AREAS FOR SETTING STRATEGIC OBJECTIVES
-Strategic objectives are set on the organizational aspects that are critical in the success or performance of the organizational therefore we use critical success factors /key success factors (CFS KSF)/they include
1.Profitability area 6.Employees relationship
2.Productivity area 7.Public and social responsibility area
3.Technological areas 8 .Quality -product /project quality
4.Human resource area 9.Customer care service /royalty
5.competitive 10.Growth and expansion area
1.Profitability :Ability to make profit out of capital invested in project .
Profitability can be improved by educing costs & by increasing revenue
Measures to reduce project costs
i)Reduce cost of labor
- ii) Reduce cost of material
iii) Reduce cost of capital
iv)Reduce general overheads
Measures to Increase project Revenue
i)Increase advertising and promotion of project
ii)Improve project quality
iii)Increased market share & sales
- iv) Developing new projects & cover new markets (Expand project portfolio)
Example :To increase net profit on all rad construction lines by 20% in the next 3 years .
2.Productivity:-The ability to use project inputs (factors of production in the most efficient and
productive way so as to increase output results many folds.
General productivity = input x100
1)Labor- productivity of labor/workers (Return from labor x100%)
cost of labor
2)Capital-productivity of capital/finance ( Return from capital ROT X 100%)
Cost of capital
3)Machinery-productivity of machinery (Output from machinery/WK/PM/YR
Total of machinery
4)Materials-productivity of material (Unit product x 100%)
total cost of material
5)Total productivity of products (Total result/output of project x 100%)
How to improve productivity of a project
1.Ensure that employees of a company working on a project are well trained,highly motivated and committed to their work.
ii)Ensure that capital borrowing etc are done at lower rates of interest.
iii)Purchase/out source /hire a state of art machinery
iv)Efficient stock level management eg.JIT-JUST in time purchasing
3)Technology : the method means of company uses to produce good s or provide services
(a)Production and manufacturing technology/mature technology
(b)Information technology eg ICT /new technology -profitable but risky
(c)Biological technology /new technology
(d) Construction /building technology /moderate /medium technology .
Roles of Technology in Project management
i)Undertaking project activities /tasks (manufacturing,IT,biological
constructions,space technology )in most efficient and effective manner.
- iv) Improve quality
N/B :Technology to can be used in research and development (Innovation)
Out sourcing technology
Advantages of outsourcing
i)Reduce initial cost
- ii) Get a new technology/hard to get
iii)Efficient project operation
iv)Improve on general production quality
v)Saves time in project completion
vi)Maximize use of labor & cut down labor cost
vii)Minimize material wastage
Disadvantages of out sourcing
i)Over dependent on the external company
ii)Requires employment of managers from outside to manage it ,leading to date leakage
iii)May be cheap initially but very expensive in the long run because repair and maintenance must be done by original company .
iv)The out sourced technology may not fit our conditions eg production,expense sna d skills .
v)Out sourced technology may fail to work
Example:to double the number of computers used in proving online ticketing in the next 3 yrs.
4.Human Resource Development:Refers to the process of training or developing workers so workers so that they can acquire new skills,knowledge,talent and competencies required to
execute project activities .
-HRD is importance because it enable the organization to to create an sustain human resource capital that is not duplicatable or imitable by other firms therefore ii is a source of project competitive advantage for the firm .
Example:-to ensure that 90% of the staff will be computer literate by the end of 31st/Dec/2016
5.Employee Relation :Concerned with developing a strong relationship between the ordinary employees and project managers. it can be done through change of company policies to favor employees. Re- designing jobs or tasks within the project act to make them interesting and challenging .
Importance of Employee Relation to a project Manager
- ii) It creates positive relations with customers ie if managers relate well with
employees ,employees in turn do same with customers
iii)It creates a conducive atmosphere for organizational learning to take place ie
their acquisition of new skills,knowledge talents or competencies among
members of the project &the sharing of such information with all other
members in the organization so as to improve their performance in the future
Example:To reduce staff complains by 20% in the ext 3 years .
6.Public & Social Responsibility(CSR):CSR-is defined as the deliberate planned and voluntary activities or programs undertaken by the organization not to make profit but to achieve the welfare or well being of the general public in a manner that is above the legal requirement of society .
Basic characteristics of CSR.
I)Deliberate and planned :think and plan before undertaking it
ii)Voluntary :it is done by the organization at their own will/choice
iii)Activities/programs:activities/programs or any event that is undertaken by
iv)Not to maximize profit :not to make profit but to achieve other strategic
v)For long term well being or welfare of the general society
vi)Above the legal requirement eg required by the law to pay for your staff
salaries & wages but other extra welfare programs eg Benevolence ,tea
Strategic Importance of CSR from project management
i)To create awareness about the project being undertaken
ii)To build positive image for the company & project being undertaken so that all the stakeholders can support it and make it successful.
iii)To avoid government regulations or restriction on your activities which may lead tosanctions .
- iv) To avoid legal suits/tussles from other stakeholders who may feel aggrieved (offended by your project eg regulatory -NEMA
V)Enable the project company to build new project portfolio for wider profit eg collection of refuse paper -recycle them into toilet papers for sale .
vi)It is a way of building a stronger stakeholder-ship eg Employees shareholders ,client,customers ,surrounding comm-land/labour /market .
Limitation of CSR to Project Management.
i)it is very costly or expensive hence increase the cost of your project and contribute to selling your project at a higher price making your project less competitive .
ii)Direct managers attention non-core/non critical project activities,this can lead qto project failure/termination before completion .
Example:to increase public expenditure on CSR art by 200% in the next 3 years .
iv)May be a major contribution to emerging corruption and other unethical conduct amongest
the project managers.
v)Project managers are powerful people in the society and giving them the opportunity to engage in public and social responsibilities may make them too powerful. They will influence public policy.
CSR Strategies /Activities
(Activities /programs undertaken in CSR of a comp .org
i)Be allowed a bidding corporate citizen
ii)To engage in public education ,debate etc
iii)undertake sponsorship:giving financial support or contribution to a particular event or programs eg a cultural event,spouts,charity organization activities.
iv)Initial and financial development programs eg road,market ,school,hospital and social amenities.
v)Exhibition,trade fairs or demonstration
vi)Lobbying :campaign among parliamentarian so that they can support a certain/particular bill to become a Law.
viii)Help in emergencies and crisis response eg flood,fire,security.
7.Quality :this product or service quality is the ability for an organization to provide a product or service that meets customers expectations,meet the standards set by quality regulations eg KEBS and fulfill the measurement put by the manufacturer or regulator.
i)Enable project managers to attract and retain large numbers of clients ie controlling a larger market share.
ii)Enable project manager to generate higher demands ,higher sales revenue and higher profitability for the project.
iii)Reduce project costs that may be caused by product rejections replacement or defective products,it also reduces wastage of raw materials.
iv)Since quality generates higher revenue and profitability it enables the firm to produce up to maximum capacity ie using all the productive capacity of the project .
v)Improve customers loyalty and maintain along term relationship with old customers.
Example:to reduce level of defective products or services by 90% in the next 3 years .
8.Customer care/services/Loyalty :customer care refer to the personalized care given to clients before during and after purchase of your project eg the chief executive officer -Kenya Airways goes 3 Boeing Company -Dream liner .
*Customer service refers to the service given to any customers after they have purchased your products (after sale)
*customer services are those services rendered to a client after purchasing the product in order to effectively use the purchased item eg installation,training ,education,guarantees ,warranties,spare parts
Example:To increase the level of customer satisfaction by 100% in the next 5 years.
9:Competitive position:this is the position held by a particular /firm in relation to other similar firms within a given industry on basis of market share/quality sales turn over /profitability and technology ad vancement5 .
Competitive Position Analysis
The process of acquiring information about a particular industry and the firms competing within that industry and deciding on the basis of comparing the firm is called competitive position analysis.
Example;Banking industry -we can conduct competitive analysis for KCB,Equity,Barclay’s ,standard charted .
i)Identifying the industry eg Banking industry
ii)Identifying competitive firm
iii)Deciding on the competitive positioning ie market shareholder
iv)Establish measures ;sales
v)Rank the banks
Competitive Position Bank names %market share comment
1 Equity 40% Market leader
2 Barclay s 30% Market challenger
3 KCB 17% Market follower
4 Standard charted 13% Market Nicher
Strategies adopted by marketing leader,challenger,follower and Nichers.
1.Defensive strategies:to defend /protect your market share
2.Offensive strategies :To attract the market share held by market leaders.
3.Fellowship strategies -a close distance or a far distance
4.Nichmanship strategies -strategy r look for Niche market .