Deming, Armand V. Feigenbaum and Joseph M. Juran jointly developed the concept of
TQM. Initially, TQM originated in the manufacturing sector but it can be applied to all organizations.

W. Edwards Deming is considered by many to be the father of the total quality management
movement.

Goals of Total Quality Management (TQM)

Total quality management (TQM) helps bring your entire organization together with one main goal:
continually improving processes and products to ensure customer satisfaction.

The word “Total” implies that all employees in the organization, from development to production to
fulfilment, must improve operations. “Management” suggests that this methodology should be a
focused effort. It is not a passive or casual approach to quality improvement but a well-organized and
structured management philosophy. TQM requires a strong commitment from leadership and a clear
direction for the organization.
There are several goals associated with TQM. A few of these goals include:

• Detect, reduce and eliminate manufacturing errors,

• Prevent problems before they occur,
• Streamline supply chain management,
 • Improve customer service,
• Make sure employees are trained in quality,
• Increase employee productivity,
• Focus on continual process improvement of procedures.

Put more simply, TQM is a management system where a company achieves organizational
advancement through a commitment to customer requirements.

Every individual who receives his/her paycheck from the organization has to contribute equally to
design foolproof processes and systems which would eventually ensure superior quality of products
and services.
Total Quality management is indeed a joint effort of management, staff members, workforce, suppliers
in order to meet and exceed customer satisfaction level. You can’t just blame one person for not
adhering to quality measures. The responsibility lies on the shoulder of everyone who is even remotely
associated with the organization.

Total quality management ensures that every

single employee is working towards the
improvement of work culture, processes,
services, systems and so on to ensure long term
success.

Total Quality management can be divided into

four categories:

▪ Plan
▪ Do
▪ Check
▪ Act

What is the PDCA framework?

Also referred to as PDCA cycle.

1. Planning Phase

Planning is the most crucial phase of total quality management. In this phase employees have
to come up with their problems and queries which need to be addressed. They need to come up
with the various challenges they face in their day to day operations and also analyze the
problem’s root cause. Employees are required to do necessary research and collect relevant data
which would help them find solutions to all the problems.

2. Doing Phase

In the doing phase, employees develop a solution for the problems defined in planning phase.
Strategies are devised and implemented to overcome the challenges faced by employees. The
effectiveness of solutions and strategies is also measured in this stage.

3. Checking Phase
 Checking phase is the stage where people actually do a comparison analysis of before and
after data to confirm the effectiveness of the processes and measure the results.

4. Acting Phase

In this phase employees document their results and prepare themselves to address other problems.

W. EDWARDS DEMING’S 14 PRINCIPLES/ POINTS

Dr. Deming, a physicist and statistician, was key to the development of TQM and is often referred to
as the “Father of Quality Management.” He developed 14 points for implementing TQM successfully
in the workplace, each of which is meant to serve as advice to leadership on what values to embrace
and how to build a company culture that will enable TQM to thrive in the organization.

These 14 points include:

1. Create constancy to improve products and services.
2. Adopt the new philosophy.
3. Stop depending on inspection to achieve quality.
4. Work with single suppliers rather than taking business based off price alone.
5. Embrace continuous improvement: Never stop evaluating your planning, production, and
service processes.
6. Implement regular on-the-job training.
7. Adopt strong leadership.
8. Drive out fear.
9. Break down any barriers between staff.
10. Avoid or get rid of slogans, exhortations, and targets for the workforce.
11. Don’t implement quotas for the workforce or any numerical goals for management.
12. Eliminate annual reviews or rating systems and open avenues for people to feel pride in their
work.
13. Encourage continuous education and self-improvement throughout the company.
14. Get everyone in the company on board with the transformation.

TQM was developed by William Deming, a management consultant whose work had great impact on
Japanese manufacturing. While TQM shares much in common with the Six Sigma improvement
process, it is not the same as Six Sigma.
What Is Six Sigma?

The concept of Six Sigma was introduced by Motorola in 1986, but was popularized by Jack Welch
who incorporated the strategy in his business processes at General Electric.

Six Sigma is a set of techniques and tools used to improve business processes. It was introduced in
1986 by engineer Bill Smith while working at Motorola. Six Sigma practitioners use statistics,
financial analysis, and project management to identify and reduce defects and errors, minimize
variation, and increase quality and efficiency.
The five phases of the Six Sigma method, known as DMAIC, are defining, measuring, analyzing,
improving, and controlling.

KEY TAKEAWAYS

• Six Sigma is a quality-control methodology that businesses use to significantly reduce defects
and improve processes.
• The model was developed by a scientist at Motorola in the 1980s.
• Companies often use the Six Sigma model to increase efficiency and boost profits.
• Six Sigma practitioners can earn certifications modeled on the color belts used in martial arts.

Understanding Six Sigma

Six Sigma is based on the idea that all business processes can be measured and optimized.

The term Six Sigma originated in manufacturing as a means of quality control. Six Sigma quality is
achieved when long-term defect levels are below 3.4 defects per million opportunities (DPMO).

Six Sigma has since evolved into a more general business concept, focusing on meeting customer
requirements, improving customer retention, and improving and sustaining business products and
services. Among its best-known proponents was the longtime General Electric CEO Jack Welch.

Six Sigma certification programs confer belt rankings similar to those in the martial arts, ranging
from white belt to black belt.

Importance
The importance of Six Sigma in operations management can be noticed in the following aspects.

1. Six Sigma is a data-driven approach to improving production and operations management.

2. Six Sigma aims to reduce defects and variation in production and operations processes.
3. Six Sigma uses statistical tools and methods to identify and track causes of defects and
variation.
4. Six Sigma seeks to eliminate waste and improve efficiency in production and operations
processes.
5. Six Sigma can help improve quality and customer satisfaction in production and operations
processes.
6. Six Sigma can help reduce costs associated with defects and variations in production and
operations processes.
The etymology is based on the Greek symbol "sigma" or "σ," a statistical term for measuring process
deviation from the process mean or target.

DMADV

Here is a step-by-step breakdown of Six Sigma DMADV. The first three steps of this methodology
are identical to DMAIC. Because the two acronyms are so similar, some companies use the acronym
DFSS (design for Six Sigma) in place of DMADV.

1. Define: Identify the project scope and all customer deliverables.

2. Measure: Understand current performance.

3. Analyze: Determine root causes of any defects.

4. Design: Create a process that meets customer needs and expectations.

5. Verify: Ensure process designed meets customer needs and performs adequately.

Step-by-step Six Sigma DMADV process breakdown.

• When contemplating Six Sigma DMAIC versus DMADV, it is important to understand the
circumstances in which each should be used.

• The DMAIC methodology should be used when an existing product or service is not meeting
customer needs or performing to its highest standards.

• The DMADV methodology should be used when an organization is developing a new

product or service, or when using DMAIC for a current project or process fails
The Six Sigma Methodology
The two main Six Sigma methodologies are DMAIC and DMADV. Each has its own set of
recommended procedures to be implemented for business transformation.

DMAIC

DMAIC is a data-driven method used to improve existing products or services for better customer
satisfaction. It is the acronym for the five phases: D – Define, M – Measure, A – Analyse, I – Improve,
C – Control. DMAIC is applied in the manufacturing of a product or delivery of a service.

DMADV

DMADV is a part of the Design for Six Sigma (DFSS) process used to design or re-design different
processes of product manufacturing or service delivery. The five phases of DMADV are: D – Define,
M – Measure, A – Analyse, D – Design, V – Validate. DMADV is employed when existing processes
do not meet customer conditions, even after optimization, or when it is required to develop new
methods. It is executed by Six Sigma Green Belts and Six Sigma Black Belts and under the supervision
of Six Sigma Master Black Belts. We'll get to the belts later.

The two methodologies are used in different business settings, and professionals seeking to master
these methods and application scenarios would do well to take an online certificate program taught by
industry experts.

The Six Sigma Process of the DMAIC method has five phases:

The 5 Steps of Six Sigma

The Six Sigma Process of Business Transformation
Although what is Six Sigma uses various methods to discover deviations and solve problems, the
DMAIC is the standard methodology used by Six Sigma practitioners. Six Sigma uses a data-driven
management process used for optimizing and improving business processes. The underlying
framework is a strong customer focus and robust use of data and statistics to conclude.
Each of the above phases of business transformation has several steps:

1. DEFINE

The Six Sigma process begins with a customer-centric approach.

Step 1: The business problem is defined from the customer perspective.

Step 2: Goals are set. What do you want to achieve? What are the resources you will use to achieve
the goals?
Step 3: Map the process. Verify with the stakeholders that you are on the right track.

2. MEASURE

The second phase is focused on the metrics of the project and the tools used in the measurement.
How can you improve? How can you quantify this?
Step 1: Measure your problem in numbers or with supporting data.
Step 2: Define performance yardstick. Fix the limits for "Y."
Step 3: Evaluate the measurement system to be used. Can it help you achieve your outcome?

3. ANALYZE

The third phase analyzes the process to discover the influencing variables.
Step 1: Determine if your process is efficient and effective. Does the process help achieve what you
need?
Step 2: Quantify your goals in numbers. For instance, reduce defective goods by 20%.
Step 3: Identify variations using historical data.

4. IMPROVE

This process investigates how the changes in "X" impact "Y." This phase is where you identify how
you can improve the process implementation.
Step 1: Identify possible reasons. Test to identify which of the "X" variables identified in Process III
influence "Y."
Step 2: Discover relationships between the variables.
Step 3: Establish process tolerance, defined as the precise values that certain variables can have, and
still fall within acceptable boundaries, for instance, the quality of any given product. Which
boundaries need X to hold Y within specifications? What operating conditions can impact the
outcome? Process tolerances can be achieved by using tools like robust optimization and validation
set.

5. CONTROL

In this final phase, you determine that the performance objective identified in the previous phase is
well implemented and that the designed improvements are sustainable.

Step 1: Validate the measurement system to be used.

Step 2: Establish process capability. Is the goal being met? For instance, will the goal of reducing
defective goods by 20 percent be achieved?
Step 3: Once the previous step is satisfied, implement the process.
DMADV
Here is a step-by-step breakdown of Six Sigma DMADV. The first three steps of this methodology are
identical to DMAIC. Because the two acronyms are so similar, some companies use the acronym DFSS
(design for Six Sigma) in place of DMADV.

1. Define: Identify the project scope and all customer deliverables.

2. Measure: Understand current performance.

3. Analyze: Determine root causes of any defects.

4. Design: Create a process that meets customer needs and expectations.

5. Verify: Ensure process designed meets customer needs and performs adequately.

Step-by-step Six Sigma DMADV process breakdown.

When contemplating Six Sigma DMAIC versus DMADV, it is important to understand the
circumstances in which each should be used.

The DMAIC methodology should be used when an existing product or service is not meeting
customer needs or performing to its highest standards.

The DMADV methodology should be used when an organization is developing a new product or
service, or when using DMAIC for a current project or process fails.

Six Sigma Certification and Belt Rankings

Individuals can obtain Six Sigma certification to attest to their understanding of the process and their
skills in implementing it. These certifications are awarded through a belt system similar to karate
training. The belt levels are:2
 • White belt: Individuals with a white belt have received some instruction in the basics of Six
Sigma, but have not yet gone through any formal training or certification program. This gives
them enough knowledge to become team members.
• Yellow belt: This level can be attained after several training sessions, and equips participants
with the knowledge to lead small projects and assist managers who hold more advanced belts.
• Green belt: To achieve this level, individuals take a more comprehensive course that prepares
them to become project leaders.
• Black belt: After reaching the green belt level, participants can move on to black belt
certification, preparing them for leadership roles in larger and more complex projects.

People with black belts can become masters and champions. Someone with a master black belt is
considered an expert and strong leader with excellent problem-solving skills. A champion is a lean
Six Sigma leader trained in maximizing profits through the elimination of waste and defects.2

Note
These certifications, and the courses required to obtain them, are offered by a variety of companies
and educational institutions and can differ from one to another.

Six Sigma Levels in more details

The Six Sigma training levels conform to specified training requirements, education criteria, job
standards, and eligibility.
White Belt
This is the simplest stage, where:

• Any newcomer can join.

• People work with teams on problem-solving projects.
• The participant is required to understand the basic Six Sigma concepts.
Yellow Belt
Here, the participant:
• Takes part as a project team member.
• Reviews process improvements.
• Gains understanding of the various methodologies, and DMAIC.

Green level
This level of expertise requires the following criteria:
• Minimum of three years of full-time employment.
• Understand the tools and methodologies used for problem-solving.
• Hands-on experience on projects involving some level of business transformation.
• Guidance for Black Belt projects in data collection and analysis.
• Lead Green Belt projects or teams.
Black Level
This level includes the following:
 • Minimum of three years of full-time employment
• Work experience in a core knowledge area
• Proof of completion of a minimum of two Six Sigma projects
• Demonstration of expertise at applying multivariate metrics to diverse business change
settings
• Leading diverse teams in problem-solving projects.
• Training and coaching project teams.
Master Black Belt
To reach this level, a candidate must:
• Be in possession of a Black Belt certification
• Have a minimum of five years of full-time employment, or Proof of completion of a
minimum of 10 Six Sigma projects
• A proven work portfolio, with individual specific requirements, as given here, for instance.
• Have coached and trained Green Belts and Black Belts.
• Develop key metrics and strategies.
• Have worked as an organization's Six Sigma technologist and internal business
transformation advisor.

Fig: The five-tiered levels of Six Sigma Certification

What Is Lean Six Sigma?

Lean Six Sigma is a methodology that combines two powerful process improvement techniques: Lean
and Six Sigma.

Lean focuses on minimizing waste and maximizing efficiency by identifying and eliminating non-
value-adding activities. This involves streamlining processes, reducing defects, improving quality, and
optimizing resources to deliver more value with less effort.
On the other hand, Six Sigma is a statistical approach to process improvement that aims to reduce
variation and defects by using data-driven decision making. It involves defining, measuring, analyzing,
improving, and controlling processes to achieve consistent and predictable results.

By combining the strengths of these two methodologies, Lean Six Sigma provides a comprehensive
approach to process improvement that can be applied to any industry or sector. It is widely used in
manufacturing, healthcare, finance, and service industries to improve efficiency, reduce costs, and
enhance customer satisfaction.

Installing information and operating systems

Tying rewards and incentives to execution
Both employees and employers benefit when rewards and incentives are offered in the workplace.
Many managers use rewards and incentives to boost morale, motivate their staff and develop a sense
of teamwork through friendly competition. In return for rewards and incentives, a company can
experience an increase in sales, employee loyalty and positivity within the office. In this article, we
discuss what rewards and incentives are and the advantages of rewards and incentives in the
workplace. We also share some examples of rewards and incentives.
What are rewards?
Although some employers may use the terms rewards and incentives interchangeably, there are
some differences between the two. Rewards are the items and experiences that employees earn for
meeting goals, turning in exceptional work, being a team player or any other recognition parameters
that a manager puts in place. Rewards can be monetary or non-monetary.Read more: How To
Become a Successful Team Leader
What are incentives?
Incentives are something you receive for completing a specific action. They frequently have a time
period associated with them, as in the employee must achieve an action or goal by the end of the
third quarter of the year to be eligible for the incentive. Incentives are goal-oriented and are usually
combined with a reward. They are often given to employees when they have reached or exceeded a
goal. Most incentives are recognition or cash-based but can also come in other forms.Incentives can
also be those items that come as job perks, like a cell phone stipend or health care reimbursement
for those who complete a biometric screening every year for insurance

Examples of companies using Rewards and Incentives

Many companies use rewards and recognition programs to motivate and retain their employees. Here
are some well-known companies that are recognized for their employee reward programs:

Google
Google is famous for its employee perks and incentives, including free meals, on-site fitness centers,
and opportunities for personal and professional development. They also offer bonuses and stock
options to reward top performers.

Starbucks
Starbucks offers its employees, known as “partners,” benefits like stock options, healthcare
coverage, and tuition assistance, even for part-time workers.

IBM
IBM has a comprehensive recognition program that includes cash awards, gift cards, and other
incentives to acknowledge outstanding performance and contributions.
Difference between Reward and Incentive
Reward and incentive programs are commonly used in various settings to motivate individuals and
drive desired behaviors. While these terms are often used interchangeably, they have distinct
meanings and implications. In this , we will explore the difference between rewards and incentives,
their definitions, types, benefits, and key differentiating factors.

Rewards Incentives

Rewards are typically given as recognition or Incentives are offered to motivate individuals to
compensation for achieving a goal, completing a achieve specific goals, perform certain tasks, or
task, or exhibiting desirable behavior. exhibit desired behaviors.

They are often provided after the desired behavior Incentives are typically offered in advance or as a
or outcome has been achieved as a form of promise of a reward to encourage individuals to
recognition or appreciation. take specific actions or reach certain targets.

Rewards can be tangible or intangible, such as Incentives are commonly tangible rewards or
monetary bonuses, gifts, certificates, praise, benefits, such as cash bonuses, discounts,
promotions, or public recognition. promotions, privileges, or other valuable
offerings.

Rewards are typically based on past performance, Incentives are often based on future performance
accomplishments, or milestones reached, reflecting or actions, serving as a catalyst to drive
outcomes already achieved. individuals toward desired outcomes.

They can help build a sense of satisfaction, pride, or Incentives can create a sense of anticipation,
loyalty among individuals who feel recognized and excitement, or competition as individuals strive to
appreciated for their efforts or achievements. attain the rewards or benefits being offered.

Rewards can enhance individual and team Incentives can create a sense of urgency,
performance, encouraging individuals to go above encourage competition, and drive individuals to
and beyond expectations and continuously improve. meet specific targets or deadlines.

They are often given as a form of recognition or Incentives are primarily given as a means to
appreciation, acknowledging and valuing the efforts motivate or induce specific actions or behaviors
and contributions of individuals. that align with organizational goals or objectives.

Rewards can be given in various contexts, including Incentives are commonly used in business
education, workplace, sports, sales, and personal settings, sales, marketing, and performance
achievements. management to drive specific outcomes or
behaviors.

Rewards can contribute to employee retention, loyalty, Incentives can be used strategically to influence
and long-term commitment to an organization, as behavior, drive short-term performance, and achieve
individuals feel valued and recognized. specific goals or targets within a defined timeframe.

They can enhance employee motivation, job Incentives can create short-term bursts of
satisfaction, and overall well-being, leading to motivation, drive, and effort to achieve the desired
increased productivity and performance. outcomes or targets associated with the incentives.