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Operation and control model

Operation and Control Model
In order to improve the efficiency of management in the period of high-speed expansion on business, capital and organization, based on the experiences of the consulting service provided for several huge group conglomerates, CCAFM has concluded that solutions on operation and control model are oriented by corporate strategy, based on the contribution theory of group value, and restrained by specific management system and culture. Also, the solutions are for the reconstruction of the control model, the design on organization and function, and the optimization of management process and institutional system; and for the establishment of control system with clear segregation of duties and appropriate delegation of authority.

The philosophy of CCAFM on enterprise operation management
CCAFM has worked closely with some advanced research institutions home and abroad, and provided consulting services for many leading conglomerates on enterprise operation management. Therefore, CCAFM has formed the philosophy on enterprise operation management, keeping systematicness, practical applicability and growth as the central points.

1. Systematicness
The system of enterprise operation management is a core juncture in operational administration, which combines the decomposition of strategic planning with each managerial and operational module.

2. Practical applicability
CCAFM has provided tailored solutions for companies based on the in-depth knowledge of the internal and external features. The design of each program focuses on the practical applicability. Also, CCAFM has offered mating tools and follow-up assistance for the implementation of the operation control system.

3. Growth
In order to adapt to dynamic external environment and match the development and strategic adjustment of the company, the operation management system of CCAFM has paid close attention both to the current needs of enterprise operation management and to the future requirement of operational development.

The basic framework of CCAFM on enterprise operation management
CCAFM has assimilated international achievements of operation management, combing with the features of the environment and Chinese companies. Thus, based on the consulting experiences of tens of companies from different industries, CCAFM can provide a series of systematizationed and integrated solutions on enterprise operation management.

Surrounding the strategic planning, CCAFM can enhance organizational capital and improve operational efficiency through the implementation and optimization of “the Big Five System”.

Group positioning——the partition of functional interfaces
Enterprise operation management is the guarantee mechanism for the implementation of strategic planning and the precondition for the business of each professional module.

In view of the features of Chinese companies, CCAFM has created value contribution model for enterprise groups, and assessed the current situation of the control of enterprise groups in terms of system theory.

To determine the position of a group and each subordinate business unit reasonably. The effective partition of functional interfaces is the core and start point of the control of the group.

Both the positioning of headquarters and business units and the partition of functional interfaces can not copy a current model or experiences from other outstanding companies, but should rely on an objective and in-depth examination on the current situation of enterprise operation management. CCAFM has adopted the value contribution model for enterprise groups to make a deep appraisement on the features of companies through the four steps upwards and to design customerized programs on the group positioning and the partition of functional interfaces.

CCAFM has analyzed the characteristics of the parent company by several factors, such as company culture, organizations, systems, processes, functions, resources, services, power relationship and so on. CCAFM not only has concerned itself with the strategy that requires the parent company to contribute value, but also examined the ability and management style of the parent company.

CCAFM has broken the tradition concept that the headquarter of a group is viewed as an “administrative agency”. Based on the knowledge on the characteristics of the parent company, CCAFM has analyzed and chosen the contribution way of the parent company, oriented by the corporate strategy and value creation.

The headquarters of a group should not only manage each business unit, but also take advantage of its special position to provide service for them. CCAFM has regrouped and composed miscellaneous businesses of the group through a sharing platform to clarify which services and key resources should be offered to each business module.

After finishing the aforementioned three steps, CCAFM has determined the positioning of the group and the partition of the functional interfaces by matching the three factors effectively, and has adjusted them by the change of the strategy.

The design for the control model
It is the reality that Chinese companies have faced the managerial problem that to what extent managers have to delegate powers to lower levels. Centralization or Decentralization is an administrative puzzle many group leaders have faced. The core of the solution of this problem is to choose an appropriate control model and put it into practical use.

A successful control model of a group can hardly be copied by another one. In fact, it is difficult to find out a control model that can be accurately described and universally used.

Most of the domestic designs for the control model have focalized on studying successful experiences from several groups, especially renowned international companies, so that they can learn from these experiences in themselves and find out the right control model for their own development.

The design for the control model of a group should be based on several factors, such as characteristics, strategic objectives, industrial positioning, business model, operational environment, developing history, human capital, company culture and so on.

CCAFM has formed a selection model of the control model of a group, according to the experiences from professional consulting services we provided for some large groups to manage change, and has assisted the group in developing its appropriate strategy and control model.

The methodology of CCAFM on the design for the control model of a group
1. The dimension of the decision-making characteristic
Some features, like the relative size of different businesses in a group, the risk and the investment return cycle, to a great degree, have influenced various aspects of operational decisions, such as the frequency and timeliness of decision-making, and the cost of poor decisions, and then have determined whether the characteristic of decision-making is in line with centralization or not.

2. The dimension of the competitive environment
The analysis on the characteristics of the competitive environment is to examine external environment factors like features of changes and intensity of competition.

3. The dimension of the development stage
The analysis on the factors of the development stage is divided into two parts, one is on the development state of each business unit, and the other is on the headquarters. The analysis on the former one has mainly focused on the assessment of the necessity that the group should strengthen the control on each business unit, and the latter one has concentrated on the evaluation of the feasibility.

4. The dimension of the business maturity
CCAFM has assayed the maturity of each business from the structure of the business unit, the business model, and the operational experiences. Based on the maturity of different business units, which needs disparate inputs from the group management, CCAFM has prepared distinct design proposals on the control model.

5. The dimension of the strategic intent
In the strategic planning of a group, CCAFM has clarified different development positioning of each business unit through a comprehensive analysis on certain industrial attraction and adaptability of group resources and abilities. These include that which businesses will be further developed, which have priority to be cultivated, and which pay more attention on short-term return. Different control models are adopted in various situations.

There is not a single result for the selection of the control model. It is indispensable to aim at diverse strategic status of each business and to establish homologous control model, so that the development of each business can be promoted and the entire strategic objective can be realized.

The design for the organizational structure
It is essential that the organizational structure should adapt to new circumstances, adjustments of business contents and optimization of the control model, which just can mobilize internal resources effectively and improve efficiency of operation and administration. CCAFM has determined the organizational structure by structural analysis and benchmarking analysis.

Under the guidance of the strategic planning, CCAFM has designed the organization form of each subordinate business unit, which is based on the control model of the group and combined with the characteristics of industry and management.

The organization structure is not only suitable for the business characteristics and control requirements of current stage, but also considered for the strategic objective of longer term, which should be of predictability and flexibility.

CCAFM has combined organization analysis with process analysis to design each post of all departments, which can make sure that each post meets the needs of different functional responsibility and business process. On the ground of the full post design, each post can eventually contribute to the realization of the strategic objective.

To determine the personnel allocation by “work load analysis”
The analysis of work load is helpful when a company sets up its position, which can boost work efficiency of the employees, and save costs.

Business process optimization
Many companies has already been aware of the significance of business process optimization, because it is critical to ensure the implementation of strategic planning, meet the requirements of group management model, and stimulate the future development when the external market is complex and volatile. However, some problems are emerging so that business process management can hardly play its due role. For example, the process is in motion without execution. The process is out of line with actual operation. And the fragments of the process are separated from each other.

The activities on management process and business process of a group are numerous, some of which are strongly professional. CCAFM believes that, the optimization of business process not means giving up all the original processes, but optimizing current ones on the basis of materiality principle and differentiation principle.

CCAFM has incorporated the international design theory on business process, and learned from experiences of process management of excellent companies. On the basis of experiences of process design for many large groups in China, CCAFM has formed a series of design solutions on process optimization for Chinese business conglomerates.

The optimization of group process can not only focus on single or partial problems:

But also concentrate on comprehensive solutions based on systemic framework:

Management process and business process after optimization
Can make sure that the headquarters have core competence to participate in the international competition.
Can further improve the managerial level of the group as a whole.
Can boost the efficiency of each business unit, reduce costs and form industrial competence.
Can help each business unit establish competitive managerial system and business process.
Can let change ideas win the hearts and minds of people and improve the ability of strategic implementation in the group.

The construction of institutional system
Most business conglomerates have aimed at constructing a body of institutional system that is of international competition, abreast of the times, and of strong maneuverability. CCAFM has learned from many projects experiences and summarized a trilogy for the construction of group institutional system.

1. The macro level of enterprise institutional system
The macro level of enterprise institutional system is mainly about how to match the construction of institutional system with the company’s environment, the strategy of development and control model. Based on the research of the internal and external environment, CCAFM has appraised the control model of the company and features of its organizational structure, on the foundation of the analysis of the company’s strategic objective and developmental direction. And CCAFM has streamlined business and management process, clearly segregated duties and responsibilities, and formed enterprise institutional system.

2. The mid-scale level of enterprise institutional system
CCAFM has created an integral and systematic set of institution by assembling interdependent regulations and rules together, which is Institution Tree. Combining a number of Institution Trees from different functions, all institutions have been covered through the design of the system, and formed into a framework which is categorized laterally and longitudinally. Thus, there is no repetition and omission.

3. The micro level of enterprise institutional system
CCAFM has emphasized details when providing constructional project of institutional system so that the form and content of the project are both high qualified. CCAFM has paid attention to the content of regulations and rules to make them more reasonable and executable, and attached importance to the form too. Thus, the power and responsibility is clearly specified. The business process is reasonable, and the content is intact.

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