1

Chapter 9

Strategy Implementation:

Staffing and Directing

2

Strategy Implementation

Staffing:– Hiring new people with new skills,

firing people with inappropriate skills, and/or training existing employees to learn new skills.

3

Strategy Implementation

Staffing follows strategy:– Training and development

• Firms with training programs 19% higher productivity

• Reduction in scrap• Overall cost savings

– Matching the manager to the strategy• Executive type - executives with a

particular mix of skills and experiences

4

Strategy Implementation

Executive Types:– Dynamic industry expert– Analytical portfolio manager– Cautious profit planner– Turnaround specialist– Professional liquidator

5

Matching Chief Executive “Types” with Strategy

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

Me

diu

m

Weak

Growth—Diversification

Analytical Portfolio Manager

6

Strategy Implementation

Executive Succession:– Process of replacing a key top

manager.

7

Strategy Implementation

Executive Succession:– Boards help CEO develop succession

plan– Identify succession candidates below

top layer– Measuring internal candidates against

external candidates– Appropriate financial incentives

8

Strategy Implementation

Identifying Abilities & Potential:– Establish a sound performance

appraisal system– Assessment centers

• Used to evaluate a person’s suitability for an advanced position.

– Job rotation• Used to ensure that employees are gaining

the appropriate mix of experiences to prepare them for future responsibilities.

9

Strategy Implementation

Problems in Retrenchment:– Downsizing (“rightsizing”)

• Planned elimination of positions or jobs• Used in retrenchment strategies

10

Strategy Implementation

Guidelines for Downsizing:– Eliminate unnecessary work vs. making

across-the-board cuts– Contract out work for efficiencies– Plan for long-run efficiencies– Communicate reasons for action– Invest in the remaining employees– Develop valued-added jobs to balance out

job elimination

11

Strategy Implementation

International issues in staffing:– Considerable planning– Can be very costly– Cultural differences must be

considered– Experience through international

assignments

12

Strategy Implementation

International issues in staffing:– Effective management of foreign

assignments:• Focus on transferring knowledge and

developing global leadership• Foreign assignments to people with

technical skills matched or exceeded by cross-cultural abilities

• Deliberate repatriation at end of assignment with career guidance and jobs

13

Strategy Implementation

Strategy-Culture Compatibility:– Consider the following:

• Is the planned strategy compatible with the firm’s current culture?

• Can the culture be easily modified to make it more compatible with new strategy?

• Is management willing to make major organizational changes?

• Is management committed to implementing the strategy?

14

Assessing Strategy—Culture Compatibility

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

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 strategy

Tie changes into the culture.

15

Strategy Implementation

Managing different cultures:– Integration– Assimilation– Separation– Deculturation

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Managing the Culture of an Acquired Firm

17

Strategy Implementation

Action Planning:– Action Plan

• States what actions are going to be taken, by whom, during what time frame, and with what expected results.

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Action Plan Elements

• List specific actions.• List dates to begin and end each action.• Name person responsible for each

action.• Name person responsible for monitoring

timelines and effectiveness of each action.

• Estimate expected financial and physical consequences of each action.

• Develop contingency plans.