L3M4 SUMMARY NOTES

CHAPTER 1 PERSONAL ATTRIBUTES FOR ORGANISATIONAL SUCCESS

LO 1.1. Identify the personal attributes required to support overall organisational success

1 PERSONAL KNOWLEDGE + PERSONAL VALUES

5 top personal attributes: confidence, proactivity, resilience, adaptability + positivity

‘Big 5’ personality traits: openness to experience, conscientiousness, extroversion,

agreeableness, neuroticism

Individuals contribute to the work of their employer through their personal attributes + their
personal values

2 SELF-DEVELOPMENT + SELF-AWARENESS

Self-awareness is key contributor to organisational success for an inidvidual

3 UNDERSTANDING THE PROCUREMENT + SUPPLY PROCESS

Personal attributes required to support overall organisational success

4 FURTHERING AIMS OF THE PROCUREMENT + SUPPLY PROFESSION

Creating effective, efficient + ethical supply chains globally, CIPs members + students
expected to contribute to achievement of this aim.

CIPs members + students should develop personal knowledge + self-awareness- success of

procurement + supply profession depends to large extent on personal qualities of its
members
L3M4 SUMMARY NOTES

CHAPTER 2 DEVOLVED RESPONSIBILITIES FOR PROCUREMENT + SUPPLY

1 RESPONSIBILITIES FOR PROCUREMENT + SUPPLY

Delegated responsibilities: handed down to specific job/job holders- job holder has authority
to perform certain tasks/decisions but accountable to more senior person

Devolved authority: handing responsibility for certain activities from central management to
local management. Devolving procurement + supply responsibilities means giving
responsibility for purchasing + supply to local managers within org. instead of making a
central procurement department responsible.

Tall organisation structure vs flat organisation structure

Good practice for different employees to be responsible for the following 3 activities:
determining the need (responsibility for requisition or spec), undertaking the procurement
(sourcing supplier + making contract), financial aspects (authorising payment)

Separation/segregation of duties ensures 1 person doesn’t control entire process

Buyers: receive authorised purchase requisitions, identify + select suppliers, send RFQ/ITT
to selected potential suppliers, negotiate contract terms, ensure order is placed

Procurement thresholds, Quality control, Expeditors or PO administrators, Supplier

Relationship Managers, Budget Holders

2 DEVOLUTION OF AUTHORITY FOR PROCUREMENT

Centralisation advantages: greater specialisation, requirements of different divisions can be

consoliated into larger orders, greater co-ordination of procurement activities, can establish
function at head office

Decentralisation advantages: maximise coordination between procurement activity +

operating departments, local buyers can respond more quickly to user needs, locally based
buyers know locally based suppliers- delivery cost/lead times shorter

Centre-led action networks (CLAN): relatively decentralised model used in many large
organisations- all procurement staff located in single unit + report to local management of
their business unit though also have respnsobility to small procurement centre located in
corporate HQ- e.g. of matrix management structure- lead buyer defined procurement
responsibilities are delegated to one person within user department

3 ENSURING COMPLIANCE WITH ORGANISATIONAL PROCEDURES + PROCESSES

Procurement manuals incl: organisation, policies procedures, instructions, regulations

Compliance is essential to: avoid errors, unnecessary costs, fraud/crime, injury, damage to
reputation

4 ACHIEVING VALUE FOR MONEY IN PROCUREMENT

Lean manufacturing seeks to improve performance by eliminating waste + achieving zero

defects in production: Time, Inventory, Motion, Waiting, Overproduction, Over-processing,
Defects
L3M4 SUMMARY NOTES

CHAPTER 3 LIASING WITH STAKEHOLDERS

1 INTERNAL SUPPLIERS + INTERNAL CUSTOMERS

Internal customers: design + engineering, production, stores and warehousing, marketing,

ICT, Quality Control, Operations, Accounts / Finance
If procurement seen as internal supplier providing service to internal customer we need to
achieve VFM and evaluate effectiveness of the service: average time between purchase
requisition + delivery of g/s for different types of purchases, average cost of processing a
requision through to delivery for different types of purchase/procurement thresholds, no./%
of complaints from user departments, cost savings achieved for user departments

2 OTHER INTERNAL STAKEHOLDERS

External: Suppliers, Manufacturers, Distributors, Authorities & regulatory bodies

Connected: not part of organisation but have direct, legal, contractual or commercial
dealings with it e.g. banks, customers, shareholders
Internal: members of organisation e.g. directors, managers, employees

Mendelows matrix for stakeholder mapping: minimal effort (low power/low interest), keep
informed (low power/high interest), keep satisfied (high power/low interest), key players (high
power/high interest)

Procurement function involved in measures to improve quality assurance + reduce amount

of defective items in production, arrange logistical measures for return of defective items
from customers, assist in production + marketing departments in meeting urgent customer
order by negotiating ‘rush order’ for materials with supplier

3 ADVISING INTERNAL CUSTOMERS + OTHER STAKEHOLDERS

Right Quality/Price: trade-off between them, procurement function may advise user
department which supplier + which combination of price + quality seem best
Right Quantity: how much required to obtain price discount, how easy it might be to arrange
top-up order etc.
Right Time: how urgent, can it wait, how long it will take (lead time)
Right Place: where it will be delivered, multiple locations?

4 STRUCTURE + OBJECTIVES OF THE PROCURMENT + SUPPLY FUNCTION

Objectives:

1) Support operational requirements

2) Manage procurement process + supply base efficiently and effectively
3) Develop strong relationships with other groups within organisation
4) Support organisational goals + objectives

Also: lower costs but obtain best terms, reduce risk + ensure security of supply, manage
relationships with suppliers, improve quality, pursue innovation, leverage technology

Strategic responsibilities: developing guidelines, procedures + performance monitoring

systems, major sourcing decisions – single vs multiple sourcing, major decisions relating to
capital investment or make-or-buy, establish LT partnership relations with key suppliers
Tactical: preparing spec + VA programes, selecting + contracting suppliers vs Operational
L3M4 SUMMARY NOTES

CHAPTER 4 CROSS-FUNCTIONAL TEAMS IN PROCUREMENT + SUPPLY

1 THE NATURE + PURPOSE OF CROSS-FUNCTIONAL TEAMS

Cross-functional teams are established:

1) innovation: come up with more + better ideas than working alone

2) sharing knowledge
3) improved communications
4) improved relationships
5) faster completion of tasks
6) motivation

2 BEHAVIOURS IN A TEAM

Common problems: floundering, overbearing participants, dominant participants, reluctant

participants, unquestioned acceptance of opinions as facts, rush to accomplishment, early
evaluators, discounts + ‘plops’, wanderlust: digression + tangents, feuding team members

3 EFFECTIVE + INEFFECTIVE TEAM LEADERSHIP

7 leadership styles Tannenbaum + Schmidt: Tells, Tells + sells (sells), Tells + talks
(suggests), Consults, Involves (joins), Delegates, Abdicates

4 leadership styles: Dictatorial (tells, tells + sells), Autocratic or directive (tells +talks,
consults), Democratic (involves, delegates), Laissez-faire (abdicates)

Adair: action-centred leadership- achieving the task, building the team, developing
individuals within the team

Scholtes trust matrix: affection, distrust, trust, respect

4 DEVELOPING POSITIVE RELATIONSHIPS

Benefits of positive relationships- individuals more willing to:

- listen to what everyone has to say

- exchange ideas
- help each other
- work together
- agree (or disagree respectfully)

Also should have respect for others, listen to others, good communication

7 Cs to effective communication:

1) Clarity
2) Consideration
3) Correct
4) Complete
5) Concise
6) Concrete
7) Courteous
L3M4 SUMMARY NOTES

CHAPTER 5 THE CONTRIBUTION + CHALLENGES OF TEAM WORKING

1 FORMING AND DEVELOPING TEAMS

Tuckman: forming, storming, norming, performing + dorming/adjourning

Belbin’s team roles:

- Doing/acting: implementer, shaper, completer/finisher

- Problem solving/thinking: plant, monitor/evaluator, specialist
- Concern for people + feelings: co-ordinator, teamworker, resource-investigator

2 BARRIERS TO SUCCESSFUL TEAMWORKING

Clear team goal, Plan of Action, clearly defined roles, clear communication, well-defined
decision procedures, balanced participation of team members, established ground rules for
behaviours, use a ‘scientific approach’ to problem solving, understanding of group dynamics

Split roles- if individual working in cross-functional team on part-time basis, they have
divided loyalties

Gantt chart and identifying milestones can be used when a plan of action has been formed

3 RESISTANCE + CONFLICT WITHIN TEAMS

French and Raven 6 bases/sources of power: legitimate, reward, expert, referent, coercive,
informational

Hart and Bell 8 causes of conflict: conflicting needs, conflicting styles, conflicting
perceptions, conflicting goals, conflicting pressures, conflicting roles, different personal
values, uncertain policies

Mullins sources of conflict: perceptions, departmentalisation, limited resources, lack of clear

objectives, violation of territory, macro environment

4 HANDLING CONFLICT WITHIN A WORK TEAM

Nelson ways of managing conflict: direct approach, bargaining, enforcement, retreat, de-
emphasis

Steps in conflict resolution:

1) Gather the facts

2) Evaluate the facts
3) Consider solutions
4) Determine the solution
5) Communicate
6) Resolve

Strategies for overcoming conflict: clarification of goals/objectives, resource distribution,

HRM policies + processes, non-monetary rewards, group activities, leadership,
organisational processes, good behaviour

Conflict resolution should be a win-win solution

L3M4 SUMMARY NOTES

CHAPTER 6 ORGANISATIONAL CHANGE

1 THE NATURE OF ORGANISATIONAL CHANGE

Planned change: reactive (occurs in response to an event e.g. organisation’s external

environment or recognition that current system is no longer working efficiently) or
anticipatory/proactive change (the need to make a change is forecast or predicted in
advance)

3 stages: current position -> transition -> planned future position

Factors to consider: who will be affected, who will be involved, timescale, communication,
flexibility, detailed plan, available resources + finance, making the change ‘stick’

2 MAKING THE TRANSITION

1) Identify need for change 2) persuade stakeholders 3) plan 4) provide resources to make
change 5) communicate 6) monitor progress, celebrate success in reaching milestones in
change process 7) complete transition 8) embed the change

Internal change agents vs external change agents

6 elements of cultural web: stories, symbols, power structure, organisational structure, control
systems, rituals – organisational culture can be an obstacle to change
ADKAR model 5 building blocks of change: awareness, desire, knowledge, ability,
reinforcement
3 INCREMENTAL CHANGE + TRANSFORMATIONAL CHANGE

2 approaches to organisational change:

incremental- small change, quick to implement, do not meet strong resistance from
employees, TQM continuous incremental change kaizen
transformational/step- big change, introduced suddenly, lead to strong resistance
Lewin’s change model: (current situation) unfreeze-> change -> (new situation) refreeze

4 EVOLUTION, ADAPTION, REVOLUTION + RECONSTRUCTION

Incremental, big bang (major change imposed by top management in a short time,
transformational change, realignment (does not involve change in culture)

Evolution: gradual and slow change + proactive – variation, selection, retention, competition
Adaption: involves incremental change in response to external event (reactive) – new
regulations, new technology, competitors actions, political or economic change
Revolution: big bang/proactive, ceasing to operate in existing way + switching to something
very different- to be one step ahead of competition, to take measures to avoid financial crisis
Reconstruction: big bang/reactive, in response to developments in
organisation/environment- happens quickly but doesn’t change organisations culture

5 CLOSED, CONTAINED + OPEN-ENDED CHANGE

Closed change- can be controlled, contained- where cause + effect of change not known
with certainty but can be estimated with probabilities, open-ended change- no link between
cause + outcome of the change, management unfamiliar with situation
L3M4 SUMMARY NOTES

CHAPTER 7 TRIGGERS FOR CHANGE

1 THE NATURE OF TRIGGERS FOR CHANGE

Changes can occur in external environment or within organisation itself - can be monitored
by regular reports.

2 CHANGES IN THE EXTERNAL ENVIRONMENT: PEST FACTORS

- Political: international/civil war, trade war, changes in trading relationships, new

government
- Economic: growth/decline in economy, rate of inflation, interest rates, ER, rates of
taxation
- Social/cultural: demographic change, changing attitudes, education
- Technological: internet, new technology, AI + robotics-> new jobs etc.
- Environmental/ecological: new laws/regulations, new production systems, changing
materials, set targets for CO2 reductions
- Legal/regulatory: H+S, employment law, personal data protection, financial crime

3 INTERNAL TRIGGERS FOR CHANGE

1) Leadership: may decide to centralise/decentralise, delegate responsibility, devolved

authority, change in decision making, change in business strategies
2) Staff: rapid organisational growth-> change in organisational structure, company
more international-> diverse workforce
3) Culture: more women + POC in senior management positions + on board of
directors, disciplinary measures against bullying + harassment
4) Strategy: more emphasis on training existing employees than recruit externally,
change in remuneration policy, change in growth strategy, allowing employees to
work more from home
5) Operations: increase regular maintenance on its fleet of trucks, increase employee
training or provide employees with better equipment to reduce no. of errors
6) Finance: loss-making company may shut down some operations, profitable may look
for new areas of expansion

4 FUTURE TRENDS + INNOVATION

4 Industrial revolutions show innovation and how businesses grow because of it

4th industrial revolution embraces emerging technology breakthroughs in fields such as AI,
robotics, Internet of Things, autonomous vehicles, 3D printing, nanotechnology etc. –
happening at a very fast rate and in ways that cannot be easily predicted

In the future, technological innovation will lead to a supply-side miracle with LT gains in
efficiency + production – organisations must change and innovate in order to succeed and
survive
L3M4 SUMMARY NOTES

CHAPTER 8 ORGANISATIONAL RESPONSES TO CHANGE

1 ENVIRONMENTAL TURBULENCES

Ansoff +Mcdonnell 5 levels of environmental disturbance

1 (repetitive) - stable environment, stable response from org, keep doing same as past, slow
+ easy-to-manage change
2 (expanding) - slow + incremental change in environment, reactive response from org,
make incremental changes based on past experience to extrapolate likely future
3 (changing) - fast + increment change in environment, anticipatory response from org,
make incremental changed based on change that can be predicted, although with difficulty
4 (discontinuous) – big change predictable to some extent, entrepreneurial response from
org, major change needed but changes partially predictable
5 (surprising) – big change unpredictable, creative response from org, major change needed
+ org needs to be creative and flexible in responding to environmental change

Market turbulence: customer preferences + needs are changing + speed of change

Competition turbulence: ranges from v. high with cut-throat competition between rivals or
where competitors are weak and don’t pose a substantial threat
Technological turbulence: the pace of change in technology e.g. mobile banking
Disasters + turbulence- e.g. 9/11, Internal turbulence- a sudden change in leadership

2 RESISTANCE TO CHANGE

Loss of status or job security, poor reward systems, fear of the unknown, peer pressure,
mistrust: lack of trust in leaders, organisational politics, fear of failure, change fatigue, poor
implementation of the change

Force field analysis: forces in favour of change- changes in tech, company’s markets, reward
system to pay more to employees for making change + general willingness of employees to
accept change – task of change managers: weaken forces resisting change + strengthen
forces in favour of change, so that current position ‘unfreezes’ + change can happen

McKinsey 7S model: Hard factors- strategy, structure, systems, Soft factors- staff, skills,
style, shared values

3 CYNICISM AND SCEPTISM – remove cynics but get sceptics to change their mind

4 THE CHALLENGE OF MAINTAINING CHANGE

Stages of change model: 1) pre-contemplation, 2) contemplation, 3) preparation, 4) action,

5) maintenance, 6) relapse
Measures to maintain change: achieve results asap + communicate them, train employees
with skills, reward individuals for achievements, find allies, don’t let up
Kotter 8-step model of change 6) create ST wins, 7) consolidate improvements, 8) anchor
the changes

5 THE CHANGE CYCLE

1) Loss 2) Doubt 3) Discomfort 4) Discovery 5) Understanding 6) Integration

Kubler-Ross Change curve (mental stages before accepting change) : shock, denial,
frustration + anger, depression, experimentation, decision, integration
L3M4 SUMMARY NOTES

CHAPTER 9 METHODS TO ACHIEVE CHANGE

1 CLARIFYING GOALS TO ACHIEVE CHANGES
Initial stages in clarifying goals: Understand what you want to achieve, decide a timeline, be
very specific, ensure that goals are achievable – should be SMART Final
stages in clarifying goals: plan the stages, communicate the changes, implement the changes,
review/monitor + change where appropriate.
2 REFINING METHODS + PROCEDURES FOR CHANGE
Radical change: business process re-engineering or BPR- BPR management processes today
associated with the introduction of advanced new technology
Gradual change: associated with concepts like lean manufacturing (TIMWOOD), continuous
improvement (kaizen) + agile project management
5Ss- sort, set in order, shine/sweep, standardise, sustain + JIT production/purchasing
Agile project management- divide project into small stages, plan stage 1 in detail and stage 2
broad detail, as stage 1 ends, plan stage 2 in detail and carry on the process
3 EMPOWERMENT AND OWNERSHIP
Involving employees in change through quality circles – meet regularly + discuss work with
aim of coming up with ideas for making small changes + improvements
Empowerment of employees means: giving employees resources they need, making sure that
they know about best practices in their area of work, give them authority
Requirements for successful empowerment: consult with them before empowering, establish
guidelines for what empowerment means, encourage open comms with them, give full
support to personal development, establish culture of trust with them Ownership
of work- employee treats business as if it were their own
4 INCREMENTAL ADJUSTMENT
5 levels of adjustment: fine-tuning, incremental adjustment, process re-engineering, modular
transformation, corporate transformation 3
varieties of change: smooth incremental change, bumpy incremental change, discontinuous
change
5 COLLABORATION, COMMUNICATION, DIRECTION + COERCION
Methods of introducing change: collaborate, communicate, direct + coerce
Chin + Benne 3 management approaches: power coercive, empirical-rational, normative-re-
educational
Kotter + Schlesinger: coercion, manipulation, negotiation + agreement, facilitation + support,
participation + involvement, education + commitment
Hawthorne/Coch + French in favour of collab + comms vs McGregors Theory X and Theory
Y support direction + coercion in some situations, also collaboration