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STRATEGIC MANAGEMENT & BUSINESS POLICY12TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
Prentice Hall, Inc. ©2009 10-2
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. ©2009 10-3
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. ©2009 10-4
Staffing Follows Strategy
• Training and development• Executive types
– Dynamic industry expert– Analytical portfolio manager– Cautious profit planner– Turnaround specialist– Professional liquidator
Prentice Hall, Inc. ©2009 10-5
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. ©2009 10-6
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. ©2009 10-7
Problems in Retrenchment
Downsizing the planned eliminated of positions or jobs
• Can damage the learning capacity of an organization
Prentice Hall, Inc. ©2009 10-8
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. ©2009 10-9
International Issues in Staffing
• Culture differences• Management styles• Human resource practices• Suboptimization• Communication and coordination• Lack of international management with
experience
Prentice Hall, Inc. ©2009 10-10
Implementation involves leading and coaching people to use their abilities and skills most effectively and efficiently to achieve organizational objectives
Prentice Hall, Inc. ©2009 10-11
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. ©2009 10-12
Accessing Strategy-Culture Compatibility
1. Is the proposed strategy compatible with the company’s current culture
2. Can the culture be easily modified to make it more compatible with the new strategy
3. Is management willing and able to make major organizational changes and accept probable delays and a likely increase in costs
4. Is management still committed to implementing the strategy
Prentice Hall, Inc. ©2009 10-13
Prentice Hall, Inc. ©2009 10-14
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. ©2009 10-15
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. ©2009 10-16
Prentice Hall, Inc. ©2009 10-17
Action plan- what actions are going to be taken, by whom, during what time frame, and with what expected results
1. Specific actions to be taken to make the program operational
2. Dates to begin and end each action3. Person responsible for carrying out each action4. Person responsible for monitoring the timeliness and
effectiveness of each action5. Expected financial and physical consequences of each
action6. Contingency plans
Prentice Hall, Inc. ©2009 10-18
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. ©2009 10-19
Prentice Hall, Inc. ©2009 10-20
Prentice Hall, Inc. ©2009 10-21
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. ©2009 10-22
Total Quality Management (TQM)- philosophy that is committed to customer satisfaction and continuous improvement
Objectives1. Better, less variable quality of the product and service2. Quicker less variable response in processes to
customer needs3. Greater flexibility in adjusting to customers’ shifting
requirements4. Lower cost through quality improvement and
elimination of non-value added work
Prentice Hall, Inc. ©2009 10-23
Essential Ingredients
1. Intense focus on customer satisfaction2. Internal as well as external customers3. Accurate measurement of every critical
variable in a company’s operations4. Continuous improvement of products and
services5. New work relationships based on trust and
teamwork
Prentice Hall, Inc. ©2009 10-24
Dimensions of National Culture
1. Power distance2. Uncertainty avoidance3. Individualism-collectivism4. Masculinity-femininity5. Long-term orientation
Prentice Hall, Inc. ©2009 10-25
1. What skills should a person have for managing a businessunit following a differentiation strategy? Why? What shoulda company do if no one is available internally and the company has a policy of promotion from within?
2. When should someone form outside the company behired to manage the company or one of its business units?
3. What are some ways to implement a retrenchmentstrategy without creating a lot of resentment and conflictwith labor unions?
4. How can corporate culture be changes?5. Why is an understanding of national cultures important
in strategic management?
Prentice Hall, Inc. ©2009 10-26
PowerPoint created by:
Ronald Heimler
• Dowling College- MBA• Georgetown University- BS Business
Administration• Adjunct Professor- LIM College, NY• Adjunct Professor- Long Island
University, NY• Lecturer- California State Polytechnic
University, Pomona, CA• President- Walter Heimler, Inc
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Copyright ©2010 Pearson Education, Inc. publishing as Prentice Hall