STRATEGIC MANAGEMENT & BUSINESS POLICY 13TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER

Staffing The implementation of new strategies often calls for new human resource management. Priorities and a different use of personnel. Such staffing issues can involve hiring new people with new skills, firing people with inappropriate skills. Prentice Hall, Inc. ©2012

Example on acquired companies The percentage of an acquired company’s top management either quit or asked to leave: Around 25% after the first year, 35% after the second year, 48% after the third year, 55% after the fourth year, and 61% after five years. Prentice Hall, Inc. ©2012

Staffing Integration Managers Prepare a competitive profile of the company in terms of its strengths and weaknesses Draft a profile of what the ideal combined company should look like Develop action plans to close the gap between actual and ideal Establish training programs to unit the combined company and make it more competitive Prentice Hall, Inc. ©2012

Successful Integration Managers Deep knowledge of the acquiring company Flexible management style Ability to work in cross-functional teams Willingness to work independently Sufficient emotional and cultural intelligence to work in a diverse environment Prentice Hall, Inc. ©2012

Staffing Follows Strategy Training and development Executive types Dynamic industry expert Analytical portfolio manager Cautious profit planner Turnaround specialist Professional liquidator Prentice Hall, Inc. ©2012

Selection and Management Development Executive succession- replacing a key top manager Succession planning Identifying candidates below the top layer of management Measuring internal candidates against external candidates Providing financial incentives Prentice Hall, Inc. ©2012

Identifying Abilities and Potential Performance appraisal system identifies good performers with promotion potential Assessment centers evaluates a person’s suitability for an advanced position Job rotation- ensures employees are gaining a mix of experience to prepare them for future responsibilities Prentice Hall, Inc. ©2012

Problems in Retrenchment Downsizing the planned eliminated of positions or jobs Can damage the learning capacity of an organization Prentice Hall, Inc. ©2012

Successful Downsizing Eliminate unnecessary work instead of making across the board cuts Contract out work that others can do cheaper Plan for long-run efficiencies Communicate the reasons for actions Invest in the remaining employees Develop value added jobs to balance out job elimination Prentice Hall, Inc. ©2012

International Issues in Staffing Culture differences Management styles Human resource practices Suboptimization Communication and coordination Lack of international management with experience Prentice Hall, Inc. ©2012

Implementation involves leading and coaching people to use their abilities and skills most effectively and efficiently to achieve organizational objectives Prentice Hall, Inc. ©2012

Managing Corporate Culture Strong cultures are resistant to change Optimal culture supports mission and strategies Change in strategy should be followed by change in culture Prentice Hall, Inc. ©2012

Accessing Strategy-Culture Compatibility Is the proposed strategy compatible with the company’s current culture Can the culture be easily modified to make it more compatible with the new strategy Is management willing and able to make major organizational changes and accept probable delays and a likely increase in costs Is management still committed to implementing the strategy Prentice Hall, Inc. ©2012

Prentice Hall, Inc. ©2012

Managing Cultural Change Through Communication CEO and top management communicated the strategic vision throughout the organization Current performance was compared to competition and constantly updated Vision was translated into key elements needed to accomplish the vision Prentice Hall, Inc. ©2012

Managing Diverse Cultures Following an Acquisition Methods of managing two different cultures Integration- balanced give and take of cultures Assimilation- domination of one culture over the other Separation of the two cultures Assimilation- disintegration of one culture resulting from pressure form the other to impose its culture and practices Prentice Hall, Inc. ©2012

Prentice Hall, Inc. ©2012

Action plan- what actions are going to be taken, by whom, during what time frame, and with what expected results Specific actions to be taken to make the program operational Dates to begin and end each action Person responsible for carrying out each action Person responsible for monitoring the timeliness and effectiveness of each action Expected financial and physical consequences of each action Contingency plans Prentice Hall, Inc. ©2012

Importance of Action plans Serve as a link between strategy formulation and evaluation and control Specifies what needs to be done differently from current operations Evaluation and control processes appraise performance and identify remedial actions Prentice Hall, Inc. ©2012

Prentice Hall, Inc. ©2012

Prentice Hall, Inc. ©2012

Management by Objectives (MBO)- encourages participative decision making through shared goal setting and performance assessment based on achieving stated objectives Establishing and communicating organizational objectives Setting individual objectives Developing an action plan to achieve objectives Performance review (periodic and annual) Prentice Hall, Inc. ©2012

Total Quality Management (TQM)- philosophy that is committed to customer satisfaction and continuous improvement Objectives Better, less variable quality of the product and service Quicker less variable response in processes to customer needs Greater flexibility in adjusting to customers’ shifting requirements Lower cost through quality improvement and elimination of non-value added work Prentice Hall, Inc. ©2012

Essential Ingredients Intense focus on customer satisfaction Internal as well as external customers Accurate measurement of every critical variable in a company’s operations Continuous improvement of products and services New work relationships based on trust and teamwork Prentice Hall, Inc. ©2012

Dimensions of National Culture Power distance Uncertainty avoidance Individualism-collectivism Masculinity-femininity Long-term orientation Prentice Hall, Inc. ©2012

What skills should a person have for managing a business unit following a differentiation strategy? Why? What should a company do if no one is available internally and the company has a policy of promotion from within? When should someone form outside the company be hired to manage the company or one of its business units? What are some ways to implement a retrenchment strategy without creating a lot of resentment and conflict with labor unions? How can corporate culture be changes? Why is an understanding of national cultures important in strategic management? Prentice Hall, Inc. ©2012