COMPETITIVE CONTEXTS AND THEIR MANAGERIAL & MSS EMPHASES
Enterprises enjoying
legislative protections
against competition and
so comprehensible as
de jure monopolists
Firms positioned as de facto
monopolists, in that they
are the strongly dominant
presence in some industry or
product-market sector
Enterprises operating in
commodity- type markets or
industries characterized by
quasi-pure competition 2
Firms facing only
constrained competition
due to limited opportunities
or incentives for serious
product differentiation (or to
regulatory structures or to
collusive arrangements
Enterprises engaged in
extensive (ill-constrained)
competition, given their
Involvement in innovationdriven industries and/or
adolescent markets
COMPETITIVE CONDITIONS
No direct competitors, but some
secular susceptibility to demand
displacement via technological
developments (cell phones, say) or
changing politico-economic sentiments
(e.g., state-mandated decentralization
in the power sector)
CORE MANAGERIAL OBJECTIVES
Romancing political authorities to preserve monopolistic privileges and to
leverage favorable rate-related rulings from regulatory agencies. Technical
managerial requirements much limited because of demand (price) inelasticity
and the fact that firms’ prosperity is not intimately tied to either levels of
efficiency or satisfaction…and because ROI guarantees can insulate executives
against even serious decision errors. The main operating task is simply to avert
egregiously embarrassing shortfalls in supply or charges of confiscatory pricing
MAIN MANAGEMENT SUPPORT SYSTEM REQUIREMENTS
The decision calculus is short on exogenous (external) variables and long
on controllables. Though integral tasks (e.g., power generation,
communications switching) demand highly sophisticated process
management systems, administrative requirements are generally wellenough served by conventional MIS-type (accounting and clerical)
provisions. [Recent tendencies towards lateral diversification, however,
pose the need for more capable administrative system components] 1
As competitors are all weak, the
dominant firm can take essentially
peremptory, self-serving positions with
regard to product development, supply,
pricing and customer service, etc.
Many firms in the field, but they act
entirely independently of one another;
no meaningful competition in terms of
either price or product quality
Exercising political muscle (through extensive lobbying and campaign
contributions, etc.) to avert regulatory obtrusions and attract X-efficiencies.
Exercising raw market power and predatory practices to discourage or defeat
competitive intrusions. Perhaps the primary (and unique) ‘technical’ challenge
for de facto monopolists is nurturing aggregate demand
Key factors (price and demand) are either resolved entirely exogenously or are
otherwise beyond local managements’ influence; nor is there any opportunity
(or much reason) for firms to inform themselves of each others’ intents. There
thus remains only this objective: Produce all you can with all you can get!
Main axis of contention is relative
market shares, mainly via minor (e.g.,
cosmetic) product differentiation and
promotional (advertising and
merchandising-related) initiatives
A firm’s success in such markets is much dependent on its management’s
ability to recognize, and subsequently exploit, opportunities for increasing
(marginal) productivity. More pragmatically, the critical managerial challenge
here is to realize enough in the way of efficiencies to keep the firm situated
somewhere in the neighborhood of the low-cost producer/provider.
Here, it’s not just share-of-market
that’s at stake, but survival.
Competitors thus see themselves as
players in something akin to a zero- (or
constant) sum game. Hugh sensitivity,
also, to broad technological advances
and/or changes in consumer/client
tastes or preferences
The focal purpose of such enterprises is the pursuit of monopoly profits (which
are accruable only so long as the enterprise firm remains the sole available
provider for some novel product or service). Hence, the key managerial
challenge is to excite a succession of products or services that involve
significant substantive differentiation from any predecessors. On the other
hand, firms must be constantly alert to opportunities to foreshorten the productdevelopment cycle, if only to help then react more quickly to innovations
introduced by competitors
Most of these firms entail an admixture of Process and Job shop aspects,
and so require facilities to support mass production as well as project
management. Common also is a reliance on extensive networking, both
internal (via intranet links) and external (to connect with subcontractors,
and suppliers, and perhaps aid in customer-binding, etc.)
Operational decisions dominate at all levels of enterprise, so posing the
requirement for mathematically-based analytical instruments that can
generate effectively optimal resource allocation decisions… and hence
for ISY facilities that can capture/encode the clinical data to drive them.
Firms require suites of MSS (IT & DT) instruments suitable for the
management of enterprises constituted as Process Shops (anchored
around assemble-line apparatus). Tactical decision requirements
dominate; hence the need for provisions for accommodating empirical
predicates (i.e., relational databases or their more powerful successors,
relational model-base structures) and for probabilistic (especially
statistical-inference based) decision aids.
Managements of such enterprises are the only ones that can be said to
have true strategic decision responsibilities, due mainly to consistent
scarcity of objective predicates (positivist or empirical). This poses the
need for unconventional IT facilities (e.g., intelligence vs. data processing
provisions), and non-algorithmic (qualitative-analysis based) instruments
that can help discipline logical or judgment-driven decisions. MSS
constructs must provide facilities pertinent to Job Shops (to support
bidding, dynamic job scheduling and perhaps mass customization, etc.).
1. As an example, consider that many electrical utilities have now taken to producing excess power that they then to sell to other power providers. But power-brokering is a technically demanding task that
dictates the need for an entirely different (and more powerful) set of informational and analytical tools than were required by firms catering only to local needs; the dramatic failure of ENRON can, at least in part,
by its failure to equip itself with properly-capable system instruments.
2. Here might also be included a special sub-class of firms that are weakly-autonomous or captive enterprises, in that decisions regarding price, volume and product properties may be imposed on the firm
by a superior enterprise (say, for example, a mega-retailer like Wal-Mart).
3. Per provisions of the sort discussed in the Virtual Corporation.