Business management and organizational policy

Business Management and Business Policy

1. Consider and discuss the role of strategy implementation. In your own words, explain why the textbook authors referred to strategy implementation as the point where "the rubber hits the road."

In every company there is an ongoing debate of which strategy to pursue in each specific market of interest, including the execution of each strategy components. Often there are many options on just which strategy is the best possible one to move a company forward to its goals. The essence of strategy implementation is in synchronizing the many departments and their processes together to achieve a common objective. As simple as this sounds, the extensive collaboration and coordination between departments can be time-consuming and often requires intensive project management skills. Many companies are particularly proud of their ability to execute strategies and gain results, including the ability to define steps for successful strategy implementation. The ability of a company to fulfill their claims of strategy execution and implementation along with achieving intended results is what the authors call "where the rubber hits the road". The most challenging aspects of strategy implementation however are reconciling potentially conflicting and even disconnected goals of departments to achieve a common aim. Synchronizing all available resources, departments, processes, products and people to achieve a common objective is what best practices in strategy implementation is all about. From this standpoint you can see what the authors mean when they mention that "the rubber meets the road" is where strategy and the many efforts to synchronize and coordinate implementation meet.

2. Japanese corporations typically involve many more organizational levels and people in development of implementation plans than do United States corporations. Discuss how this affects the implementation process. Do you consider this an advantage or a detriment to the success of the implementation of strategy? Justify your answer.

Japanese corporations are by nature highly driven for the need for consensus in all decision-making activities. This originates form their cultural and social values, and it permeates Japanese corporations' approach to decision-making. There is a familiar saying in Japan of "the nail that sticks out gets nailed down" stressing the high level of conformity that pervades that culture. The work of Geert Hofstede (2006) illustrates this aspect of the Japanese culture through his analysis of cultural dimensions. Visiting Hofstede's website graphically illustrates the differences between the Japanese and U.S. cultures for example. By western standards this seems extreme and often time-consuming, adding days or weeks to the decision making process and the implementation of strategies. Yet from within Japanese corporations, this approach to consensus-building actually ensures a higher level of synchronization and collaboration between and among departments. While the implementation process is slower, when the actual strategies are impelemtned they are done so with a much higher level of coordination than would have been possible without the high amount of consensus building that goes on. For strategic, long-range and fundamental decisions regarding the direction of a company, this approach to consensus building is exceptionally strong in ensuring collaboration and coordination across a company. Where this practice becomes a detriment when decisions need to be made quickly and agility needs to be achieved. In this instance the consensus-building approach can be a liability. To generalize the value of consensus-building across organizational departments and across levels, it's clear that there is much value in collaboration and coordination. Optimally there needs to be a balance however to ensure the strategic issues get the depth of analysis and coordination at implementation required while the shorter-term decisions get implemented quickly enough to be relevant in rapidly changing markets. 3. One of the current managers of an SBU is capable, but does not appear to have the skills and experiences necessary to implement a strategy that is vital to the success of the firm. As CEO, discuss the options available to you that could improve this manager-strategy fit. Which option do you see as the most difficult to accomplish? Why?

In the instance where a manager of an SBU has excellent skills at managing the business unit but lacks the specific skills to accomplish a specific strategy, there are many approaches to resolving this problem. By far the best approach is to recommend to the manager experts in the specific area of strategy being implemented and offer to bring on a consultant or expert as part of the persons' staff. It is critical to not replace the manager, but provide them with expert-level resources to assist them in accomplishing the strategy. In general when a manager doesn't have the skill to implement a strategy the best approach is to surround them with experts in their field. Another strategy is to create a cross-functional team to complete the strategy implementation, as the tasks of implementation may be bigger than a single manager should be tasked with. The last and most difficult option is to replace the manager with someone who can implement the strategy. Often this is the most rash and causes the manager to eventually leave the company, as it is in effect a demotion. Instead, when a manager is struggling to implement a strategy it is best to surround them with experts and provide exceptionally high levels of support to increase their chances of succeeding.

4. The text pointed out the importance of assessing the strategy-culture compatibility, when implementing a new strategy. Do you feel that culture follows strategy or does strategy follow culture? Justify your answer.

The bottom line is that over time, they influence one another. In the short-term, culture has a major impact on strategy and often acts as a "filter" applied to any potential strategy. Included in the cultural "filter" so to speak that is used within company cultures to evaluate strategies include the time required to complete the implementation, the extent of collaboration or coordination required, the relative level of spending relative to other priorities, and the measurement of results. Often cultures dictate the scope of strategies at their beginning, the expectations of their performance while in progress, and the evaluation of the results of strategies at the end. Schein (1983) has defined culture as follows: For an organizational culture to exist there must be a definable organization in the sense of a number of people interacting with each other for the purpose of accomplishing some goal in their defined environment. The founder of an organization simultaneously creates such a group and, by force of his or her personality, begins to shape the culture of that group. But the culture of that new group is not there until the group has had its own history of overcoming various crises of growth and survival, and has worked out solutions for how to cope with its external problems of adaptation and its internal problems of creating a workable set of relationship rules.

As Schein (1983) notes, culture has a significant short-term impact on strategies, in fact all activity in a organization. Over time, leadership can change culture through more aggressive use of strategies, more accountability over results, and a stronger focus on aligning strategies to customer needs. To change culture however takes much time, much effort, and much intensity on the part of a leader. Both the formal and informal organization structures need to change to make culture significantly shift over time. There are many examples of leaders changing the culture of a company to make it more effective at executing its strategies. GE's Jack Welch is a classic example of how a leader, working over time to create a strong management team and culture focused on excellence of execution, can significantly change a company's culture. The bottom line is that in the short-run a culture will have a stronger influence on strategy, yet in the long-run, strategy has a greater potential to influence culture. This is especially the case with leaders who bring their own priorities and in many cases, urgency for change to occur.

5. Explain why goal displacement and short-run orientation are likely side effects of the monitoring of performance. As CEO of a corporation, what measures could you take to avoid these side effects? Is there a measure that can totally eliminate either side effect? Why or why not?