Nowadays, the role of middle management is still debated. Whether a middle management can be considered as a “strategic asset” is a matter of discussion. Up to date, middle management is perceived as additional costs to the organizations, ones who slow down decisions and also as blockers of information by top down models of change. In addition, middle managers are described as resistant to change. Opposing to this, Balogun (2003) in his article “From Blaming the Middle to Harnessing its Potential: Creating Change Intermediaries”, state that middle managers play a great role in change implementation and also, are capable of contributing at strategic level. According to Balogun (2003) middle managers are change intermediaries rather than “implementers” or simply, “change recipients”. The author emphasizes on middle manager’s interpretation of change and affirms its importance for actual change outcome and organizational survival.
Mica Wulff Kamm, the Head of Global Product Management at TeliaSonera, after working 11 years as middle manager, believes that “in knowledge intensive industries middle managers are definitely needed”. From the lecture, we could see that she is very enthusiastic and proud of being middle manager for so long. She believes that middle managers are not just implementers of plans coming from senior management and she thinks that middle managers are able to “influence” senior managers in designing strategies and initiating a change in the company. She seems to be a good leader since she inspired us by using real examples from her work experience and tried to influence our perception of middle management. In theory, Balogun (2003) states that middle managers:
• Use their position within the organization and their contacts externally to gather and synthesize information for senior managers on threats and opportunities
• Encourage fledgling projects within their own department to help facilitate adaptability within the organization
• Use resources at their disposal to champion innovative ideas and business opportunities to senior managers.
In practice, Mica has provided us with the example of introducing a product line by TeliaSonera, which was initiated by middle management team and supports the above theory. According to Mica, middle management depicted the introduction of competitor product for specific market segment and saw it as threat and at the same time, as an opportunity. They developed the competing plan for overcoming competition and maintaining leadership in the whole market and “influenced” senior management to introduce suggested product. This example clearly shows that middle management is not in the middle of strategic and operational level, rather it plays great role in maintaining innovativeness and competitiveness of the company.
Referring to Westley’s article “Middle Managers and Strategy: Micro-Dynamics of Inclusion”, middle managers in large bureaucratic organizations are “viewed as suppliers of information and consumers of decisions made by top-level managers.” Consequently, top management is perceived as responsible for strategy sense-making, excluding the importance of middle manager’s involvement in “strategic conversations” (Westley, 1990). Even though inclusion of middle managers in strategic processes does not guarantee satisfaction, the author suggests that middle managers should not only be “feelers of rules” but also “framers of rules”. This in turn leads to empowerment of middle managers in the organization meaning they have dominant position as in strategic conversation as well in coalitions in the organization. Moreover, middle managers are more enthusiastic and energetic if they are not excluded from “hierarchy of coalitions” and they can negotiate rules with senior managers (Westley, 1990). Significantly, empowerment is under the groups of values shared in TeliaSonera. Mica emphasized the vitality of empowering middle managers in order to foster innovative thinking in the organization, which is another value within TeliaSonera. In addition, Mica believes that in order to be successful as middle managers we need to “choose our boss carefully” and “the organization, equally carefully.”
In addition, middle manager’s role in emotional balancing during the transition in the organization has granted high significance (Huy, 2002). While tension in the transition exists on the individual level, middle manager’s low emotional commitment to change might cause organizational inertia and high commitment but no attendance to employee emotions might lead to chaos. For that reason, middle manager’s plays a great role in emotional balancing and facilitating organizational adaptability, “developing new knowledge and skills”. (Huy, 2002)
Finally, my personal opinion regarding the role of middle management is that they are essential part of organizational success and innovativeness. As they are “bridge” between senior managers and low-level employees as well they might be “initiators” or “creators” of new products or strategies. I strongly agree with Mica in that “middles can influence seniors” in a way that being as middle manager stays ambitious and motivating position in the organization. In sum, I would like to share Mica’s suggestions derived from her real life experience to assist you in “stepping out” sometimes and “influencing” seniors:
• Be there when the ground shakes
• I’m good when my co-workers are visible
• If I do a good job I’m not needed in the end
REFERENCES:
Balogun, J. (2003). From Blaming the Middle to Harnessing its Potential: Creating Change Intermediaries, British Journal of Management, vol. 14, 69-83.
Huy, N. Q. (2002). Emotional Balancing of Organizational Continuity and Radical Change, Administrative Science Quarterly, 47(1), 31-69
Kamm, M.W. (2008). Guest Lecture 24th of November, Middle Management - Real Life, Retrieved 2008-11-25 from Jönköping International Business School’s website:
http://jibsnet.hj.se/documents/files/download/832478114/3385827292690149047/Microsoft%20PowerPoint%20-%20Middle%20Management%20JIBS%2020081124.pdf
Westley, F. T. (1990). Middle Managers and Strategy: Micro-Dynamics of Inclusion, Strategic Management Journal, Vol. 11 (5), 337-351.
Sunday, November 30, 2008
Thursday, November 27, 2008
Have you ever thought to be a middle manager?
The role of middle managers is a subject of discussion. Some think that they are executors of the already developed plans and strategies; some suggest that their role in change management is increasingly important, while many others believe that middle managers can step out and influence senior management. My personal opinion regarding the role of middle managers is that they are very important people in the organization. They facilitate communication within the organizational structure; they are needed to guide and coach many those employees senior managers are not able to (lack of time and more emphasis on strategic planning). Moreover, they are the ones contributing to successful change in the organization.
From my point of view, they are not only change receivers and executors; rather they may be the drivers of a change. Significantly, Balogun J. & Johnson G. (2004) discuss how middle managers influence organizational transition but never mention that they might be the “change initiators”. They emphasize more on the interpretation of change by middle managers and how this interpretation develops, change and impact on the organizational transition. Whereas, Furnman, A. (2002) states that “middle managers have a pivotal role in organizational change. They are often both the instigator of change as well as the target of change programmes.”
After those theories, I was not sure if middle managers could influence the senior management strategy making and future directions of the organization. But, the guest lecture led by Mica Wulff Kamm gave me the insights and the practical examples how she would step out and influence the change in the company. She gave an example of launching a product line initiated by middle management in response to competitor’s actions. She pointed out that senior management would have done that but some time later, while they saw the threat, worked out the plan and influenced the senior management to instigate a new product development.
Overall, I liked the guest lecture on middle management since one of the successful middle manager talked to us and shared the experiences. In her final suggestions for future managers, discussed how important it is to choose your boss carefully. Unless you have a boss who lets you step out sometimes and influence, you can not be a successful middle manager. Also, she recommended choosing the organization equally due to great differences in management practices and the organizational structure. Finally, to be an influential middle manager we need to be involved highly in the change, we need to be part and the driver of it.
REFERENCES:
Balogun, J. & Johnson, G. (2004) “Organizational Restructuring and Middle Manager Sensemaking”. Academy of Management Journal. Vol 47, 523-549.
Furnham, A. (2003) “Managers as Change Agents” Journal of Change Management. Vol 3, no 1, 21-29.
Kamm, M.W. (2008). Guest Lecture 24th of November, Middle Management - Real Life, Retrieved 2008-11-25 from Jönköping International Business School’s website:
http://jibsnet.hj.se/documents/files/download/832478114/3385827292690149047/Microsoft%20PowerPoint%20-%20Middle%20Management%20JIBS%2020081124.pdf
From my point of view, they are not only change receivers and executors; rather they may be the drivers of a change. Significantly, Balogun J. & Johnson G. (2004) discuss how middle managers influence organizational transition but never mention that they might be the “change initiators”. They emphasize more on the interpretation of change by middle managers and how this interpretation develops, change and impact on the organizational transition. Whereas, Furnman, A. (2002) states that “middle managers have a pivotal role in organizational change. They are often both the instigator of change as well as the target of change programmes.”
After those theories, I was not sure if middle managers could influence the senior management strategy making and future directions of the organization. But, the guest lecture led by Mica Wulff Kamm gave me the insights and the practical examples how she would step out and influence the change in the company. She gave an example of launching a product line initiated by middle management in response to competitor’s actions. She pointed out that senior management would have done that but some time later, while they saw the threat, worked out the plan and influenced the senior management to instigate a new product development.
Overall, I liked the guest lecture on middle management since one of the successful middle manager talked to us and shared the experiences. In her final suggestions for future managers, discussed how important it is to choose your boss carefully. Unless you have a boss who lets you step out sometimes and influence, you can not be a successful middle manager. Also, she recommended choosing the organization equally due to great differences in management practices and the organizational structure. Finally, to be an influential middle manager we need to be involved highly in the change, we need to be part and the driver of it.
REFERENCES:
Balogun, J. & Johnson, G. (2004) “Organizational Restructuring and Middle Manager Sensemaking”. Academy of Management Journal. Vol 47, 523-549.
Furnham, A. (2003) “Managers as Change Agents” Journal of Change Management. Vol 3, no 1, 21-29.
Kamm, M.W. (2008). Guest Lecture 24th of November, Middle Management - Real Life, Retrieved 2008-11-25 from Jönköping International Business School’s website:
http://jibsnet.hj.se/documents/files/download/832478114/3385827292690149047/Microsoft%20PowerPoint%20-%20Middle%20Management%20JIBS%2020081124.pdf
Wednesday, November 26, 2008
What if more SMEs use Benchmarking as a Strategic Tool?!
After we discussed several strategic tools for SMEs in class, I found benchmarking to be one of the most significant tools. Benchmarking is not the practice which requires the deterioration of the flexibility and the smallness of the SME. Most importantly, benchmarking is easily achieved or successfully used in SMEs due to its flexibility. If benchmarking suggests the firm to restructure and usually, its usage leads to constant organic changes, then SME is more flexible to change constantly rather than large organization with its “big”, more or less “formal” structure.
According to Monkhouse (1995) “Strategic management” and “change management” are becoming synonymous due to huge emphasis and importance of continuous improvement and change in SMEs. Almost all organizational or SME business development models focus and suggest continuous growth and reinvention in SMEs. Specifically, internal organizational development is valued. Whereas, benchmarking is one of the strategic tools which assist in internal development of organizations, processes, functions, tools and techniques. Most importantly, leadership practices, people management and other critical assets can be compared and benchmarked mostly involving organizations from different industries. Benchmarking can be used at strategic as well as operational and tactical levels. One of the most significant outcomes of benchmarking is the establishment of “networks” that lead to innovation in SMEs - “Developing a network of knowledge transfer mechanisms amongst customers, suppliers and manufacturers may lead to greater innovation comparison to less effective knowledge sharing company routines, providing a situation of competitive advantage” (McAdam R., & Kelly M. 2002 p.12).
In addition, I would like to share with you the empirical evidence by McAdam R. & Kelly M. (2002), where they connected three SMEs with each other, three of them agreeing on free exchange of information and advices.
From the beginning, the Company 1 had a problem of employee commitment and loyalty in addition to customer dissatisfaction. Whereas, Company 2 had an experience in building teams within the firm, motivating employees, leading to more loyalty and commitment. While, Company 3 was rated high on customer satisfaction and it was known for its practice in meeting customer expectations. What happened after the benchmarking was used is that Company 2 and 3 shared their practices and provided advices to Company 1, leading to performance improvement, particularly in building employee commitment and customer satisfaction.
Finally, I would point out that Benchmarking is continuous and systematic process rather than done with intervals or some frequency. It allows improving performance gaps in SMEs and triggers new strategic thinking in entrepreneurs or owner-managers. Benchmarking practices lead to innovation in SMEs if it is used systematically and continuously. At last, it could provide a SME with a situation of competitive advantage.
REFERENCES:
McAdam R., & Kelly M., A business excellence approach to generic benchmarking in SMEs, Benchmarking: An International Journal, Vol.9 No. 1, 2002.
Monkhouse E., The role of competitive benchmarking in small to medium-sized enterprises Benchmarking for Quality Management & Technology, Vol. 2 No. 4, 1995, pp. 41-50.© MCB University Press, 1351-3036
According to Monkhouse (1995) “Strategic management” and “change management” are becoming synonymous due to huge emphasis and importance of continuous improvement and change in SMEs. Almost all organizational or SME business development models focus and suggest continuous growth and reinvention in SMEs. Specifically, internal organizational development is valued. Whereas, benchmarking is one of the strategic tools which assist in internal development of organizations, processes, functions, tools and techniques. Most importantly, leadership practices, people management and other critical assets can be compared and benchmarked mostly involving organizations from different industries. Benchmarking can be used at strategic as well as operational and tactical levels. One of the most significant outcomes of benchmarking is the establishment of “networks” that lead to innovation in SMEs - “Developing a network of knowledge transfer mechanisms amongst customers, suppliers and manufacturers may lead to greater innovation comparison to less effective knowledge sharing company routines, providing a situation of competitive advantage” (McAdam R., & Kelly M. 2002 p.12).
In addition, I would like to share with you the empirical evidence by McAdam R. & Kelly M. (2002), where they connected three SMEs with each other, three of them agreeing on free exchange of information and advices.
From the beginning, the Company 1 had a problem of employee commitment and loyalty in addition to customer dissatisfaction. Whereas, Company 2 had an experience in building teams within the firm, motivating employees, leading to more loyalty and commitment. While, Company 3 was rated high on customer satisfaction and it was known for its practice in meeting customer expectations. What happened after the benchmarking was used is that Company 2 and 3 shared their practices and provided advices to Company 1, leading to performance improvement, particularly in building employee commitment and customer satisfaction.
Finally, I would point out that Benchmarking is continuous and systematic process rather than done with intervals or some frequency. It allows improving performance gaps in SMEs and triggers new strategic thinking in entrepreneurs or owner-managers. Benchmarking practices lead to innovation in SMEs if it is used systematically and continuously. At last, it could provide a SME with a situation of competitive advantage.
REFERENCES:
McAdam R., & Kelly M., A business excellence approach to generic benchmarking in SMEs, Benchmarking: An International Journal, Vol.9 No. 1, 2002.
Monkhouse E., The role of competitive benchmarking in small to medium-sized enterprises Benchmarking for Quality Management & Technology, Vol. 2 No. 4, 1995, pp. 41-50.© MCB University Press, 1351-3036
Are SMEs “little big businesses”???
I would like to share my thoughts about the module on “Managing the SME” by Friederike Welter. I found it very interesting to learn about the specifics of SMEs. From the module literature and the lectures, It is very obvious that SMEs are not “little big businesses “and need to be managed differently than large organizations. Before this module, I never thought about the relationship between the size of an organization and strategy making, business development, finance and risk management, and crisis management. If we take these management practices and concepts from the perspective of Small and Medium Size Enterprises, we see that they should be modified or fitted with the characteristics of SMEs.
So, how do we define SMEs? Actually, we talked about two criteria in the class as qualitative and quantitative criteria. European Commission defines it as “An enterprise which employs less than 250 people; has an annual turnover of less than €50m and/or balance sheet assets of less than €43m; and has no more than 25% of its capital or voting rights owned by a larger firm or public body.” This would be considered as quantitative criteria and whether SME is independent business or owner-managed or not can be regarded as qualitative criteria. In addition, SMEs are particularly focusing their operations on single product or service. Srinivas (http://www.gdrc.org/sustbiz/what-are-smes.html) associates SMEs with three words: Small, Single and Local. Small, according to the number of employees, capital and assets, and turnover. Single, as having one owner and maybe producing one product or providing single service. Local, as having the market localized where they also have an office. It is also very important to distinguish SMEs from large organizations when analyzing the economical importance and the impact they have on the society. “SMEs are socially and economically important - they represent 99% of an estimated 23 million enterprises in the EU and provide around 75 million jobs representing two-thirds of all employment. SMEs contribute up to 80% of employment in some industrial sectors, such as textiles, construction or furniture. “(http://www.gdrc.org/sustbiz/what-are-smes.html).
After we know that SMEs are not “little big businesses” and the importance of SMEs on the economy, it is very attractive to know more about the characteristics of SME. Derived from the module, I can characterize SME as small and flexible enterprise with informal structures. SME has few employees and limited resource base while resulting in big difference in output size comparing with large businesses. Significantly, SME often has one person as the owner and the manager of the company known as owner-manager. Consequently, he/she (owner-manager) is mainly responsible for most decisions and furthermore, delegation is low or absent within the company.
Taking the definition and the characteristics of SMEs into consideration, we need to design strategies, develop business development plans, construct financial and risk management scenarios, and deal with crisis in a different way than we behave in regard to large organizations bearing in mind that SMEs are not “little big businesses”.
REFERENCES:
Srinivas H, (2008). What are SMEs? The Global Development Research Center, Retrieved
2008-11-26 from http://www.gdrc.org/sustbiz/what-are-smes.html
Welter F., (2008) Lecture 10th of November, Strategies and Strategy making in SMEs Retrieved
2008-11-11 from Jönköping International Business School’s website:
http://jibsnet.hj.se/documents/files/download/338583202/4045835152691469727/lecture%201_strategies_module%20managing%20sme_ibc%202008.pdf
So, how do we define SMEs? Actually, we talked about two criteria in the class as qualitative and quantitative criteria. European Commission defines it as “An enterprise which employs less than 250 people; has an annual turnover of less than €50m and/or balance sheet assets of less than €43m; and has no more than 25% of its capital or voting rights owned by a larger firm or public body.” This would be considered as quantitative criteria and whether SME is independent business or owner-managed or not can be regarded as qualitative criteria. In addition, SMEs are particularly focusing their operations on single product or service. Srinivas (http://www.gdrc.org/sustbiz/what-are-smes.html) associates SMEs with three words: Small, Single and Local. Small, according to the number of employees, capital and assets, and turnover. Single, as having one owner and maybe producing one product or providing single service. Local, as having the market localized where they also have an office. It is also very important to distinguish SMEs from large organizations when analyzing the economical importance and the impact they have on the society. “SMEs are socially and economically important - they represent 99% of an estimated 23 million enterprises in the EU and provide around 75 million jobs representing two-thirds of all employment. SMEs contribute up to 80% of employment in some industrial sectors, such as textiles, construction or furniture. “(http://www.gdrc.org/sustbiz/what-are-smes.html).
After we know that SMEs are not “little big businesses” and the importance of SMEs on the economy, it is very attractive to know more about the characteristics of SME. Derived from the module, I can characterize SME as small and flexible enterprise with informal structures. SME has few employees and limited resource base while resulting in big difference in output size comparing with large businesses. Significantly, SME often has one person as the owner and the manager of the company known as owner-manager. Consequently, he/she (owner-manager) is mainly responsible for most decisions and furthermore, delegation is low or absent within the company.
Taking the definition and the characteristics of SMEs into consideration, we need to design strategies, develop business development plans, construct financial and risk management scenarios, and deal with crisis in a different way than we behave in regard to large organizations bearing in mind that SMEs are not “little big businesses”.
REFERENCES:
Srinivas H, (2008). What are SMEs? The Global Development Research Center, Retrieved
2008-11-26 from http://www.gdrc.org/sustbiz/what-are-smes.html
Welter F., (2008) Lecture 10th of November, Strategies and Strategy making in SMEs Retrieved
2008-11-11 from Jönköping International Business School’s website:
http://jibsnet.hj.se/documents/files/download/338583202/4045835152691469727/lecture%201_strategies_module%20managing%20sme_ibc%202008.pdf
Sunday, November 9, 2008
Management of Multiple Innovations
Management of multiple innovations is a significant phenomenon due to high demand on firms to introduce something radical rather than solely focusing on incremental advancements or improvements over time. Innovation can be an essential source of maintaining sustainable competitive advantage (SCA). Therefore, the power of innovation leads to its’ importance in strategic management. Importantly, management of radical innovations is given more attentions since it is perceived as critical to the long-term survival of many today’s firms. In addition, management of radical innovations requires management techniques different from those used in management of incremental innovations. Despite, when it comes to understanding what hinders and what enhances innovativeness in the firm, it is better to look at multiple innovations radical and incremental innovations. After analyzing articles by McDermott, C. M. (2002), Brown, R. (1991) and Damanpour, F. (1991), it is can be suggested that managerial attitude toward change is essential to effective innovation in the firm, while centralization hinders innovation. But when analyzing the characteristics that enhance or hinder innovativeness of the firm, it is useful to analyze whether the firm is for-profit or not-for-profit, manufacturing or service, in order to better understand the characteristics. In addition, Damanpour (1991) suggests considering the scope of innovation while analyzing determinant-innovation relationship, due to increasing practice of multiple innovations in today’s firms. Finally, it is interesting to discuss whether particular innovation is regarded as radical or incremental by the firm or the market. The following figure shows the S-curve of innovation and small S-curves for each market:
What these small S-curves shows is that the firm should consider that each segment should be treated solely while moving upwards or enlarging market size by entering others segments after the product has reached its limit on the small S-curve. Another important point here is that company may regard this innovation radical first when it is introduced to the market and then, view it as incremental since it advances the product for each segment. While each segment may perceive the innovation radical since it enters into new “market”. For example, first calculator was big and was mainly designed for scientists. Then, it was advanced and with less size for accountants. Consequently, pocket size became attractive for public use, particularly at schools. This example shows how a firm might treat each segment by moving upward, whereas entering directly to the mass market (public) might result in failure. Mainly due to the fact that public may not know how to use the product or why it is useful. At last, analyzing small S-curves in that figure may suggest that after firm introduces radical innovation and the first segment accepts it, then entering into another segment may be less risky and less uncertain. The following figure shows how risk is moving down, which is in agreement what I have said earlier about the perception on radical vs. incremental innovation.
To summarize, management of multiple innovation is very important for the firm’s SCA and for understanding the determinant-innovation relationship. At the same time, analyzing diffusion of innovation with small S-curves may lead to risk and uncertainty reduction. Also, firms may find it useful while avoiding entering mass market and focusing more on each segment.
REFERENCES:
Brown, R., (1991) Managing the “S” Curves of Innovation. Journal of Marketing Management Vol 7. pp.189-202
Damanpour, F., (1991) Organizational Innovation: A Meta-Analysis of Effects of Determinants and Moderators, Academy of Management Journal, Vol. 34, No. 3, pp.555-590
McDermott, C. H., O’Connor, G. C., (2002) Managing radical innovation: an overview of emergent strategy issues. The Journal of Product Innovation Management. Vol.19. pp.424-438
What these small S-curves shows is that the firm should consider that each segment should be treated solely while moving upwards or enlarging market size by entering others segments after the product has reached its limit on the small S-curve. Another important point here is that company may regard this innovation radical first when it is introduced to the market and then, view it as incremental since it advances the product for each segment. While each segment may perceive the innovation radical since it enters into new “market”. For example, first calculator was big and was mainly designed for scientists. Then, it was advanced and with less size for accountants. Consequently, pocket size became attractive for public use, particularly at schools. This example shows how a firm might treat each segment by moving upward, whereas entering directly to the mass market (public) might result in failure. Mainly due to the fact that public may not know how to use the product or why it is useful. At last, analyzing small S-curves in that figure may suggest that after firm introduces radical innovation and the first segment accepts it, then entering into another segment may be less risky and less uncertain. The following figure shows how risk is moving down, which is in agreement what I have said earlier about the perception on radical vs. incremental innovation.
To summarize, management of multiple innovation is very important for the firm’s SCA and for understanding the determinant-innovation relationship. At the same time, analyzing diffusion of innovation with small S-curves may lead to risk and uncertainty reduction. Also, firms may find it useful while avoiding entering mass market and focusing more on each segment.
REFERENCES:
Brown, R., (1991) Managing the “S” Curves of Innovation. Journal of Marketing Management Vol 7. pp.189-202
Damanpour, F., (1991) Organizational Innovation: A Meta-Analysis of Effects of Determinants and Moderators, Academy of Management Journal, Vol. 34, No. 3, pp.555-590
McDermott, C. H., O’Connor, G. C., (2002) Managing radical innovation: an overview of emergent strategy issues. The Journal of Product Innovation Management. Vol.19. pp.424-438
Subscribe to:
Posts (Atom)