Key components of effective strategic management

DEVELOPMENT MANAGEMENT (Part V)

MANY organisations still prefer to be measured solely on their bottomline performance, taking cognisance mainly of marketing, financial and operation management to represent the core operations of their business.

However, there is a growing number of farsighted and successful organisations incorporating "development management" as part and parcel of their mainstream management activity.

The predominant components of development management include, human asset management, research and development (R&D) and management information systems.

Human Asset Management

Human asset can be an enigma to an organisation in that it can be the most gratifying asset or the most insidious liability. Therefore human asset management has become particularly challenging for both local and international organisations.

There is an increasing awareness of how important human resources are to effective strategic management. They can be more involved and proactive to all activities undertaken by the organisation to ensure that actual operations conform as planned.

For the staff to be involved, they have to be motivated. Management must influence their staff convincingly without prejudice to work hard in order to accomplish specific objectives.

Communication plays a major component in motivation. Two-way communication is vital in gaining support for the organisation's objectives and policies. It also encourages staff to voice their concerns, reveal their problems, give recommendations and provide possible suggestions to solutions.

The next step after communication would be empowerment. A term which suggests the need to go beyond just communication; to that of decision-making. Therefore, authority must be given to this function to be effective, and the decision-making can be contained between the set "upper and lower" acceptable limits.

Without doubt, training of staff is absolutely important and must be continuous. Training should cover induction and on-the-job training on various new skills. With the ever frequent development changes in business practices, the workforce must be trained and retrained on new technology and methods of doing business in order to remain competent, competitive and relevant.

Research and Development

Not many organisations conduct R&D. Organisations who invest in R&D strongly believe that it will lead to producing superior products and services that would give them the competitive edge to address the changing consumer tastes and needs, new technologies, shortened product life cycles, and aggravated domestic and global competition.

The role of R&D in an organisation should support the execution of business, help launch new business, improve product quality, develop new products, improve production efficiency, and advance as well as expand the organisation's technological capabilities.

The cost for R&D activities may vary by company and industry. However, it would be prudent that total R&D costs do not exceed the manufacturing and marketing start-up costs.

Management Information Services

Information links all business functions and provide the basis for all business decisions. An effective management information system collects, codes, stores, syntheses and produces customised information that addresses and improves important operating and strategic issues.

Data collected from the internal functional activities and the external business economic and technological environment are integrated to support management decisions.

Data can only become relevant if they are evaluated, filtered, condensed, analysed and arranged for a specific purpose/problem in a given time frame.

The benefits of an effective management system are improved understanding of business operations, improved communication, a better analysis of issues and more informed decision-making.

As business organisations are becoming more complex, decentralised and globally dispersed, the role of information systems is growing more in importance. Management information systems allow organisations to establish distinctive competencies in their respective industries.

Therefore, the importance of development management, though supportive in nature to an organisation's operations, cannot and should not be underscored.