The Department of Agribusiness Management and Entrepreneurship (DAME) of the College of Economics and Management (CEM) kicked off its Strategic Management (STRAMA) Seminar Series on Oct. 7 at the Rural Economic Development and Renewable Energy Center.
In the seminar “Creating Value Through Strategic Management in the Power Sector,” attendees were taught how to apply classroom concepts and theories to real-life situations in the power industry.
Reginald Vargas, an instructor at DAME, said in his opening remarks that the seminar intended to emphasize how strategic management can help deal with the different problems organizations face amidst the turbulent business environment.
The featured resource speaker was Roel Z. Castro, an alumnus and an adjunct assistant professor at DAME. Castro has more than 20 years of experience in the power industry, with stints in generation, transmission, and distribution at the National Grid Corporation of the Philippines (NGCP) and Palm Concepcion Power Corporation (PCPC) before becoming president and CEO of MORE Power, a power distribution unit in Iloilo City.
Castro began his talk by showing short video clips and discussing the strategy shown in them. He discussed the fundamentals of strategic management by defining the terms management, strategic, and strategy.
According to Castro, everything in management must be done strategically because resources are limited. He highlighted time and budget as the essentials of strategic management.
Castro pointed out that strategic management involves several functions or individuals and know-how in managing cross-functional activities and decisions. “Adapting to the changing business environment is critical because your strategy today is not the same as your strategy tomorrow,” he said. Castro said that policies constantly change, technology will continue to improve, and that the only thing that remains constant is the thinking process.
Castro discussed strategic management tools such as SWOT analysis, BCG Growth-Share-Matrix, and Porter’s Five Forces Competitive Analysis. “Despite the many tools available, it is more important to construct something simple that one can truly understand,“ Castro said. He shared his framework that revolved around three questions: what is your goal, what are your resources, and what are the challenges?
In the second part of the seminar, Castro applied the different strategic management tools to a project case study. The case study focused on PCPC’s goal of building the most reliable and efficient coal powerplant with a budget of PhP12 billion and a timeline of 36 months. It discussed the company’s issues concerning finance, construction, contracts and regulatory concerns, transmission, environment, and social concerns.
In power generation, the price that consumers pay involves two components. One component is fuel, passed onto consumers as its cost differs depending on the supply.
The other component is the cost recovery factor (CRF), or how the company would earn back its capital.
To entice households to subscribe to PCPC, Castro aimed to make the company’s CRF lower than the competition by employing Chinese contractors while ensuring that the turbine, generator, and boiler are of the best quality.
Cultural barriers may be an issue when working with different nationalities, but Castro intentionally designed PCPC with that in mind. He explained that the conflict brought by the cultural differences between the project managers and contractors would put pressure on the project’s proper completion. Castro said there would be no project if the environment were always harmonious.
He concluded the seminar by discussing the success of PCPC in constructing the powerplant within the 12-billion-peso budget and 36-month timeline.
Castro also said that one needs to know when to micromanage or lose sight of the timeline and budget. According to him, having a calculated risk-taking attitude, or lakas ng loob, is critical in making big decisions in the power industry. “How would you know if a project will be successful if you haven’t started?” he asked. The DAME STRAMA seminar series aims to promote industry-academe collaboration. It was organized by Master of Management (MM) students taking MGT 281 (Strategic Management) class under faculty member Jeanette Angeline B. Madamba in partnership with UPLB DAME. The following seminars will be announced on DAME’s official Facebook page. (Antoinette Sia)