How SAP's Business Model and Strategies Made It the Global Business Software Leader - Assignment Example

Organizational Management Organizational Management Question Then case “How SAPs Business Model and Strategies made it the GlobalBusiness Software Leader” highlights and describes the important role of business strategy and model in organizational success and competitiveness (Jones, 2006). An international business strategy is depicted within the case as a challenging organizational management approach. This is due to the fact that business processes and market climate varies from one market to another. The company had to adjust its business activities in software development, so that they would meet the needs of consumers or users in its international markets. In order to overcome the challenges of international business, SAP employed a decentralized business model. It is through this model that the business activities and management processes were aligned with the unique attributes of each market. For instance, the pricing of the company’s software was congruent with the demand and supply forces within each market. Through the decentralized business management model, SAP’s software offerings were effectively coordinated. The rewarding of software tenders and dealings in software adoption and implementation were designed to align with the technological climate of each of its international markets. Chaos in the management processes were also eliminated through decentralization. This decentralization was made effective through an integrated communication model. This allowed the management team to coordinate the planning, control and supervision of the company software business across the world. The company’s international consultants in software development and implementation were also managed effectively through the integrated communication model. The needs of client companies were accommodated by the company regardless of the managerial challenges that it faced in its internationalization process. It is through this that the company was able to overcome the business rivalry that emanated from local software developers. For instance, the company made customized software after analysis and interpretation of the business needs of its client companies. Representatives from client companies were also involved in SAP’s software design and development processes. The company’s software designers, engineers and consultants used system models to illustrate the application of their software to the client companies. In this sense, the company was able to satisfy the needs of their clients. It is therefore through the implementation of an effective business model and management strategy that the company was able to win the loyalty of its customers. Through organizational change model and strategies, SAP was able to grow into a leader in the global software design, development and retail market. The need for change within the company was motivated by the management challenges that it experienced in its business growth phase. For instance, the company experienced a high consultant turnover. The consultants that it had trained left the company and joined rival organizations. The employees of the company were also less motivated. This caused poor quality in service delivery as depicted by the long time that software design, development and installation took. However, through organizational change model, the company’s managers implemented change in the human resource management approaches. This included better working conditions and competitive compensation packages. In return the company’s employees and consultants were highly motivated, which resulted in high quality delivery of software services to the customers. The implementation of software design and development projects was implemented through the team work model. The company’s management realized that teams were more productive than projects that were executed by individual employees. In this sense, the managers assigned roles among team members and motivated communication and positive team dynamics. In return, employees shared creative ideas and knowledge. This is attributed to the innovative nature of the company, which propelled it into the global leader position in software design, development and implementation. SAP’s management encouraged openness among teams. These teams comprised of diverse employees. Diversity is among the most effective human resource management strategies, which cultivated a culture of respect and professionalism and the resultant improvement in performance. Team members were also encouraged to work on individual projects and take risks so that they can come up with new and innovative projects in software developments. It is as a result of this that SAP proved to be a desirable working environment for its employees. SAP’s software evaluation strategies are the main forces behind its growth into the global leader in the software business. The company engaged its designers and software engineers in research and development processes, through which they were able to determine the highest standards upon which their software could be assessed. The software engineering mindset was therefore focused at the design and development of software packages and systems which received the highest market premiums from its client companies. The ERP model in the implementation of software was based on practical research and development based solutions. Each stage in software development was guided and assessed in accordance to the highest industry standards. It is through this that the company was able to meet its mission for providing linked divisions and functionalities within its software, which made them unique, original, differentiated and highly competitive in the market. Question 2 The coordination, grouping and division of research and development activities are defined by an organization’s structure. A manufacturing organization should therefore design its organizational structure in a manner that it can become highly effective in research and development activities. This is due to the important role of research and development in implementing evidence and practical based solutions in manufacturing processes. Research and development processes also allow a manufacturing company to determine the needs of its consumers and their preferences, so that the development of products would be guided by these needs. Work specialization is an effective aspect of organizational structure, which allows employees to engage in research and development activities that are related to their areas of work, expertise and experience. Through work specialization, a company’s employees are able to conduct dedicated and in-depth research that would promote innovative development of a specific product by the company. The chain of command in research and development activities within a manufacturing company is important for effectiveness. An effective chain of command involves clearly defined roles and responsibilities in research and development processes. This will allow a company to make informed decisions or choices in its development or product manufacturing processes. Research and development activities should be headed by skilled, experienced and knowledgeable managers at the top of the chain of command. These managers will play the role of planning for research and development activities, such as budgetary allocation. Additionally, the managers will also ensure that research and development activities are supervised, controlled and evaluated in line of their objectives and goals. It in line with this that productivity and high performance of employees in research and development processes can be guaranteed. The organizational structure of research and development activities should be decentralized. It is through decentralization that research and development processes for each of the company’s products can be demarcated and dedicated to experts in that field. The management processes of all research and development activities would also be facilitated through a decentralized structure. Decentralization allows low level personnel to play active roles in research and development processes. This would be achieved through the delegation of managerial roles in a company’s research and product development processes. Conflict within a company’s departments is avoided through decentralization. This will allow a manufacturing company to ensure that roles in research and development are not duplicated. Organizational culture defines the methods that are employed in the execution of research and development activities within a manufacturing firm. It is therefore mandatory for manufacturing companies to adopt and implement an effective organizational culture, so that it becomes innovative and competitive in the production of new products and improvement of its current goods. A manufacturing company should instill the values of respect, communication and good relationships in its research and development processes. This is attributed to the reality that contemporary manufacturing firms are composed of diverse production teams. In this sense, the employees will be able to respect each other, regardless of their social cultural, economic or ethnic values. It is through a respectful working environment that employees would be motivated to become more productive in research and product development activities or processes. A communicative culture will enhance coordination, work relationships and management processes within research and product development activities. Manufacturing companies often employ teams in the process of implementing projects for new products. Effective teamwork is facilitated by positive team dynamic processes, such as communication, contribution and sharing of ideas among production team members. Good relationships among product development teams and managers will also develop through effective communication processes. It is as a result of this that a two communication paradigm is recommended for production companies that are engaged in research and development processes. The result of an effective culture I research and development is high quality products and ability to meet the unique requirements, expectations and preferences of consumers. In return, the company becomes highly competitive by toppling market rivals in the production processes. In order to cultivate a positive culture among research and development teams or employees, organizational managers need to motivate change attitudes in the work place. Employees must be able to recognize that they are working towards a common objective or goal. This would be achieved through an organizational culture which encourages the contribution of ideas among its employees. Employees should therefore be encouraged to engage in new individual projects and innovative ideas, which would be used to enhance the quality of the company’s products. An informal mechanism of organizational control is encouraged in a manufacturing company’s research and development processes and activities. Informal control is working culture which gives employees more autonomy in research processes and the development of new products. In this sense, the employees will become more creative and participatory in research and development endeavors. Informal control is will also limit the misunderstanding that may emanate from product development or research activities. More importantly, the decision making culture of a manufacturing company should be based on consensus basis. This will promote mutual understanding, sense of appreciation, recognition, motivation and efficiency in research and development activities. Question 3 A learning organization describes a company or business entity, which engages its management team and employees in regular learning programs and projects, which are aimed at promoting positive change in all business activities and processes. The concept of a learning organization is crucial on the basis of its role in promoting the competitiveness of a company within its area of operation or market. Companies engage its employees in skills improvement programs, to enable them to become more effective, efficient and innovative in the production and service delivery processes. It is through this that a company is able to meet the expectations of its consumers and provide them with value though its product and service offerings. In return, a company is able to overcome market rivalry within a competitive business landscape. Interconnected approach of thinking within an organization is another important or crucial element which necessitates a learning organization. When employees and managers are engaged in continuous training and professional development, they achieve a deeper understanding of the company’s business processes and activities. In return, their thinking processes become interconnected or more coordinated. This means that the employees are allowed to work towards common objectives and strategic goals of their company. Their work processes, values, beliefs and attitudes also become engraved in the envisioned organizational culture through engagement in training processes. More notably, employees become active in change processes when they are engaged in training activities within a learning organizational paradigm. It is through such training that employees are able to embrace, adopt and implement new work approaches, methods and technologies. In developing a new restaurant as an own investment and making it a learning organization, the five core feature of a learning organization should be adopted and implemented within the restaurant’s business processes. These are shared vision, systems thinking, personal mystery, team learning and mental models. A shared vision of the new restaurant must be developed and implemented within its organizational culture. The restaurant’s shared vision would be the provider of highest quality and standards of restaurant services and products to all of its customers. This means that the training programs within the restaurant must demonstrate to the employees and managers how they can be able to achieve its vision. For instance, the employees will be trained and presented with knowledge of the industry standards, which the restaurant must meet in order to become competitive within its market segments. Employees will also be engaged in training processes on how they must conduct themselves in service delivery in order to meet or supersede the expectations of their customers. System thinking is an aspect of a learning organization, which allows its subunits or departments to work independently towards a common mission. The new restaurant’s departments, such as food production, ordering, serving customers and home deliveries will be able to work in a collaborative or coordinated manner if the learning organization paradigm is implemented. This means that regular learning programs will be implemented within the restaurant during which the employees will be trained on their departmental roles and organizational obligations or mandate. In this sense, the employees will be able to become effective in their respective departments. Employees will also be trained in effective communication processes. This will ensure that the restaurant’s departments are integrated into a holistic system. The success of the new restaurant will be based on personal mystery among its employees. Personal mystery will be achieved through continuous training and professional development among the employees. This includes training employees on the most effective skills and abilities that would make them masters or highly effective in their respective roles within the restaurant. The employees will also be provided with an opportunity of working as teams so that they can learn from each other and therefore mastering new skills in the delivery of restaurant services. In order to achieve personal mystery, various mental models will be used in order to allow the employees to picture the ideal working environment and services. As the owner of the restaurant, I have authority to create the models of a restaurant that will become highly competitive and admirable within the market. These models involve the work flows and processes that will promote coordination and efficiency in service delivery. The models will then be included in the training content, so that they can be envisioned and implemented by employees as mental models. Team learning will be initiated from the first day of business activities within the restaurant. This is related to the reality that teams promote exchange of creative ideas and lessons that will make the implementation of the learning organization in the restaurant possible from its inception. These teams will be composed of diverse employees. The social cultural differences among the employees of the restaurant will allow them to learn from each other on the culturally motivated expectations of customers from different social cultural market segments. It is therefore evident that the dream of a learning organization within the new restaurant can be realized through the implementation of the core features that define a learning organization in all of its departments. Question 4 Team work and project management are management concepts within an organization that can be used to limit the negative implications of bureaucracy with an organization that has a traditional structural design. Projects modify bureaucratic structures because roles are delegated to project leaders. These projects eliminate bureaucracy effectively when they are implemented through teamwork. Each individual within a project team is allowed to participate in decision making, and as a result limiting delayed decisions which characterize bureaucratic organization structures. Integration of an organization’s departments through information systems would also eliminate the negative effects of bureaucratic models. This is due to the role of integrated information systems in enhancing communication and access to information within the organization. When communication processes are facilitated, front line employees and top managers are able to engage with each other in a more effective manner. Customer orientation is a concept in organization culture, which plays a role in eliminating the negative implications of bureaucratic organization of a company’s management structure. When the management team and employees are focused on the customer, personalization of authority, job titles and responsibilities, which characterize bureaucratic structures, is eliminated. Instead, flexible procedures and rules are implemented with a view of meeting the changing and diverse preferences of customers. Organizational change is another concept in management, which can be used to reduce the negative impacts of bureaucracy. It is through organizational change that the beliefs, values and procedures of an organization can be changed to meet the modern approaches of management rather than the traditional bureaucratic approaches. The mindsets of managers and employees on decision making processes and communication would also be changed through the organizational change model. Within my university, some processes, such as decision making and approval of plans, are affected by the negative impacts of a bureaucratic organization structure. These effects can be minimized effectively through the implementation of an integrated information system within the university. This would be made possible through the adoption, installation and implementation of common information system software, within the university’s departments. Through the integrated system efficiency in communication between one department and another will be improved significantly. In return, problems will be solved quickly. The decision making processes will also be promoted through the integrated system. For example, communication among students affairs department, admission department, academic departments and the university’s constituent schools will be enhanced through the integrated system. This will be an effective way through which students can be managed, supervised or controlled. An integrated information system is recommended for the university because it would promote team work and as a result enhance the utilization of resources, creativity and innovation. Bureaucratic structures have been reported to be barriers to innovation and utilization of an organization’s resources. When the organizational processes within the university are integrated through a common software platform, health competition will be encouraged within its constituent departments. This will allow the university to achieve its goals and mission in a more effective manner. More importantly, the university will be able to implement the current academic standards and certification requirements through an integrated approach. More importantly, the structural barriers that characterize bureaucratic organizational structures will be eliminated from the university if an integrated information system is implemented within its departmental operations. Question 5 The case "Paradoxical Twins: Acme and Omega Electronics" depicts two rival firms, which employed different management strategies and business models to achieve success and competitiveness in the technological products market and industry (Jones, 2006). Within this case, the two companies are presented to have almost equal value and employee number. With annual sales of $10 million, Acme was $2 million more profitable than Omega. The differences in profitability among companies are often attributed to the nature of their management approaches and business models. Acme is depicted to have retained most of its original members of the management team. This is due to the fact that its managers were highly skilled and experienced in then management roles. The company’s managers were also conversant with its business culture. Mr. John was promoted and became Acme’s president because of his effective leadership style. From this case study, the important role of managers and the leaders of a company in its success and business strategies are evident. Omega is a paradoxical case, which upgraded several of its employees and employed a new president. Even though Omega’s human resource management practices and leadership approach seem different from Acme, they are suited to it organizational culture and mission. On one hand, Acme has a distinctly defined structure of management, while Omega’s organizational chart seems to be an artificial barrier. The differences in organizational structure and culture among these companies are defined by their models of management and approaches of leadership. For instance, within Acme, the decisions of the top managerial team are reached without any consultations with the manufacturing department. This depicts a more bureaucratic organizational structure. On the other hand, Omega employs participative management approach. This is revealed by the reality that employees were encouraged to make contributions on the actions that they considered more effective in its business processes. Job responsibilities within Acme are well defined. This is unlike Omega in which job specifications for employees are not well defined. Acme’s approach in human resource management is more effective because employees become more productive when they know their roles and responsibilities and base their efforts towards meeting specific goals. The development of prototypes within the two firms is also paradoxical or different. The memo that Acmes president issued to the drafting, purchase and industrial engineering department demonstrated that the company was facing significant time constraints. It is as a result of this that the production foreman disregarded the normal protocols of contacting the company’s methods engineers before the assembly of the prototype was set up and started. Complaints that the plant managers received should have been avoided if proper procedures were followed in the process of developing the prototype. It is evident from the Acme case that effective design and development is made possible when all processes and procedures are adhered to by all employees. The development of prototype within Omega is more coordinated than that of Acme. This is demonstrated by the coordination of Omega’s heads of department in the design and development processes. It is through this coordination and adherence to the specified procedure that the company was able to detect and correct errors n the design process. This case study reveals two companies which designed and produced similar products and provided same services, but using different strategies. Mr. John is depicted as autocratic and tough leader. This is due to the absence of a two way communication process within Acme. From this company, the important role of communication in achieving effective design and product development processes is appreciated. For instance, poor communication processes are attributed to the delivery delays that were experienced by Acme. Additionally, ten out of hundred units that were produced by the company were deemed to be defective. On the other hand, the effectiveness in communication and coordination within Omega caused all of its units to be passed and rendered to be of high quality. The evaluation of the two companies’ business strategies and organization structure is used to demonstrate how companies change their policies and procedures once they are sold to other investors. The analysis of the two companies within the case reveals that even if a company has a distinctly defined organizational structure, poor ad unidirectional flow of information leads to ineffective design and production processes, which cause product errors. The Acme case also demonstrates that the management team and technical experts must engage in active communication and direct contact, so that high standards and quality are achieved in design and production processes. Omega reveals that interdepartmental communication, which is implemented within all levels of an organization, is the reason behind the success of a manufacturing company. Prompt response within Omega’s departments is attributed to the success it achieved in the development of its prototypes. However, in the long run, Acme became more successful as compared to Omega. It is as a result of this that it is conclusive that clear allocation of job roles and responsibilities to employees is one of the most important determiners of its success. Question 6 The history of a company determines whether it employs a centralized, decentralized or hybrid organization structure. For instance, organizations which have been developed majorly by the efforts of a single person tend to adopt and implement a centralized structure. On the other hand, companies, whose history is characterized by consolidations, amalgamations and mergers, are likely to be decentralized or employing a balanced structure of a hybrid of both decentralized and centralized model. The competence of managers also determines the organizational structure of companies. Companies which lack competent managers may fail to strike a balance between centralized and decentralized structures and maintain the centralized approach. The size of a company influences its ability in striking a balance between centralized and decentralized organizational approaches or structures. Large organizations embrace a decentralized structure with a view of facilitating the processes of making decisions and reducing the management and operational costs. The technicality of work related tasks also define the structure of an organization. Organizations which deal with the design and development of technical products, such as technological applications tend to be decentralized because the limited technical abilities of top managers. The control and planning policies or procedures of an organization also plays a role in defining its structure. When the objectives and goals of a company are clearly defied, it is able to strike a balance between decentralized and centralized organizational structures. Striking a balance between the two models of organizational structure is argued to be the key to decentralization and the resultant omission of bureaucracies and slow decision making processes. Companies face the challenge of striking a balance between standardized and mutually adjusted work processes. Standardizing the behavior of employees, while at the same time providing them with the autonomy of becoming innovative and creative, challenges many managers. Organizational culture is one of the main factors which define the ability of a company in striking the balance between these two concepts. When the values and beliefs of employees are aligned with strict work procedures and policies, an organization may not be able to implement mutual adjustment in its work processes. In order to balance mutual adjustment and standardization, companies should provide adequate time to their employees during which they engage in personal projects. It is as a result of this that employees will be encouraged to take risks and become more creative or innovative. This will eventually lead to mutual adjustment of the company’s work processes. The authority and level of control within a company play a role in determining the balance between standardization and mutual adjustment. The authority of a company may bar employees from becoming flexible and creative in their work processes. When the level of control is lower in the organizational structure, employees are likely to participate more in decision making processes and as a result promoting the implementation of a mutually adjusted working behavior. The differentiation of work processes also defines the level of standardization and mutual adjustment within a company. Horizontal differentiation favors mutual adjustment while vertical differentiation favors standardization of work behavior. Reference Jones, G. R. (2006). Organizational Theory, Design, and Change. Toronto: Pearson Prentice Hall. Read More