Theorist and Practice of Business Administration - Albert Humphrey...

Theorist and Practice of Business Administration - Albert Humphrey

Once Albert Humphrey planned to engage in chemistry, later, however, he switched to activities, to the first two diplomas of the relationship not having - he became a specialist in business management. In this field, Humphrey achieved impressive results: a number of techniques developed by him are actively used in real projects to this day.

Albert Humphrey ( Albeit S. Humphrey, 02.06.1926 31.10.2005) is an American consultant, specialist in business theory, organization management and cultural change.

Education Humphrey received at the University of Illinois ( University of Illinois ) ; he specialized in chemical technology. By the same specialty, Albert received a master's degree - already at the Massachusetts Institute of Technology ( Massachusetts Institute of Technology ) . After a while, Humphrey became also a graduate master of business administration: he learned the secrets of a new profession already at Harvard ( Harvard University ) .

The research conducted by Humphrey when he was a member of the Stanford Research Institute ( Stanford Research Institute ) , led to the creation of a group planning technique - later transformed first into SOFT <-> analysis, then - to the now widely known SWOT -analysis .

One of Humphrey's clients, W. X. Smith ( XV. N. Smith ) , built its annual budget with an emphasis on long-term planning. The program developed for him was the first one to involve employees in business planning. It is believed that it is from this program that the system " Investors in People" has grown in the future.

While working in Stanford, Humphrey laid the foundations of the program " Team Action Management." The main concepts were later referred to by leading politicians, economists and entrepreneurs.

In total, during his career, Humphrey has worked as a consultant for more than 100 different companies.

In 2004, Humphrey won a place in the 7th edition of the "Who's Who in Science and Engineering" list. In 2005, he was listed "Who's Who in the World", "Dehrett's People of Todey", "Who's Who in the City" and The Directory of Directors ;

Albert Humphrey passed away on October 31, 2005. At the time of his death, the eminent theorist and practice of business administration was 79 years old.

Consider the use of the SWOT analysis.

The basic idea SWOT of an analysis can be defined as follows:

• Development of a set of measures to convert weaknesses into strengths and threats in the possibility;

• Strengthening and development of the company's strengths, taking into account its limited capabilities;

• full use of all the benefits identified through environmental analysis. The SWOT analysis is divided into four stages

Fig. 7.5. Scheme of application SWOT analysis

In the first stage SWOT of the analysis, forces are studied - specific advantages of the firm in the following areas:

• patentability of the goods being manufactured;

• price of goods;

• Progressiveness of technology;

• Qualification of staff;

• Cost of resources used by the firm;

• the age of fixed assets;

• geographical location of the company;

• Infrastructure;

• management system (including marketing);

• The strength of competition on the input and output the management system of the firm, etc.

In the second stage SWOT of the analysis, the weaknesses of the firm are studied. It begins with an analysis of the competitiveness of goods produced in all markets. A tree of competitiveness indicators is being constructed: at the 0th level, a complex indicator of the competitiveness of the goods; at the 1st level - a useful effect (integral quality indicator), total costs, conditions of application of the goods; at the 2 nd level - specific indicators, etc. The indicators are calculated in accordance with the constructed tree. Similar figures for competing products are being collected or projected. Deficiencies are determined based on the competitive advantages of the firm studied at the first stage.

At the third stage of the SWOT analysis, the factors of the company's macro environment (political, economic, technological, market, etc.) are studied to predict strategic and tactical threats, reducing weaknesses and increasing strength.

At the last, fourth stage of the SWOT analysis, the forces are coordinated with the opportunities for the formation of a project of individual sections of the firm's strategy.

As a result of applying the described approach, each firm will face a different set of opportunities and threats, each will have different strengths and weaknesses. Therefore, the strategy of each company will be unique. Common to all is the following rule: good strategies are built on the strong positions of the company and the thoughtful use of all the possibilities of the environment.

At the same time, the inefficient use of SWOT -analysis leads to the compilation of voluminous lists of recommendations. And the longer the list is compiled, the more uncertain the strategic picture becomes. Another drawback of this method is that it does not give a complete picture of the firm's internal reserves. This is primarily due to the fact that all aspects of the firm's activity are classified either as strong or as weak. Therefore, very often the question arises: strong or weak, but compared to what?

To conduct a complete analysis of the organization, it is necessary to apply scientific approaches to management, modern methods of analysis, forecasting and optimization, including the McKinsey 7 S model, matrix of Anzoff, a matrix of competition by M. Porter, a matrix model of the Boston Consulting Group.

5. Formation of strategic objectives of the innovative activity of the enterprise. The main goal of this activity is to increase the well-being of the owners of the enterprise and maximize its market value. At the same time, this main goal requires certain concretization taking into account the tasks and features of the forthcoming innovative development of the enterprise. The system of strategic goals should ensure the selection of the most effective areas of innovation; formation of a sufficient volume of innovative resources and optimization of their composition; acceptability. Level of innovative risks in the process of implementation of the forthcoming economic activity, etc.

6. Development of target strategic standards for innovation activities. The system of strategic innovative goals, formed at the previous stage, should receive specificity of certain strategic targets. The development of such strategic targets for innovation activity serves as a basis for the adoption of basic management decisions and ensuring control over the implementation of the innovation strategy.

7. Adoption of key strategic innovative solutions. At this stage, based on the goals and target strategic standards of investment activity, the main investment development strategies of the enterprise are defined in the context of individual dominant spheres: an innovation policy on certain aspects of its innovation activity, a portfolio of alternatives to strategic approaches to the implementation of the goals set and implemented their evaluation and selection. This allows to form a comprehensive program of strategic innovative development of the enterprise.

8. Evaluation of the developed innovation strategy. Such an assessment is conducted according to the system of special economic and non-economic criteria established by the enterprise. Based on the evaluation results, the necessary innovation is introduced into the developed innovation strategy, after which it is accepted for implementation.

9. Ensuring the implementation of the innovation strategy. In the process of implementing the innovation strategy, along with the planned strategic actions, new managerial decisions are prepared and implemented, caused by unforeseen changes in environmental factors.

10. Organization of control over the implementation of the innovation strategy. This control is carried out on the basis of strategic innovation controlling, reflecting the course of implementation of the main strategic target standards of the enterprise.

The stated sequence of the main stages of the process of developing an innovative enterprise strategy can be refined and detailed, taking into account the features of the company's innovative activity and the level of strategic thinking of its managers.

Consider the main types of innovation strategies, depending on the level of innovative development of the enterprise.

1. Traditional strategy. Since the traditional innovation strategy is to implement innovations to improve the quality of traditional (existing) goods, the total volume of R & D should be dominated by those works that are aimed at improving production in the current period. Improving the quality of products is associated with the implementation of both product and technological R & D.

The considered type of strategy is more applicable to established products. Therefore, the products that are in the maturity stage should predominate in the volume of output. The technology of its production should be well developed. Most of the products are sold in a stable market.

The firm has no serious competitors in the market. If we are talking about the traditional strategy as a whole, and not for individual products, it is advisable to have a production of technologically related products. The share of the firm's products on the market should be quite high.

The traditional strategy places high demands on the level of use of equipment and materials used. Conducted more OCD than NIR.

2. Opportunistic strategy. The main idea: the assortment is renewed due to the production of products that do not require significant R & D costs.

This strategy can be implemented by:

• Updating the assortment by issuing relatively simple new products;

• release of modifications of existing products;

• Improvements in production based on updating the fleet of equipment, the use of new materials, modernization of the technological processes used.

The enterprise produces the overwhelming volume of products of this type, far ahead of competitors. Since it is difficult to be a monopolist in the production of a particular type of product for a long time, the enterprise mainly produces new products. The same factor determines the presence of a large proportion of products that are at the stage of market entry and growth stage.

In total R & D expenditures, R & D expenditures predominate.

3. Residual strategy. The main idea: the desire to stay on the market with the old product. The products are sold in a stable market, the company owns a significant market share, is ahead of its main competitor. Most of the products are in the maturity stage, most of the products are produced more than 5 years.

4. Simulation strategy. The main idea, borrowing/acquiring new technology from other firms. The simulation strategy can be implemented in the following basic forms:

• introduction of licensed technology without carrying out work to improve it (type I);

• use of the most effective elements of borrowed technology in conjunction with its own improvements (type II);

• application of the basic principles of borrowing technology for conducting their own research and development in order to create their own new technology (type III).

I type . The enterprise does not require a significant number of researchers, but it is necessary to have a sufficient number of employees to conduct the ROC. Current R & D prevails, the share of R & D is insignificant.

Type II . It is necessary to carry out a sufficient amount of research, for this purpose a corresponding number of researchers is needed. Significant volume of medium and long-term work.

Type III. Significant volumes of research, medium and long-term work. The share of R & D in the volume of R & D is more than 30%. The share of fundamental works does not reach the norm, which determines the need for borrowing technology. At the same time, there is a sufficient number of researchers, designers, technologists, workers engaged in R & D.

5. Defensive strategy. The main idea: conducting research and development without the orientation of taking the leading positions in the market. The main task is to prevent a backlog in technical development.

Implementation of this strategy requires the presence of a high staffing potential of R & D, a fairly high share of research in the total amount of R & D. At the same time, the share of fundamental works in the total volume of R & D is low - 10-15%. This share is significantly lower than the norm. R & D, focused on current, medium-term and long-term production requests, are correlated in approximately equal proportions.

6. Dependent strategy. The main idea: focus on the development and technology of large firms that are connected with the activities of the company.

This strategy does not require a significant potential of researchers, but assumes the existence of a sufficiently powerful design and technological service and well-established production preparation mechanisms. Fundamental developments are practically not implemented, and the share of current R & D is high. The firm is highly dependent on its main competitor. The ratio with the volume of production is insignificant.

7. Intermediate strategy. The main idea: to find an unoccupied niche, avoid direct confrontation with competitors. These are modifications of already known products that can be implemented in various forms:

• a change in the class of products produced without changing the essential properties (for example, the production of two-compartment refrigerators instead of single-chamber refrigerators);

• Change in the class of products produced by changing the essential properties (for example, changing the size):

• a slight change in the individual properties of products, causing a corresponding small change in demand.

Each of the listed forms assumes the availability of different innovative potential.

In general, this strategy is characterized by a significant potential of researchers, designers, technologists, workers engaged in R & D, a high level of technology, significant R & D.

The need for an intermediate strategy is caused by the employment of traditional markets, which determines the need to search for an unoccupied niche.

8. The strategy for creating a new market. This strategy involves entering the market with a product that no one produces. Such a strategy can be implemented by an enterprise with a sufficiently strong R & D service engaged in diverse research, including interdisciplinary research. This strategy has some commonality with an acute-offensive strategy, but differs from it in that the creation of a product by the firm and the market implies the absence of competition

9. Ostro-offensive strategy. The main idea: the desire to be the first when introducing innovation in a certain segment of the market.

This strategy is implemented in a highly competitive market. As a rule, innovation is developed in parallel by several enterprises. An enterprise striving to apply this type of strategy has its own goals:

• the first to enter the market;

• ensuring the greatest technical and economic efficiency of innovations;

• Obtaining the possibility of selling products at relatively low prices due to low production costs;

• Occupying a significant market share for this innovation (and product).

The implementation of an acute offensive strategy is manifested in the concentration of significant funds on the development of this product with the purpose of early withdrawal to the market, achieving higher technical and economic parameters, capturing a much higher share of the market in comparison with the competitor. With regard to reduced costs and low prices, at the stage of market entry, the values ​​of these factors are not decisive. Much more important is the project competitiveness of the product, as well as the comparative effectiveness of the development. The latter indicator gives grounds to determine the competitiveness of the development by comparing the level of the complex parameter of innovation and development costs. If the firm's ratio of consumer properties and costs is lower than that of a competitor, then the use of an acute-offensive strategy may turn out to be wrong.

10. Moderately offensive strategy. This strategy is aimed at taking the second place in the group of leaders. There are two main differences between a moderately offensive strategy and an acute offensive one. First, lower costs are spent on R & D. Secondly, the product is brought to the market only after it has been approved by competitors. The possibilities of applying such a strategy are, first of all, for large enterprises that are monopolists in the market of these products. They can allow a small enterprise to carry out a fundamentally new development, go out with it to the market and temporarily occupy the place of a leader there. After the new product was accepted by the market, a large firm carries out activities to absorb a new firm, purchase a patent, license.

The second option for applying a moderately offensive strategy is related to the firm's activity, which is inferior in scale to several of the largest competitors and does not have sufficient financial and scientific and technical resources to carry out advanced development. In this case, the firm tries to maintain its market share, not seeking to enter the first roles. As a rule, the innovations of this firm are reactive. The firm simultaneously operates with a small number (one, two) generations of technology, mainly in a stable market.

The relationship between types of innovation and innovation strategies

The classification of innovations according to the depth of the changes introduced was proposed by the Czech economist F. Valenta. This approach allows us to trace the shifts from lower-level innovations to higher ones. There are seven types of innovations:

1) zero-order innovation - regenerating the original properties of the system, saving and updating its existing functions;

2) first-order innovation - changing the quantitative properties of the system;

3) second-order innovation - the rearrangement of the components of the system in order to improve its functioning;

4) Third-order innovations - adaptive changes in the elements of the production system for the purpose of adapting to each other;

5) Innovations of the fourth order - a new option, the simplest qualitative change that goes beyond simple adaptive changes; the initial signs of the system do not change - there is some improvement in their useful properties (equipping the existing electric locomotive with a more powerful engine);

6) Innovations of the fifth order - a new generation; all or most of the properties of the system change, but the basic structural concept is preserved (for example, the transition from A & A series motors to the AI ​​series),

7) sixth-order innovation - a new kind, a qualitative change in the original properties of the system, the original concept without changing the functional principle (the appearance of a shuttleless loom);

8) Innovations of the seventh order - a new genus, a higher change in the functional properties of the system or part of it, which changes its functional principle (transition to semiconductors and transistors).

Table 7.6

The relationship between innovation types and innovation strategies

Strategy type

Prevailing type of innovation

The order of innovation in the depth of changes in the production system

Traditional

• Expanding

and rationalizing innovation

• Innovation-processes

Innovations 0-4 orders

Residual Strategy

• Reactive (adaptive) innovation

• Innovation-processes

• Expanding innovation

Innovations 0-3 orders

The defensive strategy

• The predominance of reactive innovation with a certain share of strategic

• Innovation-followers

Innovations 0-7 orders

Simulation

• Mainly innovation followers

• Borrowed innovation, reactive innovation

Innovations 0-7 orders

Opportunistic

• Innovation followers

• Borrowed innovation, reactive innovation

Innovations of 2-3 orders

Dependent

• Primarily complementary innovations, reactive, innovation followers

Innovations 0-7 orders

Intermediate

• Strategic innovation, innovation markets

Innovations of 4-7 orders

The strategy of creating a new market

• Strategic innovation

• Innovation markets (new)

• Innovations that create new needs

• Innovations created on the basis of new scientific discoveries

Innovations of 4-7 orders

Moderate offensive strategy

• The combination of strategic and reactive innovation with the predominance of strategic; Innovations aimed at finding new applications in the old markets

Innovations 0-6 orders

A strong offensive

Strategy

• Strategic innovation

• Innovations that create new needs

• Innovations created on the basis of new scientific discoveries

• Innovation-markets

• Innovation-products and processes

• Innovation Leaders

Innovations of 4-7 orders

thematic pictures

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)