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Category Archives: General Management

Adaptive Search Method For Strategy Formulation

PFR Interim Management Services Posted on July 20, 2020 by Peter FransMay 10, 2023

One of the methods in formulating strategies is Adaptive Search Method. This method uses a search procedure in arriving at a strategy. This is accomplished through a ‘cascade’ approach: at the outset possible decision rules are formulated in gross terms and are then successively refined through several stages as the solution proceeds.

For example, a civil contractor may analyze its past performance and prospects and arrive at a decision to seek diversification. As the second step it would decide that a closely related industry is the natural direction to follow and pick real estate development as its preferred arena. This would be followed by a detailed analysis of the firm in relation to the competitive characteristics of real estate developers. The end product would be specific decision rules such as the competitive and joint effect interactions desired for the new entry. Thus armed with a concept of the business it wishes to become, the firm would begin to seek out, create, and evaluate opportunities.

Another important characteristic of this process is feedback. Since the cascade is a process of search for the best solution, information may develop at later stages which cast doubt on previous decisions.

Thus the civil contractor may discover that it does not have as good a match with the real estate business as appeared on preliminary rough examination. It will then re-examine the previous choice of the product-market scope. The procedure within each step of the cascade is similar:

  • a set objectives is established,
  • the difference (the gap) between the current position of the firm and the objectives is estimated,
  • one or more courses of action (strategy) are proposed,
  • these are tested for their ‘gap-reducing properties’.

A course is accepted if it substantially closes the gap; if it does not, new alternatives are tried.

To continue the simple example, the civil contractor may choose 12 per cent annual rate of return on investment (ROI) as its sole objective (this may be highly unlikely in real life, but helps the example). It finds that past history and current trends show that 8 per cent ROI is the best that can be attained with maximum effort in the civil contracting business. The gap is 4 per cent.

Trends in the real estate industry indicate an average 14 per cent return for the industry. To attain a 12 per cent average, a certain size of acquisition is needed. A test is made to see whether an acquisition of such size within a reasonable period of time is within the firm’s resources.

If the answer is yes, the real estate industry is selected; but the result is provisional, because later stages of analysis may show that the civil contractor’s chances of doing as well as the average in the real estate industry are not very great, or that a much larger investment will be needed than was originally anticipated.

The example points to the feature of the method which introduces the word ‘adaptive’ into the title of this article.

Suppose that the firm cannot find any industry through which it can attain a 12 per cent ROI. In that case the goal will have to be revised downward. Or a more happy event, suppose the real estate entry looks so promising that even 15 per cent would be reasonable. Up goes the goal. Thus the method has what Reitman calls ‘open constraint’ property; both the objectives and the evaluation of the present position are subject to revision as a result of insights obtained in the process of solution.

To summarize briefly, the adaptive search method described above is its application in the formulation of a business strategy of a firm. Its salient characteristics are:

  • a ‘cascade’ procedure of successive narrowing and refining the decision rules,
  • feed-back between stages in the cascade,
  • a gap-reduction process within each stage, and
  • adaptation of both objectives and starting-point evaluation.

(By Peter Frans – Principal Consultant)

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Posted in General Management, Strategic Management | Tagged General Management, Leadership, Strategic Management

Reasons To Change A Corporate Culture

PFR Interim Management Services Posted on February 20, 2016 by Peter FransApril 22, 2022

Changing a corporate culture is an option to be selected only after a thorough analysis of the existing culture. Before rushing in to change things it is necessary to understand the culture as it exists now, and to be clear about where you want it to go. In a large organization, shifting the culture is like turning a battleship. The captain should plan well in advance, have ample power, have enough time and space. Here are some reasons you might … Continue reading →

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Posted in General Management, Human Resources Management, Leadership, Strategic Management | Tagged Change Management, HR Management, Leadership, Organization Development, Strategic Management

Leadership : Visioning

PFR Interim Management Services Posted on December 10, 2012 by Peter FransOctober 4, 2018

“Where there is no vision, the people perish” (King Solomon) As a Leader your thinking skills can be considered directional skills because they set the direction for your organization. They provide vision, purpose and objectives. These are your eyes to the future, allowing you to recognize the need for change, when to make it, how to implement it, and how to manage it. You find vision by reaching for any available reason to change, grow, and improve – find something that … Continue reading →

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Posted in General Management, Leadership, Strategic Management | Tagged HR Management, Leadership, Visioning

Strategic, Administrative & Operating Decisions

PFR Interim Management Services Posted on December 2, 2012 by Peter FransAugust 8, 2016

From a decision viewpoint the overall problem of the business of the firm is to configure and direct the resources-conversion process in such way as to optimize the attainment of its objectives. Since this calls for a great many distinct and different decisions, dividing the total decision ‘space’ into several distinct categories can facilitate a study of the overall decision process. One approach is to construct three categories: Strategic-, Administrative-, and Operating decisions. Each related to a different aspect of … Continue reading →

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Posted in General Management, Leadership, Strategic Management | Tagged General Management, Leadership, Problem Solving & Decision Making

An Effective Leader is Decisive !

PFR Interim Management Services Posted on April 6, 2012 by Peter FransAugust 8, 2016

Decision-making is a basic ingredient of leadership. It is not important whether the leader actually comes up with the proposed actions or simply endorses them. The key is that the leader does make decisions. He or she overcomes the fear of failing or being second-guessed. A leader gathers as many facts as possible, consults with stakeholders and then decided on a course of actions. Once the decision is made the effective leader does not waste time on second thoughts. The … Continue reading →

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Posted in General Management, Leadership | Tagged HR Management, Leadership, People Management, Peter Frans

The Problem Of Fragmentation

PFR Interim Management Services Posted on July 23, 2002 by Peter FransMay 18, 2023

In my practice assisting organizations to plan and implement Change , we often encounter organizations with ‘fragmentation” problem. They continually fragment problems into pieces; yet the challenges they face are almost always systemic. According to Senge & Deming, this fact may have its roots in early childhood. Since our first school days, we learn to break the world apart and disconnect ourselves from it. We memorize isolated facts, read static accounts of history, study abstract theories, and acquire ideas unrelated … Continue reading →

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Posted in General Management, Human Resources Management, Leadership, Strategic Management | Tagged Peter Frans, Strategic Management, The Problem Of Fragmentation

Developing Innovative Organizations

PFR Interim Management Services Posted on July 23, 2001 by Peter FransApril 1, 2023

Innovation rarely, if ever, just happens. It requires imagination, coordination and a sense of purpose. Sad to say, a great many boardrooms lack some or all of those qualities. So it’s not that surprising that some companies find it hard to innovate. Before we look at how you – as chief executive or as an ordinary manager – can create an environment where innovation will flourish, we should first demolish several common and highly pervasive myths. First Myth The first … Continue reading →

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Posted in General Management, Leadership, Strategic Management | Tagged Developing Innovative Organizations, Innovation, Organization Development, Peter Frans, Strategic Management

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