Strategic Management of The Made Maid Company - Research Paper Example

Made Maid Company: Strategic Implementation and other Strategic Management-related Issues and Concerns I. Strategic implementation The management of Made Maid Company realizes the need to exercise strategic control over the entire operations of the company through the use of informational and behavioral controls. It is known that there are actually two basic approaches to informational control, and these are the traditional approach and the contemporary approach. In the traditional approach, goals and objectives are set, and a set of standards are drawn to compare the results of strategic efforts to meet goals and objectives after over a period of time. The first part of the traditional approach has already been achieved with the setting of the company goals and objectives, to wit: 1. In five years, Made Maid plans to open another branch in Jeddah. 2. In five years, Made Maid plans to offer courses for drivers; these courses would include Arabic courses and Courses that would teach them the major routes and attractions in Jeddah. 3. In ten years, Made Maid plans to open a third branch in Jeddah. 4. In ten years, Made Maid plans to introduce itself in Riyadh by opening a branch there. 5. Made Maid plans to breakeven its start-up expenses within 18 months of the beginning of its operations. 6. Achieving revenue growth of 15% to20% per year. Such company goals and objectives as stated above indicated targets which can then serve as the standards with which results will be compared or measured given the time frame set. The second approach, on the other hand, is referred to as contemporary approach, which requires the periodic assessment of the internal and external environment of the company, enabling the managers to determine if revisions of strategic goals, objectives, and business plans would be necessary. In Made Maid company, management will always be on the lookout for any major changes in the configuration of its external and internal environment. Made Maid management will always be abreast of the latest developments in order to keep track of the opportunities and threats in the external environment, and the strengths and weaknesses of the internal dynamics and use of resources of the company. Strategic management through behavioral control aims to attain a balance between the use of culture, rewards, and boundaries in attaining corporate goals and objectives. In Made Maid, behavioral control will be used by management as a tool to keep its human resources aligned with the goals and objectives set to be attained by the company. Being a pioneer firm in the industry, Made Maid will strive well to set a corporate culture that exemplifies the values it has set for itself. It will aim to become a role model of sort when it comes to corporate culture, something like an industry standard that others will follow in setting their own corporate culture. At the beginning, the company has already decided to adopt a set of initial values that it will profess to adopt throughout its business life, to wit 1. Made Maid affirms its commitment to the highest standards of excellence in it courses. 2. Made Maid will provide the highest quality of service for the continuous patronage of its clients, 3. Made Maid pledges to provide its trainors or instructors of the highest quality of employment, and ensure that they are constantly improving. 4. Made Maid guarantees personal respect, fair competition, and equal treatment to all its employees. 5. Made Maid acknowledges its obligation to provide its employees with a clean and safe working environment. Furthermore, Made Maid promises all its employees that it will provide all opportunities possible to all who qualify for advancement. 6. Made Maid assures courteous, efficient, and ethical dealing with its suppliers. 7. Made Maid pledges conscientious citizenship and a helping hand for worthwhile causes in its community. With a strong corporate culture practices pervading in the company, coupled with a just rewards system, the management of Made Maid will be able to rely less on boundaries, such as rules, regulations, and procedures, as a behavioral control. Made Maid will ensure that its employees understand and are able to internalize the goals and objectives set by the firm, so that management will be able to expect that the employees behave the way they should. In such a situation, there will be less need to monitor their behavior, and consequently, management will have a more productive use of its time and effort focusing more on the other important organizational goals and objectives set by the company. A. Corporate governance Made Maid will promote strong corporate governance and will implement mechanisms and controls that will be consistent with the company’s overall strategy to meet its mission/vision/goals and objectives. Good corporate governance requires that the interests of and expectations by the company’s owners or shareholders are aligned with that of the management. Accordingly, there are three corporate governance mechanisms that would align management’s interests with that of the shareholders. These include commitment and involvement of the board of directors, shareholders’ activism, and managerial rewards and incentives system. For Made Maid company, the focus is clear and simple, as it should increase the shareholders’ long term wealth and value. And as there are reported correlations between good corporate governance with superior financial and investment performance, Made Maid will strive hard to attain superior quality corporate governance, in order to meet more investment opportunities and in order to attract additional investors, if required, to the company. This for sure will provide more opportunities for Made Maid to attain superior financial performance, bringing profitability to the company at its maximum level. In order to practice good governance, Made Maid will organize a board of directors who will have active and critical participation in defining the future of the company. It will have the following set of duties and responsibilities, tailored from the top US corporations: 1. Select, evaluate and appoint a competent Chief Executive Officer who will run the daily affairs of the company. 2. Review and periodically assess the financial objectives, strategies, and plans of the company. 3. Provide advice and counsel to top management. 4. Determine management compensation and succession plans. 5. Review adequacy of system in compliance with legal requirements; ensure corporate social responsibility is practiced. B. Organizational design There are important implications which Made Maid company has to consider in determining the appropriate organizational design for the company. First, Made Maid must determine the appropriate organizational structure considering the nature of business that it wants to engage in. Second, a fit between the technology, resources, and manpower complement on one hand, and the organizational structure on the other hand, will have to be made in order to achieve a seamless organizational structure that will be used to attain the objectives that is being set for the company. Designing Made Maid’s organizational structure entails aligning company resources with its vision/mission as previously determined. This means that, accordingly, Made Maid has to evaluate the relationships “between tasks, workflow, responsibility and authority, and making sure these all support the objectives of the business”. Figure 1. Organizational Structure, Made Maid Company Given all the above considerations, and as the company will start small with eventual growth in the future, the organizational structure that will be adopted by Made Maid initially, will be a flat structure wherein the chief executive officer or the president of the company will have full control and managers of functional department will be reporting directly to him (see Figure 1). As the company is starting small, it is not yet necessary to have various formal arrangements and groupings of activities. Eventually, as the company grows, specialists will be hired in the various functional areas of the company. Made Maid’s CEO will be responsible for aligning the company with its strategic vision. His core duty is to facilitate business outside of the company while providing directions and guiding heads of departments and employees towards the vision, mission, goals, and objectives set by the company. The head of the Training department will be in charge of the instructors and trainors that will be hired by the company to conduct the domestic staff training services. In manufacturing firms, this will be the counterpart of the production department. The training department will be in charge of producing the services that the company will offer to its clients. The head of the marketing department will be in charge of implementing the marketing plan that will seek out customers, promote the service to the company’s target market, and continuously seek out opportunities to offer and sell the company’s main services that are being offered to the public. The head of finance and administration will be in charge of the accounting system, administrative matters, and more importantly will provide inputs for the chief executive on various financial investment opportunities given the resources of the company. In other words, aside from financial and administrative management, the head of finance is also expected to recommend investment opportunities to the company’s chief executive officer. II. Other strategic issues of concerns If within five to ten years of operations Made Maid company will prove to be a success, then opportunities abound and will present themselves to the company for additional investments and for expansion purposes. One opportunity that is being considered is to go in the international arena and establish itself as a leading company offering domestic staff training services outside the kingdom. Such countries being considered include the gulf states of Qatar, Bahrain, the United Arab Emirates, and Kuwait. These Middle East countries are also known to employ foreigners as domestic staff, and a similar demand for training services may exist in these countries. Opportunities for expansion in these countries may prove to be profitable and a worthy undertaking. However, going international requires a different set of corporate strategy as obviously operating outside the domestic home front will require huge resources. Such decision to enter the international market will also impact on the corporate structure of Made Maid. Three important factors will have to be taken into account if it so decides to enter the international market. These three important factors are, accordingly, international strategy, product diversity, and the extent to which Made Maid will now become dependent on sales generated by its foreign market division. Initially, two possibilities will be considered with regard to the international expansion of the company vis-à-vis its organizational structure. As managers who will be assigned to braches outside KSA will have to respond to local conditions in their respective areas of operations, a greater degree of autonomy is given to such managers to provide them the flexibility of decision-making, but at the same time guided still by the overall corporate mission/vision/strategy of the company. Given the international demand and orientation of operating branches outside the kingdom, the appropriate strategies for Made Maid company to adopt when it concerns organizational structure are the international division and geographic area division structures. In the international division structure, local managers are given the high level of autonomy to manage their operations, given the constraints and demands of their local markets or their local area of operations. And as sales increases, where the contribution of foreign sales to total sales of Made Maid grows by leaps and bounds, there will have to be a shift from an international division structure to a geographic area division structure. In a geographic area division structure, foreign subsidiary or corporation may have to be established in order to become more flexible and responsive to the needs of such particular market. It is tantamount to saying that several foreign companies may be created as a spin-off from the original Made Maid company originally established in Jeddah. References ______. Organizational design: aligning organizational structure with business goals. 2010. [Online] Available at: http://www.mindtools.com/pages/article/newPPM_95.htm [Accessed 22 May 2010] Cateora, P. International marketing. 9th edition. 1996. Irwin Group. U.S.A. Read More