CHAPTER 7 STRATEGIC ASSET MANAGEMENT

Strategies are appropriate courses of action formulated by organizations to attain their set objectives in
the light of their vision and mission statement. These strategies include planning, selection, and analysis.
In formulating business strategies, there should be consistency in the direction of the organization,
responsiveness to global, local, and organizational environments, and conformity and agreement with
the functional strategies of the organization. Furthermore, these strategies should be feasible, flexible,
smart, and competitive. Competitive assets are talents, abilities, resources, properties, and other
endowments that provide plus points to organizations. They can take the form of intellectual property
assets, human resources assets, marketing assets, and infrastructure assets.

 Intellectual Property Assets

Intellectual property assets refer to assets that result from the activities of the mind. These
properties may be products of purposive research like outcomes of a person's ingenuity, brilliance,
and creativity, or may just be discovered accidentally. Intellectual property assets generally come in
the form of trademarks and service marks, software, copyrights, patents, and trade secrets.

 Trademarks include all service marks, trade names, designs, logos, seals, and symbols that
are uniquely developed by an individual, a group of individuals, or an organization.
 Software are organized information in the form of operating systems, utilities, programs,
and applications that enable computers to work. They are commonly divided into two main
classifications: system software that control the basic functions of a computer and usually
come preinstalled with the computer; and application software that handle common and
specific tasks like word processing and others. Software also include all programmed
manuals, operational instructions, methodologies, and techniques.
 Copyrights - Original literary, music, and art compositions that are unique and distinct.
 Trade secrets refer to types of information, technical, or otherwise, like organizational
philosophy, strategies, processes, financial data, transaction data, and lists of customers and
suppliers.

Unique designs, innovative products, ideas and concepts, one-of-a-kind packaging, new
methods and processes, inventions, chemical formulations, and software are examples of
intellectual property outputs. Protected by law, intellectual property assets rightfully belong
to individuals/organizations. They can apply for exclusivity rights for a specified period by
having their intellectual property assets patented or copyrighted. During this period, the
individual/organization enjoys monopoly of said assets.

 Organizational Monopoly

When an organization possesses intellectual property assets, the entity is said to have created a
competitive edge called organizational monopoly. By virtue of this so-called monopoly of ownership
—

1. the organization solely enjoys the opportunity to use this intellectual property, to optimize its
worth, and enjoy the benefits akin to it;
  The organization carries the reputation to have invented/conceptualized an idea, a
product, service, process, technology, a distinct way of doing things, a novel approach,
or an inimitable mindset.
 The organization gains an internal advantage in terms of efficiency and productivity,
pride in the organization, heightened level of motivation, and employee involvement.
 The organization can draw financial returns from the production, utilization, and sales of
this intellectual property. Given a period of 15 to 25 years, the monetary earnings
generated by this intellectual property will generally be generous, as in the case of
pharmaceutical companies who continuously discover new cures for diseases. They
enjoy exclusive and absolute rights to produce and sell the results of their researches.
2. it safeguards corporate assets by providing a legal mechanism for brand protection, protection
of trade secrets by non-disclosure agreements, and provision for patents and copyrights; and
 because the government believes and respects the intellectual properties of individuals
and organizations, it provides legal protection from infringement. Thus, copying,
duplication, and reproduction are not allowed unless with the permission of the rightful
owners.
 Brand protection is guaranteed and trade secrets are safeguarded by non-disclosure
agreements. Patents and copyrights are proofs of legal ownerships.
3. it allows organizations to enjoy low cost leadership and increase its competitive strength.

 Human Resource Assets

Human resource assets are the strengths of organizations that consist of collective "expertise”,
personal traits, creative and problem-solving capabilities, managerial, entrepreneurial, and
competency asset skills, and organizational human-centered assets.

More specifically, collective “expertise” in an organization can result from any of the following:
impressive educational attainment, unique and cutting-edge professional competence, relevant and
“intelligent" environmental knowledge, adept but creative and highly differentiated work-related
knowledge, and an inclusive, complete, but objective historical knowledge.

 Impressive educational attainment does not necessarily obtaining the highest level of formal
schooling, However, fields of specialization and degree of academic achievement add value
to individuals.
 For professional competence to create leverage, it must be distinctive, highly inimitable, and
forward-looking. Ownership of these traits creates worth in individuals.
 Work-related knowledge in marketing, production, operations, finance, human resource,
and information and communication technology does not automatically constitute
intellectual capital. These functional expertise should be deliberately focused on
differentiation and innovation, a mindset that continuously seeks for substantial
improvements, notable enhancements, dramatic changes, and if possible, new creations,
discoveries, and possibilities.
 Regardless of functional focus, individuals who are considered human resource assets are
smart and strategic. They are not only fully and critically aware of recent developments and
 significant issues in the global, local, and organizational milieus. Rather, they possess the
ability to adequately evaluate the environment "intelligently.” Individuals having
environmental knowledge inevitably enhance their worth in the organization.
 Individuals With historical knowledge are people who have stayed in the organization for a
long time. They are valuable assets since they have seen the evolution of the company. They
have worked with the organization's managers and employees and have seen these people
"come and go" through the years. They have also witnessed the "difficult and good times" of
the organization, and are in the best position to clearly describe the culture of the
organization. Although they may be in the maturing or retiring years of their lives, they are
still valuable.

On the other hand, personal traits considered as human resource assets include qualities like:

 transformational leadership or the ability to inspire others and optimize their potentials
toward productivity and effectiveness;
 ingenuity to differentiate existing ideas, products, or services and to conceptualize new
ones;
 first rate problem-solving capabilities;
 a personality that is self-motivated and vibrant;
 sustained energy; and
 other essential attributes like adaptability, proactivity, initiative, industry, and integrity.

Managerial, entrepreneurial, and competency asset skills include:

 planning, organizing, delegating, staffing, and monitoring skills that do not simply emphasize
efficiency but rather effectiveness;
 cutting-edge business expertise, critical and reliable business intelligence, and a "futuring"
business outlook of the environment; and
 competency assets like skills in communication, expertise in information technology,
practical and vocational qualifications, and other allied abilities that can create a
competitive advantage in the individual and the organization.

Possessing all these skills enhances the intellectual capital of individuals and consequently, that of
the organizations. Individuals with these skills are invaluable assets. Human-centered assets do not
merely refer to the presence of behaviorally mature employees or just having an atmosphere that is
characterized by employee involvement and collaborative teamwork. More than these, human
resource leverage is created in conditions where:

 employees have "high" emotional quotients, attributes of self-awareness, self-acceptance,

and personal responsibility, skills in decision-making, managing feelings and handling stress,
traits like insight, assertiveness, and empathy, and affiliation skills in communication, group
dynamics, and conflict resolution;
 synergistic interrelationships exist between management and employees, between
supervisors and subordinates, among peers, and between the organization and its
customers, suppliers, the community, and government; and
  commitment or a "sense of owning" is instilled in employees, thus, resulting in social
relationship enrichment, rich and healthy interactions, optimum productivity, and
competitive advantage.

 Human Resource Leverage

Possession of human resource assets creates both leverage and a competitive edge. An organization
greatly benefits from ownership of these assets.

1. Organizations with employees owning remarkable "expertise" assets are different from the
others. A fusion and symbiotic interplay of impressive educational attainment, unique and cutting-
edge professional competence, relevant and "intelligent" environmental knowledge, creative and
highly differentiated work-related knowledge, and an inclusive and objective historical knowledge
will no doubt put an organization in the forefront. The results are far-reaching.

2. Good personal qualities possessed by employees although uniquely individualized can create a
convergent impact on the organization. Traits like transformational leadership, ingenuity, first-rate
problem-solving capabilities, sustained energy, and attributes like adaptability, proactivity, initiative,
industry, and integrity can impact organizational temperament and nurture a climate of enthusiasm
and drive.

3. Managerial, entrepreneurial, and competency asset skills shore up effectiveness and

organizational success, thus, creating comparative advantage in relation to other organizations.

4. Organizational human-centered assets like the presence of employees with "high” emotional
quotients, synergy, and employee involvement open more windows to organizational opportunity,
realization, and achievement.

In essence, human resources possess multi-talents. They contribute to the "robustness" of the
intellectual capital of the organization. Their long-term impact cannot be overlooked. Their
knowledge, expertise, and skills invariably add and complement organizational growth,
competitiveness, and "winability."

Consequently, organizations need to recognize and develop the potentials of their human resources,
give them full access to opportunities toward human development, and constantly nurture them.
When employees leave the organization, they bring with them these assets. This is a loss to the
organization. The human resource leverage created is almost all the time ephemeral and temporary.

 Marketing Assets

Market assets are results of market-related intangibles such as brands, company names, customer
loyalty, repeat business, distribution channels, contracts, and agreements.

1. Brands are considered as effective means to attain market supremacy. Marketing experts
believe that if a product or service is not a recognized brand, then it is not a commodity after all.
Many organizations do carry brand names but they do not necessarily create market
 dominance. Brand names that promote substantial sales are considered market assets. For
example in this country, "Colgate" is the household name for toothpaste; "Kodakan" is
colloquially mentioned for any picture-taking activity; and "Xerox" is synonymous to
photocopying.

2. Apart from brand names, organizations have their own company names. Some company
names are considered market assets. Their names ring a bell. They are popular. They have
gainfully created an impression to the consumers. In fact, they need not advertise. Their
"names" simply "SELL." Many of these organizations have withstood the tests of time, as in the
case of General Electric.

3. Customer satisfaction is not considered an intangible market asset. It simply meets the
minimum requirements of making and closing a business deal. More than customer satisfaction
is customer loyalty. The market benefits derived from customer loyalty are many. Customer
loyalty helps organizations attain a bigger market share. It is a result of the intimate relationship
between the customer and the supplier and is characterized by sustained concern and support.
Support may be in the form of financial, technical, marketing, and managerial assistance. In the
end, both customer and supplier benefit from each other and consequently, long-term business
relationships are assured.

4. Having many distribution channels does not automatically assure market control. What is
important is the presence of efficient distribution channels that are structured, systematized,
and comprehensive. This enables organizations to extend beyond their existing reach. As a
result, organizations are able to attract potential customers, maintain their present customers,
and even gain the customers of its competitors.

5. Networking per se will not create market ascendancy. Instead, organizational alliances and
linkages need to be strategic and collaborative. They should look into the best practices of each
of their organizational partners, benchmark on them and be even better, if possible.
Accordingly, organizations become more vigorous, progressive, and successful.

 Market Dominance

The competitive edge or dominance brought about by market assets includes:

1. An effective but less expensive medium for product and service identification. Aside from
denoting ownership, branding creates popularity and product awareness. Its inherent
advertising advantage effectively promotes the organization's products and services at minimum
costs or no costs at all.

2. A company name that is well-known, recognized, established, and reputable significantly

increases the financial worth dan organization. Its value becomes more than its physical assets,
ranging from 50 to more than 100%. Some call it “goodwill.” This is monetarily valuated when
deals like sales, mergers, and joint ventures are closed.

3. Repeat business is a by-product of customer loyalty. Suppliers who have nurtured a degree
of affinity and intimacy with their customers create a unique form of market advantage. There is
an assurance of continuing customer loyalty and mutually profitable collaboration.
 4. Increased product and service sales result from efficient and well-organized modes of
bringing goods and services to the public. They minimize scheduling and transportation costs
on one hand, and optimize market sales on the other hand. In both cases, the sum of the market
asset benefits is heightened,

 Infrastructure Assets

Infrastructure assets include positive organizational features like structure, management

philosophy, organizational culture, high involvement practices, quality standards, and technology
that enable an organization to establish its competitive advantage.

1. A lean organizational structure is considered an infrastructure asset when a flat framework is

able to beneficially lessen bureaucracy, streamline job tasks, and simplify mode of
administration.

2. Organizational cultures vary in every organization. By definition, organizational culture refers

to a unique way of thinking. It is a way of life. It is the result of a smooth blending of four
essentials, namely, organizational beliefs, attitudes, and values; the interests and expectations
of its members, the intra- and interrelationships existing; and the philosophies, managerial
styles, and ethical practices adopted by organizations.

Some organizational cultures are plain, stark, and insignificant. They do not awaken the
members a sense of purpose. The members are, in a way, uncertain, apathetic, and lethargic. As
a result, these cultures are stale and dreary. Organizational cultures characterized by these traits
are not considered intellectual capital. On the other hand, there are organizational cultures that
are potent and full of life. They are thriving and pulsating. In short, the energy exuded is felt by
everyone from the top management to the middle management down to the regular members.
Dynamic organizational cultures are characterized by the following:

 Personal and organizational values that translate into unswerving beliefs and positive
attitudes. There is alignment between cognitive outlook, opinions, and judgments on one
hand, and behavioral actions on the other.
 Interests and expectations of members that are linked to organizational goals while pursuing
personal objectives. In these aspects, both individuals and the organization benefit.
 Emotionally balanced intra-relationship of individuals that are characterized by self-
confidence. Similarly, the interrelationships existing among the employees are intimate,
warm, mature, and Convivial. These congenial rapport and friendly affiliation create an
atmosphere of open acceptance, smooth interaction, communication and connectedness,
and heightened productivity.
 Organizational philosophies that are zealously embodied; management styles that are
genuinely participative and highly transformational; and ethical practices that are observed
to the highest standards without discrimination.

3. Managerial and functional work practices typified by high involvement reinforce

competitiveness and are further enhanced when the organization faithfully adopts quality
standards. They are likewise regarded as infrastructure assets.
  Demonstration of high involvement practices brings into the organization both internal and
external fit. The interactions among employees are complementary and consistent with
organizational goals and objectives.
 For managerial processes to be considered infrastructure assets, they need to be focused on
effectiveness While funclion7al administrations to purposively geared toward efficiency. In
effect, errors and wastes are minimized; accuracy is emphasized; and results are based on
remarkable quantitative performance.
 Quality standards are today being adopted by organizations. These standards may have
been Simply drawn out, formulated' and set by the members of the organization; or they
may have been based on national or global standards. Whether self-formulated or adopted,
the logical of implementing quality standards are competitiveness and financial returns.

4. Technology, being the application of knowledge, is broad in scope and perspective. Its
applications are in the fields of agriculture, business, science, and education among others. It is
an infrastructure asset When its impact produces phenomenal outcomes.

 Comparative Advantage

Possession of infrastructure assets brings about a comparative advantage to organizations.

1. A streamlined organizational structure makes communication between management and

employees easier because it eliminates bureaucracy. As a result, job tasks and projects are
completed faster. There is speed in delivering goods, rendering services, and providing after-sales
service. In fact, in some instances, speed is the only thing that gives a company its comparative
advantage. In a lean organizational structure, there are fewer opportunities for miscommunication.
Problems are significantly minimized; responsibilities are performed promptly; people relationships
are not hampered and disturbed; and productivity is considerably improved.

2. Organizational cultures aptly create infrastructure advantage in the following ways:

 A juxtaposition of personal, organizational, and universal beliefs, attitudes, and values brings
about a corporate milieu that is characterized both by divergence and by commonality of
purpose. In effect, it creates a deeper and fuller sense of direction in individuals and
organizations as a whole.
 Diverse interests and expectations among members in organizations are realities. Differing
family backgrounds and a variety of needs, wants, and demands when coupled with
responsible intra- and interrelationships help bring about an atmosphere of collective and
shared vision and vigor.
 When management philosophies contextualize organizational thrust, they inevitably
accentuate organizational rationale and infuse substance to its existence. Corporate
philosophies, in effect, influence managerial styles to help bring about a synergistic
paradigm of doing things.
 Ethical practices adopted in organizations are viewed as infrastructure assets. Although
seemingly irrelevant in the context of the local environment today, its significance and
magnitude cannot be overlooked, more so, overemphasized. "Organizations that conduct
 their trade ethically bring about, at the least, good business results." It is just for
organizations to validate this statement.

3. With high involvement work practices, managerial and functional processes that are guided by
quality management systems, the organization inevitably possesses intellectual capital.

 High involvement work practices have a substantial and positive impact on organizational
performance.
 Managerial and functional processes are both administrative and operational. When
paperwork, formalities, and administration are conducted with a high sense of
professionalism, competence, and order, cooperative effort and efficiency inevitably result.
Specifically, standardized processes assure precision in delivering and generating outputs.
 When functional processes are trouble-free and cost-effective, operational costs are greatly
minimized, and consequently, profitability is increased.
 The adoption of quality standards includes having an agreed quality philosophy, a quality
policy, quality management systems, continuous quality assurance, and periodic quality
control. If nurtured consistently, they bring about comparative advantage.

4. As the principal catalyst of change, information technology has brought about radical
transformations in the global skyline. Its impact and influence are greatly felt in every facet of life. It
is an infrastructure asset where:

 a database of human resource skills and competencies facilitates accurate matching of

employee abilities with corresponding job tasks, insures placing the right people to fill up
job requirements, and identifies correctly the people who are qualified to undergo training
for capability development or enrichment;
 a database of customers allows organizations to anticipate consumer needs and
requirements and be ahead of its competitors;
 a database of suppliers monitors inventory requirements, determines lead-time and delivery
dates, and checks quality and quantity of raw materials delivered with precision; and
 a database of buyers helps organizations to create timely "switching costs." This versatility
helps sustain the loyalty of the buyers.
 Figure 7.1 Strategic Asset Management

In summary, possession and management of competitive strategic assets create a viable and
valuable edge in organizations. More particularly, intellectual property ownership assets are
monopolistic assets. Human assets bring about leverage, influence, and power while market
assets result in market dominance and ascendancy. Comparative advantage is a natural
derivative of infrastructure assets.

 Asset Management Strategies

Managing the strategic assets of an organization is optimizing its valued resources. These assets are
intellectual property assets, human resource assets, market assets, and infrastructure assets.
Considered as pillars of effective competitive asset management, three distinct but interrelated
approaches are presented. They are competency learning, strategic enhancement, and competitive
innovation. The smooth interplay of these facets is shown in Figure 7.2.

Figure 7.2 Facets of Asset Management Strategies

 Competency Learning: “Laying the Groundwork"

By definition, competency refers to the knowledge, attitudes, and skills expected of an individual in
carrying out his job tasks. It is aligned to the organization's vision-mission. It is a necessary tool for
the actualization of organizational plans and the implementation of strategies. It puts emphasis on
evaluation and accountability of performance. It is essential in the attainment of optimum
productivity.

Examples of competencies are business orientation, commitment to excellence, analytical thinking,

presentation, and decision-making skills. Every job task requires specific competencies. Generally,
these competencies be based on specific job descriptions that delineate the tasks, functions, and
responsibilities expected of an individual. In other words, each job competency has to be correctly
identified, clearly defined, and fully explained. Precise and clear job descriptions result in the
following benefits:
 1. Provide employees a performance framework with respect to requisite knowledge, skills, and
attitudes.

2. Assure management that employees performing definite job tasks possess the necessary
competencies.

3. Streamline organizational management in terms of ill-equipped employees, redundancy, low

productivity, and cost-related wastes related to inefficiency and ineffectiveness.

4. Serve as bases for evaluating work output for reward and promotion purposes, monetary, or
otherwise.

5. Provide the blueprint for preparing and conducting recruitment, selection, hiring, and training
development programs. Thus, only employees with "the right fit" are recruited and hired. Efforts
are directed toward proactivity, differentiation, innovation, smart strategies, productivity,
effectiveness, and competitive advantage. Accordingly, organizations become productive.

6. Allow young people possessing competencies to move up the corporate ladder faster than
those who are inept and deficient. As compared in the past, seniority will not be a priority
anymore. This is the new evolving paradigm on competency learning.

 Classifying Competencies

The realization of organizational vision-mission coupled by the attainment of its goals and objectives
are largely dependent on its people, namely, leadership and support of top management,
managerial skills, effectiveness of middle managers, efficiency, and synergy among the regular
members.

To attain a high level of organizational success, these people must possess competencies that are
aligned and consistent with their respective job descriptions. Required competencies vary with
respect to classification, ranking, and level of mastery.

Figure 7.3 Classifications of Competencies

 Classifications of competencies include core, functional, and managerial.

1. Core competencies are basic. They include all fundamental competencies expected of every
employee. They are minimum requirements set by the organization. For example, integrity is a
core competency. As a whole, rank-and-file employees are expected to possess core
competencies.

2. Functional competencies are expected of employees performing job functions in marketing,

production, human resource, technology, and finance. Possession of functional competencies
assumes having the core competencies.

3. Managerial competencies are administrative and attitudinal in nature. They include

competencies in planning, organizing, delegating, staffing, and monitoring, as well as people
skills, leadership, and behavioral maturity. Both functional and core competencies are assumed
to be minimum, requirements for employees occupying managerial positions.

 Strategic Enhancement: "Widening the Horizon"

Another facet of successful intellectual capital management is strategic enhancement. Given a

dynamic environment where product cycles are shorter, and where the need to be efficient and
cost-effective has never been that critical, organizations of today have no other alternative but to be
uniquely knowledgeable to survive and compete. There are different ways in strategically enhancing
an organizational memory-based system. They are the following:

1. Maximize the reach of the organization's infrastructure technology. Computers are perfect
mediums for broadening new business possibilities. They approximate human intelligence, thus the
term artificial intelligence. Information technology greatly facilitates the efficient and effective flow
of knowledge, helps systematize documentation and operation of processes, minimizes unnecessary
paper activities, provides precision and efficiency, and simplifies modifications and reproductions.

2. Corporate entities need to appreciate the business value of knowledge, information, and
communication technology. By managing infrastructure capabilities, business performance can be
actualized and improved by doing the following:

 creating a data-based portfolio of customers, suppliers, competitors, and all information

allied to these entities;
 seriously undertaking systematic computer-based recording and application of knowledge in
systems, programs, and processes;
 engaging in e-marketing and e-trading to sell, promote, and distribute its products or
services;
 involving in business to business (B2B) exchanges to take advantage of discounts and other
low pricing promotions offered by suppliers;
 using computer software that produce attractive and unique product designs and packaging;
 using communication technology to minimize time "leaks"; and
 availing of courier hubs for fast delivery of products and services to cross-spanning
boundaries.
3. Continuously conduct formal and informal types of training. Training is a good source of
knowledge generation and enhancement. It helps realign the employees' mindset to a paradigm of
awareness, readiness, understanding, and adaptability to changing global demands. More
particularly, education helps provide employees with hard knowledge, managerial skills, and
professional business orientation. An example is computer literacy. In fact, it has become a core
competency requirement for all white-collar employees. Some employees undergo formal education
for new job assignments or enrichment like presentation and communication skills, accounting,
business planning, and others. On the other hand, other strategic training enhancements include
supervisory effectiveness, quality and continuous improvement, change management, and
emotional intelligence. Hence, management should not underestimate the importance of sending
employees to trainings because they will help in the development of a corporate memory-based
organization.

4. Systematize a process of enriching job pathing of employees beginning from being starter, with
zero or negligible knowledge to becoming learners through supervised apprenticeship; from being
performers with average output to becoming masters and excelling as experts. Moreover, cross
training through job rotation or performing other knowledge-based skills and attitudes, and job
enrichment or expanding to new job tasks will develop multi-skilled employees. In both instances,
corporate memory is heightened and complemented.

5. Empower employees to reach sustainable self-development by promoting valuable knowledge,

rewarding those who unselfishly share their knowledge to others and to the organization. IOS
noted that only 20% of a person's knowledge is being used. The remaining 80% are under-utilized or
never utilized at all. Therefore, the gap between knowledge and competency skills is widening.

6. Interact with experts who have proven their worth and expertise in their specialized fields.
Although part of the organization, some refuse or fail to recognize the rich reservoir of knowledge
they possess. Experts are assets to the organization. Their proficiencies may have been a result of
formal schooling, the virtue of wisdom, years of experience, reliable "seat-of-the-pants" intuition,
sheer acumen, and intelligence. Thus, interactions with experts can be optimized by having informal
conversations for knowledge exchanges, holding brainstorming sessions for knowledge sharing,
conducting workshops for knowledge updates, creating and promoting a mentee-mentor
relationship for knowledge guidance and support, teaching for knowledge instruction, and working
closely for knowledge and technology transference.

7. Prepare programs for employees leading to attitudinal change. To "widen the horizon” is to plan
activities directed mainly toward intangible assets like behavioral maturity and betterment with
emphasis on work and knowledge values. Examples of these organizational values are responsibility,
accountability, credibility, integrity, initiative, people sensitivity, adaptability, and synergy.

8. Provide access to needed resources. Resources can be in the form of:

 market data to help create appropriate market plans and competitive product positioning;
 infrastructure technology to reinforce high performance and organizational sustainability
through efficient processes and operations;
 human resource expertise to help hone professional competence, attitudinal maturity, and
competency skills;
  intellectual property rights to safeguard corporate memory in the form of trade secrets and
copyrights;
 financial resources to provide funding for corporate memory generation, development, and
enrichment in whatever form and nature; and
 management resources to support thought leadership, organizational direction, and
operations.

9. Broaden networking through strategic alliances, which can come from within and from the
outside.

 Within the organization unit, functional and managerial collaborations need to be

promoted. These can take the form of vertical and horizontal sharing of ideas, data,
information, knowledge, and expertise.
 In addition to interdepartmental cooperation, intradepartmental interaction and networking
can similarly take place. From the outside, partnering can be done with other organizations,
the industry, the government, and the community.
 Strategic enhancement of organizational memory can be done through competitive and
collaborative bench learning in terms of product, service, operations, technology, and
marketing.
 "Bench learning" illustrates productivity and reinforces efficiency in organizational learning.
It is actualized by studying the best •learning practices of different organizations, how they
plan things and adopt to urgent issues within and outside the organization, and by
emphasizing the human element, more specifically, the attitudes in organizational growth
and development.
 Inputs can likewise be drawn from the government with regard to its priorities and
programs and from the society most especially, the consumers with respect to communal
needs, wants, demands, and expectations.

10. Analyze cultures. Culture is continuously evolving and it largely emanates from the top. There
are varied types of cultures that are interchangeable and interacting. The impact of this
phenomenon must be significantly considered in strategically enhancing organizational memory.

 The first variable is the nation's culture that provides explanations as to why and how
people live, think, talk, act, and relate.
 The next factor is the corporate culture that explains how employees perceive work,
perform job tasks, and react to workplace interrelationships. Since the lifespan of
knowledge is becoming shorter than ever, corporate culture goes through continuous
change. However, such change has to be characterized by ongoing organizational renewal.
 The last consideration is intra-cultures existing within the organization. Although attempts
are exerted to adjust to the culture of the organization, individuals of different nationalities
generally keep their own cultures.

 Competitive Innovation: "Creating Bargaining Power”

 The term, "innovation," is the best assurance in achieving business sustainability, competitive
advantage, and consequently, creating bargaining power. Sailing away from existing traditional
practices, innovation may refer to any of the following:

1. Creating, conceptualizing, or inventing new ideas. It is re-engineering new insights and

knowledge. It is "originality in action." organizations need to identify employees who come up with
new concepts, propositions, plans, competencies, capabilities, proficiencies, processes, techniques,
presentations, and others. Their value in the organization cannot be overemphasized.

2. Bringing a paradigm shift from the usual conservative mindset to that of openness, willingness,
aggressiveness, initiative, focus, and adaptability to needed changes in the context of changing
environmental and organizational variables. This outlook affects organizations in two ways:
revitalizes an innovative climate characterized by an atmosphere of readiness and flexibility for
"new opportunities" and "new possibilities" among employees; and shapes an innovative culture
where all the hard and soft facets of an organization like vision, goals, objectives, plans,
management, performance, processes, systems, and results coupled with values, attitudes,
organizational philosophy, aspirations, and management style are "open" to "new learnings" and
"new systems."

3. "Revolutionizing" a synergistic outlook and willingness to invent a spectrum of "new

perspectives," unique insights and knowledge between and among organizational units and
departments.

Innovation Scenarios

To innovate is to present any of the following scenarios:

1. Differentiating existing products and services. On the softer side, differentiation is a "lower"
version of innovation. It involves improving that which is already existent. Such improvements
may come in different forms like highlighting features that are generally overlooked,
strengthening attributes that are weak, and doing little or big improvements.

2. Reinventing products and services. This involves more aggressive and radical changes. It is
more deliberate than differentiation. It includes conceiving mentally, redirecting, devising,
repackaging, and even re-introducing a product or a service through added features, new
slogans, and strategies to achieve a higher impact on public imaging. These changes may be:

 in the product itself like logos, colors, size, attributes, texture, and purpose, or in service
like nature, quality, efficiency and productivity;
 in pricing schemes like "opportunity" offers;
 in attractive promotions that have unique mass appeal;
 in supplier-customer intimacy relationships like cost-effectiveness, performance
management, and after-sales service; and
 in channels of distribution like efficient scheduling and minimum transportation costs.

3. Continuously experimenting. This involves faithfully undertaking researches for new

product/service development, approaches, and processes, as in invariably: producing new
 products or services that are demanded by the local and global marketplaces; designing new
approaches that create competitive advantage for the organization; reshaping for a robust
organizational built; and streamlining processes and operations for maximum productivity.

4. Applying recent and new technologies in information or communication that will

significantly change organizational structures and systems for optimality.

5. Changing business models. This involves generating a new framework and approach
characterized by innovative, smart, and strategic ideas and plans in pursuing and conducting a
business.

6. Creating new products and services to "futurize" the organization.

7. Widening the breadth and depth of intellectual capital found in individuals, teams, and
departments, particularly, intellectual property assets and ownership. This feature of intellectual
capital management essentially creates the organization's bargaining power. The best proof of
competitive innovation is Bill Gates.

In summary, competencies today are more important than seniority. The degree of performance
or delivery of outcomes is a significant indicator of how individuals will succeed in their
respective careers. Strategic enhancing widens one's career horizon while achieving competitive
innovation creates his/her bargaining power.

World's Greatest Strategists

Warren Buffet: Berkshire Hathaway

At 83, Warren Buffet is considered a legendary investor who remains at the top of his game.

He is a visionary value creator with a one-of-a-kind mind. Berkshire Hathaway looks stronger than ever,
with shares near a record high, capping a 9,000-fold increase during his tenure.

Buffet continues to fortify Berkshire for the future and for his yet unnamed successor, The company
invested $10 billion last year in the Heinz buyout and keeps searching for an "elephant size' deal to
deploy a chunk of its $42 billion in cash.

Berkshire's next CEO will get to run a company with more than $15 billion of annual earnings power and
an impressive portfolio of businesses. Buffet has built a legacy and he is still adding to it.

Strategies

 Someone is sitting in the shade today because someone planted a tree a long time ago.
 It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you will
do things differently.
 Risk comes from not' knowing what you're doing.
 It is better to hang out with people better you. Pick out associates whose behavior is better than
yours and you will drift in that direction.
 Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who
take the subway.
 Price is what you pay. Value is what you get.
 Chains Of habit are too light to be felt until they are too heavy to be broken.
 There seems to be some perverse human characteristic that likes to make easy things difficult.