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"BUSINESS POLICY & STRATEGY: AN ACTION GUIDE"   Term Paper ID:19137 Click to get this paper

Essay Subject: (Robert Murdick, Carl Moor & Richard Eckhouse). Chapter-by-chapter summary: business failure & success; environmental factors; management; marketing; accounting; human resources; computers, etc.... More...

31 Pages / 6975 Words 1 sources, 40 Citations, APA Format $100.00 Return to List of Papers

Paper Abstract: (Robert Murdick, Carl Moor & Richard Eckhouse). Chapter-by-chapter summary: business failure & success; environmental factors; management; marketing; accounting; human resources; computers, etc. Paper Introduction: Business Policy and Strategy: An Action Guide, by Robert Murdick, R. Carl Moor and Richard H. Eckhouse, attempts to tie together the broad policies and interrelationships that exist among the many functional areas which undergraduate students typically study. The authors intend the text to supplement the typical case book and/or computer simulations used in teaching business strategy" (p. ix). Situational analysis is presented, as is a structure for developing strategy. Practicality and real-world experience is combined with educational theory to provide as complete a picture as possible of strategy in business. The authors have divided the text into 15 chapters with no further subdivisions. It is possible, however, to group the chapters into specific areas of study. For example, the first Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Murdick, Moor and Eckhouse suggestthat a business has seven groups of stakeholders, each of which providessome level of legitimacy to the organization: customers, shareholders,general public, suppliers, competitors, governments and special interestgroups (p. There is alsothe possibility that figures may not (whether intentionally or not),accurately reflect the true position of the company. Imposing the tight,formal structure of medium and large companies on small companies can bedeath for the smaller firm, according to the authors (p. Murdick, Moor and Eckhouse cite that the most prevalent problemfacing small companies is operating at below peak efficiency. However, theauthors point out that the balance sheet must be adjusted to enable evenrudimentary analysis. Murdick, Moor and Eckhouse present factors that they believe have ledto the increasingly complex labor environment. Therefore, it is necessary to anticipate the industryreaction to proposed actions by a company. Environmentalanalysis and forecast and internal analysis have already been discussed inprevious chapters. 61). When companies do not understand strategic management, there is anotable shift among various tactical strategies. Chief among these reasons is the idea that financialanalysis is the most direct way to point out that a company may beexperiencing difficulty. 7). Full-time specialists, such as lawyers or treasurer, may also be found in medium-sized firms, but not in small ones. Murdick, Moor and Eckhouse identify a four-step process to helpformulate strategic directions for business. Three, internal analysis is necessary to determine resource andcapability. Softwareis defined as the instructions that tell the computer what to do. Situational analysis is presented, asis a structure for developing strategy. Determining the legal typeof organization requires careful analysis. 8). The realworld examples are well-thought out and appropriate to the material athand, and the charts and diagrams are well chosen to represent theinformation being presented. As they do elsewhere in the text, Murdick, Moor and Eckhouseemphasize the need for a unified sense of direction among the engineeringand research divisions. They indicate how well the company expects to do, and how well thecompany has predicted their past performance. Murdick, Moor and Eckhouse offer seven major areas that should beinvestigated when performing an industry background study. Three, they present a framework fordetermining a unified sense of direction. The authors then turn their attention to marketing policy and findthat there are three policy options within marketing: expand sales into newclasses of customers; increase penetration in existing market segments;avoid marketing innovations, but work to maintain present market share withproduct design and manufacturing innovations. Legal constraints are oftenobvious, but political constraints may be nebulous. These companies may not have goodcontrols, or may try to implement too many controls at one time. 1 3). 177). Murdick,Moor and Eckhouse go through the case step by step, illustrating the pointsthat they have made in this chapter, and using tools that they developedthroughout the book. Top managers may strongly disagreeabout the direction the firm is taking, or should be taking. Here, the authors findthat successful firms have written objectives and policies that cover allaspects of a company's operations, including its internal and externalenvironment (p. In suggestingways to analyze the marketing of an organization, the authors suggest thatcompanies strive to establish and maintain a competitive edge. Rather than making the common mistake ofbeginning an MIS system with a computer system, the authors warn the readerto begin by establishing an MIS. One, with proposing concepts, means andpolicies for increasing productivity. In chapter 13, the authors discuss industry studies. Medium-sized companies are best servedby "flat" organizational charts; that is, few hierarchical levels, withfunctional managers reporting directly to the president. 49). To help their readers overcome this problemand successfully manage one or more businesses, Murdick, Moor and Eckhouseidentify five points that they address in the remaining 14 chapters. Here, they suggest that thehistorically popular approach of studying functional areas separatelywithout understanding their interrelationships proved short-sighted and thesource of many business problems, and some spectacular failures. Included is an examination of theplanning behind establishing the human resource needs. For example,Murdick, Moor and Eckhouse suggest that the production of a life insurancepolicy is very different and has different requirements from the productionof a piece of machinery. The authors suggest that any one of three events may move the designprocess into action. The chapter ends with a detailed checklist ofspecific items that should be considered when preparing an industry study. In fact, the authors consider the effect of government on humanresources important enough to include a four-page chart on recentgovernment legislation. Organizations may follow one of the six "pure" forms identified bythe authors: people, product, geographic area, process, function or phaseof activity (p. This illustrates the importance that the authors placeon accounting and finance, and also the trepidation they believe mostreaders have when it comes to these subjects. This is a luxury for small companies; a requirement for largeorganizations. Four, how can activities becoordinated? The authorspresent a chart that illustrates how businesses large and small can bothhave "relatively short successful life spans" (p. The authors include three appendices to this chapter, including keymerger and acquisition terms, a discussion on value-based planning and adiscussion of discounted cash flow valuation. To those business managers who are of theopinion that they cannot forecast the future because they have problems inthe present, the authors counter that by being mindful of what the futuremay hold, the managers can minimize their problems in the present. Conditions of employment,labor management relations, legal aspects, productivity and the computerhave also contributed to the increased complexity in personnel relations. Identifycharacteristics of the most successful and least successful companieswithin the industry. Murdick, Moor and Eckhouse identifyseven areas that may be covered by these strategic marketing policies:morality and public service, products, markets, profits, personal selling,customer relations and promotion (p. Financial analysis can be used to establish thatthere is a problem, though it may not always establish what the root causeof the problem is. Evaluate thepotential growth of the company relative to the industry. 267). Communications, both formal and informal, should beevaluated, as should individual training and development programs.Performance appraisal, and compensation and benefits are also areas thatshould be looked at carefully. 16). To help the reader analyze the production process of a company, theauthors identify five systems for identifying problems within productionpolicies: the manufacturing organization; production planning; productionoperations; production control; and, relationships between manufacturingand other organizational components (p. 242). The general manager develops the concept of the enterprise, guidesthe development of a set of visions, goals, values and policies, andconducts the strategic management tasks of renewal and growth (p. This chapter examinesthe former case, but the authors are confident that their suggestions areequally applicable to American firms doing business in America againstforeign-based competition. It is up tothe general manager to balance conflicting objectives of subsystems,differing value systems of internal and external influences, opposing viewsof priorities and emphasis and conflicting proposals for criteria in allareas. General managers are identified as individuals"responsible for a business system" (p. Chapter 8 is concerned with the functional area of production. Three, E & R makes a technical advance withpractical applications (p. Business Policy and Strategy: An Action Guide, by Robert Murdick, R.Carl Moor and Richard H. Managers failed torecognize potential problems. In chapter 5, Murdick, Moor and Eckhouse take up the complex issue ofsurvival and prosperity among firms. Developing strategy is, along with implementingstrategy, one of the most complex tasks a firm undertakes. To assist the reader, the authors suggest three approachesthat may be used. 1 4). Quality is often relegated to lesserprominence, although not in all companies. Industry practices or labor unions may dictatelabor relations. While these are thelegal forms of organization a business may have, the law does not dictatewhich form is appropriate for a given business. However, each case may have different roles for the analyst,with some looking upon the analyst as a consultant, and other casesdemanding that the analyst assume the role of president. Production equipment engineering is defined as designingunique or specialized equipment used to manufacture a specific product.Process (manufacturing engineering) is defined as the specification ofequipment and processes to be used in production. Murdick, Moor and Eckhouse are also careful to discuss plans andtactics for keeping with the marketing concept and strategy. Good marketers recognize that marketing is both an art and ascience, and they make the best use of scientific information in order toenhance the art. They also stress the importance of considering any otherpertinent questions that must be considered for the specific company andindustry. Finally,and perhaps most importantly, the authors suggest that weighing different,exclusive courses of action quantitatively provides additional tools tomanagers to make strategic decisions. 41). The nature and impact of the policy of the United States are alsoexamined; certainly American foreign policy affects the markets, marketingand production that an American company can undertake. As businesses change andstrategies are modified, managers must be willing to undertake changes inthe legal organization, as well, in order to maintain the most competitiveand advantageous organizational structure. Throughout the text, the authors emphasize the importance of aunified strategy. They can also be used tospot difficulties and problem areas in the present, as well as areas thatbecame problems in the past. Murdick, Moor and Eckhouse also findthat the underlying principle behind human resources is to maximize long-run productivity. Multinational businessanalysis is the subject of chapter 12, while chapter 13 turns the reader'sattention to how to conduct an industry study. When examining the marketing position of a company, it is necessaryto analyze the marketing philosophy, policies, strategy and operations.Fundamentally, it is necessary to establish that a company is following itsmarketing concept. Instead,small companies work best with loose organizational structures that allowfor maximum creativity. While they admit that new firms havethe greatest risk of failure, they also point out that old, establishedfirms (such as Packard Motors and Baldwin Locomotive) can also disappearfrom the business scene. Manufacturing policies, which may be recommended by the manufacturingmanager, are often decided upon by top management. The appendices cover businessarithmetic, break-even analysis and definitions of accounting terms. The authors' case solution is then presented. The chapter ends with specific questions that should be asked ofsmall and large companies with regard to human resources. Visually, the book is crowded without much white space for readersto make notes. Personal selling mustbe taken into account. Hardware is defined as "if you kick it youwill hurt your toe" -- the physical computer equipment (p. The policies, strategiesand actions of one company within an industry affect other companies withinthe same industry. Murdick, Moor and Eckhouse suggest that organization provides thestructure of the business system. This may mean delegating some responsibilities in order toallow the owner-manager time to focus on strategic planning. 253). Chapter 11 shifts the reader's focus from human resources to dataprocessing, management information systems and computers. Themarketing strategy of the company must be well defined within these broadpolicies. Some organizational aspects are dictatedby law; sole proprietorships, partnerships, limited partnerships,corporations and joint-ventures are examples of these. Career management, labor managementrelations and government regulations are also subject to the authors'scrutiny. Theynote that when performing industry comparisons, it is important to comparelike industries, and like companies within the industries. These include the changingcomposition of the workforce, with an increased proportion of workersemployed in services and an increasing number of women in the workforce.Social changes, including drug and alcohol abuse, have also contributed tothe necessity for a human resource manager. They also emphasize that itis through repeated and frequent analysis that the reader is likely toimprove his financial analysis skills, and the tools presented in the threeappendices to this chapter are designed to assist in that improvement. Five,they give detailed case and analysis tools to enhance the reader's abilityto identify complex business problems. However, the book itself is notparticularly well organized, nor does it present the information in aclear, straightforward manner. The authors present a number of organizational forms that amultinational business might take on. Avoiding environmental threats requires long-term planning and anticipation of potential problems. There can be a tendency to let the creativity fromthese two areas run unchecked and without tying it to the company's overallstrategy. Murdick, Moor and Eckhouse identify seven major tasks that form thestrategic management process: formulation of the philosophy of management,corporate purpose and goals; environmental analysis and forecast, internalanalysis of strengths and weaknesses; formulation of strategy; evaluationof strategy; implementation of strategy; and, strategic control (p. Companieswhich may run efficiently may not be running according to their strategicplan. 227). The authors concentrate onthe basic aspects of finance and accounting that can be learned quickly andthat will bring the greatest benefit when taking a strategic approach tobusiness. By providing the reader with the tools necessaryto achieve a basic knowledge of key functional areas within a company, theyhelp ensure that the reader will be better able to understand theinterrelationships that permeate organizations. Three appendices provide review material for those readers whofeel they are lacking in some area. The authors end the chapter with a note of caution. The philosophy of management is concerned with what the firm strivesto achieve in the long-term, not with immediate objectives. Marketingresearch is of prime importance in order that the company base itsdirection on as much quantitative information as possible. Selecting thewrong category can render the value of the ratio comparison null. It is the general manager whois responsible for profit and loss and for long-term survival. Evaluate thepast growth of the company relative to the industry. Murdick, Moor and Eckhouse do not believe that managers should becomputer experts; they do believe that managers should be familiar withmanagement information systems, computer systems and data processing.Management information systems monitor and retrieve data from theenvironment. Technological changes, changes in consumer demand and otherenvironmental factors that are outside the realm of financial analysis canbe overlooked if there is too much emphasis on historical financialperformance. Finally, the authorssuggest that financial analysis is an art that is mastered by all too fewpeople for it to be considered the ultimate analysis tool. Constraints may require careful and thoughtful analysis inorder to realize their full implications. Specific characteristics of themarketing concept include treating the customer as all-important,pinpointing a target market, gaining a competitive edge, and focusing onprofits (pp. Chapters 14 and 15 focus onhow to analyze a case and illustrations of case analysis, respectively.The text concludes with an appendix of symbols used by those who evaluatereports and a general index to topics within the book. 191-192). This is necessary, according to the authors, because eitherAmerican businesses are competing in foreign countries, or because theyface foreign competition here in the United States. It is important that the business act in a manner that ismorally responsible toward these groups. In-depth financial analysis cannot be performed, forexample, because the financial data is summary in nature. Finally, marketing operations must be carried out effectivelyand efficiently (p. Chapters Six through Nine addressspecific functional areas (marketing, accounting/finance, production, andengineering/research and development). It gives the reader a clearunderstanding of what the goal is, then shows him how to achieve it. 1) Reasons for theultimate failure are presented in this chart, and the authors go intogreater detail in the text. General sources, such as Moody's and Standard &Poor's are discussed as are ratio reports. This discussion reminds thereader that the valuation method or changing valuation may result in acompany overstating or understating its actual position. Threats which pose immediate problems may also pose extremely fragileenvironmental situations. The authors then provide information on how readers can obtainfinancial information. In order to better understand why some firmssurvive while others fail, the authors look at small, medium and largefirms. Chapter 4 formally introduces and explores a concept that has beencentral in the text so far, but which the authors have not defined untilnow: strategic management. Design engineering is defined as beginningwith the performance specifications as a given and ending with the designspecifications. It is possible, however, to group the chapters into specificareas of study. Companies seeking outside capital to infuse into thebusiness find that potential investors consider financial analysis key totheir decision-making process; inside managers would do well to keep afinancial picture of the company in mind to prevent unpleasant surprises.Since financial analysis is quantitative, it can help point up whereproblems exist, rather than where managers may think they exist. While managers of small firms that are growinginto medium-sized firms are well-advised to avoid hiring managers fromother medium-sized firms, and instead, seek to teach the individuals whoare already associated with the company the skills they will need in thenow-larger organization. Chapter 15 is dedicated to presenting two sample cases and caseanalyses. High technology companies or those in rapidly expandingindustries may have financial figures that are too uneven to provide anaccurate picture of how the company is actually performing. This, in turn, enhances the company's profitability.Technological forecasting is one area that should occupy much of the E & Rresources. Murdick, Moor andEckhouse take a philosophical rather than mechanical approach to marketingin order to provide the reader with a better base of understanding that canbe applied in the real world. The last four chapters discuss theissues involved with analyzing business situations. Two, analysis of the situation outside the company must beundertaken to see what opportunities and threats might be realized orovercome. ix). Fundamentally, the authors find that managers in business are unableto determine what action to take, or are unable to implement the necessaryaction once they have identified it. Chapter 1 is concerned with human resource policies and problems.Recognizing that the legislative and competitive environments have createdhuman resource situations that are increasingly complex, the authorssuggest that it is imperative that line managers work closely withprofessional human resource managers. Murdick, Moor and Eckhouse also present five systems that can assistthe reader in analyzing E & R policies: commitment of the company tocreativity and innovation; the E & R organization itself; the planning andcontrol system; the design process; relationships between the E & Rorganization and other components. The first case, Shaft Nursery and Landscape Company, isstraightforward with only a small amount of information provided. Murdick, Moor and Eckhouse favor comparing performance acrossdepartments within a single organization, and across companies within asingle industry in order to arrive at the most accurate comparison. The reader is then introduced to the funds flow concept thatestablishes how many funds are needed for projects and the possible sourcesof those funds. Environmentalthreats may include competitors, changes in customer demand, legislation,inflation, recession and technological breakthroughs. The end result is less than optimal use of resources, human andotherwise. In Chapter 2, the authors move to consider the field of action, orthe arena in which business executives and businesses operate. Ratios are of particular importance to the authors; they devote fourpages of a chart to figuring ratios and a lengthy discussion on theirproper use. Eckhouse. For example, there can be a tendencyto use financial analysis to focus on the past, rather than anticipatingwhat the historical figures may indicate about the future. Had the authors taken their own advice andpaid more attention to format and writing style, the text would stand as amuch stronger learning tool. 94). Such plans greatly enhance implementation byleaving few variables subject to chance. The remote environment consists of such aspects as: globaleconomics, political factors, social and demographic features, technologyand physical resources. The authors are of the opinion that most problems within anorganization are fundamentally people problems. 2 8-211). The authors present a number of key areas that they consider typicalof a good analysis of human resources. Turning their attention to medium-sized firms, Murdick, Moor andEckhouse first acknowledge that there are no clear-cut rules fordifferentiating between medium and large companies, except throughexamining assets, sales, equity and number of employees. Where? Markets which have particularly volatileexchange rates are also likely to be less attractive as markets in whichmultinationals want to do business. Since small companies generally have arelatively small market share, their employees must divide their time amongseveral different tasks, each of which may be associated with a differentschedule. The authors divide the environment into two distinct parts: remote andimmediate. Here, the authorspresent a chart showing how government policy both helps and hindersexporters (p. 5) . 46). Chapter 7, which focuses on the functional area of accounting andfinance, is the longest chapter in the book; it is nearly twice as long asany other chapter. Distribution and pricing strategies must bereviewed and modified on a regular basis in order to keep the companyoperating at maximum efficiency. Murdick, Moor and Eckhouse strongly recommend that when thereader undertakes case analysis, he is careful to evaluate the individualsas well as the policies and corrective actions involved. These include export, multinationalproducer and a multinational system of subsidiaries working under a singleparent company. However, any one of these groupsmay be powerful enough to force a business to close, or to support itsoperation even during general business downturns. One, top management mustsettle on the personality of the company through open and frankdiscussions. One, they present the field of action in which managers must operate. 144-145)? The General Agreement on Tariffs and Trade (GATT)provides the primary international agreement among countries, but GATTtalks continue to take place and not all countries are in agreement withGATT. From this, comparisons can be made toindividual companies within the industry. Inflation in many countries greatlyoutpaces inflation in the United States, for example, and the balance ofpayment problems in the host country may greatly affect the financialhealth of the American company. If the trend in sales is up, but thetrend in profits is down, the company is very likely already in serioustrouble (p. These problem areas include management and marketing; theauthors provide specific areas within both these realms to be examined. Murdick, Moor andEckhouse recommend a span of management of at least six people withoutcrossover responsibilities (pp. One, a customer of the firm may indicate a specificneed. Three, what is goingwrong? Two, the analyst can start with the symptoms of the problem and workbackward to the individuals involved. Such aids would makethe book more valuable and enhance the learning experience of readers. Development is definedas being concerned with examining new conceptual designs or developingperformance specifications. 22-23). Failing to provide line managers with the tools theyneed to stick to that purpose, or, worse, failure by top management toidentify that purpose, is likely to result in the eventual demise of theorganization. Financial management, which the authors have already identified asdifficult for American firms operating in American markets, is even morecomplex for multinational businesses. Short-term productivity gains such as may be realized bynot providing a good physical workplace or poor rewards are likely toresult in long-term decreases. Strategic plans involve writing down what is to be done,when, how, and by whom. Immediate opportunities include new applications ofexisting products, new processes in manufacturing, and new and improvedcustomer service (p. Chapter 1 examines why some businesses fail and why others succeed.The first sentence in the book states exactly where the authors stand onthe issue: "Businesses fail because managers fail" (p. The authorsrecognize that computers have greatly transformed the business environment,and that computers have made available greater quantities of information,at greater levels of accuracy, than ever before possible. Having presented a wealth of information to the reader on finance andaccounting, the authors end the chapter with a lengthy chart designed tohelp the reader use his newly acquired skills. The chapter concludes with adetailed checklist for analyzing the production policies of a givenorganization. The discussion of the business system begins with the identificationof general management. The authors then discuss budgets, which they consider to be of primeimportance when evaluating a company's managerial performance. Financial analysis can alsospotlight symptoms of problems (although not the underlying cause,necessarily). 1 5-1 6). The authorsdefine strategy as 1) a statement of strategic objectives of theorganization, 2) courses of action to be taken in moving the organizationfrom its present position to a position defined by its principal strategicobjectives, and 3) policies and standards of conduct pursued for one long-range cycle of the organization (p. At this point, the authors shift their focus from finance toaccounting, and discuss how accounting can help decision-makers. Growth for its own sake needs to be avoided, as doesundercapitalization. Finally,there is likely to be no long-term, written strategic plan for theorganization, including strategic goals and the ways those goals will bereached (pp. Total company control is necessary to long-term survival. By channeling the creativity into the strategic direction thatthe company is taking, the organization reaps greater benefit and avoidsinefficiency. Murdick, Moor and Eckhouse also consider the effect of socioculturaland economic forces, and identify some common areas where mistakes arelikely to occur. Chapter 6 begins a four-part section on functional areas with adiscussion of marketing. Recognizing that the business environment is now a multinationalenvironment, the authors devote chapter 12 to analyzing multinationalbusiness. Peakefficiency is the level at which the small companies would be able torealize economies of scale. They define fundamental (basic)research as a search for new knowledge without regard to possibleapplication. References Murdick, Robert G., R. As with Shaft Nursery, theauthors use a step-by-step approach to illustrate how they intend toconduct the analysis, then they proceed to do so. Eckhouse, attempts to tie together the broadpolicies and interrelationships that exist among the many functional areaswhich undergraduate students typically study. Failing companies maysuffer inadequacy in one or more key functional areas, or have peopleproblems that cannot be overcome. One, how is the company doing overall? Murdick, Moor and Eckhouse give several examples of inventoryvaluation and the effect that changing valuation methods may have whenconsidering a company's financial position. Strategic marketing policies are developed by top managers workingfrom top level marketing policies. Carl Moor and Richard H. Large companies are likely to combine several ofthese forms. The authors first present the idea of a "marketing concept," whichthey define as a philosophy that guides the attitude and behavior of eachemployee in the organization (p. Any trends that exist overthis period are likely to persist, according to the authors, because trendsgenerally do persist barring unforseen circumstances. Murdick, Moor and Eckhouse are successful in illustrating how variousfunctional areas within an organization are dependent on other functionalareas and also are responsible for the ultimate success or failure of theorganization as a whole. Murdick, Moorand Eckhouse begin by defining an industry as a group of companies thatproduce similar or substitute products (p. The authors end this chapter with a discussion of decision problems.Such problems are identified as situations that require action based onexecutive decision to pursue a given course of action (p. Because this field ofaction is dynamic, it is up to the managers of individual organizations todetermine the proper level of responsibility toward each of these groups ofstakeholders. Murdick, Moor and Eckhouse also suggest that monitoring andforecasting the business environment is vital to the success of a business. Here, Murdick, Moor and Eckhouse suggest thatsuccessful firms are characterized by everyone in the company beingmarketing-oriented (p. The next two chapters focuson the "field of action," including the business environment and thebusiness system. Two, marketing may identify a problem that can be solved through anew or improved product. The computer system is identified as comprising three subsystems:hardware, software and people. The second case presented in this chapter is that of Vogue Creations,Inc. A detailed chart is presented to illustratethis last technique (pp. They find that good marketers are thosewho can identify the key factors associated with their business, foreseehow those factors will behave in the future, and who can create outstandingstrategies based on these factors. Four, the internal capabilities must be matched to theexternal opportunities (p. The authors then move to writing the case itself, and suggest thatthe case analyst take the time to prepare an outline. Some countries, such as the European Community, have formed tradingblocs designed to give their members economic advantage and limitcompetition from nonmember countries. Key concepts could also have been separated from supportingtext in a more clear manner. 15). Identify the number andcharacteristics of companies within the industry. Recognizing that these arenebulous terms to many readers, Murdick, Moor and Eckhouse begin thischapter by introducing their definitions. First and foremost, they warn againstrestating information that is already clearly stated in the case material.The authors suggest dividing the problem into parts, determining whichfacts are material to each part, combining the problems and facts in a formthat expedites synthesis and interpreting the facts by drawing conclusions. Five, is the company operating as effectively as it can inits environment (pp. 4). While each chapter has a summary, they do nothave an introduction or a listing of key words of concepts that the studentshould learn as a result of studying each chapter. For these reasons, the authorsstrongly suggest that an industry study be undertaken. The use of appendices that contain information which may be commonknowledge among some readers is a strong positive organizational point.Those who are already familiar with the material may skip to the nextchapter, while those who are not have the opportunity to learn. Finally,medium and large companies that fail to operate with an "international"mentality may well find themselves facing difficult times (p. Having established the reasons for hiring a human resource manager,Murdick, Moor and Eckhouse suggest three areas with which a human resourcemanager should be concerned. Returning briefly to ratio analysis at this point, the authorsidentify four key areas to examine: profitability, liquidity, leverage andturnover. Budgetsassist in planning, but also indicate how the firm has performed in thepast. Good marketers satisfy a large numberof customers at a high level of profit over a long period of time (at leastten years). Small firms need to focus on facts rather than hunches andguesses. Such companies lackprocedures for developing strategies and plans, and may be carryingsubsidiaries or products that are no longer money-makers. Another factor to take into account when evaluating the productionactivities of a company is the type of business they are in. Murdick, Moor and Eckhouse consider break-even analysis to beimportant when: deciding whether to increase sales or advertising expensesto increase volume; weighing the relative merits of decreasing prices toincreasing volume; determining the advisability of borrowing for capitalimprovements to increase capacity; and when evaluating office automation.The first step in break-even analysis, according to Murdick, Moor andEckhouse, is dividing costs into fixed (constant) and variable. Chapters 2and 3 focus on this field of action, with chapter 2 looking at theenvironment of the business system. Peopleare the part of the system that perform the tasks the hardware and softwarecannot. (1989).Business policy and strategy: An action guide. The authors make good and frequent use of charts, graphs, forms andother graphic techniques to illustrate their points. The authors conclude this chapter with a summary of the marketing mixas well as a summary of the pitfalls that may be symptomatic of companiesexperiencing marketing difficulty. Lack of cash planning and managerial problems alsoplague small companies. They also find that it is not enough for acompany to understand the science of marketing; a company and its marketingstaff must be able to understand the art, as well. Theysuggest that long-term plans include identification of Key PerformanceAreas (KPAS) and the monitoring system that will keep these areas on trackwith the strategic vision of top management (p. Theauthors begin this chapter by stating that the concepts they are puttingforth with regard to production apply equally to businesses that producetangible goods as well as that provide service. Companieslacking strategic management are likely to suffer a loss of market shareand a deteriorating capital position. Good case reportshave structure and organization, strong format, and a clear writing style(p. Practicality and real-worldexperience is combined with educational theory to provide as complete apicture as possible of strategy in business. Four, they give a brief accountof policies and problems in the major functional areas of business. Work design and jobanalysis should be given careful consideration as should recruitment andselection procedures. Of course, this leads to the question of how to associate problemsand people. Government regulations may also affect the productionstandards from industry to industry. The authors further define synthesis as the creative structuring of dataand the development of goals and plans for the company. From here, Murdick, Moor and Eckhouse move to suggesting that therole of Engineering and Research (E & R) within a company is to providetechnical support to the development and implementation of the company'sobjectives. Within these broad areas of concern,Murdick, Moor and Eckhouse set out a series of 12 functional areas in whichthe human resources manager is either directly or indirectly involved (p.2 5). Broad marketing policies must be established. Applied research is defined as the research done in pursuitof a specific product line or individual product. 46-48). All thesetechnological changes have made necessary revolutionary changes in businessoperations, structure, procedures and human skills. This chapter begins with an examination of the role of thecase analyst, which the authors determine to be central to the structure ofthe case. Organizational policies (as opposed to personnel and staffingpolicies), identify information such as the principles to be followed inorganizing the parts of the company, relationships among majororganizational components, guidelines for position titles, functionaldescriptions of components and spans of management. Beginning with small firms, Murdick, Moor and Eckhouse suggest thatthe competitive edge that defines a company's survival be carefullyanalyzed. One, what is the sales trend?Two, what is the trend of cost of goods sold as a percentage of sales?Three, what is the trend of operating expenses as a percentage of sales?Four, what is the trend in profits? The authors identify a number of new concepts that the reader isencouraged to consider, and they also suggest that integrated, flexibleinformation systems are the key to companies reaping benefit from theirmanagement information systems in the future. 18). Two, whenevaluating alternate plans, which is most attractive? Large companies arecharacterized by "staff" and "line" personnel, with staff personnelproviding support services to line personnel, who are responsible for thecompany's products or services. Columbus, Ohio: PublishingHorizons, Inc.----------------------- 34 Having recognized that there is hesitation and a general lack ofcomfort among business when confronted with accounting and finance,Murdick, Moor and Eckhouse discuss why it is important to understandfinancial analysis. The authors have divided the text into 15 chapters with no furthersubdivisions. 111). In addition to opportunities and threats, which help managers attainlong-term and short-term business success, managers must also be aware ofconstraints. Anticipating that readers are curious as to how to begin theiranalysis, the authors suggest that they begin by taking financialinformation from the most recent ten years. This case is not straightforward and makes use not only of financialdata (income statements and balance sheets), but also of in-depthinterviews conducted with key executives. Examples of suchpolicies include labor-related policies (hiring, promotion, discipline,training), equipment purchasing, transportation of raw material andinventory levels of finished goods. 18 ). They suggest thatmedium-sized firms can be differentiated from some companies in that medium-sized companies require a functional manager for each functional area.Small companies may have one manager for several functional areas. The actual case reportfor this case is much -more involved than that for Shaft, and is wellorganized in giving the reader a clear understanding of what case analysiscan become in complicated situations. The fourth and fifth chapters introduce strategicmanagement (chapter 4) and the struggle not only to survive, but to prosperusing strategic management (chapter 5). There are increased layers of managementin large companies when compared to medium and small firms, and there areoften subdivisions or subsidiaries that are grouped under one large parentorganization. Despite the fact that the authors consider financial analysis to bekey in understanding companies, they are also careful to point out thelimitations of this type of analysis. Chapter 1 concludes with a list of business failures and their causesof 1987, helping the student to understand the importance of strategicmanagement in the success or failure of a company (p. Two, with keeping line managersapprised of the legal environment as it relates to personnel matters.Three, with keeping records and preparing reports related to staffing andother aspects of human resources. Murdick, Moor and Eckhouse are also confident in identifying somegeneral manufacturing problems that they expect the reader to encounter.These include poor space planning, obsolete equipment and a large backlogof orders. For example, the first chapter, "Business Failure --Business Success," examines why businesses fail, and provides the reasonfor continuing with the remainder of the text. Foremost amongthese is the idea that trends do exist and financial analysis is one of themost effective methods for spotting them. The authors also include a list oftypical policies assigned to E & R, general E & R problems, and a detailedchecklist for analyzing E & R. They find thatthe best-made plans do no good unless they are implemented. Each chapterconcludes with a selected bibliography that the student may use foradditional research, The book is printed entirely in black ink; the use ofcolor for key concepts would have enhanced the book's value as a teachingtext. Large companies usually have complex organizational structures thatmay have any one of several hundred forms. Industrial engineeringis defined as a broad area encompassing the technical and economic problem-solving necessary for manufacturing (pp. How can it be fixed? In chapter 3, the authors turn their attention to the businesssystem, which is the second field of action. Chapters 1 and 11 introduce thereader to the problems of managing human resources (chapter 1 ) and dataprocessing resources (chapter 11). Owner-managers need to seek out qualified professional advice andtake advantage of it. Some constraints togrowth are identified by Murdick, Moor and Eckhouse as lack of naturalresources, declining productivity and deteriorating transportation systems(p. Murdick, Moor and Eckhouse identify basic concepts that are essentialto the analysis of any case. 33). This unity extends across all departments of anorganization and through all levels of an organization. Medium and large companies are grouped together in the remainder ofchapter 5 to examine why they succeed and fail. Murdick, Moor and Eckhouse also move to strategic planning andimplementation, and suggest that planning is, in fact, the beginning ofimplementation. They also point out that there are many more causes for failurethan can be covered in any one text, let alone any one chapter. 92). Identify tradeassociations, trade practices and standards that may exist. Four MIS subsystems (management, operating, database andcomputer) are identified. Find the sales trendand sales potential of the industry. Technological forecasting involves determining the directionand degree of technological advances for as much as 25 years into thefuture. This chapter, with its forthright approach to case analysis, is oneof the most valuable in the text. Murdick, Moor and Eckhouse identify small firms as those that areguided by a single individual, or by two partners. To betterunderstand this relationship, American managers are encouraged tounderstand nationalism, economic goals of the host government, how the hostgovernment views international business and various host policies. 1 ). Or, managers failed to act on potentialproblems. The reasons for these shortcomingsare many, but the authors find that managers may be unable to differentiatebetween problems and symptoms. 45). Finally, the authors address the issues of trade barriers andinternational agreements that may help, or hinder, American companies.Trade barriers, which include tariffs, quotas, exchange control and non-tariff controls, may be put in place by the host government to protecttheir own industries. With that in mind, Murdick, Moor and Eckhouse find that the mostimmediate goals are to produce the right quantity of the product (orservice) at the right time. Having presented this rather lengthy discussion on the limitations offinancial analysis, the authors then counter with an equally lengthydiscussion on the advantages of using financial analysis. Murdick,Moor and Eckhouse suggest that financial accounting should answer fivebasic questions. The authors suggest that the reader consider four questions whenexamining the profit and loss statement. It is unity ofpurpose and the adherence to a single strategy that enables the bestcompanies to survive. Two, they describe common major problems that must be identified andsolved in order for firms to prosper. 192). In all cases, the goal is to keep the owner-manager occupied in the areas in which the company benefits the most fromhis expertise. The authors intend the textto supplement the typical case book and/or computer simulations used inteaching business strategy" (p. Chapter 14 is the last expository chapter in the book and presentscase analysis. The immediate environment comprises such areas as:customers and prospects, competitors, the labor pool, suppliers, creditorsand government agencies (p. Production, they suggest,is the "process of converting any design of product or service into theactual product or service" (p. Chapter 9 covers the last functional area -- a combination ofEngineering and Research & Development. To prepare an industrial analysis, it is necessary to determine theeffect of the economy and the industry on each other. 13). Theinclusion of the authors' own interpretation gives the reader theopportunity to go through the cases and try them on his own before turningto see how the authors proceeded. Advertising andsales promotion policies must be considered in light of the company'scustomers, industry and other environmental factors. There is alsoan inherent danger in expecting past trends to accurately predict futuretrends. The information contained in the text is good, and providesthoughtful reading for those interested in the dynamic world of businessmanagement as it exists in the 199 s. Murdick, Moor and Eckhouse suggest that opportunities, like theenvironment itself, can be divided into immediate and long-term for thepurpose of analysis. The authorsbelieve that these areas provide the basis for evaluating the status,growth and future of the industry. Three, the background and apparentperformance of individual executives, including successes and failures, canbe evaluated and analyzed. Among the new concepts theypresent are: decision support systems (DSS); expert systems; artificialintelligence (AI); office automation (OA); and, information centers (IC).The chapter concludes with a discussion of policy questions that the readermight use to evaluate the management information strategy of a givencompany. 147). Murdick, Moor and Eckhouse also attempt to identify thecharacteristics of good marketers. From this point, the authors turn their attention to the nature andeffects of host government policy, or the policy of the government of themarket in which the American company plans to operate. This chapter concludes with a discussion of opportunities andthreats. In addition, since thecompanies that comprise an industry are likely to operate in similarexternal environments, it can be useful to compare the performance ofindividual companies against the industry as a whole when evaluating afirm's performance. 1 9). One, indepth interviews can be conducted with keyindividuals within the organization and associated with a given problemarea. Companies in this size category that fail almostalways have no unified sense of direction (p. 1). If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.