Research Korner: Equity Finance

LITERATURE REVIEW_Strategic Management

LITERATURE REVIEW     Definition and Brief History of Strategy   Strategy is elementarily defined as a long term plan of action designed to achieve a particular goal (2003). The concept, however, is not originally made for business. Rather, the business industry borrowed it from the military to help organizations in bridging the gap between policy and tactics ( 2000).   Strategy is a word adopted from the Greek word strategia, which means “generalship”. It basically refers to the military act of deploying troops as well as how it affects policies (2000). Over the years, the concept of strategy has been exported to different industries, including business and politics. (1967) provided this early definition of strategy: “the art of distributing and applying military means to fulfill the ends of policy.". A few years later,  (1979) provided the following characteristics of strategy in management application: strategy is that which top management does that is of great importance to the organization; strategy refers to basic directional decisions to purposes and missions; strategy consists of the important actions necessary to realize these directions; strategy answers the question: What should the organization be doing?; and strategy answers the question: What are the ends we seek and how should we achieve them?   From then on, the concept of strategic management in business application has evolved into two mainstreams of theoretical approaches – the “content”; and “process” view of strategy (2005). The first one focuses almost entirely on the internal analysis of the firm; while the second one concerned mainly with the "process" of managing change and, from an external perspective, on how companies compete ( 2005).   Strategic Management Practices               Earlier, we have defined the term ‘strategy’ and found that it was adopted from the military and is a design to achieve goals. Strategic management, on the other hand, is defined as the “art and science of formulating, implementing, and evaluating cross-functional decisions that enable an organization to achieve its objectives” (2003). It is the formal process, or set of processes, used to determine the strategies (actions) for the organization ( 2004). It focuses on many areas, including the integration of: management; marketing; finance/accounting; production/operations; research and development; and computer information systems (, 2003). Its main objective is to help the organization achieve success through the formulation of different strategies, their implementation, and evaluation (2003). It is also synonymous with the term “Strategic Planning” (2003).               Strategic management, even though there are several definitions provided, is still not adequately defined because of the process and concepts that involves within it.  (1979) argued that strategic management cannot be defined by brief sentences or paragraphs, because for him, it involves “plan, ploy, pattern, position and perspective”. One of the ways, however, to look at strategic management in a nutshell, is through the Strategic Management Framework Model (see figure 1) (2003).                                                                                                                                                                                                                                                                                 Strategy                                         Strategy                   Strategy                                    Formulation                                Implementation          Evaluation      Figure 1: Comprehensive Strategic-Management Model (, 2003).                 (2003) explains that Strategic Management Model is dynamic and continuous. Furthermore, one major change in one or more of the process can affect the other processes as well.  (2003) explained that strategy formulation, implementation and evaluation should be performed on a continual basis. Corporate Strategy               The vision-mission statement of a firm is one of the factors that create its corporate image (, 2003). This, in turn, will allow the firm to establish its long-term objectives. There are many factors that build up the image of an organization. (2001) stated that corporations should have economic and legal responsibilities to the public at large.  (1996) enumerated seven economic responsibilities of firms, which are to: satisfy customers with goods and services of real value; earn a fair return on the funds entrusted to the corporation by its investors; create new wealth, which can accrue to non-profit institutions which own shares of publicly-held companies and help lift the poor out of poverty as their wages rise; create new jobs; defeat envy though generating upward mobility and giving people the sense that their economic conditions can improve; promote innovation; and diversify the economic interests of citizens so as to prevent the tyranny of the majority. Legal responsibilities, on the other hand, should be to follow the law or the rules that govern firms; while ethical responsibilities involve the use of practices that are acceptable by the society and the business world ( 1996).               Several studies have proven that not having a sound corporate image can be detrimental to the organization. A number of industry surveys suggest that consumers are willing to make an effort to support proactive corporate citizens. For instance,  study shows that 76 percent of consumers are prepared to switch to brands or stores that seem concerned about the community ( 1997). Similarly, a Walker Information national survey showed that 14 percent of US households actively seek do-gooders when making purchases, while similarly, 40 percent judge corporate citizenship as a tie-breaking activity (1997). Similarly,  (1997) demonstrate that negative corporate social responsibility associations can have a detrimental effect on overall product evaluation, whereas positive associations can enhance product.   External and Internal Audit                 According to  (2003), the purpose of an external audit is to develop a finite list of opportunities that could benefit a firm and threats that should be avoided. This may include the evaluation of the legal, economic, political, environmental, social and technological advantages and disadvantages of the firm and doing the needed adjustments (2003). On the other hand, the internal audit concerns with evaluating the internal performance of firm e.g. the performances of employees, the stability of its management system, infrastructure issues, etc (2003).               Competitive advantage has always been an issue in the external business environment. This was clearly addressed by Michael Porter in the early nineties, which led to several moels such as the Five Forces. His theory of competitive advantage is one of a number of theories that place geographical industrialization and innovation at the centre of the process of development and competition ( 1999). In this theory, Porter mentioned four attributes namely: factor conditions; demand conditions; related and supporting industries, and; firm strategy structure and rivalry (1996). Each attributes are discussed in a national context. Factor conditions basically refer to a nation’s position on factors of production (i.e. skilled labor or infrastructure), which are necessary to compete in a given industry. Demand condition is the nature of national or local demand for both service and tangible products. Related and supporting industries, on the other hand, pertains to the presence or absence in the nation of supplier industries and other related industries that are internationally competitive. Finally, firm strategy, structure and rivalry determines the conditions in the nation governing how companies are created, organized and  managed, as well as the nature of domestic rivalry ( 1996). The four attributes interact with one another. Modeled as the diamond, its systemic nature is indeed variable. Several factors transform the diamond into a system. This includes domestic rivalry and geographic industry concentration. Domestic rivalry promotes upgrading of the entire national diamond; while geographic concentration transforms the diamond into a system because it elevates and magnifies the interactions within the diamond (1990;   1999). This systemic nature then promotes clustering, which enables both vertical and horizontal linkages between industries (1986;  1999).               Porter’s theory provides an interesting framework on how the conditions of industries are shaped and influenced. However, many factors or competitive advantage determinants are missing in the theory. For instance,  (1996) mentioned that Porter did not give importance to the culture or politics, while  (1999) criticized that Porter failed to provide a comprehensive explanation on how clusters are developed. Another missing factor is the competitive advantage of alliance or strategic alliance. Porter’s theory offers an incomplete framework, but serves as a reminder that rivalry is not the only means for survival. Furthermore, it suggests that through rivalry partnerships or alliances can arise, leaving more space for competition.               Another specific example of a framework that can be used for external audit is the 4Cs developed by  (2004).  (2004) stated that the competition is now in the global scale, and hints that explaining competitive advantage in the national context may already be obsolete. To make up for the limitations of competitive advantage models of the past such as Porter’s theory,  (2004) integrated different theories and created the 4Cs. Here, views of pro-coordinated marketing proponents such as Levitt, Ohmae and Yip are integrated with competitive advantage theory of Porter. This new 4C model features integrated attributes such as: creation and innovation; competition; cooperation; and co-option.   In the internal audit of the firm, two specific examples of concerns are the issue of culture and the management of staff, specifically how the staff can be motivated. One of the ways to assess culture is to take heed of its value dimensions. As explained by (1980), there are four cultural value dimensions:   Ø  Large versus small power distance. Large power distance is the extent to which the members of a society accept that power in institutions and organisations is distributed unequally; while small power distance is the extent to which members of a society or organization accept that power is distributed fairly (1997). Ø  Strong versus weak uncertainty avoidance. Strong uncertainty avoidance means the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity, which leads them to support beliefs promising certainty and to maintain institutions protecting conformity; while weak uncertainty avoidance is the degree to which members tend to be relatively tolerant of uncertainty and ambiguity and require considerable autonomy and lower structure ( 1995). Ø  Individualism versus collectivism. Individualism is the preference for a loosely knit social framework in society; collectivism stands for a preference for a tightly knit social framework. Ø  Masculinity versus femininity. Masculinity is the preference for achievement, heroism, assertiveness and material success; while femininity refers to a preference for relationships, modesty, caring for the weak and the quality of life. Cultural dimensions can help the firm assess the culture of their employees (Hofstede, 1980). This can help management strategies easier to implement and execute (1980). Motivation is also in an issue in the internal management of the firm. It is important because it manages and controls the turnover rate and productivity within the firm’s internal environment.  and define motivation as “the set of processes that arouse, direct and maintain human behavior toward attaining some goal” (1997). This definition contents three key essential aspects: arousal, direction and maintaining. Arousal is to do with the drive/energy behind people’s actions such as their interests to do the things or they do it just want making a good impression on others or to feel successful at what they do. Direction means the choices people make to meet the person’s goal. Maintaining behavior could keep people persisting at attempting to meet their goal hence to satisfy the need that stimulated behavior in the first place ( 1997).   Theories of motivation that organizations can use are divided into two categories: the content and process theories of motivation ( 1999). Content theories emphasize the factors that motivate individuals. Examples of content theories are Maslow’s theory, Alfelder’s theory, McClelland’s theory, and Herzberg’s theory (1999). On the other hand, the emphasis on process theories is on the actual process of motivation. Examples of process theories are Expectancy theories, equity theory, goal theory, and social learning theory. Strategies                  (2003) stated that there are a total of 11 types of strategies that a firm can use to gain advantage over competitors. These are: forward integration (gaining ownership or increased control over distributors or retailers); backward integration (seeking ownership or increased control of a firm’s supplier); horizontal integration (seeking ownership or increased control over competitors); market penetration (seeking increased market share through greater marketing efforts); market development (introducing present product’s or services in new geographic areas); product development (improving present products or services or developing new ones); concentric diversification (adding new but related products or services); horizontal diversification (adding new but related products or services for present customers); retrenchment (regrouping through cost and asset reduction to reverse declining sales and profit); divestiture (selling a division or part of the organization); and liquidation (selling all of the company’s assets, in parts, for their tangible worth).              (2003) stated that several means to achieve those strategies are through joint venture/partnership or merger/acquisition.

LITERATURE REVIEW_Strategic Management

LITERATURE REVIEW Definition and Brief History of Strategy Strategy is elementarily defined as a long term plan of action ...

The Role of the State in Globalization

The role of the State in Globalization     Introduction: Understanding Globalization                  Globalization is a multi faceted term that incorporates many ideas in the society. It is a term that has been used to describe and explain many worldwide events in the 20th century. Much debate was been said about the very idea of globalization, yet they can never come up with a concrete answer as to where globalization would bring the entire humanity in the new millennium.             Globalization is relatively a new concept, but all through out history, many wars was been made out of globalization. What really is globalization? Globalization is the term used to describe the changes in societies and the world economy that result from dramatically increased international trade and cultural exchange. It describes the increase of trade and investing due to the falling of barriers and the interdependence of countries. In specifically economic contexts, the term refers almost exclusively to the effects of trade, particularly trade liberalization or "free trade, more broadly, the term refers to the overall integration and resulting increase in interdependence, among global actors, be they political, economic, or otherwise.             Globalization is the beginning of endless debates from two polar points of views. It has been given positive connotations by those who advocate greater economic and cultural integration across national borders, while it has been fiercely criticized by radical groups who perceive it as threat to social cohesion and is only one of the many wheels in the advancement of unfettered capitalism.             Globalization is a complex phenomenon that it brings no justice to label it as sanctified or demonized, nor should it be used as a scapegoat for the major problems that are affecting the world today. It has a multi dimensional character and thus it does not have the privilege of unique definition. It creates both opportunities and costs for different players in the globalization of goods, services, capital, ideas information and people. This unrestricted assimilation produce cross border integration of a number of economic, social and cultural activities.   Main Body (The Role of State in Globalization)             It seems that man has a natural instinct to expand his territories beyond his border, and venture towards horizon. Globalization might be a new concept, but man has been practicing the very basic of ideals of globalization since man found out that “the grass is always greener on the other side of pasture”.             Alexander, Napoleon, Magellan and Columbus all pioneered global expansion of territories. Alexander and Napoleon might be thinking of military might as the reason for its expansion of empire while Magellan and Columbus where thinking of economic gain and advantage by finding the island of spices and controlling the trade route of the old world. All this conquest, were sponsored by the state. Alexander, Napoleon, Magellan and Columbus sailed and conquered the world carrying the name of their state. The mission in the first place was funded and was for their own respective territories.             The modern worlds enjoys and defend well its well defined territories and state which is sovereign from one another, and is recognized by other states and the community of nation.  A state is defined as an organized political community occupying a definite territory, having an organized government, and possessing internal and external sovereignty. Recognition of the state's claim to independence by other states, enables it to enter into international agreements, this is not only important for the establishment of its statehood, but equally important that a state can take part in the activity of nations.             Because of this need for state to enter into international agreements, globalization seemed inevitable. The interdependence of nations and states created a global community. A world, reduced or shrinked into what is now termed as the “global village”.             There are four main driving forces behind increased interdependence of the states. These are trade and liberalization, technological innovation and the reduction of communication costs, entrepreneurship and lastly global social networks. Trade and investment liberalization is important to every state, especially those who lacks in economic materials needed to run their economy efficiently. A state that do not enjoy large oil deposits like the Arab countries have, would engage into trade with states with large oil deposits, large enough for their own consumption. In this way, both state receives advantage and can continue operating their economies smoothly. With the birth and wide use of internet, individuals and states can now communicate freely with out leaving their own neighborhood, again making globalization inevitable. The entrepreneurs, or better known as the multi-national who outsource their businesses to other countries contribute also to globalization. Services and infrastructures are offered by the host country in exchange with the capital investment and jobs the investment would create. And lastly, most sovereign and democratic states need to ally itself to other states to better position themselves in lobbying for their agendas, or just friendly relation aimed at fostering stronger ties between states. Information’s are exchanged, technologies or even humanitarian help are extended between countries who are members of the global social network.   The significant role of the State               Although many believe that technological innovation and entrepreneurship are the main forces behind globalization, these factors cannot alone explain the process of enhanced economic integration. National governments have played a pivotal role in allowing a greater interdependence and economic integration of specific activities through the elaboration and adoption of market-oriented policies and regulation, at both international and local levels. In 1980’s many government supported economic liberalization in number of economic areas which significantly increased global integration. In general, liberalization refers to a relaxation of previous government restrictions, usually in areas of social or economic policy. The latter included “financial sector deregulation, the removal of controls over foreign exchange and enhanced freedom of trade. Financial deregulation has resulted in the progressive elimination of capital controls, the removal of controls over interest rates, and lifting of traditional barriers to entry into banking and other financial services (1995).             State efforts to uphold free trade and to encourage the reduction of trade barriers have been reflected in the eight successive negotiating rounds of the former General Agreement on Trade and Tariffs (GATT), which culminated in 1995 with the establishment of a multi lateral trading system, the World trade Organization (WTO). The latter organization of states in favor of multi lateral trading between countries has not only led to the reduction of barriers to trade in goods, but has also proceeded to liberalize services and capital flows. The WTO has as well focused more closely on an ever growing range of policy measures affecting the terms and conditions of market access, such as standards and regulations, subsidy practices, and intellectual property rights (1998 ).             Contrary to popular beliefs that economic globalization is a blind force that is not controlled by any factor, it is still individual governments that set the policies and the rules in the globalized economy. Economic globalization is, in other words, the result of “policy decisions made by individual countries that allow global market forces to operate (2002).             How the States Operates in Globalized Economy?             Not all states in the world are equal, if it is so then globalization would be redundancy. Some countries or states are more influential than the other. Economic factor as well as military factor plays a big role. But in peace time, it is usually the industrialized nations that are the most influential. The big and real issue here then is which countries set the rules, whom do they favor and how can the least powerful state also influence policy-making in the international arena, and do it in ways that will benefit them.  Due to significant power imbalances among nations brought by the factors mentioned, and are reflected in institutional institutions, some countries do not have as much leverage as others in setting the international economic and political agenda. As a consequence, the present form of globalization is largely shaped by the rules advanced by one part of the world, namely the most influential or industrialized countries, and these rules do not necessarily favor developing countries and countries in transition ( 2002).  “Globalization can be a powerful and dynamic force for growth and development if it is properly managed. And the foundations for enduring and equitable growth at the international level can be laid. For that it is essential to persevere in the search for consensual solutions through open and direct dialogue that takes account of the fundamental interest of all (2000).             As mentioned above, globalization and more in particular economic integration, presents both opportunities and costs. Greater economic openness, foreign direct investment and transfer of technologies offer potential opportunities for economic growth. Free trade allows specialization of services and goods between regions, allowing them to produce according to their own comparative advantage. It also expands the consumption choices of the citizens by providing increased opportunities to buy goods and services from other country. It is in this respect important to keep in mind that international trade is not a game where some countries are winners and some countries are losers. On the contrary, all countries benefits from trades because it enhances the choices of the consumer and the quality of products. It is also worthwhile to underline that countries as to what is commonly believed, compete with each other. Or that any of their major economic problems can be attributed to failures to compete on world markets (1994).             Economic globalization has also provided opportunities for developing countries in that it expands the size of their markets for exports and attract foreign capital, which aids in local development. Foreign investment is conducive to technology transfers and know-how, which in return increases local productivity. Another positive effect of globalization is greater competition among firms, which benefits consumers who have access to products at increasingly lower prices. Those who gain most from the free trade initialized by the government in both developed and developing countries are very often the poorest since they can buy goods at more affordable prices and therefore have a higher standard of living. In this sense, governments and states are seeing free trade as an indirect way to reduce poverty.             Despite many concerns about the loss of sovereignty , the state remains the key factor in the domestic as well as international arenas. The popular assumption that the emergence of global civil society, and increasing levels of cross border trade, finance and investment flows turns the nation or the state into an anachronism is wrong. In the international arena, closer cooperation and concerted actions among states represents an exercise of state sovereignty. Such concerted actions does not necessarily weaken the states, rather it can strengthen them by creating a more stable international environment and by giving them greater scope top expand their exchanges in variety of fields. Moreover, globalization without effective and robust multilateralism is bound to lead to crisis because markets are neither inherently stable nor equitable.             The state will persist because the need for the state has grown over times. It also will continue its existence because the local resource pools and socio economic problem on which states are based are undiminished. Only the state can guarantee, through independent courts, the respect of human rights and justice. It also promotes national welfare and protect the general interest of the state. The role of the state is also fundamental in operating the intricate web of multi lateral arrangements and inter governmental regimes. It is still the state, collectively or singly, that set the rules of the game, that enters into agreements with other states, and that make policies which shape national and global activities.   The changing role of the State   The functions and role of the state have transformed substantially. The general configuration of its responsibilities has changed and this has introduced important modifications both in the policy arena and in the state’s requirements for high level skills, qualitatively and quantitatively. Overall, the course of change points to a shift of focus away from hands-on management and the direct production of services and goods towards strategic planning with a view to the establishment and maintenance, refinement and reform of an enabling framework for private enterprise and individual initiative.             A parallel shift has moved the state’s centre of gravity and with it the locus of power. Decentralization, debureaucratization and deregulation are adding to the importance of the local government and non political actors on whom significant factors and functions are devolved or outsourced. At the same time range of tasks and policy decisions, traditionally handled by the central government in the state capital is being increasingly transposed to an inter governmental level as a result of increased flows between countries of goods, capital, labor and information. Increasingly the state is called upon to act as the link or the bridge of process of planning, consultation, negotiation, and decision making involving all other players in the globalization game. The state is the hub of activities connecting multiple partners and stakeholders from varying fields, regions, cultures, occupations, professions and interests.             In these globally aware state governments, institutions have been created or altered to scan the rapidly changing environment, to promote policy invention and dialogues to speed up decision making in order to take advantage of emerging opportunities, and to embrace short term failures in favor of creating a more long term sustainable strategies. The state are faced with dynamic transformations at the global and local level, the states without adequate capacity to recognize and respond to change are destined to be left behind in the dynamic waves of change. The ability to embrace change is related to an attitude of openness and diversity, to embrace and take comfort with uncertainty and optimism about the future. Globally aware leaders must be chosen by the state to seek and build institutions that can embody these attitudes to inspire the citizens to participate in the emerging aspects of globalization at the same time attracting global forces to participate the states local development. With the advance of globalization, the state has an important role to play in the establishment and preservation of an even playing field and enabling an environment for private enterprise, individual creativity and social action. It can also contribute to the establishment and maintenance of social safety nets, to promote as well as facilitate dialogue and understanding at the sub national, national and international levels. Lastly, a strong democratic state is responsible in the necessary need to protect the children, the sick, the elderly and other vulnerable segments of the society, to combat social exclusion of minority groups and most importantly to ensure a more equitable distribution of the benefits of globalization.   Conclusion               It is increasingly being acknowledged that good governance is the key and the main factor in the development process of any country, state and government. Good governance ensures that the benefits of globalization are benefited by all in the society. The state in partnership with the civil society and the private sector has a major role to play in the quest for peace, freedom, social equity and sustainable development. The state is also responsible to seek improvement and reformation in public administration and governance systems, for this are critical in addressing number of issues, including making globalization work for all. That is, globalization would be used as a tool in alleviating poverty and income inequality. It should also advance human rights and democracy, protect the environment, promote sustainable development, manage violent conflict and in combating international crimes or terrorism. The state can either guarantee people’s freedom and measure of social justice, or it can hold back the state’s development. Therefore, it is how the state structure, administer and operate its public sector and how it pursue policies that makes great impact on people’s well being.               The promotion of higher quality of life and the protection of human dignity should be regarded as a crucial element in ay effort to globalize. Accordingly, globalization also do not mean abandonment of state’s guidance over its market control. The economic sphere cannot be separated from the more complex fabric of social and political life and sent shooting off in its own trajectory. To survive and thrive, a global economy must have a more solid foundation in shared values and institutional practice. It must advance broader and more inclusive social purpose (2000).  The state must at first satisfy the basic needs of its people as an end in itself, but also as a means to allow people to be able to seize a greater extent the benefits of globalization. This is especially true in developing countries should benefit more from  the rapid transformations in terms of technology where the people can have better access to q1uality education and health programs. The improvement of physical infrastructures including transport and communication networks, hospital and water systems improved and if poverty amidst plenty is reduced and technology gap between industrialized nation and developing nation is narrowed, that is to say that people have greater opportunity to make choices (1999).             Simply, what people can achieve in the advancement of globalization can be positively achieve as influenced by economic opportunities, political liberties, social powers and the enabling condition of good health, basic education and the encouragement and cultivation of personal initiatives to improve. And the state have a very important role to play in this aspects.

The Role of the State in Globalization

The role of the State in Globalization Introduction: Understanding Globalization Globalization is a mul...

Organizational Decision Making Essay

Organizational Decision Making Essay   The advances in technology and the fast modernization of the world, in general, opened new and very promising avenues of business opportunities not just in an individual’s locale but also abroad. A lot of business-minded individuals from different countries with different nationalities and cultural orientation have and continuously defied the geographic boundaries that exist between continents. This is evident in the growing number of internationally-operating business firms all over the world run by entrepreneurs of varying race and culture. The information man has successfully rebelled against intercontinental borders and the challenge that confronts him the most, deals with how to fit and blend in the new cultural environment in which their businesses are situated. How are decisions made in an organization? Decision making is a cognitive process in which one selects a choice from among many. It is considered a psychological construct because even though it is not physically tangible, the results can be observed if a decision has been done. It is basically an activity which calls for a subsequent action to be done. Management involves the skillful planning and execution of business strategies.  It is concerned with creating important decisions that affect the long-term goals of an organization (1996). Normally, organizations focus on the external characteristic of the business environment. Top management usually focuses on their aggressive competitors and the constant change in supply and demand. However, the internal area in the organization should be taken into account since it is where they get the services or products for the consumers. Areas such as human resource planning, quality assurance and operations management are some of the essential fields an organization should be taken into account during the decision-making process. The process can be best understood in the diagram below with emphasis on the importance of communication and information within the organization.   Figure 1. Role of information in the decision process. (1998)   What are the organizational barriers and environmental barriers in an organization that impact the decision-making process? Financial resources. As the nature of financial management become more and more complex in this information and efficient communication era of international business, finance managers face a wide array of challenges, opportunities and options for him or her to enhance the investing and financing activities of the firm as well as the inherent risks and circumstances of the decisions that will be made. The challenge now for the financial manger is to explore the options and take advantage of the opportunities while taking caution in managing the risks. Communication and work relationships. In government, business, and other occupational arenas, professionals often need to communicate assertively and effectively outside the social boundaries of their own organization or organizational unit (such as outside their own department, division, or project group). Unfortunately, professionals might discover that engaging in cross-boundary communication can be a baffling and stressful experience that does not always result in a desirable outcome. Although many practitioners need to draw on an array of social and rhetorical strategies to succeed in cross-boundary communication and to avoid or overcome its associative risks, sacrifices, and problems, relatively little is known about how to interact and negotiate across organizational boundaries. Ethics. In a given culture at a given time, there is a broad agreement on major values. Several people agree on what is good and what is bad. Not all hold the same values, but those of the majority will affect the beliefs and behaviors of society (1987). Public awareness of ethics in general and unethical behavior in organizations has increased in recent years. Part of this increased emphasis on business ethics can be attributed to the continued tension between the business world and the public at large. Such tension over the past century has often resulted in calls, by the public at large, for increased deterrence and stricter regulation of the business world (1994). What actions might be taken to address organizational and environmental constraints on decision-making? Finance issues. The dramatic changes and advances in communications and information technology facilitated the way towards a sustained progress in the international business and finance environment. The low cost and the efficiency as well as the attractiveness of conducting and entering an international business venture were made available by these technological advances which characterize the global marketplace. Today, greater challenges are faced by financial managers as opportunities for growth as well as possibilities of risks increase in the current and more attractive business world. Defined goals and objectives of the company. Some commonly held organizational values are the importance of resources, return on investment, the welfare and well-being of employees, service to customers and clients, and loyalty to the organization. Although the goals and values of an organization may be implicit or explicit, to a growing extent they are being placed in writing. Many companies have adopted codes of ethics or include sections in their policy statements that relate explicitly to the ethical realm. They address such issues as leadership, integrity, equity, employee rights, employee development, and participation in policy formulation, nondiscrimination, quality of work life, and the like. Communication and good working relationships. Communication is the process on which the initiation and maintenance of an organizational change depends. Successful strategies are those that elicit cooperative interaction among people as individuals, work group members, and community stakeholders. Such strategies promote collaborative and united change efforts throughout all levels of the organization (1995). There should be weekly or monthly consultancy meeting between the management and the employees. Not that every single decision should be consulted to the employees but the suggestion is before making a big decision especially if the decision will have a radical change to the organization it must be consulted to the employees first. Establishing a distinctive ethical position in an organization would result in harmony within the organization, free from chaos and conflict and thus making the work and operation smooth and efficient. There will be no grudge between employees, employers, etc. Through ethics, everybody in the organization is in understanding, patient with one another, and creates a harmonious relationship. Leadership skills. If the staffs are required to be competent for their jobs, supervisors and managers should also be qualified and competent in their prospective positions (2003). Competency in business leadership, functional leadership, team leadership and personal leadership are all key elements of a successful business leader's skill set. The requirement for well-developed competencies in team leadership and personal leadership, however, is particularly important in the international context. What techniques can be used for improving the decision making process? For coming up with more creative solutions?  There are many decision strategies that can be used in choosing which of the alternatives to execute. These strategies help the decision maker in terms of making the task of decision-making more organized, easier and faster as the needs of many decision makers such as doctors and businessmen demand.  (1987) have named quite a few examples of decision-making strategies. The optimizing strategy helps an individual determine the expected cost which is not necessarily the financial cost along with the benefit of the result associated with all solutions. The cost/benefit analysis would then produce the optimal solution. This technique is very time consuming and costly because it involves technology and other enhancements. Examples of this strategy are linear programming, decision analysis and other forecasting techniques. There is also a satisfying strategy wherein the decision-maker comes up with alternative solutions until he generates a solution which can satisfy a minimal set of criteria. This strategy doesn’t compare the alternative decisions because it executes the first reasonable action that comes to mind ( 2005). It is less time consuming and costly than the first strategy; however, this would often result to a less optimal decision. The next strategy is the heuristic strategy wherein the decision-maker chooses from a selection of alternatives. It is used to simplify complex problems through increasing the probability that a solution will be found within a reasonable amount of time. An individual may use a compensatory decision rule which will permit a high value on one dimension of the decision to compensate for the low value of another dimension.

Organizational Decision Making Essay

Organizational Decision Making Essay The advances in technology and the fast modernization of the world, in general, opened new and ...