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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
16
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.
18
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.