APPLIED SUMMARY PAPER STRATEGIC MANAGEMENT PREPARED BY RICHARD JOHN Motivational Concepts. The New York City Transit Authority being a public benefit company cannot give economic rewards, for example bonuses, profit sharing, stocks, to motivate its employees, it instead uses being employed by the company and the comprehensive benefits packages that comes along with it, as the main motivator for its employees system wide. The comprehensive benefits package includes, Equal Employment Opportunity, protection against discrimination based on gender, race, religion, and sexual orientation. Wages are usually comparable with other companies. Employees are also entitled to paid vacation and sick leave, collective bargaining, the right to arbitration of disputes, medical and dental benefits, on going training and opportunities of promotions, generous pension plans, and the option to join other retire plans such as 401 k plans, free transportation in New York City on its trains and buses. These benefits, along with the retirement plans, make the NYTCA a very desirable place to work and as such it is very competitive to become an employee.
Other motivational methods are letters sent to all employees for different goals that have been achieved, and there are various competitions that employees can enter voluntarily to win cash prizes. Competitions such as "The Suggestion Program" enables employees who win, earn cash prizes if their suggestions have value and it can save the company a lot of money by either improving something like a mechanical device, or a way to do something different. These competitions give extrinsic and intrinsic value to the winner's and intrinsic value to the other participants (Bateman & Snell pg, 407). Motivational and congratulatory letters are sent to employees who have reached a number of year's service, or having a clean record, or having a good attendance record. These motivational approaches are very effective, and they encompass and facilitate the five categories that motivates productive people (Bateman and Snell pg, 398). The five categories are (1) Joining the organization; Most titles requires passing a test.
This gives legitimacy, levels the playing field and creates a standard of high skill level for the process. Prospective employees are motivated to trying to get the highest score. (2) Remaining in the organization; Employees remain in the organization because of the good benefits and also the knowledge that when they retire they will be receiving 70% of their salary every month in addition to other entitlements due to them. (3) Come to work regularly; Employees know that not coming to work regularly and on time is grounds for termination of employment, and this motivates them to come to work regularly. (4) Performance; Poor performance can create havoc and put lives at risk, which can result in criminal charges being leveled against offenders. Employees are conscious of these at all times, and it motivates them to perform to the best of their abilities most of the time.
(5) Exhibit good citizenship; employees are generally cooperative and respectful to their peers and seniors at all times. I have learned that in addition to the above mentioned, all important work behaviors are motivated. Setting goals that are specific, quantifiable, and challenging (Bateman & Snell pg 399). Reinforcing good performance; Behavior that is followed by positive consequences will probably be repeated (Bateman & Snell pg, 400). Maslow Needs theory; the theory of people satisfying their lower needs before satisfying their higher needs.
Maslow believed that that people will satisfy their lower needs before satisfying their higher needs (Bateman & Snell pg, 405). Create a motivating and empowering job: Well designed jobs can lead to high motivation, high quality and performance, high satisfaction, low absenteeism and turnover (Bateman & Snell pg, 410). Achieving fairness using the equity theory; this theory proposes that people assess how fairly they have been treated according to two factors; input and output (Bateman & Snell pg 413). The causes and consequences of a satisfied work force; the importance of quality of work programs that can enhance employees well being and satisfaction. Advocates of these programs claim that it improves organizational effectiveness and productivity (Bateman & Snell pg, 417).
Leadership and Management Styles. A leader is one who influences others to achieve goals (Bateman & Snell pg, 366). They must also be able to bring about change, set direction and motivate people to overcome obstacles and move the organization towards its ideal future (Bateman & Snell pg, 387). Leaders must have vision and know what they want and their followers must be able to understand what they want. Leaders must articulate their wants properly so that their followers can grasp and act accordingly.
Leaders must have have power, the ability to influence other people. Five important sources of power are legitimate, reward, coercive, referent, and expert power. These sources of power can make a person very powerful in an organization (Bateman & Snell pg, 370). There are also three traditional approaches to leadership.
They are the trait, behavioral, and situational approach. The first and oldest the trait approach was dominant for several decades (Bateman & Snell pg, 371). It assumes that leaders are born not made. Personality characteristics of trait leaders are drive, leadership, motivation, integrity, self confidence and knowledge of business (Bateman & Snell pg, 371). The behavioral approach to leadership attempts to identify what good leaders do (Bateman & Snell pg, 372). Personal characteristics are considered less important than the actual behaviors the leader exhibits (Bateman & Snell pg, 372).
Three categories, task performance, group maintenance, and employee participation in decision making are important aspects in this approach. The last, situational approach is the belief that effective leader behaviors vary from situation to situation. The leader should first analyze the situation and then decide what to do (Bateman & Snell pg, 377). Management styles can take either autocratic, democratic, or performance verses maintenance oriented behaviors (Bateman & Snell pg, 374. ). Autocratic leadership, makes decisions, and then announces them while democratic leadership seeks input from others.
The style of management, many times, is determined by the situation. Autocratic is usually the best in times of crisis and urgency. Leaders can also use performance and maintenance behaviors to help them in their roles as leaders. Performance behavior is showing concern for production, directive leadership, initiating structure, work speed, quality and accuracy, quantity of output and following the rules (Bateman & Snell pg, 373. ). Maintenance behavior is showing concern for people, supportive leadership, people's feelings and comfort, appreciation of them, and stress reduction (Bateman & Snell pg, 373).
Leaders should be high on both of these dimensions (Bateman & Snell pg, 375). The techniques typically used in my department are autocratic. I feel this is the correct way due to the time factors and safety issues involved. In the Car Equipment department there are limited cars (trains cabs) and time to service, repair and return them to service and no nonsense approach is an effective way to approach this.
The author's management style follows the autocratic style. This is due mainly to the type of business the author is in. The author incorporates high performance and high maintenance behavior into this style if it is necessary to assist the author in getting things done. The author's observations about the author's organization's management techniques as they relate to organizational productivity, effectiveness, efficiency and group and individual functioning are that they are very efficient and this adds security to the organization, and thus job security for its employees. While there is room for improvement in some aspects, deviating for the sake of trying something new is very risky and should be done very cautiously over a long period of time.
Strategic Management The New York City Transit Authority is in the mass transportation business, specifically the mass transportation of the five million residents of New York City and its' four outer boroughs by buses and trains. There is no other mass transportation organization serving this area as such the NYTCA has no competition. The long term strategic focus of the organization is to: a. Achieve a safe, orderly, customer oriented, cost effective, and public transportation. b. Adapting new technologies to make its services more attractive to current and prospective customers, for example replacing fleet with new technologically replacements, improved metro card systems for easy entry into system. c. Increased focus on customer satisfaction and cost effectiveness. d.
Strive to be a good cooperate citizen by paying attention and having good relations with its neighbors and the environment. e. Expanding service by acquiring remaining private bus lines, constructing a Second Ave line, and expanding the #7 line further on the West side of Manhattan. (mt a web site). The NYTCA strengths are its resources and core competencies (Bateman & Snell pg, 121). Its resources have both tangible and intangible assets. Its tangible assets includes real estate, stations, tracks, signal systems, trains, buses, while its intangible assets are company reputation, technical knowledge, accumulated knowledge and experience, and a very dedicated and high quality work force.
These resources are valuable, rare, difficult to imitate and well organized, and to gether they give the NYTCA a very strong core competency (Bateman & Snell pg 121). Its weaknesses include vandalism by hooligans, waste of resources by staff, vulnerability to terrorist attacks, slow adaptation of new technology, inadequate funding from federal and state government for upgrading system, and threats of industrial action from its unions. The global implications for this industry are very uncertain due to it being a favorite target for terrorists. Terrorist's attacks can undermine customer confidence in the industry. Strategic managers for these operations globally, have to implement policies to increase vigilance and enhance security for these operations. The strategic vision of the organization is communicated very well to the employees.
The organization regularly sends out memos to all employees stressing the importance of working safely, showing up for work, dealing professionally with customers and coworkers, and protecting property and equipment. A zero tolerance policy is in effect for violators. Memos and notices placed system also asks employees to be vigilant for the threat of terrorism. These notices caution that if one sees something, say something. The author would recommend that employees receive detailed and easy to understand booklets and workshops to better understand the importance of these strategies. A weakness recently reflected of the organization is the destruction by fire of a relay signal switching station for the A and C lines.
Service was interrupted for a few days while the organization scrambled to get the two lines up and running. Customers were inconvenienced and the press made the organization a laughing stock. This incident reflected the lack of security in vital areas as well as the absence of sprinkler systems to protect these very important resources that are located through out the system. The authors' recommendation for improvement in the organization is that employees at all levels should be included in the strategic management process. Weaknesses in security, equipment and staff that are identified should be addressed and necessary changes made expeditiously. Mangers in charge of any operation that is not functioning to its optimum should be replaced or retrained.
College educated managers should be introduced gradually into the organization to replace managers whose only qualification is experience and years of service. Homeless people and derelicts should be eradicated from the system. They have always been a threat to the smooth functioning of the system and they will continue to be a threat. These people are known to start fires to keep warm underground and in the process subjecting the system to a major disaster. The NYTCA has to get the word out that it is not a homeless shelter. Planning.
The planning function is very important and necessary function in an organization. It can be best described as the conscious, systematic process of making decisions about goals and activities that an individual, group, work unit, or organization will pursue in the future (Bateman & Snell pg, 108). Planning is a decision process and it usually follows specific steps (Bateman & Snell pg, 108). The requirements for effective planning are first, there would be a situational analysis of the objectives and goals the organization want to achieve.
Secondly, an alternative set of plans and goals are decided on. Third, both goals and plans are evaluated. Fourth, there would be a selection of the goals and plans that meets the objective. Fifth, the plans are implemented. Sixth, there is the monitoring and control of the plan. The process starts by analyzing the external and internal forces affecting the organization, or activity.
This usually leads to a plan to achieve desired objectives. A set of alternative plans are then made in case the original plans have to be abandoned for whatever reason or situation arises. After these plans are evaluated for advantages and disadvantages, a set of plans that are feasible and appropriate are then selected (Bateman & Snell pg, 110). The end result is a set of written goals and plans that are appropriate and feasible within a predicted set of circumstances (Bateman & Snell pg, 110). Once this selection is completed they must be implemented. The best plans are useless unless they are implemented properly (Bateman & Snell pg, 111).
Implementation has shown to be easier when both managers and their subordinates participate in the planning process. This is at all levels. Employees are better informed, and their level of commitment and motivation, very necessary and desirable behaviors are higher. Lastly, monitoring and controlling the implemented plans enables the organization to evaluate if the goals are being met, and taking corrective action if they are not. The senior executives of the organization, creates and develops the strategic plans and goals for the organization.
These plans are long term and cover major portions of the organization. They have to first establish a mission, vision and goals. Second, analyze external opportunities and threats. Third, analyze internal strengths and weaknesses. Fourth, compare SWOT (strengths, weaknesses, opportunities and threats) analysis to create a strategy formulation. Once these goals and plans are identified they become the basis of planning done by middle level and frontline managers (Bateman & Snell pg, 112).
The middle level managers would develop and carry out the tactical planning like marketing and human resources, and the front line managers would develop and carry out the operational planning. Fifth, implement strategies, and sixth, carry out strategic control. In my organization the top level managers would set plans and goals for the organization. These plans are usually long term.
These plans would then go to middle level managers and then to front line managers. Impediments to effective planning includes poor analysis of industry and markets, changing political, social and regulatory issues, unstable human resources pool, macroeconomic conditions and technological factors. The author's personal experience with effective planning is the smooth functioning of the author's work site, the "239 Street Main Shop". Trains are serviced at this location.
The service cycle is planned one year in advance in detail down to the expected parts that will have to be replaced. Trains come in on time and leave on time every day. I attribute this to the excellent planning that takes place. Financial Statements. The significance of Financial Statements in understanding an organization is that it gives a picture of the financial affairs of the organization or entity (Bateman & Snell pg, 500). Two Financial Statements enable this.
They are; (a) the Balance Sheet and; (b) the Profit and Loss statement. The owner equity is sometimes listed on this sheet. The Balance Sheet is divided into two sides, the left side lists the assets and the right side lists the liabilities. The owner equity is sometimes located on the bottom of this sheet, or it maybe on a separate sheet. The assets are any resources of value that the organization has title to, and the liabilities are the amounts owed to creditors.
The Owner's equity is the total investment that the owner has in the organization (Stanford Guide pg, 13). The basic accounting equation is; Assets = Liabilities + Owners Equity. Assets can be categorized as either, current assets and long-term assets. Current assets also called short-term assets are those assets that can be converted into cash. They are cash, marketable securities, accounts receivable, inventory, and pre-paid expenses.
Long-term assets include property, plant, and equipment, acquisition convention, and depreciation. Liabilities are either current or long term. Owner's equity is the investment the owner has invested into the business, or invested and retained earnings. The Profit and Loss statement states the income and expenses of an organization. It is itemized and can be used to set goals. Performance can be measured by this statement, and problem areas can easily be identified and steps taken to correct them.
Financial ratios are another important aspect of the Financial Statement. It can be used for checking the overall performance of an organization. Liquidity ratios assess a businesses ability to meet its upcoming obligations (Stanford Video Guide pg, 18). The most common liquidity ratio is the current ratio. A ratio of 2 to I, or 2.00 is a desirable minimum. The leverage ratio shows the relative amount of funds in the business supplied by creditors and suppliers.
Then there is the profitability ratio which indicates the management ability to generate a financial return on sales or investment (Bateman & Snell pg, 503). Financial Statements also have an Income Statement. This statement shows the operating and non-operating expenses. The operating expenses are; revenues earned, cost of goods sold, gross profit, period cost, selling expenses, administrative expenses, and operating income. The non-operating expenses are; net income, cost of goods sold, depreciation and amortization, and the useful life of an asset. The last financial statement to be mentioned here is the Cash Flow Statement.
The Cash Flow Statement reconciles the Income Statement with actual changes in the cash position on the Balance Sheet. The Cash Flow Statement has three major divisions: Cash Flows from Operating Activities, Cash Flows from Investing Activities, and Cash Flows from Financing Activities. An analysis of these statements will be able to give one an overall financial picture of an organization. These statements should be up to date at all times and all entries should be truthful and correct.