1.SLIDES_Managing_Organizational_Tensions (1).pdf - Performance Management Control Systems MIE 2018\/2019 Managing Organizational Tensions Anna

1.SLIDES_Managing_Organizational_Tensions (1).pdf -...

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11/01/191Performance Management & Control SystemsMIE 2018/2019Managing Organizational TensionsAnna Prenestini, Ph.D. [email protected]2Running even the most complicated corporation must sometimes seemlike child's play compared to trying to manage almostany hospital.Henry Mintzberg
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11/01/192Agenda§An introduction§System for Performance Measurement& Control§BalancingOrganizationalTensionsProfit, Growth, and Control Short-termResultsvs Long-termOpportunitiesPerformance Expectationof DifferentConstituens(Stakeholders)Opportunitiesand AttentionMotivesof Human BehaviourSituation§SarahStyleistheownerofasmallclothingchaininsuburbanBoston(BostonRetailCompany)§Shestartedwithonesmallstoreandtheideatooffercheapbutfashionableclothingtocollegestudents,alongwithaselectionofdecorativemerchandise§Now,thebusinessemploysover100employeesinsixstores4
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11/01/193Situation (cont’d)§ThekeytosuccessisStyle’semployees:youngandintunewiththecollegeclientele(youthfulfashionandlifestylechanges),§theyexperimentcontinuallywithnewproductsandfashionfadsandrecommendchangesinmerchandisingmix5Situation (cont’d)§However,asthecompanyhasgrownlarger,profitabilityamongthesixstoreshasbeenuneven.Twostoresarehighlyprofitable,whileoneconsistentlyunderperforms.§Thecausesofhighlyprofitabilityofthetwostoresarealsonotclear.6
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11/01/194Situation (cont’d)7§OtherissueshaveabsorbedalotofSarah’stime.Sheknowsthatsomeofthenewproductssoldbriskly,butoverallstoresalesdeclined.§Sarahworriesaboutmissingthenextfad,whilesheisconsideringexpandingintoNewYorkStateandmakingproductsavailableforsaleonthecompanywebsite§Whatis/are Sarah Style’sproblem/s?Situation analysis8Strength• Innovation based on employees’ suggestions(fine-tuned with the target clientele)• Several suggestions havebeen commerciallysuccessfulWeakness• Some employees’ ideashave been failures• Geographical distance and increasing number of stores hampercommunication betweenCEO and employees
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11/01/195§Settingdirectionandgoals,makestrategicdecisionsisrelativelyeasyforasmallbusinesswhereemployeesworktogetherinonelocation§Insuchacontext,managerscanrelyondirectsupervisionandinformalcommunicationtoensureeffectivemanagementofthebusinessandofitsinherenttensions9Lessons learnt§Asabusinessgrows,itisharderfortheowner(ortopmanagement)tocommunicateaclearvisionandtocollecttheinformationnecessarytomanagethebusinesseffectively.
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