Strategic Management Tools

McKinsey Model of Value Based Management

The McKinsey model, developed by leading management consultants McKinsey & Company, is a comprehensive approach to value-based management.  This approach is based on the discounted cash flow principle, which is a direct measure of value creation.  

McKinsey Model of Value Based Management  focuses on the identification of key value drivers at various levels of the organization, and places emphasis on these value drivers in all the areas, i.e. in setting up of targets, in the various management processes, in performance measurement, etc.

Value based management is a model that allow managers to run a business focusing on the creation, improvement, and delivery of value.  … Read the rest

Abey Francis

Survey Feedback as an Organizational Development Tool

The study of Survey Feedback played an important role in formation and history of Organizational Development (OD). Developed as an  organization wide intervention by Mann and his associates (1957-1965), survey feedback is a  process in which organizational members complete questionnaires on various organizational issues, receive feedback on the results, then take appropriate actions to address the critical needs and concerns.

Though some type of survey method was prevalent in various organizations earlier, Institute for Social Research (ISR) of University of Michigan, USA developed a comprehensive questionnaire for conducting survey in different aspects of an organization. The basic objectives of survey feedback method are as follows:

  1. To assist the organization in diagnosing its problems and developing action plan for problem-solving.
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Grid Training

Grid training is basically based on grid organization development developed by Blake and Mouton. It is a comprehensive and systematic Organizational Development  programme which aims at individuals, groups, and the organization as a whole. Grid training  utilizes a considerable number of instruments, enabling individuals and groups to assess their own strengths and weaknesses; focuses on skills, knowledge, and processes necessary for effectiveness at the individual, group, inter-group, and total organizational levels. Its specific objectives are as follows:

  1. To study the organization as an interactive system and apply techniques of analysis in diagnosing its problems.
  2. To understand the importance and rationale of systematic change.
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Thomas-Kilmann Conflict Mode Instrument (TKI)

Organizational Conflicts are resolved mostly through behavioral measures. Thomas-Kilmann Conflict Mode Instrument is one of the tools used to assess an individual’s behavior in conflict situations. Research has shown that there are five basic styles or modes for handling conflict. The Thomas-Kilmann Conflict Mode Instrument provides a profile of individuals and teams that indicates the gamut of conflict-handling skills which one uses in the kinds of conflict situations one faces. Five basic ways of addressing conflict, namely Avoidance, Collaboration, Compromise, Competition and Accommodation were identified by Thomas and Kilman. This is suited for organizational conflicts.

1. Avoidance

Avoid or postpone conflict by ignoring it, changing the subject, etc.… Read the rest

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Business Reconstruction

In the case of business reconstruction, a new company (hereinafter referred to as ‘transferee company’) is formed, the existing company (hereinafter referred to as transferor company’) is dissolved by passing a special resolution for members voluntary winding up and authorizing the liquidator to transfer the undertaking, business, assets and liabilities of the transferor company to the transferee company.  The old company goes into liquidation and its shareholders, instead of being repaid their capital are issued and allotted equivalent shares in the new company. Consequently, the same shareholders carry on almost the same undertaking or enterprise in the name of a new company.… Read the rest

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Financial Evaluation of a Divestiture

A divestiture involves the sale of a division or plant or unit of one firm to another. From the seller’s perspective, it is a form of contraction; from the buyer’s point of view it represents expansion.  Hence a divestiture is the obverse of a purchase. It is important to recognize that companies often achieve external expansion by acquiring an operating unit — plant, division, product line, subsidiary, etc — of another company. In such a case the seller generally believes that the value of the firm will be enhanced by converting the unit into cash or some other more productive asset.… Read the rest

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