MNB2601
NOTES
, MNB 2601
BUSINESS MANAGEMENT BY PORTFOLIO
UNIT 1
BUSINESS PORTFOLIO MANAGEMENT FRAMEWORK
BUSINESS MANAGEMENT BY PORTFOLIO – a business philosophy followed by organisations with a high level of
business maturity
FRAMEWORK – refer to the supporting structure of an object (e.g. building a vehicle). In business management
context it refers to the basic structure underlying the activities of an organisation
FUNCTIONAL ORGANISATION – areas of speciality (marketing, procurement, finance) with clear lines of
managerial responsibility
LIFE CYCLE – a phased timeline, consisting of sequentially structured work or process groups that provide
structure to the life of a product/service from its initiation stage through its retirement stage
MATRIX ORGANISATION – combines traditional functional organisation with a project organisation in a matrix
configuration. When needed, functional staff have dual reporting lines:
Vertical: report to functional manager
Horizontal: report to a project manager
MATURITY – organisations ability to apply business portfolio management to realise its strategic organisational
goals by adopting to high levels of uncertainty, adapting or developing processes & business tools, and
innovation new products and services
METHODOLODGY – a system of methods used in a particular area of study or activity. In business management
context it refers to system of methods used by an organisation to realise its goals and objectives
OPERATIONS – the day to day running of an organisation that produces core products and services that
justifies the organisations existence
PORTER’S VALUE CHAIN – classifies business activities as primary and support activities.
Primary activities = core business activities
Support activities = provide centralised service to all core functions
PORTFOLIO – organisational fund that forms part of the organisational structure at executive level, with the
purpose of attracting funds for funding and activating portfolio programmes & portfolio projects
PORTFOLIO PROGAMME: combination of related projects that work together as part of a
portfolio to contribute to the achievement of strategic organisational goals
PORTFOLIO PROJECT: combination of related deliverables, combined with their associated
activities, that form the scope of work produced in definite times, cost & quality for contributing
to the achievement of strategic organisational goals
PRODUCT MATURITY – degree to which product characteristics comply with product requirements, as specified
by the product customer
Downloaded by Shah AK ()
, THE EVOLUTION OF MANAGEMENT THEORY:
A. CLASSICAL APPROACH
3 Management theories developed on the premise that organisations are rational systems that should
operate in the most efficient manner possible
1 – SCIENTIFIC APPROACH (FW TAYLOR) focused on production efficiency
2- (MAX WEBER) focused on best possible structure within an organisation
3- ADMINSTATIVE MANAGEMENT (HENRI FAYOL) provided managers with the general duties &
functions of managers within a framework of clear guidelines
B. BEHAVIOURAL APPROACH
To find ways to change individual & group behaviour in order to improve organisational efficiency
C. QUANTITATIVE APPROACH
Mathematical content approach to solve managerial problems e.g. statistics, linear programming,
waiting line or queuing theory, decision trees and Monte Carlo simulations development
D. THE QUALITY MOVEMENT
TQM (total quality management) knowledge, tools & techniques of quality are applied in a co-
ordinated way, throughout the organisation, to all functions at all managerial levels.
4 pillars of TQM
1-SATISFYING CUSTOMERS
2-SATIFYING SYSTEMS & PROCESSES
3-PEOPLE INVOLVEMENT
4-CONTINUOUS BUSINESS IMPROVEMENT
E. SYSTEMS APPROACH
Organisation relies on the inputs from the environment, which it transforms using business processes,
into product & services that are then returned to the environment. The organisation become a
subsystem of the larger system.
F. CONTINGENCY THEORY
There is no best way of organising & depends of several contingency factors
1-complexity of the environment in which organisation functions
2-technology
3-organisational strategy
4-size of the organisation
G. BUSINESS MANAGEMENT BY PORTFOLIO
Provide business managers with an efficient, value-adding business process framework to deliver the
required business result effiency & effectively through teamwork, taking the turbulent business
environment into consideration. It allows them to:
• Define business systems
• Structure business organisations
• Structure organisational leadership
Downloaded by Shah AK ()
, CLASSIFICATION OF BUSINESS MANAGEMENT BY PORTFOLIO
Business management by portfolio is a business management philosophy embraced by organisations with a
high level of maturity. Maturity is the organisations ability to:
1. Apply business portfolio management
2. Adapt to high levels of uncertainty in the management environment
3. Adapt or develop processes & tools for ground-breaking work
4. Innovate new products & services
5. Realise strategic organisational goals & objectives
BUSINESS MANAGEMENT BY PORTFOLIO FOLLOWS A TOP-DOWN BOTTOM-UP APPROACH
TOP DOWN APPROACH – senior executives decides on the organisations vision, mission, goals & overall
strategies
BOTTOM UP APPROACH – completion of activities & deliverables, project, programmes, & portfolios and
attainment of strategic goals of organisation
HIERARCHY THAT SUPPORT PROGRAMMES & or PROJECTS
• PORTFOLIOS THAT SUPPORT STRATEGIC GOALS
• PORTFOLIO PROGRAMMES
• PORTFOLIO PROJECTS
• DELIVERABLES THAT SUPPORT THE PROJECT
• ACTIVITIES THAT SUPPORT THE DELIVERABLES
PLANNING TO ACHIEVE STRATEGIC GOALS
i. Identify, plan & provide the necessary business systems & processes
ii. Plan, allocate & match skilled human resources to the complexity of the various activities
iii. Identify, plan and provide material requirements where applicable
iv. Estimate the delivery timeframes and the associated costs of the activities –are submitted to
management for approval
v. Identify & contract quality requirements
Downloaded by Shah AK ()
NOTES
, MNB 2601
BUSINESS MANAGEMENT BY PORTFOLIO
UNIT 1
BUSINESS PORTFOLIO MANAGEMENT FRAMEWORK
BUSINESS MANAGEMENT BY PORTFOLIO – a business philosophy followed by organisations with a high level of
business maturity
FRAMEWORK – refer to the supporting structure of an object (e.g. building a vehicle). In business management
context it refers to the basic structure underlying the activities of an organisation
FUNCTIONAL ORGANISATION – areas of speciality (marketing, procurement, finance) with clear lines of
managerial responsibility
LIFE CYCLE – a phased timeline, consisting of sequentially structured work or process groups that provide
structure to the life of a product/service from its initiation stage through its retirement stage
MATRIX ORGANISATION – combines traditional functional organisation with a project organisation in a matrix
configuration. When needed, functional staff have dual reporting lines:
Vertical: report to functional manager
Horizontal: report to a project manager
MATURITY – organisations ability to apply business portfolio management to realise its strategic organisational
goals by adopting to high levels of uncertainty, adapting or developing processes & business tools, and
innovation new products and services
METHODOLODGY – a system of methods used in a particular area of study or activity. In business management
context it refers to system of methods used by an organisation to realise its goals and objectives
OPERATIONS – the day to day running of an organisation that produces core products and services that
justifies the organisations existence
PORTER’S VALUE CHAIN – classifies business activities as primary and support activities.
Primary activities = core business activities
Support activities = provide centralised service to all core functions
PORTFOLIO – organisational fund that forms part of the organisational structure at executive level, with the
purpose of attracting funds for funding and activating portfolio programmes & portfolio projects
PORTFOLIO PROGAMME: combination of related projects that work together as part of a
portfolio to contribute to the achievement of strategic organisational goals
PORTFOLIO PROJECT: combination of related deliverables, combined with their associated
activities, that form the scope of work produced in definite times, cost & quality for contributing
to the achievement of strategic organisational goals
PRODUCT MATURITY – degree to which product characteristics comply with product requirements, as specified
by the product customer
Downloaded by Shah AK ()
, THE EVOLUTION OF MANAGEMENT THEORY:
A. CLASSICAL APPROACH
3 Management theories developed on the premise that organisations are rational systems that should
operate in the most efficient manner possible
1 – SCIENTIFIC APPROACH (FW TAYLOR) focused on production efficiency
2- (MAX WEBER) focused on best possible structure within an organisation
3- ADMINSTATIVE MANAGEMENT (HENRI FAYOL) provided managers with the general duties &
functions of managers within a framework of clear guidelines
B. BEHAVIOURAL APPROACH
To find ways to change individual & group behaviour in order to improve organisational efficiency
C. QUANTITATIVE APPROACH
Mathematical content approach to solve managerial problems e.g. statistics, linear programming,
waiting line or queuing theory, decision trees and Monte Carlo simulations development
D. THE QUALITY MOVEMENT
TQM (total quality management) knowledge, tools & techniques of quality are applied in a co-
ordinated way, throughout the organisation, to all functions at all managerial levels.
4 pillars of TQM
1-SATISFYING CUSTOMERS
2-SATIFYING SYSTEMS & PROCESSES
3-PEOPLE INVOLVEMENT
4-CONTINUOUS BUSINESS IMPROVEMENT
E. SYSTEMS APPROACH
Organisation relies on the inputs from the environment, which it transforms using business processes,
into product & services that are then returned to the environment. The organisation become a
subsystem of the larger system.
F. CONTINGENCY THEORY
There is no best way of organising & depends of several contingency factors
1-complexity of the environment in which organisation functions
2-technology
3-organisational strategy
4-size of the organisation
G. BUSINESS MANAGEMENT BY PORTFOLIO
Provide business managers with an efficient, value-adding business process framework to deliver the
required business result effiency & effectively through teamwork, taking the turbulent business
environment into consideration. It allows them to:
• Define business systems
• Structure business organisations
• Structure organisational leadership
Downloaded by Shah AK ()
, CLASSIFICATION OF BUSINESS MANAGEMENT BY PORTFOLIO
Business management by portfolio is a business management philosophy embraced by organisations with a
high level of maturity. Maturity is the organisations ability to:
1. Apply business portfolio management
2. Adapt to high levels of uncertainty in the management environment
3. Adapt or develop processes & tools for ground-breaking work
4. Innovate new products & services
5. Realise strategic organisational goals & objectives
BUSINESS MANAGEMENT BY PORTFOLIO FOLLOWS A TOP-DOWN BOTTOM-UP APPROACH
TOP DOWN APPROACH – senior executives decides on the organisations vision, mission, goals & overall
strategies
BOTTOM UP APPROACH – completion of activities & deliverables, project, programmes, & portfolios and
attainment of strategic goals of organisation
HIERARCHY THAT SUPPORT PROGRAMMES & or PROJECTS
• PORTFOLIOS THAT SUPPORT STRATEGIC GOALS
• PORTFOLIO PROGRAMMES
• PORTFOLIO PROJECTS
• DELIVERABLES THAT SUPPORT THE PROJECT
• ACTIVITIES THAT SUPPORT THE DELIVERABLES
PLANNING TO ACHIEVE STRATEGIC GOALS
i. Identify, plan & provide the necessary business systems & processes
ii. Plan, allocate & match skilled human resources to the complexity of the various activities
iii. Identify, plan and provide material requirements where applicable
iv. Estimate the delivery timeframes and the associated costs of the activities –are submitted to
management for approval
v. Identify & contract quality requirements
Downloaded by Shah AK ()
