Feb 24, 2010

Business Model :Key to deciding what to change

As a response to my earlier post of how does one decide what to change in an organization, a colleague referred me to the book 'Confronting Reality'.

My colleague was  pointed out that a review of the 'business model' will enable one to identify what needs to be changed.

The authors ( Larry Bossidy and Ram Charan, 'Confronting Reality" 2005) define a business model as a statement of an organization's current reality and its likely-as opposed to hoped-for- future direction.
The business model ( see figure) has three essential components
  • the environment in which the business operates
  • the organization's financial targets
  • Activities of the business:strategy formulation,operating activities,selection deployment,development of people, and organizational processes and structures
The authors believe the business model provides a blue print of taking action.Repeated review of the components of the business model till a harmonization can be achieved will throw up the factors that need to change..

Any thoughts?

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