1. Prentice Hall, Inc. © 200610-1 STRATEGIC MANAGEMENT & BUSINESS POLICY 10 TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER CHAPTER 10 Strategy Implementation: Staffing & Directing

2. Prentice Hall, Inc. © 200610-2 Staffing & Directing Success is ; well – executed strategy implementation

3. Prentice Hall, Inc. © 200610-3 Staffing & Directing Staffing – Hiring new people with new skills; firing people w/ inappropriate skills; training existing employees to learn new skills Leading – Specifying clear performance objectives and promoting team- oriented corporate culture

4. Prentice Hall, Inc. © 200610-4 Staffing & Directing Staffing follows strategy – Having formulated a new strategy, a corporation may find that it needs to either hire different people or retrain and develop current employees to implement new strategy –It is known that; Training & Development results in : Higher productivity Reduction in waste Overall cost savings

5. Prentice Hall, Inc. © 200610-5 Staffing & Directing  A study in UK found that 71% of leading companies rated staff learning and training as important compared to 62% of the other companies  Another study in US revealed that corporations with training programs had 19% higher productivity than those without such programs  Motorola estimates that every $1 it spends on training delivers $30 in productivity gains within three years

6. Prentice Hall, Inc. © 200610-6 Staffing & Directing It is possible that a current CEO may not be appropriate to implement a new strategy. Matching manager to strategy Executives with a particular mix of skills and experiences may be classified as an EXECUTIVE TYPE and paired with a specific corporate strategy

7. Prentice Hall, Inc. © 200610-7 Staffing & Directing Staffing follows strategy – Executive type Dynamic industry expert Analytical portfolio manager Cautious profit planner Turnaround specialist Professional liquidator

8. Prentice Hall, Inc. © 200610-8 Staffing & Directing Executive Types – Dynamic industry expert A corporation following a concentration strategy emphasizing vertical or horizontal growth would probably want an aggressive new CEO with a great deal of experience in that particular industry Analytical portfolio manager A diversification strategy might call for someone with an analytical mind who is highly knowledgeable in other industries and can manage diverse product lines

9. Prentice Hall, Inc. © 200610-9 Staffing & Directing Cautious profit planner A corporation choosing to follow a stability strategy would probably want its CEO as a cautious profit planner Turnaround specialists Weak companies in a relatively attractive industry tend to turn to a type of challenge- oriented executive Professional liquidator If a company cannot be saved, a professional liquidator might be called on by a bankruptcy court to close the firm and liquidate its assets

10. Prentice Hall, Inc. © 200610-10 Staffing & Directing Executive Succession (it is an eventuality) Insiders vs Outsiders Selection & Management Development

11. Prentice Hall, Inc. © 200610-11 Staffing & Directing On the other hand; firms in trouble overwhelmingly choose outsiders to lead them. Boards realize that the best way to force a change in strategy is to hire a new CEO who has no connections to the current strategy. Companies who uses relay executive succession (insiders), have significantly higher performance than those that hire an outsider Prosperous firms tend to look outside for CEO candidates only if they have no obvious internal candidates. Hiring an outsider to be a CEO is a risky gamble.

12. Prentice Hall, Inc. © 200610-12 Staffing & Directing Selection & Management Development – Identifying Abilities and Potential Performance appraisal system Assessment centers Job rotation Recent studies are suggesting that female executives score higher than man on motivating others, fostering communication, producing high-quality work, and listening to others, while there is no difference between them in strategic planning or analyzing issues

13. Prentice Hall, Inc. © 200610-13 Staffing & Directing Retrenchment strategy– –Downsizing (sometimes called rightsizing) Eliminate unnecessary work Contract out work for cost savings (outsource) Plan for long-run efficiencies Communicate reasons for action Invest in remaining employees Develop value-added jobs (cancel outsourcing) But ;

14. Prentice Hall, Inc. © 200610-14 Staffing & Directing Problems in Downsizing – What is the distinction between cutting the fat or cutting the muscle. A study of downsizing automobile related US companies revealed that at 20 out of 30 companies, either the wrong jobs were eliminated or blanket offers of early retirement prompted very valuable managers to leave. Downsizing can seriously damage the learning capacity of organizations and creativity drops significantly. Cost conscious executives tend to defer maintenance, skimp on training, delay new product introductions and avoid risky new businesses – all of which leads to lower sales and eventually to lower profits. A situation can develop in which retrenchment feeds on itself and acts further weaken instead of strengthen the company.

15. Prentice Hall, Inc. © 200610-15 Staffing & Directing Problems in Downsizing – Successful downsizing firms undertake a strategic reorientation, not just a bloodletting of employees. Research shows that; when companies use downsizing as part of a larger restructuring program to narrow company focus, they enjoy better performance

16. Prentice Hall, Inc. © 200610-16 Staffing & Directing International issues in staffing If a corporation is to extend its operations to another country, it should hire and promote people from; - Country of origin, (problems of culture and bureaucracy) - Host country, (sub optimization) - International orientation regardless of their country of origin or host country assignment.

17. Prentice Hall, Inc. © 200610-17 Staffing & Directing Managing Corporate Culture - A company is a culture (Weick) - Corporate culture has a strong tendency to resist change because its very reason for existence often rests on preserving stable relationships and patterns of behavior - There is no best corporate culture. An optimal culture is one that best supports the mission and strategy of the company of which it is a part. - Unless strategy is in complete agreement with the culture, any significant change in strategy should be followed by a modification of the organization’s culture. - Although corporate culture can be changed, it may often take a long time, and it requires much effort.

18. Prentice Hall, Inc. © 200610-18 Staffing & Directing

19. Prentice Hall, Inc. © 200610-19 Staffing & Directing Assessing “Strategy – Culture” Compatibility Managing Corporate Culture Communication is key to the effective management of change Rationale for strategic changes should be communicated to workers not only in newsletters and speeches but also in training and development programs

20. Prentice Hall, Inc. © 200610-20 Staffing & Directing Managing Diverse Cultures– –Integration –Assimilation –Separation –Deculturation

21. Prentice Hall, Inc. © 200610-21 Action Plan Example

22. Prentice Hall, Inc. © 200610-22 Staffing & Directing Management By Objectives – Goal-Setting Theory Proposes that setting goals that are accepted, specific, and challenging yet achievable will result in higher performance than having no or easy goals. Benefits of Participation in Goal-Setting Increases the acceptance of goals. Fosters commitment to difficult, public goals. Provides for self-feedback (internal locus of control) that guides behavior and motivates performance (self- efficacy).

23. Prentice Hall, Inc. © 200610-23 Management by Objectives Setting Goals Planning Action Implementing Plans Reviewing Performance 1 2 3 4

24. Prentice Hall, Inc. © 200610-24 Staffing & Directing Management By Objectives – –Establish objectives –Setting individual objectives –Action plan –Periodic performance review

25. Prentice Hall, Inc. © 200610-25 Staffing & Directing Total Quality Management (TQM) : An operational philosophy committed to -- customer satisfaction and -- continuous improvement. –Better, less variable quality –Quicker, less variable response in processes –Greater flexibility in adjusting to customer’s shifting requirements –Lower cost and elimination of non-value-adding jobs According to TQM, faulty processes, not poorly motivated employees, are the cause of defects in quality.

26. Prentice Hall, Inc. © 200610-26 Staffing & Directing Total Quality Management (TQM) TQM emphasizes prevention, not correcting. Inspection for quality still takes place, but the emphasis is on improving the process to prevent errors and deficiencies.

27. Prentice Hall, Inc. © 200610-27 Staffing & Directing Total Quality Management (TQM) – TQM INVOLVES A SIGNIFICANT CHANGE IN CORPORATE CULTURE –Intense focus on customer satisfaction –Internal as well as external customers –Accurate measurement –continuous improvement –Trust and teamwork

28. Prentice Hall, Inc. © 200610-28 Staffing & Directing International considerations in Leading – HOFSTEDE - GLOBE –Power distance (PD) –Uncertainty avoidance (UA) –Individualism-collectivism (I-C) –Masculinity-femininity (M-F) –Long-term orientation (LT)

29. Prentice Hall, Inc. © 200610-29 Staffing & Directing International considerations in Leading – –Power distance (PD) Malaysia and Mexico scored highest, Germany and Austria scored lowest. People in countries scoring high on this dimension tend to prefer autocratic to more participative management. MBO, originated from USA, succeeded in Germany, because the idea of replacing the arbitrary authority of the boss with the impersonal authority of mutually agreed-upon objectives fits the lower power distance.

30. Prentice Hall, Inc. © 200610-30 Staffing & Directing International considerations in Leading – –Uncertainty avoidance (UA) Switzerland and Japan scored highest on disliking ambiguity, whereas USA and Singapore scored lowest. People in nations scoring high tend to want career stability, formal rules, clear cut measures of performance, communication should be clear and explicit, based on facts, meetings should be planned in advance and have clear agendas. In contrast in Greece and Russia, people are not used to structured communication and prefer more open-ended meetings.

31. Prentice Hall, Inc. © 200610-31 Staffing & Directing International considerations in Leading – –Individualism-collectivism (I-C) USA and Canada scored highest, Mexico and Guatemala scored lowest. People in nations scoring high tend to value individual success through competition, whereas people scoring low tend to value group success through collective cooperation.

32. Prentice Hall, Inc. © 200610-32 Staffing & Directing International considerations in Leading – –Masculinity-femininity (M-F) It is the extent to which society is oriented toward money and things (masculine) or toward people (feminine). Japan an Mexico scored highest (on masculinity therefore lowest on femininity), France and Sweden scored lowest (on masculinity therefore highest on femininity) People in nations scoring high tend to value clearly defined sex roles where men dominate and to emphasize performance and independence, whereas people scoring low tend to value equality of the sexes where power is shared and to emphasize the quality of life and interdependence