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Wow, what a week this has been. We had found out that our bid on a team was successful, and we too have now been taken over. I certainly have not panned out as I foresaw at the start of the semester. These weeks have been much the same, with very demoralizing results which we did not foresee. Our profit is now into the negatives for the first time, and is something that will require urgent attention, something our new ‘mother company’ would probably agree with.

Highlighting that our conservative and often misinformed decisions (due to a lack of knowledge about MikesBikes, at least from myself) saw a mediocre run of results and we decided something was going to change. We decided to drastically increase expenditure to increase revenue in the hope of taking us to the side where the grass was greener.

I know the readings said the business must be looked at granularly in order to expose areas of promise and potential, but in doing this we neglected the interrelationship that existed within the organisation as a whole – once again lacking ‘conceptual skill’ (Baghai, Smit, & Viguerie, 2009; Katz, 1955).  We failed to entirely realise in order to meet the planned demand (which in itself was somewhat of a gamble, albeit a successful gamble), we did not produce enough bikes to actually cover these costs, with around 30,000 lost sales. It could also be that we were been granular in the wrong kind of way – breaking the company down into departments, possibly to validate our roles, rather than seeing it as being made up of business units.

Clearly there is a balance or compromise to be met between conceptual skills and looking at a business granularly. Although it isn’t abundantly clear to me what this would look like in MikesBikes considering we are a ‘start up,’ perhaps we could look at the business in terms of product lines or business units. Perhaps this way our efforts could be focused and more effectively assess potential for growth. In a larger corporation, I suppose it would mean moving a centralized power structure to one comprised of a wide horizontal hierarchy of executives.

Anyway, what I am going to address these problems for next week?  On a superficial level, make sure our revenue exceeds any extra expenditure that we make. On a more fundamental level,  I will try look at everything in perspective of product lines, keep things focused enough to provide ample assessment of opportunities and challenges of growth, but also wide enough to associate all conventional departments with it as well, showing some degree of conceptual skill (Katz, 1955). For example, if I and my team want to increase sales for commuter bikes, we must look at how much factory capacity we have, how much spare cash we have for an increasing to marketing budget, and how many workers we have. Once this has been sorted, it must then be negotiated with the rest of the business unit’s. These things may seem basic but with so much pressure, often gets overlooked.

Let’s hope my team can turn this around next rollover!

 

References

Baghai, M., Smit, S., & Viguerie, P. (2009). Is your growth strategy flying blind? Harvard Business Review, 87(5), 86—96.

Katz, R. L. (1955). Skills of an effective administrator. Harvard Business Review, 33(1), 33--42.

2 Comments

  1. I can relate to this journal personally, as my team has had a pretty nasty run of rollovers too, and we have not been able to get back to our successful roots. As you correctly noted, the Baghai, Smit and Viguerie (2009) reading outlines a different way of viewing business, specifically in a 'granular' manner. Although you could have outlined what this, effectively, means in your case and how that is different to your current perspective, it was a nice analysis nonetheless and the recognition that you also can't neglect other interrelationships in favour of this is key. I agree that there must be a balance in the granular view and the conceptual skills outlined by Katz (2005). 

    All the best with the new takeover!

  2. Hi Henry, 

    I found your journal very interesting, as the idea of a takeover hasn't been on my or my groups mind until this week when a few took place, and it leaves me curious as to which way things will pan out. I see it as a make or break situation, so all the best to your team and I hope it pays off for you. You have related your reflection and problems you encountered over the past week well to the readings and your journal follows Dauedlin's structure well, touching on each of the four stages of reflection. The only thing I would critique would be the sentence below, in order for it to be grammatically correct it should be "my team and I"

    if I and my team

    However that is only a minor thing that I picked up on, other than that it was a good journal. All the best for the rest of mgmt300 (smile)