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Management Tools and Models
 

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7 Ps of the marketing mix

The 7 Ps of the marketing mix help marketers prepare comprehensive marketing plans. It is thought that all Ps should be addressed in order to create a really effective marketing plan:

  1. Product – selection of a product that customers want with the right features
  2. Place – getting the product into the right place at the right time
  3. Promotion – informing or educating of potential customers about your product
  4. Price – choosing a price that people are willing to pay, while also making money
  5. People – the people who allow the product or service to be used
  6. Process – the activities which enable the product or service to be used
  7. Physical evidence – the part that allows customers to make judgements about the organisation.

This model has also been known as the 4 Ps – in this instance, only Product, Place, Promotion and Price are considered. The three extra Ps in the 7 Ps model are considered by some to be more directly related to service-based industries.

See also Translating needs into action (Marketing)

Action-centred leadership

This model suggests that good leaders should consider individual needs, group needs and task needs, because each is unique but important:

  • Individual needs – motivation, recognition and development of people
  • Group needs – coordinating, dealing with conflict, communication and team building
  • Task needs – allocating resources, planning, controlling and monitoring progress.

An important leadership technique is to be able to work with all three need types and balance them out for success. This will involve moving between the different needs and putting more focus on some than others at different times. For example, if there is a team conflict, then group needs move into the foreground, with team building being an important leadership tactic.

Activity-based costing (ABC analysis)

Activity-based costing is different from traditional accounting methods because it bases costing on the real cost of products, services and customers, by attributing costs to activities. Different products need different activities to happen and the measurement of these activities will give a ‘true’ cost. The costing is performed by defining indirect activities and resources associated with a product, then working out the costs of these. Cost drivers are pinpointed, after which the total indirect product cost is calculated and the total costs by quantity are divided for indirect cost per cost object. A cost object is a product, service or customer. The model can only be accurate if all of the input parts are included.

Adizes PAEI management roles

Adizes developed a model defining four key management roles that need to be fulfilled in order for a management team to be successful:

  1. Producer – works long hours, is conservative and gets things done
  2. Administrator – organises, likes procedures, follows rules and conforms
  3. Entrepreneur – works irregularly, is action-oriented, exaggerates, inspires and dreams
  4. Integrator – is warm, gets along with people, listens to them and solves problems by talking about them.

Managers will tend to display more than one of these types, so teams can be made up of less than four players. The importance of each of the roles depends on the stage at which the organisation is at, and this model can be used to create effective management teams.

Belbin’s team roles

Belbin’s theory identified nine team roles that need to be performed in order for a team to be successful. This does not mean that each team needs nine people, each playing one of the roles because individuals can carry out more than one role in the group. The roles are:

  1. Chairman – this person is a balanced co-ordinator who works well with the rest of the team
  2. Team worker – a listener, supporter and someone who understands others
  3. Resource investigator – an extrovert who explores new ideas and opportunities
  4. Plant – this person is introverted but is the creative spark of the group
  5. Monitor – the analytical thinker of the team, looks over all the options and is dependable
  6. Specialist – brings unique and specialised knowledge to the group
  7. Shaper – thrives on pressure and gets things going but can get people’s backs up
  8. Implementer – will transform the ideas into actions; they plan and schedule, and can be rigid
  9. Completer-finisher – the person who drives the team to meet the deadlines.

This model has practical uses in the creation of teams and assignment of tasks to individuals.

Business process redesign (BPR)

Business process redesign is seen by some as an excellent way to reduce business costs and improve quality and service. There are some important pre-runners of redesign, including deciding on the strategy first, using the core process as a basis for the others, use IT as effectively as possible and aligning organisation structure to fit the processes. It is considered that, to be successful, the Business Process Redesign team must include members from both management and the general workforce. Factors that may indicate a need for BPR might include an excessively high number of meetings or bureaucracy and/or conflict within the organisation. The redesign should focus on the business-critical success factors. Once the redesign has been carried out, measurement of success and implementing improvements is important to streamline the business. One challenge with BPR is that people do not always see the need for change and do not always adapt to the new processes quickly.

Capability maturity model

This model defines the movement towards maturity that organisations take in terms of software development. The phases are

  • Initial – development is ad-hoc
  • Repeatable – some project management is set up; it is possible to repeat processes
  • Defined – software process is defined, documented and standardised
  • Managed – process details are collected, quantified, understood and controlled
  • Optimising – continuous improvement of processes occurs, following regular feedback.

Change quadrants

This tool helps organisations to manage change effectively. Organisations are thought to be either warm or cold. A cold organisation is driven by rules and procedures, where a warm one has shared values. Changes are also said to be warm or cold. A cold change usually happens due to some external factor, such as a drop in profits. A warm change is the result of ambitions – personal or professional. The combination of cold and warm organisations and changes leads to four strategies for dealing with change, each of which handles it differently:

  • Intervention
  • Implementation
  • Transformation
  • Innovation.

Chaos model

The idea behind this model is that chaos can be an important part of moving on to a more effective way of working as an organisation. This is in part because more dynamic phases and developments sometimes lead to chaos, which should not be rigidly controlled, so that the organisation identifies its own solution. There are three potential outcomes of a chaotic situation. One is that the organisation returns to normal. The second is that a new synergy is created by the new ways. The third is regression back to the old ways. This model suggests that it is important for leaders to understand when to try to control change and when to let it happen. Four phases are proposed for using chaos:

  1. Investigate the nature of change in the organisation
  2. Make problems explicit
  3. Formulate a change impetus (let change happen)
  4. Offer limited guidance.

Competing values of organisational effectiveness

In this model, three values of organisational effectiveness are identified:

  1. Internal versus external organisational focus
  2. Flexibility versus stability
  3. Process versus goals.

These are three key areas where organisations face dilemmas. The model helps businesses to understand these challenges.

Compliance typology

Compliance typology relates to the type of relationship between those in power and those who aren’t. Power creates compliance and different kinds of involvement lead to different types of compliance. The three types of power are

  1. Coercive – can involve the use of physical force to make people comply
  2. Remunerative/utilitarian – power based on rewards and punishments
  3. Normative – the authorities have the right to dictate behaviour.

The three types of involvement are

  1. Alienative – the person in power disagrees with the person under the power, but the person goes along with it against his will due to fear
  2. Calculative – the subject’s choice to comply for reward or in fear of punishment
  3. Moral – agreement based on values.

All of these can be plotted in a matrix to create nine types of compliance. The model assists companies in understanding why employees comply or not.

Core competencies

Core competencies are those competencies that a company needs to excel. It is thought that these competencies should be focused on and developed for competitive advantage. A core competency is thought to be one which is widespread throughout the organisation, is difficult to copy, is unique to the company and is a mixture of the way that things are done using processes and technology. The model also encourages leaders to look to the future and consider which competencies may be important later and how to think about how to go about developing those competencies. Once a company has decided what they are going to do about the future, they should then build a ‘strategic architecture’ which understands the competencies that should be developed, the customers that should be understood, the new channels to follow and new developments.

Covey’s seven habits of highly effective people

Stephen Covey created a list of seven habits of highly effective people:

  1. Be proactive – taking responsibility for your behaviour
  2. Begin with the end in mind – knowing what you want to accomplish at the start
  3. First things first – staying focused on what is important right now, even if it is not the most urgent
  4. Think win-win – trying to find solutions where everyone gains
  5. First understand, then be understood – learning by listening and understanding
  6. Synergise – understanding and valuing the fact that people are different and trying to build upon these differences to make the team more effective
  7. ‘Sharpen the saw’ – continually trying to improve oneself.

Covey argued that people who had these habits were more likely to be successful in life, both in work and outside.

Cultural web

The cultural web is used to understand all the different factors that affect the way in which an organisation operates. All of these variables affect the company paradigm. The factors are:

  • Stories – of past achievements or events
  • Symbols – job titles, office size – items that indicate status
  • Rituals and routines – procedures, formal or otherwise
  • Power structures – the power base, expectations and rights
  • Control systems – how the business is regulated
  • Organisational structures – the type of structural organisation and the relationships between the different areas, such as centralised or hierarchical, for example.

The model can be used to analyse a company, department or team, or even an entire industry. It can be used to assess how cultural change may be handled within any of these groups. Some parts of the web can be more easily changed than other aspects.

Customer marketing and relationship management

The idea behind customer marketing is the understanding that keeping hold of a customer in the longer term is more important than securing a one-off sale. Organisations that follow this approach have a customer focus to their marketing effort, have customer-driven values and culture and have systems and procedures that are all aligned towards supporting the customer interface. Working under this type of structure requires an understanding of the customer, gathering information about them, creating a brand that will appeal to them, creating packages for specific customer segments and storing information on your customers.

Deming cycle

The Deming cycle contains four steps for continual improvement and learning:

Plan – think about what is going to happen

Do – take steps to improve the planned change

Check – measure the results and level of improvement

Act – amend the objectives or make improvements.

This model helps managers to understand how to lead improvement initiatives in a structured way.

EFQM model

The European Foundation for Quality Management (EFQM) helps organisations to move towards improving quality. It is thought that great results come from partnerships, resources and processes. Key areas for success are in leadership, people, partnerships and resources, processes, customer results and performance results. Feedback from performance to the objective creating arena is essential in order to move forward and continue learning and improving.

Eisenhower’s effective time management

Eisenhower’s time management model suggests that it is important to understand the importance and urgency of any given task. This is very similar to Stephen Covey’s time management matrix. To carry out an analysis of how you spend your time, you list out the tasks that you need to do and then rank them by urgency and importance. You can then divide them into four categories:

  1. Those tasks that have a high urgency but a low importance
  2. Tasks that have a high urgency and a high importance
  3. Tasks that have a low urgency and low importance
  4. Tasks that have a high importance and a low urgency

This model helps people to prioritise their time effectively.

Fifth discipline

This model describes five disciplines important in creating a learning organisation:

  1. Personal mastery – using creative vision and focusing energy
  2. Mental models – generalisations of how we see the world – these should be expanded
  3. Shared vision – people need to share in the vision for it to work well
  4. Team learning – thinking as a team and interacting effectively
  5. Systems thinking – this is the fifth discipline, as it makes all the other disciplines work together in an integrated approach, with people understanding all the core components.

Four competencies of the learning organisation

The four competencies of the learning organisation is a knowledge management theory. It is thought that to be successful in managing knowledge, four competencies need to be developed:

  1. Absorption – taking in knowledge from outside the organisation
  2. Diffusion – spreading knowledge around inside the company
  3. Generation – creation of knowledge inside the organisation
  4. Exploitation – exploiting knowledge in services and products.

The theory behind this model is that organisational learning should be pursued at all times. There are four types of knowledge (expert, methodological, social and know-how) that need to be gained and distributed throughout the company. It is important to be able to get knowledge out of people’s heads and shared for the benefit of the company. The model is used to understand the learning capabilities of the organisation and to correct any problems with knowledge sharing that may currently exist.

Generic competitive strategies

Michael Porter suggested that there are just three consistently successful strategies for succeeding in business:

  1. Cost leadership requires an organisation to protect itself against all of Porter’s Five Forces (competitive rivalry, buyers, suppliers, substitutes, potential entrants)
  2. Differentiation – to differentiate is to offer something completely different from other companies; companies following this route need to spend more time and resources on aspects such as research and design; while there is only one cost leader in a marketplace, there may be many differentiators
  3. Focus is a company’s attempt to narrow down to one group of customers or one limited product; the idea behind this approach is to provide products or services to one small marketplace extremely well.

Porter thought that it was necessary to select one of these strategies in order to succeed.

The Gods of management (a cultures model)

This model uses Greek gods to illustrate four main management styles:

  1. Zeus – where there is one powerful leader and those who are in with the leader will have a better relationship with them and get on better
  2. Apollo – a structured management style where everyone knows their place in the organisation
  3. Athena – a management style that emphasises the individual, focusing on individual success and how well individuals work within teams
  4. Dionysus – where there is an infrastructure for the purpose of the people within the organisation.

Greiner’s growth model

Greiner’s growth model helps companies to understand why particular organisational structures, management styles or ways of coordinating will work at any given time during the company’s life. It is important to understand where your company is right now, to be able to identify opportunities and to acknowledge that today’s solutions might be tomorrow’s problems. In fact, many problems of companies that are growing are thought to be the result of solutions to past issues. Greiner’s model is based on the age and size of the company, its stage of evolution and the industry growth rate. From these, Greiner identified six growth phases with distinct characteristics. It is between these phases that crises occur:

  1. Creativity – defined by hard work, low pay, informal communication and led by entrepreneurs (this phase can lead to a leadership crisis)
  2. Direction – functional organisation structure, accounting management, budgets, standards and a directive top management (this often leads to an autonomy crisis)
  3. Delegation – financial incentives, review-based decision making, formal communication (a problem that regularly occurs next is a control crises)
  4. Coordination – review of planning, coordination by corporate staff, lower-level profit sharing (the main problem now can become red tape)
  5. Collaboration – matrix-style organisational structure, team incentives, team behaviour programmes, cross-functional teams
  6. Alliances – growth may continue through merger, networks and relationships with other companies.

GROW

GROW is a useful model that helps with coaching of staff. GROW is an acronym, standing for

In a coaching discussion, first start with the goal, or where the person wants to get to. Secondly, figure out where they are right now, or their current reality. You can then examine the options or the various routes by which they might meet their goal. Finally, it is important to establish that the person has the will to achieve the goal.

Herzberg’s motivator-hygiene theory

Herzberg’s model shows us that there are two types of factors that affect motivation. These are Hygiene Factors and Motivators. The model suggests that those factors that lead to satisfaction are different from those which dissatisfy. Satisfiers include achievement, recognition, responsibility and growth. Hygiene factors comprise things such as salary, administration, supervision, company policies and working conditions. This model can be applied to job and work design, with the aim of trying to remove the adverse hygiene factors.

Hofstede’s cultural dimensions

Hofstede’s model focuses on important aspects of national cultural differences. He proposed five elements that describe national culture:

  1. Power distance – the extent to which power is distributed unequally
  2. Uncertainty avoidance – the extent to which people like or dislike ambiguous situations
  3. Individualism versus collectivism – how much people feel that they need to take care of people or that people need to take care of them
  4. Masculinity versus femininity – the focus on either assertiveness and acquisition of goods (masculinity) as compared to the feelings for people and concern for quality of life (femininity)
  5. Confucian dynamism – whether people hold a short-term or historical view point, compared with people who have a perspective that looks towards the future.

The model is used for better understanding foreign cultures and for considering international expansion. It does not really take into account people of mixed nationalities and it somewhat generalises cultures.

Just-in-time

Just-in-time was originally a Japanese theory holding that inventory corresponded to waste. A just-in-time approach aims to give a faster customer response while keeping inventories low. The following areas are scrutinised to prevent waste: inventory production, batch sizes, quality control, organisational structures (moving to flatter) and minimising of waste.

Kaizen

The meaning of Kaizen is

The Kaizen model is built around five key features: teamwork, personal discipline, increased morale, quality circles and improvement suggestions. The first aim is to reduce waste and inefficiencies on the production floor. Companies then need to create good housekeeping processes and standardise what they do. Suggestions for improvements are taken from the shop floor and cooperation at all levels of the organisation are seen as being essential for success.

Kay’s distinctive capabilities

Kay identified three capabilities that are important if companies are to have a competitive advantage:

  1. Architecture – referring to the network of relational contracts within or around the organisation, with employees and also with external groups, such as customers or suppliers; this defines the organisational routines and behaviours
  2. Reputation – this capability is critical for getting information across to customers about the products or services that the company has; reputation is built up over time and is dependent on many things, including product quality and customer experience
  3. Innovation – this is important, but is not always leveraged for competitive advantage, due to issues such as costs and poor resource allocation.

Krajlic’s purchasing model

Krajlic produced a two-by-two matrix, the dimensions of which are impact on financial result and supply risk (or uncertainty). The four quadrants within the matrix are:

  • Strategic products
  • Leverage products
  • Bottleneck products
  • Routine products.

The model helps to determine how to manage the buying of these four different types of product. For example, strategic products are hard to replace, so it is recommended that you set up long-term relationships with suppliers of these products.

Levers of control

Simons theorised that there are four levers of control which aid business success. The levers, which oppose one another, are

  1. Belief systems – relating to the creation of value and required performance levels
  2. Boundary systems – regulations, punishments and limits that exist
  3. Interactive control systems – inclusion of managers in decisions of their staff
  4. Diagnostic control systems – feedback systems helping staff to keep on target.

Managing the levers effectively is seen to be critical to the successful implementation of strategy.

MABA analysis

This model is used to compare market attractiveness with business attractiveness. It is most useful for deciding between different opportunities that may arise and choosing the correct strategy for the business. Market attractiveness is determined by factors such as profits, market size, growth and stability. Business attractiveness is related to whether a business activity will be a good fit with the company’s current portfolio or competencies.

Malcolm Baldridge award

The Malcolm Baldridge award was set up to promote quality. It is judged on the basis of seven criteria: leadership, strategic planning, customer and market focus, information and analysis, human resource development and management, process management and business results. Companies can use the categories to judge themselves and identify areas for improvement.

Maslow’s hierarchy of needs

Maslow’s motivation theory suggests that individuals have different types of needs, starting from the very basic requirements of satisfying hunger and thirst through to self-actualisation needs. Maslow argued that people move up through a hierarchy of needs, only moving to the next set of needs when the current level is met. The levels progress in the following order, starting from level one at the bottom of the hierarchy:

  1. Physiological needs (hunger, thirst, sleep sex)
  2. Safety needs (security, removing threats, order and stability)
  3. Social needs (relationships, affection, love, belonging)
  4. Self-esteem needs (status, prestige, success)
  5. Self-actualisation needs (self fulfilment)

There are some limitations to this model: in particular it’s important to recognise that not everyone moves up through the hierarchy in the same way, and that different cultures may place greater emphasis on different levels earlier or later in the process.

This model helps in team building and in understanding of how people are motivated in different ways at different times.

Mintzberg’s configurations

Mintzberg’s configurations model provides a way to categorise companies. The types are:

  • Entrepreneurial organisation
  • Machine organisation
  • Professional organisation
  • Diversified organisation
  • Innovative organisation
  • Missionary organisation.

Categorising organisations in this way provides an insight to the types of problem an organisation might have. This then makes it possible to consider rectifying the problems by redesigning the organisation.

Network analysis

Network analysis is the means by which large projects are planned and managed. Types of analysis include PERT (Project Evaluation and Review Technique) and CPA (Critical Path Analysis). Network analysis can be used not just for planning of projects but also for resource allocation, prioritisation and comparing costs. The network is made up of activities, each with arrowed lines pointing to other activities. A set amount of time is allocated to each activity. The project will last for as long as it takes to complete the longest path through the network diagram (the critical path). Activities that are not part of the critical path are less time-critical and have fewer dependencies, so there is some flexibility regarding their beginning and end date. Network analysis is performed by MS Project when a project plan is created. Instead of viewing the Gantt chart it is possible to view the network analysis.

Neurotic organisation

This model defines the five neuroses that organisations have:

  1. Paranoid
  2. Compulsive
  3. Dramatic
  4. Depressive
  5. Schizoid.

Each of these brings its own set of problems for the organisation. It is particularly problematic when organisational leaders become affected by these neurosis, as this can have a damaging effect on the rest of the staff.

Nolan’s IT growth strategies

Nolan produced a theory that determines growth in IT in companies. The phases are

  • Initiation
  • Contagion/expansion
  • Control
  • Integration
  • Data administration/architecture
  • Maturity and de-concentration.

At each phase, there are different problems that need to be overcome, and each phase needs to be managed differently for success.

Offman’s core quadrants

The core quadrants model helps you to work out what your personal core quality is. To do this you need to ask yourself a few questions. You have to determine what your biggest pitfall is: namely, when there is too much of your core quality. You have to consider what your biggest challenge is (the opposite of the pitfall). You also need to figure out what your allergy is. Your allergy is the opposite to your core quality. From these answers, people can be categorised as either flexible, organised, bureaucratic or chaotic. This model helps people to understand each other and can be used to promote team work.

Overhead value analysis (OVA)

This model is designed to help the user to focus on improving the workings of indirect activities and services within a company. This can be used to cut costs by getting rid of overhead activities that do not add value. There are six stages to overhead value analysis:

  1. Create a foundation
  2. Make an orderly listing of activities and costs
  3. Customer evaluation of services and output
  4. Identify cost-saving opportunities
  5. Prioritise opportunities
  6. Implement the changes.

Sometimes, carrying out an OVA may not be effective. This may be due to lack of data or no support for the results or implementation.

Parenting advantage

This model examines how corporate parent companies can create value. There are four types of value that can be created:

  1. Stand-alone influence – the parent aids the business unit in standing alone by doing things, such as approving expenses and bringing in good managers
  2. Linkage influence – the parent creates value by linking business units
  3. Central functions and services – provision of corporate functions to the company
  4. Corporate development – the parent purchases, develops and sells businesses.

The model helps strategists to understand parent attributes and consider how situations may progress in the future.

PIMS (Profit Impact of Market Strategy)

PIMS helps planners to assess and decide upon various different strategic options. It can also be used to decide which products to develop. The model assists with carrying out research into the different factors which may impact profit by looking at

  • Market structure – the marketplace features which affect the ability of the company to be successful
  • Competitive position – the relative strength of the company in the marketplace compared to the competition
  • Strategy and tactics – the methods by which the company operates
  • Performance – analysed using qualifiers such as ROI, cash flow and share price.

Risk reward analysis

Risk reward analysis helps companies to understand the rewards that might come from particular strategies, and to weigh them up against the risks. It is carried out by listing the potential strategic options and then considering the pros and cons of each, in detail.

Schools of strategy synthesis

Elfring and Volberda proposed three complementary synthesising schools for gaining new strategic insights:

  1. The boundary school – considering the boundary of an organisation and where the company starts and ends
  2. The dynamic capability school – looking at strategic management as a learning process to develop unique capabilities
  3. The configuration school – thinking about strategy as organisational configurations – for example, in development phases.

The model is intended to help management focus their research.

Seven forces model

This model is related to change and details the seven forces that are required for change programmes to be effective:

  1. Necessity – the need for change, creating a sense of urgency
  2. Vision – helps people picture what is needed
  3. Success – successes early on that help people understand that the change is positive
  4. Spirit – the strength of commitment
  5. Structure – support organisationally for the change
  6. Capabilities – abilities to handle the new responsibilities
  7. Systems – feedback mechanisms and reviews for good performance.

All of these forces have differing but critical roles in ensuring the success of a change.

Sociological organisation

This model is used in organisational redesign. The idea behind it is that social and technological components are important in the success and productivity of a team, department or company. It is thought that if individuals have a greater array of tasks to perform, then they will have a greater sense of purpose. In addition to improving job roles for greater motivation, technology should also be utilised, where possible, to enhance job roles.

Supply and demand

Supply and demand relates to the number of goods that sellers can sell at a set price (supply) and the number of goods that buyers want to purchase at a set price (demand). This is usually drawn as a graph, where demand curves usually point downwards and supply curves point upwards. The equilibrium is when demand and supply meet and is usually denoted on the graph. This model is used for costing, pricing of goods, supplying the right amount of goods (not a surplus and not deficient) and predicting what will happen if prices change.

Time management matrix

Stephen Covey created a time management matrix, within which there are four quadrants:

  1. The quadrant of necessity – time spent doing things that are important and urgent
  2. The quadrant of quality – time utilised doing tasks that are important but not urgent
  3. The quadrant of deception – time spent carrying out activities that are urgent but not important
  4. The quadrant of waste – time carrying out tasks that are neither urgent nor important.

We all work in all quadrants occasionally. However, many people operate in the quadrant of necessity or that of waste, dealing with an endless stream of last-minute crises, rather than having time to think, plan and prepare things properly. The best position to work within is the quadrant of quality, as you are less likely to be working in a stressed and rushed manner.

Value disciplines

Treacy and Wiersema proposed three value disciplines that aid a company to succeed:

  1. Operational excellence
  2. Product leadership
  3. Customer intimacy.

Mixtures of two or more of the above can lead to conflict, and the model suggests that it is better to pick one of the three as the basis for which to succeed. To decide on the most appropriate one for the organisation, it is critical to understand the current situation, talk through the options and assess them objectively.