Tag Archives: capital

LINKAGES FOR COORDINATION ADEQUACY (WORK FLOW, PART 2)

JP-pic 2Dr. John Psarouthakis, Executive Editor of www.BusinessThinker.com, Distinguished Visiting Fellow at the Institute of Advanced Studies in the Humanities, University of Edinburgh, Scotland, publisher of www.GavdosPress.com. Founder and former CEO, JP Industries, Inc., a Fortune 500 industrial corporation

The linkages listed in this segment and following segments on this topic to be posted in separate categories are based on my experience as senior executive as well as an entrepreneur on managing growth businesses. Because statistical techniques test for probabilities but not certainties, the wordings are stated in terms of likelihoods. Discussions of these linkages are to be presented in future articles. Other executives and entrepreneurs could come to different conclusions compared to those listed in the segments posted. Therefore, those that read my views should take them as the experience of one person and use their judgment as to whether these linkages are to be taken as stated in their case.

 

 

LINKAGES FOR COORDINATION ADEQUACY (WORK FLOW, PART 2)  

Linkage-1:  The more able the firm is to obtain needed managers, capital, and information from OUTSIDE the firm, then the more effective coordination strategy is likely to be, the less likely are things to slip through cracks, and the less often are unnecessary work delays likely to occur.

Linkage-2:  The more closely employee goals integrate with company goals, the better are employee morale and commitment likely to be,  And the more effective is the CEO’s value-sharing strategy, the more effective is coordination strategy likely to be.

Linkage-3:  The more closely employee goals integrate with company goals, the better employee commitment and morale are, and the more effective the CEO’s value-sharing strategy is, the less are unnecessary work delays likely to occur.

Linkage-4:  The more closely employee goals integrate with company goals, and the more consistent managers’ perceptions of values are with the CEO’s, less likely are things to slip through the cracks.

Linkage-5:  The better a firm is able to allocate equipment, supplies, and people, the more effective coordination strategy is likely to be.

Linkage-6:  The better a firm is able to allocate equipment, supplies and people, the less likely are things to slip through the cracks.

Linkage-7:  The better able the firm is to allocate people, the less are unnecessary work delays likely to occur.

Linkage-8:  The fewer the unnecessary work delays, the less the CEO must wait to receive financial reports.

Linkage-9:  The fewer the unnecessary work delays and the less likely things are to slip through cracks, the better the firm’s reputation.

Linkage-10:  The more effective the coordination strategy is, the better product (or service) quality, technical skills, and productivity are likely to be.

Linkage-11:  The more that things slip through the cracks, the worse technical performance is likely to be.

Linkage-12:  The reliance of business-service firms on monitoring systems is significantly greater than that of construction, manufacturing, and wholesale.

Linkage-13:  Construction firms and manufacturers rely significantly more on daily plans to coordinate efforts than do wholesalers or business-service firms.

Linkage-14:  Construction firms rely significantly more on work standards than do business services and manufacturers or wholesalers.

Linkage-15:  The larger the employment size, the less directly involved is the CEO likely to be, the more he or she is likely to rely on chain of command, and the more managers he or she is likely to delegate to.

Linkage-16:  The larger the employment size, then the more likely it is that written guidelines, job descriptions, and meetings will be used to coordinate efforts.

Linkage-17:  The larger the employment size, then the less often informal conversation likely to be used to coordinate efforts.

Linkage-18:  The larger the employment size, then the greater the number of monitoring systems a firm is likely to have.

Linkage-19:  The more a CEO relies on work standards to coordinate efforts, the better are profitability and cash flow likely to be.

Linkage-20:  The more monitoring systems a firm sets up, the greater the reliance on employee judgments, the greater the use of meetings, and the fewer managers delegated to, the more effective is coordination likely to be.

Linkage-21:  The larger or older a company is, the better the cash flow (same year and previous year) is likely to be.

Linkage-22:  The more predictable the firm’s environment is and the less diversified the firm is, the more effective coordination is likely to be.

Linkage-23:  In firms with fewer than 20 employees, the greater the reliance on chain of command, the greater the reliance on employee judgments, the fewer managers a CEO delegates to, and the greater reliance on work standards to coordinate efforts, then the more effective coordination is likely to be.

Linkage-24:  In firms with fewer than 20 employees, the fewer managers a CEO delegates to, the higher profits are likely to be.

Linkage-25:  In firms of 80 to 500 employees,  the fewer the written job descriptions and the greater the use of meetings, the more effective coordination is likely to be.

Linkage-26:  In firms of 80 to 500 employees,  the less reliance there is on written job descriptions, and the more on informal conversation to coordinate efforts, the better cash flow is likely to be.

Linkage-27:  In industries with low predictability,  the more reliance there is on work standards to coordinate efforts, the more effective coordination is likely to be.

Linkage-28:  In industries with low predictability, the less directly involved the CEO is in work flow and the greater the  reliance on work standards to coordinate efforts, the  higher profits are likely to be.

Linkage-29:  In industries with high predictability, the more directly involved the CEO is in work flow, the higher profits are likely to be.

Linkage-30:   In industries with high predictability, the more daily planning that takes place, the worse cash flow is likely to be.

Linkage-31:  In single product or services outfits,  the fewer CEO “total delegations” and the more monitoring systems there are in place, the more effective coordination is likely to be.

Linkage-32:  In single product or services firms, the more directly involved the CEO is with work flow, the higher profits are likely to be.

Linkage-33:  In firms with several related products or services,  the more informal conversation is used to coordinate efforts, the better cash flow is likely to be.

Linkage-34:  In firms 5 to 10 years of age, the more the CEO relies on employee judgments, work standards, and monitoring systems to coordinate efforts, the more effective coordination is likely to be.

Linkage-35:  In firms 5 to 10 years of age, the fewer the written guidelines to coordinate efforts, the better cash flow is likely to be.

Linkage-36:  In firms 11 to 20 years of age, the more work standards are used to coordinate efforts, the more effective coordination is likely to be.

Linkage-37:  In firms older than 39 years, the more the CEO relies on chain of command to coordinate efforts, the higher profits are likely to be.

Linkage-38:  In slower growing firms,  the fewer the managers the CEO delegates to and the more work standards are used to coordinate efforts, the more effective coordination is likely to be.

Linkage-39:  In slower growing firms, the less often written job descriptions are used and the more work standards are used to coordinate efforts, the better cash flow is likely to be.

Linkage-40:  In manufacturing firms, the more monitoring systems are used, the more effective coordination strategy is likely to be.

Linkage-41:  In manufacturing firms, the less involved the CEO is with work flow and the more informal conversation is used to coordinate efforts, the better cash flow is likely to be.

Linkage-42:  In wholesale firms, the less often meetings and the more often work standards are used to coordinate efforts, the higher profits are likely to be.

Linkage-43:  In construction firms, the more often meetings are used, then the higher profits and the better cash flow are likely to be.

SELLING IDEAS IN THE MARKET: REVOLUTIONARY AND EVOLUTIONARY INNOVATION IN CORPORATIONS


Dr. Tamir Agmon is an invited contributor to The Business Thinker. He is a Professor of Financial Economics at the School of Business, Economics and Law at Gothenburg University in Sweden.

1. Introduction

The relations between research in business and management and the practice of management are not simple. Good research is conceptual and often is based on simplifying unrealistic assumptions. Good practice of management is concrete and is closely related to a specific situation in which the manager and the organization operate. Yet, good research contributes substantially to the practice of management just because it is not an attempt to describe business reality. Good research provides a conceptual model of reality that allows practitioners to gain a better understanding of some critical processes underlying the practice of management in a specific field.

The issue of selling innovative ideas in the market is a good example of the complex relations between research and practice in management and how managers in all levels can gain better understanding from research.

It is almost a cliche to say that the managers of today operate in a knowledge economy and that business is driven by new and innovative ideas. The communication industry, the information technology industry, the microelectronics industry and the medical industry are the most well-known industries that are driven by new and innovative ideas, but a closer look will show that even traditional industries like food, glass, and the automotive industry are affected to a great extent by new ideas pertaining to the production processes, the development of new features in existing products and to other dimensions of the business. Continue reading

The Successful Business Acquisition Process – Step-#13-Financing the acquisition and step-#14-Your action plan

Financing the acquisition

Financing the acquisition requires thorough and careful planning.  You need to consider the different sources of funding accessible to you.  The amount required for purchasing the company may dictate the types of sources that you seek out.  Some combination of debt and equity is likely. Be wary of overextending yourself with too much debt. On the other hand, be careful to protect your immediate family by not taking too great a risk with your personal assets.  It should not be necessary to put your entire life’s savings up for collateral.  If the deal makes sound business sense,  if a bank or other lending institution starts making unreasonable demands, check out another bank, review your business plan, or try some other approach.  Lending institutions vary from the unscrupulous to the impeccably correct.  You need to be especially cautious with any lender that is likely to take your company away from you if you fall behind on a few payments.  Check out your sources, both equity and debt, as thoroughly as you check out the seller.  Are you dealing with honest individuals?  Have you reviewed the fine print for hidden commitments that might jeopardize your ownership?  The earlier you begin to develop your financing plan, the more likely you will be ready to close, when the purchase agreement is finally negotiated and signed.

Your action plan

You can easily get so caught up in the acquisition process itself that you delay proper planning of the takeover until after closing takes place. This would be a big mistake.  Successfully  executed acquisitions require months of planning prior to closing, to assure a smooth transition.  Much of the preliminary work overlaps with a properly done formal due diligence–extensive evaluation of the company and identification of potential problems.  The remaining work, some of which may be obvious and some of which might require more problem-solving creativity, involves identifying the necessary changes and improvements that should take place and an assignment of due dates, budgets and people responsible for carrying out these changes.  A simple format is to create a short one-page action plan for each topic, identifying the issue, the action required, who is responsible, and when it will occur, along with a budget and expected results.

The acquisition action plan may be the single most important thing you can do to assure the success of your new company.  It is viewed as an extremely critical component of the successful acquisitions.  The chief (principal) operating person must be involved in the process from the start.