Transcript Chapter2: Understanding E

Chapter 9:
E-Business Management
For use with Strategic Electronic Marketing:
Managing E-Business
Copyright 2000 South-Western College Publishing
Chapter 8 Slide: 1
LEARNING OBJECTIVES(1):
• List the pillars of success for innovative
businesses.
• Explain how management systems can create
value for a business.
• Discuss the interplay between the management
components of the e-business value chain.
• Describe the role that leadership and
organizational culture play in giving an e-business
a distinctive advantage.
For use with Strategic Electronic Marketing:
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Copyright 2000 South-Western College Publishing
Chapter 8 Slide: 2
LEARNING OBJECTIVES(2):
• Outline the role that organizational learning plays in
giving an e-business a distinctive advantage.
• Discuss how e-businesses are organizing themselves
to compete.
• Recommend the steps that a business would need to
take to restructure to be competitive in an e-business
environment.
• Identify which new management positions and duties
are used to meet e-business needs.
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Chapter 8 Slide: 3
Vignette: AT&T
• Thinking Strategically
– Speculate on why AT&T was a late mover into the
Internet industry.
– List the types of skills AT&Ts management and
employees will need to demonstrate to be competitive
in the online marketplace.
– Determine if AT&T is too large to respond quickly to
market changes.
– Explain the importance of a transformational leader in
an organization like AT&T.
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Chapter 8 Slide: 4
New vs.. Older Business Systems
• Newly formed e-business systems may have value
chains that fit the demands of current competitive
environments.
• Older business systems face a hurdle because they
must break old value chains and develop new ebusiness value chains to maintain competitiveness.
– Momentum: the tendency for businesses to keep
moving in the same direction. Like ships, the larger
the business the longer it often takes to change
direction.
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Chapter 8 Slide: 5
Table 9.1: Pillars of Success for
Innovative Businesses
Pillars of
Success
Business Focus
Description
The company stays within
a highly focused product
line and focuses on its
mission.
Top management must be
"Hands-on"
involved in the innovation
Management
process supporting new
ideas and processes and
they must understand the
relevant technology.
Entrepreneurial Internal change agents
must be fostered. Risk
Culture
taking must be encouraged
and failure tolerated.
Value Chain Implication
A business should determine what it is
best at and focus on those priorities. A
business may want to outsource nonessential business functions.
Managers must develop cultures that
allow for innovation and flexibility.
Managers must also become
technologically savvy to understand the
issues related to organizing a e-business
business.
An innovative culture must be
promoted in the firm. Innovative
employees must be allowed to introduce
new practices and be allowed to fail.
For use with Strategic Electronic Marketing:
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Chapter 8 Slide: 6
Table 9.1: Pillars of Success for
Innovative Businesses
Pillars of
Success
Adaptability
Organizational
Cohesion (A
Sense of
Community)
Sense of
Integrity
Description
Value Chain Implication
Business must be able to
undertake major and rapid
change when needed.
Firms must develop cultures that allow
for flexibility and adaptability. Intranets
can foster the free flow of
communication speeding change.
The organization must have Less attention should be paid to rank
everyone working toward and seniority. Idea sharing and
the organizational goal.
teamwork is important. Collecting and
Ideas must flow freely and using organizational knowledge
quickly.
becomes a priority. Intranets can
facilitate this process.
A business must establish Employees must feel empowered to
long-term relationships
make decisions at lower levels in the
with all of its
organization. E-business corporation
constituencies.
techniques can link e-business partners
together.
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Chapter 8 Slide: 7
Figure 9.1 Management Components of
the E-Business Value Chain (1)
MANAGEMENT
Leadership
Management
Cultures
Innovativeness
Adaptability
Idea
generation
Organizational
Learning
Employees and
culture
Intellectual
Capital
Organization
Structure
Outsourcing
Staff
Intranets, Extranets, Internet
For use with Strategic Electronic Marketing:
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Copyright 2000 South-Western College Publishing
Chapter 8 Slide: 8
Figure 9.1 Management Components of
the E-Business Value Chain (2)
Leadership
Management: CEOs
with vision and
technology knowledge.
Cultures: Employees
who are loyal, flexible,
adaptive, and quick to
respond.
Innovativeness
Adaptability: Break old
business models.
Idea generation: Use
teams, encourage
creativity.
For use with Strategic Electronic Marketing:
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Chapter 8 Slide: 9
Figure 9.1 Management Components of
the E-Business Value Chain (3)
Organizational
Learning
Employees and culture:
Must be willing to
collect and use
knowledge.
Intellectual Capital:
Requires careful hiring
and training.
Organization
Structure: Flatter, less
bureaucracy.
Outsourcing: Focus on
core values.
Staff: CIOs,CKOs, and
Webmasters.
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Chapter 8 Slide: 10
Leadership
• Top management leaders of organizations:
– Set the vision for the company
– Oversee the development of strategy
– Delegating responsibility to be sure that plans and
strategies are carried out.
• Some executives
– See e-business as unproven technologies.
– Fear disconnection from management practice
because of changes in technology.
– Fear loss of power due to new business practices.
For use with Strategic Electronic Marketing:
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Chapter 8 Slide: 11
Forward-Looking CEOs
• A survey of 303 IT managers indicated that forwardlooking CEOs are learning to love the net:
– 61.7 percent saw their CEOs as advocates of Internet
based technologies,
– 36 percent were neutral, and only
– 2.3 percent were technology blockers.
• CEOs see the use of information technology, the
management of data, the impact of new technology,
and reengineering as the most important business
issues they are facing.
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Chapter 8 Slide: 12
Forward-Looking CEOs
• The most important business issues
forward-looking CEOs are facing:
– The use of information technology
– The management of data
– The impact of new technology
– Reengineering
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Chapter 8 Slide: 13
Organizational Culture
• An organization's culture includes the shared
values, beliefs, behaviors, and norms that are
generally accepted and practiced by group
members.
– The founder of the organization often sets the tone
for an organization's culture.
– An organizational cultures must adapt to the
competitive situation in which it finds itself.
– Cultures can become self selective and reinforcing.
For use with Strategic Electronic Marketing:
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Chapter 8 Slide: 14
Organizational Culture
• A "miss-fit" between the organization and its
culture can occur when the competitive
environment changes.
– Organizations that have developed cultures that fit
a competitive environment may look to hire only
individuals who "fit" the current culture.
– Individuals who rise up through organizational
ranks may be very good at operating within that
culture and they, in turn, reinforce that culture.
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Chapter 8 Slide: 15
Cultural Typologies
• Organic cultures:
– Decentralized control and non-formal relationships.
– Organizational structures are often flatter and more
responsibility is given to individuals at the bottom
of the organizational hierarchy.
• Bureaucratic cultures:
– Use strong hierarchies
– Set rules and regulations
– Have strong management oversight
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Chapter 8 Slide: 16
Innovative organizations
• Innovative organizations often:
– Have organic forms of culture.
– Encourage change agents
– Have a culture of innovation where new ideas
can be developed, brought forward, nurtured,
implemented without fear of failure.
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Chapter 8 Slide: 17
Tools of Innovative E-Businesses Leaders
• Organizational Learning: Develop systems that can
learn from the environment and experience.
• Hire Talent: Attempt to hire employees who will fit
flexible work situations.
• Cross Functional Teams: Allows for input from
multiple constituencies with an organization.
• Sense of Community: Individuals must feel loyal to an
organization and the organizational goal.
• Develop Intranets: Intranets that can link all internal
constituencies within a business
For use with Strategic Electronic Marketing:
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Chapter 8 Slide: 18
Organizational Learning
• Organizational learning implies that a business
is able to develop insights, knowledge, and
associations between actions taken and the
effectiveness of those actions. This should allow
the organization to adapt by making incremental
adjustments to the environment.
– Learning occurs at the individual level, but a
business can help to spread knowledge throughout
the organization
For use with Strategic Electronic Marketing:
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Chapter 8 Slide: 19
Creating Learning Organizations (1)
• Creating a learning organizations requires:
– Creating a knowledge culture: Encourage
employees to capture and share information
– Setting value on knowledge created: Show returns
for individual effort.
– Democratizing knowledge: Allow individuals to
collect and use captured knowledge.
– Usage of knowledge tools: Email, Intranets,
databases, guides, etc.
For use with Strategic Electronic Marketing:
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Chapter 8 Slide: 20
Creating Learning Organizations (2)
• Creating learning organizations requires:
– Understanding what the organization knows
and does not know: Undertake knowledge audits
to assess how knowledge can better be captured
and utilized.
– Acting on the knowledge: Access to
organizational knowledge should be easy and
encouraged. Intranets can facilitate this process.
– Training of Workers: Workers need to be able to
access and use the knowledge created.
For use with Strategic Electronic Marketing:
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Chapter 8 Slide: 21
Talent
• E-businesses have recognized that human capital
is a key area of competitive advantage. In a
knowledge economy employees must have the
capacity to learn and relearn new tasks.
– Human capital is the skill that individuals gain
through education, training, and experience.
– A knowledge economy gains wealth based on
what individuals can create from knowledge, rather
than what they can create from physical labor
alone.
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Chapter 8 Slide: 22
Case 9.1: Pooling Talent (1)
• Thinking Strategically
– List some of the advantages and disadvantages
that employees may see in working for
Microsoft and Netscape.
– Determine how different generations of
workers may feel about each of these
companies.
– Explain why an employee would want to leave
Microsoft.
For use with Strategic Electronic Marketing:
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Chapter 8 Slide: 23
Case 9.1: Pooling Talent (2)
• Thinking Strategically
– Determine if Microsoft worry about the braindrain problem.
– List some of the advantages and disadvantages
employees would have in working for a startup
like Netscape.
– Speculate on if Microsoft and Netscape would
attract different types of employees.
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Chapter 8 Slide: 24
The Net Generation
• Net generation (N-Gen - born after 1977)
– This is the largest generation that has ever exited.
• Understand and have grown up with digital technology.
– The Internet has already played a role in the development of
their lives.
– The youngest segment of this generation will not have known
a world without the Internet.
• Prefer collaboration to working alone and do not like the idea of
having a traditional "boss".
– The have ability to shift easily between jobs.
– When they invest their intellectual capital into organizations
they expect to be compensated for it
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Chapter 8 Slide: 25
Organization
• Community vs. Hierarchy
– Communities of workers represent social
networks as opposed to organizational
hierarchies. Social networks map how people in
organizations actually communicate. This
structure includes individuals, hubs, and
gatekeepers
For use with Strategic Electronic Marketing:
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Chapter 8 Slide: 26
Figure 9.2:
Hierarchies and Social Networks
Hierarchy
Social Network
Marketin
g
Purchasin
g
A
CE
O
Hu
b
Individual:
Productio
n
Info.
Services
Communication
flow:
For use with Strategic Electronic Marketing:
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Chapter 8 Slide: 27
Teams
• Marketers must work together with technology
specialists, designers, and other individuals with
specialized skills in order to create Web sites, ecommerce applications, database management,
and utilize other technology based tools
– The traditional role of the marketing core (those
directly involved in the marketing process) is to
stay close to the customers and act as the interface
between the company and the customer.
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Chapter 8 Slide: 28
Aligning Information Technology
With Businesses Practice
• The most important factors for aligning information
technology with businesses practice:
– Senior executive support for IT
– IT's management involvement in strategy development
– IT's understanding of the business,
– A partnership between the business core IT.
• The largest inhibitor:
– Lack of IT and non-IT relationships.
A five year study of executives from over 800 businesses in 15 different industries: Jerry Luftman,
Enablers & Inhibitors, Information Week, September 14, 1998, pp. 283-286.
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Chapter 8 Slide: 29
Virtual Corporations
• Allows a business to focus on its core competency by
developing a temporary network of value chain
components brought together to take advantage of
market opportunities.
– Partnerships may last only as long as the market
opportunity or may continue long time.
– Can bring together of the "best" components in
developing a value chain.
– Aids in creating new ideas for products, positioning in
the marketplace, and develops a team of partners who
can successfully get the product to the market
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Chapter 8 Slide: 30
Distance Workers
• Telecommuting allows distance workers to
interface with their job and work groups online.
• Advantages:
– In 1998 an estimated 52.1 million workers did all or
part of their job by telecommuting from home.
– The average age of telecommuters is about 41 years and
48 percent are knowledge workers.
– More than 60 percent of employees see telecommuting
as having a positive effect on their careers.
– Telecommuters save companies money by lowering
office space requirements.
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Chapter 8 Slide: 31
Distance Workers
• Disadvantages of telecommuting.
– Concerns about being out of the political office
loop.
– Have less ability to form relationships with
other employees.
– Are less likely to be seen by those who can aid
in advancement and promotion.
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Chapter 8 Slide: 32
Implementing Telecommuting (1)
• Carefully select who will telecommute
– Not all jobs or employees are likely to fit.
– Employees who don't work well at a business are not
likely to work well at home.
• Provide training
– May take distance workers up to 18 months to adjust to
working at home.
– Managers also need to feel comfortable with
supervising employees that they can't see.
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Chapter 8 Slide: 33
Implementing Telecommuting (2)
• Support telecommuters with technology
– Technology staff must support equipment that is as
good as, or better than, what can be found in the office.
• Allow for face-to-face contact
– Employees and supervisors must be allowed to develop
relationships to minimize feeling alienated from the
organizational culture.
• Ensure management support
– Ensure top management support - resistance often
comes from mid-level managers.
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Chapter 8 Slide: 34
Case 9.2: Buying Into BuyPower
• Thinking Strategically
– Determine who would be hurt in the new business
model proposed by GM.
– List the key people that would need to buy into the new
selling process.
– Contrast the incentives and disincentives that sales
people would have in adopting this model.
– Speculate on GM’s top management support for this
new business model.
– Determine what key areas could be leveraged to speed
adoption of this new business model.
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Chapter 8 Slide: 35
Business Processes Reengineering (1)
Five steps to BPR:
• 1) Top management commitment:
– Top management must support the change process and
a clear leader of the change team must be designated.
• 2) Understand current business model:
– Modeling how the current business operates.
• 3) Identify key players in the organization:
– Individuals with organization knowledge must be
allowed to become part of the change process.
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Chapter 8 Slide: 36
Business Processes Reengineering (2)
Five steps to BPR:
• 4) Develop communication plan:
– Communication allows for individuals to become part
of the change process.
• 5) Develop an implementation plan:
•
•
•
•
•
Analyze leverage points
Identify process breakthroughs
Design business processes
Implement the business process
Institutionalize continuous improvement
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Chapter 8 Slide: 37
Spin-Offs
• Pure-play Internet companies
– Are able to develop new e-business models, hire
technologically savvy employees, mover quickly to
serve new markets, and set strategic goals that fit
their competitive environment.
• Traditional businesses have attempted to achieve
these objectives by spinning-off divisions.
– A spin-off occurs when a parent company creates
an independent division.
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Chapter 8 Slide: 38
Case 9.3 : An Old Player in a New Gamble
• Thinking Strategically:
– Speculate on the reasons that P&G would want to start a Web
based venture.
– Determine why P&G would spin-off this venture rather than
have it “in-house”?
– Why would the venture would be located in San Francisco.
– Contrast the advantages and disadvantages of having a
corporate board tied to P&G.
– Evaluate www.reflect.com against other customizable cosmetic
Web sites.
– Speculate on the future of reflect.com and P&G’s ability to
compete online with this current strategy.
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Chapter 8 Slide: 39
CKO, CIOS & Webmasters (1)
• Chief Information Officers (CIO)
– Senior executives in charge of information technology
and systems
– Help direct the use of information technology to
support a company's goals.
• Vice Presidents of Electronic Commerce
– Are responsible for the creation and execution of ecommerce business practices.
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Chapter 8 Slide: 40
CKO, CIOS & Webmasters (2)
• Chief Knowledge Officers (CKO)
– Oversee organizational knowledge management.
– Act as knowledge champions to encourage individuals
to add to and use knowledge.
• Webmasters
– Cross-functional experts who designing Web pages,
graphics, code, maintain pages, answer user’s
questions, aid in Web strategic planning, compile
statistics, and make purchasing decisions.
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Chapter 8 Slide: 41
ALE 9.1: Identifying Components of
the Management Value Chain
Outline the management value chain for a business that you
are familiar with and indicate areas that can be improved by
applying any e-business techniques outlined in this text.
Management
Leadership
Management:
Cultures:
Innovativeness
Adaptability:
Idea generation:
Organizational
Learning
Employees and
culture:
Intellectual Capital:.
Organization
Structure:
Outsourcing:
Staff:
Intranets, Extranets, Internet
For use with Strategic Electronic Marketing:
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Chapter 8 Slide: 42
ALE 9.2: Message Count (1)
• Keep a log of the number of messages that you
receive in one day.
• Place the message count into categories
– Phone calls, email, voicemail, postal mail, interoffice
mail, faxes, post-it-notes, message slips, and any
others message sources.
• Rate the messages in terms of:
– Immediate action needed, information to remember
for future actions, organizational knowledge, and
social information.
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Chapter 8 Slide: 43
ALE 9.2: Message Count (2)
• Compare and contrast your list against others.
• Determine if it is possible to remember all of the
messages received.
• Recommend a Web based strategy that would help
you receive, organize, and use the information that
you must work with every day.
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Chapter 8 Slide: 44
ALE 9.3:
Mapping Social Networks
• Develop a maps of social networks that you
are involved with (This could include networks
at business, school, or friends).
• Draw out any communication links between
individuals that would link these networks
together.
• Determine the role that you play in each of the
hubs.
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Chapter 8 Slide: 45
ALE 9.4: Design A Corporate Portal
• Design a corporate portal for a business.
• Set up links to the types of information that is needed
by each constituency inside the business.
• Determine how the Web site would foster social
networks.
• Determine the types of information that should be
used to increase organizational knowledge.
• Justify the design of the Web site given the business’s
culture.
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Chapter 8 Slide: 46
ALE 9.5:
Business Process Reengineering
• Choose a business that you believe needs to restructure
itself to compete in an e-business environment.
– How does the business model need to change?
– How can top management commitment be obtained?
– Who are key players in the organization that need to
back the change?
– What are some key leverage points that can be
addressed?
– What process breakthrough can be achieved with
success?
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Chapter 8 Slide: 47