Strategy Strategy Implementation : Implementation :

Staffing and Staffing and DirectingDirecting

STAFFING FOLLOWS STRATEGYSTAFFING FOLLOWS STRATEGY

• Hire different people or retain current employees Hire different people or retain current employees to implement the new strategyto implement the new strategy

• Training in technical and interpersonal skillsTraining in technical and interpersonal skills• Training specially important for a differentiation Training specially important for a differentiation

strategystrategy• Training also important when implementing a Training also important when implementing a

retrenchment strategyretrenchment strategy• Successful downsizing means that a company Successful downsizing means that a company

has to invest in remaining employeeshas to invest in remaining employees

MATCHING THE MANAGER TO MATCHING THE MANAGER TO STRATEGYSTRATEGY

• Career life cycles for executives: learning stage, Career life cycles for executives: learning stage, harvest stage, decline stageharvest stage, decline stage

• The length of the time spent in each stage varies The length of the time spent in each stage varies among executivesamong executives

• The most appropriate CEO of an organization The most appropriate CEO of an organization changes as a firm moves from one stage to changes as a firm moves from one stage to another.another.

Matching Chief Executive “Types” with Matching Chief Executive “Types” with StrategyStrategy

Average

Hig

hL

ow

Business Strength/Competitive Position

Strong

Growth—Concentration

Dynamic Industry Expert

Stability

Cautious Profit Planner

Retrenchment—Close Company

Professional Liquidator

Retrenchment—Save Company

Turnaround Specialist

Ind

us

try

Att

rac

tiv

en

es

s

Source: Thomas L. Wheelen and J. David Hunger, “Matching Proposed Chief Executive ‘Types’ with Corporate Strategy.” Copyright © 1991 by Wheelen and Hunger Associates. Reprinted by permission.

Me

diu

m

Weak

Growth—Diversification

Analytical Portfolio Manager

SELECTION AND MANAGEMENT SELECTION AND MANAGEMENT DEVELOPMENTDEVELOPMENT

• Executive succession is the process of replacing Executive succession is the process of replacing a key top manager:a key top manager:

• Promote from within (heir apparent)- InsidersPromote from within (heir apparent)- Insiders• Hiring from the outside- OutsidersHiring from the outside- Outsiders• Encourage boards to help the CEO create a Encourage boards to help the CEO create a

succession plan, identifying succession succession plan, identifying succession candidate, measuring internal candidates candidate, measuring internal candidates against outside candidates, and develop a against outside candidates, and develop a comprehensive set of skills, providing comprehensive set of skills, providing appropriate financial incentivesappropriate financial incentives

• Prosperous firms tend to look outside for CEOs Prosperous firms tend to look outside for CEOs only if they have no obvious internal candidatesonly if they have no obvious internal candidates

• Firms in trouble, choose outsiders to lead themFirms in trouble, choose outsiders to lead them• Boards realize that the best way to force a Boards realize that the best way to force a

change in strategy is to hire a new CEO who has change in strategy is to hire a new CEO who has no connection to the current strategyno connection to the current strategy

Identifying Abilities and Identifying Abilities and PotentialPotential

• Establish a sound performance appraisal system to Establish a sound performance appraisal system to identify good performers with promotion potentialidentify good performers with promotion potential

• People should be hired and identified for training without People should be hired and identified for training without regard to their racial, ethnic and religious backgroundregard to their racial, ethnic and religious background

• Assessment centers to evaluate a person’s suitability for Assessment centers to evaluate a person’s suitability for an advanced positionan advanced position

• Job rotation : moving people from one job to another to Job rotation : moving people from one job to another to improve the level of organization learningimprove the level of organization learning

Competencies to identify Competencies to identify Potential Executives (HP) Potential Executives (HP)

• Practice the HP wayPractice the HP way• Lead Change and LearningLead Change and Learning• Know the internal and external environmentsKnow the internal and external environments• Lead strategy settingLead strategy setting• Align the organizationAlign the organization• Achieve resultsAchieve results

PROBLEMS OF RETRENCHMENTPROBLEMS OF RETRENCHMENT

• Downsizing (rightsizing) refers to the planned Downsizing (rightsizing) refers to the planned elimination of positions or jobs and is used to elimination of positions or jobs and is used to implement retrenchment strategiesimplement retrenchment strategies

• Retrenchment can sometimes lead to further Retrenchment can sometimes lead to further weakening instead of strengthening the weakening instead of strengthening the organizationorganization

• When companies use downsizing as part of a When companies use downsizing as part of a larger restructuring program to narrow company larger restructuring program to narrow company focus, they enjoy better performancefocus, they enjoy better performance

Downsizing GuidelinesDownsizing Guidelines

• Eliminate unnecessary work.Eliminate unnecessary work.• Contract out work that others can do cheaper.Contract out work that others can do cheaper.• Plan for long-run efficiencies.Plan for long-run efficiencies.• Communicate the reasons for actions.Communicate the reasons for actions.• Invest in the remaining employees.Invest in the remaining employees.• Develop value-added jobs to balance out job Develop value-added jobs to balance out job

elimination.elimination.

INTERNATIONAL ISSUES IN INTERNATIONAL ISSUES IN STAFFINGSTAFFING

• Because of cultural differences, managerial style and Because of cultural differences, managerial style and human resource practices must be tailored to fit the human resource practices must be tailored to fit the particular situations in other countriesparticular situations in other countries

• MNCs provide their managers with international MNCs provide their managers with international assignments to improve organizational learningassignments to improve organizational learning

• Hiring an promoting people from the host countryHiring an promoting people from the host country• Using people with an international orientation regardless Using people with an international orientation regardless

of their country of origin or host country assignmentof their country of origin or host country assignment• Taking advantages of immigrants to staff key positionsTaking advantages of immigrants to staff key positions

LEADINGLEADING

• Managing Corporate CultureManaging Corporate Culture• Action PlanningAction Planning• Management by ObjectivesManagement by Objectives• Total Quality ManagementTotal Quality Management• International considerations in leadingInternational considerations in leading

Managing Corporate CultureManaging Corporate Culture

• Organization culture exerts a powerful influence Organization culture exerts a powerful influence on the behavior of all employeeson the behavior of all employees

• There fore it can affect the ability of the company There fore it can affect the ability of the company to shift its strategic directionto shift its strategic direction

• In case of a strong culture the change in In case of a strong culture the change in mission, objectives, strategies and policies may mission, objectives, strategies and policies may not be acceptednot be accepted

• Corporate culture has a strong tendency to Corporate culture has a strong tendency to resist changeresist change

Assessing Strategy—Culture Assessing Strategy—Culture CompatibilityCompatibility

No

Yes

No

Yes

Yes

No

No

Is the planned strategy compatible with the current culture?

Can the culture be 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

Manage around the culture by establishing a new structural unit to implement the new strategy.

Find a joint-venture partner or contract with another company to carry out the strategy.

Is management still committed to implementing the strategy?

Yes

Formulate a different stately.

Tie changes into the culture.

Managing Cultural Change Managing Cultural Change through Communicationthrough Communication

• Communication is key to effective management Communication is key to effective management and changeand change

• Rationale for strategic change should be Rationale for strategic change should be communicated to workers through newsletter, communicated to workers through newsletter, and training and developmentand training and development

• Communicate the vision to the employeesCommunicate the vision to the employees• Translate the vision into key elements necessary Translate the vision into key elements necessary

to accomplish that visionto accomplish that vision

Managing Diverse Cultures Managing Diverse Cultures Following an AcquisitionFollowing an Acquisition

• Top management must give consideration to a Top management must give consideration to a potential clash of corporate culturepotential clash of corporate culture

• When corporate cultures are similar When corporate cultures are similar performance problems are minimizedperformance problems are minimized

• It is dangerous to assume that the firms can It is dangerous to assume that the firms can simply be integrated into the same reporting simply be integrated into the same reporting structurestructure

Methods of Managing the Culture of an Methods of Managing the Culture of an Acquired FirmAcquired Firm

Not at All

How Much Members of the Acquired Firm Value Preservation of Their Own Culture

Very Much

Integration Assimilation

Separation Deculturation

Per

cep

tio

n o

f th

e A

ttra

ctiv

enes

s o

f th

e A

cqu

irer

Not

at A

ll A

ttrac

tive

Ver

y A

ttrac

tive

Source: A. Nahavardi and A. R. Malekzadeh, “Acculturation in Mergers and Acquisitions,” Academy of Management Review (January 1988), p. 83. Copyright © 1988 by the Academy of Management. Reprinted by permission.

Action PlanningAction Planning

1. List specific actions.1. List specific actions.

2. List dates to begin and end each action.2. List dates to begin and end each action.

3. Name person responsible for each action.3. Name person responsible for each action.

4. Name person responsible for monitoring 4. Name person responsible for monitoring timelines and effectiveness of each action.timelines and effectiveness of each action.

5. Estimate expected financial and physical 5. Estimate expected financial and physical consequences of each action.consequences of each action.

6. Develop contingency plans.6. Develop contingency plans.

Action Plan Example

MANAGEMENT BY MANAGEMENT BY OBJECTIVESOBJECTIVES

• Establishing and communicating organizational Establishing and communicating organizational objectivesobjectives

• Setting individual objectives through superior-Setting individual objectives through superior-subordinate interaction that help implement subordinate interaction that help implement organizational objectivesorganizational objectives

• Develop an action plan of activities needed to Develop an action plan of activities needed to achieve the objectivesachieve the objectives

• Periodically review the performance as it relates Periodically review the performance as it relates to the objectives and including the results in the to the objectives and including the results in the annual performance appraisalannual performance appraisal

Process of Management by ObjectivesProcess of Management by Objectives

Revisestructure

2

Formulate corporate, divisional, and

functional objectives

1

Evaluate corporate, divisional, and

functional performance

7

Review and discuss overall results

6

Superior plans objectives for subordinates

3

Subordinate proposes objectives

3

Review and discuss interim results

5

Drop inappropriate objectives

5(b)

Joint agreement on subordinate’s

objectives and action plan

4

Consider new information

5(A)

Feedback

and Change

Objectives of Total Quality Objectives of Total Quality Management (TQM)Management (TQM)

1. Better, less variable quality of product / service.1. Better, less variable quality of product / service.

2. Quicker, less variable response to customers’ 2. Quicker, less variable response to customers’ needs.needs.

3. Greater flexibility in adjusting to customers’ 3. Greater flexibility in adjusting to customers’ shifting requirements.shifting requirements.

4. Lower cost through quality improvements and 4. Lower cost through quality improvements and elimination of non value-adding work.elimination of non value-adding work.

Essential Ingredients of Essential Ingredients of Total Quality Management Total Quality Management

(TQM)(TQM)• Intense focus on customer satisfactionIntense focus on customer satisfaction• Internal as well as external customersInternal as well as external customers• Accurate measurement of every critical variable Accurate measurement of every critical variable

in a company’s operationsin a company’s operations• Continuous improvement of products / servicesContinuous improvement of products / services• New work relationships based on trust and New work relationships based on trust and

teamworkteamwork

International Considerations in International Considerations in LeadingLeading

• Leaders must consider the dimensions of Leaders must consider the dimensions of national culturenational culture

• MNCs must pay attention to the many MNCs must pay attention to the many differences in cultural dimensions around the differences in cultural dimensions around the world and adjust their management practices world and adjust their management practices accordinglyaccordingly

Hofstede’s International Hofstede’s International Cultural DimensionsCultural Dimensions

1. Power distance1. Power distance

2. Uncertainty avoidance2. Uncertainty avoidance

3. Individualism—collectivism3. Individualism—collectivism

4. Masculinity—femininity4. Masculinity—femininity

5. Long-tern orientation5. Long-tern orientation