The world's easiest "management strategy" planning course Chapter 7

Next, we will review the management. We proceeded from environmental analysis to philosophy formulation, business strategy, and marketing design. From here, we will create an organization to make the various strategies that we have formulated so far work. No matter how good the idea or strategy is, if you don’t have the people and money, you can’t move on to the next operation. And no matter how profitable a company is, it cannot continue as a company for a long time unless the employees working there are able to demonstrate their abilities properly. This is the same for business owners. If you talk about the founder’s brilliant achievements, but the second and third generations who inherited them have ruined the entire company, some companies will think of it. Locally rooted private stores (although they should be difficult to manage now) manage to maintain their stores because they have the right ground to buy them. If you are a listed company with many stakeholders, that responsibility is significant. Management such as human resources development know-how and financial management is a “good” that cannot be bought with money.

What you have to do as a company depends on the type of business and occupation. However, building a mechanism that maximizes human power must be kept in mind as a strategy. The management check items are introduced below.

The organizational structure of a company is not always at its best. However, at that time, it is possible to assemble the best structure under the circumstances. In order to design such an organizational structure, it is essential to be able to properly share corporate goals, that is, visions, philosophies, goals and corporate strategies, business strategies, and technologies. If we can visualize the management strategy and share it with all employees, the intention can be communicated properly and we can aim for the same goal. It’s never been so encouraging. This is necessary to prepare the organization first.

It is important that the organizational structure is consistent with the company-wide management strategy. Moreover,
・Functions played by subordinate organizations such as business divisions and departments
・Command system, allocation and authority of human resources
Must be clarified.

Basic pattern of organizational structure
There are some typical styles of organizational structure, so let me introduce them.

1. Organization by function
An organization that unitizes individual functions. For example, manufacturing, sales, R & D, finance, accounting, human resources, etc. By establishing these departments, the division of roles becomes clear and employees can aim to become specialists in each business. Decision-making authority should also be concentrated on the department head. However, there may be problems such as excessive hierarchies due to the progress of hierarchies and lack of communication between departments. For this reason, functional organizations have reached a certain size and are suitable for a stable environment with few sudden changes.

2. Business unit organization
It is a target-oriented organizational structure that is categorized in terms of market and customer segments, regions, and product groups. Since the structure is like a collection of multiple companies, the work is completed within one business division, and decision-making authority is also given to each business division. The disadvantages are that the business content and the person in charge may be overwhelmed by partial enemies, it may be difficult to match the company-wide vector, and in some cases, there may be conflicts between business divisions. However, it is suitable for companies that want to efficiently operate businesses in multiple different fields.

3. Matrix organization
It is an organizational structure that aims to improve the expertise of functional organizations and to realize decentralization management in business divisional organizations at the same time. However, since employees belong to two organizations with different roles, the chain of command is duplicated, the decision-making mechanism is often obscured, and business processes are complicated, making decisions and executing strategies. Tends to be slow. Before that, there is a disadvantage that the burden on employees is heavy.

4. Company system organization
It is an organizational structure established by speeding up the development of multiple businesses and appropriately allocating management resources. Similar to the business division system, Sony introduced the company system for the first time in 1994 in Japan, with an organizational structure in which each department is spun off, more authority is delegated to increase independent profitability, and even profit responsibility is held. .. The feature is that the strategy planning department, which determines the overall company-wide strategy, and the business execution department are clearly separated.

Points of organizational structure design
Regarding the design of an organization, Canadian business scholar Henry Mintzberg mentions four aspects:

1. Position design
What kind of specialty, work content, skills are required, etc.

2. Superstructure design
How to organize each position. Interdependence such as work flow is important.

3. Relationship design
How to connect the group together.

4. Design of decision system
Top-down / bottom-down, etc.

Based on the above four points, it is necessary to carry out in-house hearings and regular meetings with management while paying attention to the external environment and internal environment, and to build the optimal organizational structure.

In some cases, the necessary human resources can be seen from the aspect of management philosophy and management plan. If you decide that you need this type of human resources to accomplish this task, you can secure human resources by headhunting. In addition, at the stage of hiring new graduates, it is also necessary to calculate back from new business development and hire young people who match. The idea of ​​human resource management is an important element that must be properly grasped in order to secure optimal human resources for the company.

Also, as a manager, you should not forget to improve your leadership skills and prepare the soil for learning, such as training executive candidates to draw out the maximum abilities from the secured human resources, improving skills such as coaching, and enhancing training. .. The learning of the manager himself is also important. Excellent human resources should naturally gather around attractive goals and attractive managers.

Matching individual abilities with the current corporate environment and future organizational image is an important point in building a strategy for personnel education.

① Realization of the right person in the right place
Individuals’ abilities are maximized when the “right person in the right place” is realized. It is necessary to consider not only the skill aspect but also the suitability of the right person in the right place with the individual’s hobbies, tastes and personality. The “Brain Dominance Survey Method” developed by GE in the United States is said to be a method that is used to realize the right person in the right place by analyzing it in connection with the part of the individual’s aptitude brain function. Such experimental trial and error may also be necessary.

② Professionalization of employees
Since you work responsibly at the company, the ultimate “professionalization” is to develop the ability for each employee to become independent as a professional. It would be great if there was an educational system that could train such “in-house entrepreneur” classes. To that end, a method of discussing with employees and deciding on work assignments based on mutual agreement is also a way to know the right person in the right place. For that purpose, maximum performance can be expected if employees have some kind of goals and expectations for the company and voluntarily set individual goals that are consistent with company-wide goals.

③ Creation and sharing of knowledge
If an employee demonstrates his tremendous ability and achieves a big project, who has the know-how? It doesn’t make sense if it was only that employee, and the next time there was a similar theme, he wouldn’t be able to get out of his hands or feet without that employee. An organization can only be established if individual knowledge and creativity can be shared within the company. Since the mobilization of human resources is progressing, it is important to create a mechanism to convert individual knowledge into knowledge of the entire company. You should consider creating a mechanism for creating and sharing knowledge (knowledge management).

④ Support for employee autonomy
Most of what employees want from a company is not only to secure living expenses, but also to be rewarding and fulfilling. To that end, it is important to have a place to maximize self-actualization and abilities.
However, when there is absolutely no such place, not only will the results not be achieved even if you force yourself to work, but you may even become disgusted with the individual company. If there is no place where they can demonstrate their abilities, even if they are in the company, they will not benefit from each other. At that point, the company should actively support the employees so that they can change jobs comfortably, rather than yelling at them.

⑤ Employee satisfaction survey
Preparing the company for reasons why employees want to stay in the organization is an important part of their personnel strategy. There are various points that make employees attractive to the company, but it is also necessary to pay close attention to what each employee is satisfied with.

In general, the following items are factors that increase employee satisfaction.

Working conditions (salary level, welfare, working hours) / job satisfaction / fairness, equal performance evaluation / confidence in management and superiors / matching of individual and organizational goals / sense of security for the future / enhancement of career path

⑥ Perform performance evaluation

Performance evaluation is to set some criteria to quantify and evaluate things that are difficult to measure numerically, such as leadership development, employment, and employee satisfaction.

Most companies have ambiguous personal evaluation designs. Since each individual has different goals and evaluation methods, it is necessary to create effective and appropriate evaluation criteria as a motivation to motivate everyone and step up.

In order to increase corporate value, it is necessary not only to achieve management strategies and business strategies, but also to strengthen the financial base that supports the company. The mistake of raising funds and buying a company like me, but running out of working capital is now a funny story, but at the time I couldn’t laugh at all. That’s how important financial management is.

However, the economy does not turn around just by saving. It is also important to have the ability to invest with Don when appropriate. A company will continue to grow if it can achieve an optimal capital structure through the planning and execution of financial measures. In addition, if financial trust can be gained, loan negotiations for new business development will proceed smoothly. Building such a financial management strategy is one of the important pillars in developing a business strategy.

Here, we will look at the components of financial strategy by dividing them into three items: “guidelines for investing funds,” “operation management,” and “procurement management.”

① Guidelines for investing funds
Strict investment guidelines are essential to increase shareholder value. Simply put, in order to increase shareholder value, the return on investment must exceed the cost of capital (the weighted average of the cost of shareholders’ equity and the cost of borrowing).

The first thing to consider when setting guidelines is how to calculate the cost of capital, which is the evaluation standard for investment. There are two types of financing: shareholders’ equity and other’s capital by borrowing from a third party. Similarly, the cost of capital is calculated as a weighted average of the cost of shareholders’ equity and the cost of borrowing. Borrowing costs are easy to identify because they are borrowing rates, but the cost of shareholders’ equity is complicated to calculate because it includes investor expectations. There are several formulas to calculate this, but since costs and risks fluctuate as stock prices fluctuate, if a stock is recognized as a high-risk stock, shareholder costs will increase and it will be difficult to set guidelines. increase.

② Operation management
Operational management consists of three stages: “planning,” “implementation,” and “monitoring and feedback.”
First of all, about “plan”. When considering operational management, things to consider are consistency with the company’s objectives, short-term cash flow, and the life cycle of the products to be sold, and when necessary, new It is important to plan in advance whether to launch the product.

The development of “introduction” is roughly divided into three parts: “working capital management,” “capital budget,” and “M & A.”

Working capital is current assets minus current liabilities. Therefore, in order to secure working capital properly, it is necessary to always keep in mind what the current assets and current liabilities are. When making decisions about accounts receivable and inventory buildup, the point is whether or not there is enough profit to cover the cost of funds.
A capital budget is an execution plan for a company’s long-term investment strategy. If you find yourself in a deadlock in your growth as a company, you can also do M & A. In general, the aim is if a company that can greatly increase profits by restructuring or a company that brings synergistic effects to its own business by incorporating it into existing businesses is inexpensive.

“Monitoring and feedback” is exactly the PDCA cycle. Even if you execute a plan, without verification and feedback, the organization will not learn and you will not be able to expect the next growth. The process of monitoring how well the plan is working and analyzing and feeding back whatever the outcome is important here as well. It is important to regularly grasp the financial aspects such as cash flow of business divisions and projects, and constantly monitor the difference between plans and actual results.

③ Procurement management
In order to maintain shareholder value, it is important to raise funds for capital investment and working capital investment. The easiest way to raise funds is to raise money from a third party such as a bank. However, in that case, certain conditions are set in order to gain credibility. The main ones are maintaining a minimum amount of equity capital, maintaining a certain financial ratio, limiting capital investment expenditures, and some kind of collateral.
When procuring from shareholders, the method of procuring by issuing new shares, such as by increasing capital or establishing a new company, is taken.

There are also ways to gain trust by paying cash dividends and returning them to shareholders, or by purchasing own shares to raise the stock price and give shareholders a sense of security.

In financial strategy, in the extreme, cash flow is everything. Since corporate value is mostly determined by future cash flow, if you have debts there and the deduction from corporate value becomes negative, shareholder value will inevitably decline, and the future will only be clouded. Careful consideration of financial strategies is the only way to create a reassuring outlook for shareholders.

In order not to misunderstand the outlook here, it is necessary to incorporate the parts that are likely to become debts in advance and formulate a financial strategy that will not make a big mistake. For that purpose, it is necessary to accurately predict the events that accompany the results, make a proper estimate at the time of launching a new project, if any, and put it into practice at the timing when profits can be secured. It is an important point of procurement.