Transcript MOT and Venture Business

Thursday, October 16, 2014
THE MOT AND
VENTURE BUSINESS
Prof. Takao Ito,
Doctor of Economics, PH.D. of
Engineering, Graduate School of
Engineering, Hiroshima University
TOPIC 2 BASIC CONCEPTS OF
CORPORATE MANAGEMENT
1)Innovation
the introduction of new goods and
services
2)Quality
the excellence of your goods
3)Speed
Fast and timely execution,
response, and delivery of results
4)Cost competitiveness
Keeping costs low in order to
achieve profits and be able to
offer prices that are attractive to
customers
THREE USEFUL SKILLS
1)Technical
skills
The ability to perform a specialized
involving a particular method or
process
2)Conceptual and decision skills
Skills pertaining to the ability and
resolve problems for the benefit of
the organization and its members
3)Interpersonal
and communication
skills
People skills; the ability to lead
motivated, and communicate
effectively with others
Emotional intelligence
The skills of understanding yourself,
managing yourself, and dealing
effectively with others
THREE LAYERS IN CORPORATION
Changing
roles
Key
activities
Frontline Managers
from operational
implementers to
aggressive
entrepreneurs
creating and pursuing
new growth
opportunities for the
business
Middle-level Managers
from administrative
controllers to
supportive coaches
from resource allocators
to institutional leaders
developing individuals
establishing high
and supporting their
performance standards
activities
linking dispersed
attracting and
knowledge and skills
developing resources
across units
managing continuous
performance
improvement within
the unit
Top-level Mangers
institutionalizing a set of
norms and values to
support cooperation and
trust
managing the tension
creating an overarching
between short-term
corporate purpose an
performance and longambition
term ambition
DEVELOP YOUR CAREER
1)Be
both a Specialist and
Generalist
2)Be self reliant
3)Be connected
4)Be active to manage your
relation with your organization
5)Be survive and thrive
INPUT AND OUTPUT
Raw materials
Human
resources
Energy
Financial
resources
Information
equipment
inputs
Organization
Transformation
process
outputs
Goods and
Services
EFFICIENT AND EFFECTIVENESS
 Productivity
output
input
Quantity of Pr oducts
man power(resources, and Capital)
Legislation
LEGISLATION
Corporate
social
Responsibility: Obligation
toward society assumed by
business
A SIMPLE CASE
 Rental
fee for copy machine : 100,000
Japanese Yen
 The cost of each page : 15 Japanese Yen
(including paper, electricity fee etc.)
 Two departments A and B in your company
use this copy machine together. The volume of
Department A: 3,000 pcs
 The volume of Department B: 2,000 pcs
 Calculate the amount of payment of
department A and B
COST PER EACH PAGE
 The
average pages: 5,000 pcs
 Cost of each month for 5,000 pcs
y  100,000Yen  15Yen / pc  5,000 pc
 175,000Yen

Then, cost of each page
 175,000Yen
c
 35Yen/Pcs
5,000 Pcs
Total
cost
100,000
piece
ANSWER
Payment
of Department
A:70,000
Payment of Department B:
105,000
Other way for the payment?
BENEFIT OR LOSS?
The copy machine has some trouble things in
company X. Company X has to copy 1,000 pages.
They will pay 30 Japanese yen for each page.
 You will gain profit or you will lose if Company X
use your copy machine and pay 30 Japanese Yen
for each page?

ANSWER
You
may refuse because the total cost
of each page is 35 Japanese Yen,
larger than 30 Japanese Yen?
Or you will gain?
The variable cost is only 15 Japanese
Yen, less than 30 Japanese Yen.
Total profit is 15,000 Japanese Yen.
TO THINK ABOUT……
What
is the new things you
learn from the case?
KEY CONCEPTS OF CORPORATE
MANAGEMENT
efficiency: A measure of how well
or how productively resources are
used to achieve a goal.
 effectiveness:
A measure of the
appropriateness of the goals an
organization is pursuing and of the
degree to which the organization
achieves those goal.
RELATIONSHIP BETWEEN
EFFICIENCY AND EFFECTIVENESS
Low efficiency/High effectiveness: High efficiency/High effectiveness
Manager choose the right goals to Manager chooses the right goals to
pursue, but does a poor job of using pursue and makes good use of
resources to achieve these goal.
resources to achieve these goals.
Results: A product that customers Results: A product that customers
want, but that is too expensive for want at a quality and price that they
them to buy.
can afford.
Low efficiency/Low effectiveness High efficiency/Low effectiveness
Manager choose wrong goals to
Manager chooses inappropriate
pursue and makes poor use of
goals, but makes good use of
resources.
resources to pursue these goals.
Results: A low-quality product that Results: A high-quality product
customers do not want.
That customers do not want.
EFFICIENCY AND EFFECTIVENESS
Low efficiency/High effectiveness:
Manager choose the right goals to
pursue, but does a poor job of using
resources to achieve these goal.
Results: A product that customers
want, but that is too expensive for
them to buy.
EFFICIENCY AND EFFECTIVENESS
Low efficiency/Low effectiveness:
Manager choose wrong goals to
pursue and makes poor use of
resources.
Results: A low-quality product that
customers do not want.
EFFICIENCY AND EFFECTIVENESS
High efficiency/Low effectiveness:
Manager chooses inappropriate goals,
but makes good use of resources to
pursue these goals.
Results: A high-quality product that
customers do not want.
EFFICIENCY AND EFFECTIVENESS
High efficiency/High effectiveness:
Manager chooses the right goals to
pursue and makes good use of
resources to achieve these goals.
Results: A product that customers
want at a quality and price that they
can afford.
SOME IMPORTANT FIGURES
Fredric W. Taylor（1856～1915）
H. Fayol（1841-1925）
DEFINITION OF MANAGEMENT
Management
is the
attainment of organizational
goals in an effective and
efficient manner through
planning, organizing, leading,
and controlling
organizational resources.
MANAGEMENT FUNCTIONS
Planning
Select goals
and ways
to attain them
Resources
*Human
*Financial
*Raw materials
*Technological
*Information
Organizing
Assign
responsibility
for task
accomplishment
Controlling
Monitor activities
and make
corrections
Leading
Use influence
to motivate
employees
Performance
*Attain goals
*Products
*Services
*Efficiency
*Effectiveness
DECISION MAKING
THE STAGES OF DECISION MAKING
Identifying and
diagnosing the
problem
Generating
alternative
solutions
Evaluating
alternatives
Evaluating the
decision
Implementing
the decision
Making the
choices
BOUNDED RATIONALITY
Classical
model: a decisionmaking model based on the
assumption that managers
should make logical decisions
that will be in the organization’s
best economic interests.
BOUNDED RATIONALITY
Administrative
model: a
decision-making model that
describes how managers
actually make decisions in
situations characterized by
non-programmed decisions,
uncertainty, and ambiguity.
BOUNDED RATIONALITY
 The
concept that people have the
time and cognitive ability to process
only a limited amount of information
on which to base decisions.
 Satisfaction: to choose the first
solution alternative that satisfies
minimal decision criteria regardless
of whether better solutions are
presumed to exist.
ILLUSIONS
MY WIFE AND MY MOTHER–IN-LAW
PROSPECT THEORY
A
theory that people value gains
and losses differently and, as such,
will base decisions on perceived
gains rather than perceived losses.
Thus, if a person were given two
equal choices, one expressed in
terms of possible gains and the other
in possible losses, people would
choose the former.
EXAMPLE
Expectation
value is same
90
A case: E(x)=0.9*100=90
B case: E(x)=0.1*900=90
THANK YOU FOR YOUR ATTENTION!