1. Strategy Implementation: Staffing and Directing 1

2. Staffing Staffing focuses on the selection and use of employees.Staffing focuses on the selection and use of employees. Implementation of new strategies often call for new human resource management priorities and a different use of personnel.Implementation of new strategies often call for new human resource management priorities and a different use of personnel. Some staffing issues include:Some staffing issues include: –Hiring new people with new skills –Firing people with inappropriate or substandard skills –Training existing employees to learn new skills 2

3. If growth strategy implemented:If growth strategy implemented: –New people need to be hired and trained –Experienced people with necessary skills need to be found for newly created managerial positions –If growth strategy thru acquisition, may need to replace several managers in the acquired company –May need to appoint an integration manager to shepherd the company through the acquisition or merger so as to avoid losing highly skilled people who are difficult to replace in the process 3

4. If retrenchment strategy implemented:If retrenchment strategy implemented: –Large number of people may need to be laid off –Management needs to specify the criteria to be used in making these personnel decisions – Sometimes corporations find it easier to close or sell off an entire division than to choose which individuals to fire 4

5. Changing Hiring and Training Requirements Having formulated new strategy, a corporation may find it needs to hire different people or train current employees to implement new strategy.Having formulated new strategy, a corporation may find it needs to hire different people or train current employees to implement new strategy. One way to implement a company’s business strategy such as overall low cost or for a differentiation strategy emphasizing quality or customer serviceOne way to implement a company’s business strategy such as overall low cost or for a differentiation strategy emphasizing quality or customer service Training also important during retrenchment strategy – successful downsizing means that company has to invest in its remaining employees.Training also important during retrenchment strategy – successful downsizing means that company has to invest in its remaining employees. 5

6. A study of 51% corporations in UK found that 71% leading companies rated staff learning and training as important or very important.A study of 51% corporations in UK found that 71% leading companies rated staff learning and training as important or very important. Study of 155 US manufacturing firms revealed that those with training programs had 19% higher productivityStudy of 155 US manufacturing firms revealed that those with training programs had 19% higher productivity Another study found that a doubling of formal training per employee resulted in 7% in scrap Another study found that a doubling of formal training per employee resulted in 7% in scrap Motorola estimates that every $1 it spends on training delivers $ 30 in productivity gains within three yearsMotorola estimates that every $1 it spends on training delivers $ 30 in productivity gains within three years 6 Training

7. Matching Management to Strategy The current CEO may not be appropriate to implement the new strategy.The current CEO may not be appropriate to implement the new strategy. Research indicates that there may be a career life cycle for top executivesResearch indicates that there may be a career life cycle for top executives During the early years – learning stageDuring the early years – learning stage –They tend to experiment intensively with product lines to learn about their business Later during the harvest stage, accumulated knowledge allows them to reduce experimentation and increase performance Later during the harvest stage, accumulated knowledge allows them to reduce experimentation and increase performance 7

8. Decline stage occurs when experimentation reduces further and performance declines.Decline stage occurs when experimentation reduces further and performance declines. Some executives retire before any decline occursSome executives retire before any decline occurs Others fend off decline longer than their counterpartsOthers fend off decline longer than their counterparts The length of time spent in each stage varies among CEO’S and it is up to the board to decide when a top executive should be replaced.The length of time spent in each stage varies among CEO’S and it is up to the board to decide when a top executive should be replaced. 8

9. Most appropriate type of general manager depends on the new desired strategic direction of firm:Most appropriate type of general manager depends on the new desired strategic direction of firm: –Corporation following a concentration strategy emphasizing vertical or horizontal growth would probably want an aggressive new chief executive with a great deal of experience in that particular industry - Dynamic Industry Expert – A diversification strategy might call for someone with an analytical mind who is highly knowledgeable of other industries and who can manage diverse product lines – Analytical Portfolio Manager 9

10. – A corporation choosing a stability strategy might want as its CEO someone conservative with experience in controlling budgets, inventories and standardizing procedures – Cautious Profit Planner –Weak companies in a relatively attractive industry tend to turn to a challenge-oriented executive to save the company – Turnaround Specialist –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

11. Research tends to support the conclusion that as a firm’s environment changes, it tends to change the type of top executive to implement new strategyResearch tends to support the conclusion that as a firm’s environment changes, it tends to change the type of top executive to implement new strategy Chandler proposes that the most appropriate CEO of a company changes as firm moves from one stage of development to another.Chandler proposes that the most appropriate CEO of a company changes as firm moves from one stage of development to another. Other studies found a link between type of CEO and a firm’s overall strategic type.Other studies found a link between type of CEO and a firm’s overall strategic type. –Prospector firms tend to be headed by CEOs from research/engineering and general management background –High performance defenders firms tend to have CEOs from accounting/finance, manufacturing/production and general management –Analyzers firms tend to have CEOs from marketing/sales Study of 173 firms over 25 year period revealed that CEOs tended to have same functional specialisation as the former CEO especially if the past CEO’s strategy continued to be successful.Study of 173 firms over 25 year period revealed that CEOs tended to have same functional specialisation as the former CEO especially if the past CEO’s strategy continued to be successful. 11

12. Executive Succession: Insiders v/s Outsiders Executive succession is the process of replacing a key top manager.Executive succession is the process of replacing a key top manager. Some companies use relay executive succession in which a candidate is groomed to take over the CEO position by identifying candidates below the top layer, providing them with special assignments to ensure the development of a comprehensive set of skillsSome companies use relay executive succession in which a candidate is groomed to take over the CEO position by identifying candidates below the top layer, providing them with special assignments to ensure the development of a comprehensive set of skills Prosperous firms tend to look outside for CEO candidates only if they have no obvious internal candidates.Prosperous firms tend to look outside for CEO candidates only if they have no obvious internal candidates. Hiring an outsider can be risky – tend to introduce significant change and high turnover among current top managementHiring an outsider can be risky – tend to introduce significant change and high turnover among current top management Firms in trouble overwhelmingly choose outsiders to lead them.Firms in trouble overwhelmingly choose outsiders to lead them. 12

13. Leading Implementation also involves leading people to use their abilities and skills more effectively and efficiently to achieve organisational objectives.Implementation also involves leading people to use their abilities and skills more effectively and efficiently to achieve organisational objectives. Without direction, people tend to do their work according to their personal view of what tasks should be done, how and in what order – regardless of the corporation’s priorities.Without direction, people tend to do their work according to their personal view of what tasks should be done, how and in what order – regardless of the corporation’s priorities. 13

14. Managing Corporate Culture Organisation’s culture can exert a powerful influence on the behaviour of all employees and thus can affect a company’s ability to shift its strategic direction.Organisation’s culture can exert a powerful influence on the behaviour of all employees and thus can affect a company’s ability to shift its strategic direction. Corporate culture has a strong tendency to resist change because it often rests on preserving stable relationships and patterns of behaviour.Corporate culture has a strong tendency to resist change because it often rests on preserving stable relationships and patterns of behaviour. A significant change in strategy should be followed by a modification of the organisation’s culture.A significant change in strategy should be followed by a modification of the organisation’s culture. –It may take a long time and require much effort. 14

15. Assessing Strategy-Culture Compatibilty Is the planned strategy compatible with the company’s current culture?Is the planned strategy compatible with the company’s current culture? Can the culture be easily modified to make it more compatible with the new strategy?Can the culture be easily modified to make it more compatible with the new strategy? Is management willing and able to make major organisational changes and accept probable delays and a likely increase in costs?Is management willing and able to make major organisational changes and accept probable delays and a likely increase in costs? Is management still committed to implement the strategy?Is management still committed to implement the strategy? 15

16. Managing Cultural Change through Communication Communicating is key to effective management of change.Communicating is key to effective management of change. Rationale for strategic changes should be communicated to workers in newsletters, speeches, in training and development programsRationale for strategic changes should be communicated to workers in newsletters, speeches, in training and development programs –Especially in decentralised firms in distant units For successful major cultural changes:For successful major cultural changes: –Top management had a vision which was communicated at all levels. –The vision was translated into the key elements necessary to accomplish that vision. 16

17. Motivation and Rewards Linking the reward system to performance outcomes.Linking the reward system to performance outcomes. A properly designed reward structure is management’s most powerful tool for mobilizing organizational commitment to successful strategy execution!A properly designed reward structure is management’s most powerful tool for mobilizing organizational commitment to successful strategy execution! Good Reward SystemGood Reward System Motivate employeesMotivate employees 17

18. Gaining Commitment: Components of an Effective Reward System Monetary Incentives –Salary raises –Performance bonuses –Stock options –Retirement packages –Promotions –Perks Non-monetary Incentives –Praise –Constructive criticism –Special recognition –More, or less, job security –Interesting assignments –More, or less, job responsibility 18

19. Approaches: Motivating People to Execute the Strategy Well Inspire employees to do their bestInspire employees to do their best Get employees to buy into strategyGet employees to buy into strategy Structure individual efforts in teams to facilitate a supportive climateStructure individual efforts in teams to facilitate a supportive climate Allow employees to participate in decisions about their jobsAllow employees to participate in decisions about their jobs Make jobs interesting and satisfyingMake jobs interesting and satisfying Devise strategy-supportive motivational approachesDevise strategy-supportive motivational approaches 19