The exponential growth of the Internet has also served as the catalyst for the growth of highly collaborative, interactive forums and platforms on which Delphi-like brainstorming can be accomplished (Decker, Wagner, Scholz, 2005). Conversely many of the external relationships companies have and that are essential to understanding how the strategic planning process will impact an organization lend themselves to quantification. An example of this level of quantification of external factors is the use of frameworks for evaluating the performance of supply chains over time, a process area that can be highly quantified through the use of maturity models and measurements of performance over time (Gilmour, 1999). Both of these extremes, qualitative data analysis through the use of techniques including writing of scenarios, brainstorming and the Delphi technique to the extremely quantitative, both require organizations to have a fairly high level of interprocess maturity and development to be able to manage divergent points based on the analysis however (Lester, Parnell, 2008).
In what ways may corporations' structure and culture be internal strengths or weaknesses? Look at your organization analyze its' structural and cultural strengths and weaknesses? How can the weaknesses be improved?
A company's structure will over time reflect its culture, and in that structure, there will be clear definitions of interprocess dependencies, inter-role-based workflows and the continual need for interprocess communication. A company's structure will also over time grow to reflect the level of trust in the culture over time. In companies who have a high level of trust there will be more informal, process-based workflows of communication where formality is not necessary. In low-trust cultures however there is much focus on how to audit, check on and ensure communications are being actually sent and received. A company's structure and culture, when externally focused on customers' needs and having a high degree of process is extremely agile and creative in attaining its objectives over time. Within Cincom the structure is a hybrid of purely being focused on informal workflows relative to being purely rigidly hierarchical in structure. The strength of this hybrid approach include the ability to cross-functionally get more work done with less red tape, and also the ability to create collaborative plans and programs with other departments. The weaknesses of the culture include the lack of focus on accountability that occurs when cross-functional teams attempt more complex projects. There is also a lack of focus on measurable results at times when there are larger cross-functional teams that do not have shared responsibility for results. On smaller, more focused projects however the culture and structure of Cincom are highly effective.
Discuss the value of the TOWS Matrix in strategy formulation. Do you agree with this way of generating strategic alternatives? Why or why not?
The TOWS Matrix (Weihrich, 1982) is specifically designed to provide organizations with a strategic planning framework for aligning their strengths with opportunities and to minimize their weaknesses relative to threats. It is an analytical framework that is based on two dimensions and therefore limited in its scope of capturing the more complex dynamics of any given market, product strategy, or broader technological change, the Internet being the most prevalent. Despite the limitations of not capturing the more complex aspects of a given set of industry dynamics, it does serve its purpose of serving as the catalyst of creating strategic alternatives that align with the broader strategic strengths of a given organization. Since its introduction there have been literally dozens of studies of those companies who have adopted it as a framework for strategic planning, many of them German auto manufacturers (Weihrich, 1982). There are also parallels often made between the TOWS Matrix and Dr. Micheal Porter's Five Forces Model (Porter, 2008), stating that the TOWS Matrix actually captures localized competitive strength better than the Porter Model, as Porter assumes centralized competitive strength is how global, long-term competitive advantage is gained. Between these divergent points...
Based on the analysis of the TOWS Matrix and its relative effectiveness, there is much value in using it as one of many strategic planning frameworks. As with any strategic planning process, it is wise to better focus on multiple approaches, concepts and frameworks to attain the widest perspective of market opportunities and threats. The bottom line is that the TOWS Matrix is a valuable framework to be used in conjunction with the Five Forces Model (Porter, 2008) and the widely used Boston Consulting Group Growth/Share Matrix.
What are the tradeoffs (pros and cons) between an internal and an external growth strategy? Which approach is best as an international strategy? Why?
The benefits and costs of having an internal growth strategy begin with greater interprocess integration, higher levels of potential collaboration and higher levels of synchronization as a result of strategies being created and executed in-house. There is also great auditability and traceability of strategies when growth strategies emanate from inside an organization. The use of Balanced Scorecards (BSC) and the use of dashboards to continually monitor progress are also possible. In short, it is easier to plan, execute and control growth strategies when their basis is internally driven. The costs or drawbacks of having an internally-based growth strategy are that organizations tend to get myopic over time and begin to make assumptions about the external market that often over time prove to be either inaccurate or eventually false. Internally derived growth strategies often lack the urgency over time as well as organizations begin to ignore the outside factors that influence these strategies, especially when they are initially successful. Success breeds complacency in organizations, and this is especially true of strategies created and executed entirely internal to the organization. Contrary to these points, the pros and cons external growth strategy are as follows. Externally-based growth strategies must stay in alignment with the cultural and sociological factors that define specific regions and nations. The use of the Cultural Dimensions Model (Hofstede, 1993) is critically important for externally-based growth strategies. This is a major advantage of any external growth strategy. Second, external growth strategies are based more on customer-driven vs. internally driven requirements. Third, external growth strategies often require intensive support and strategic partnerships to survive. The cons or drawbacks of externally-based growth strategies are relative lack of measurability and performance data available, especially when partners and 3rd party service providers are relied on. A second disadvantage is that cost estimates can often be exceeded very fast when external factors influencing the strategies change. Another factor is that the entire strategy is visible to competitors as well. In conclusion, between the two approaches, externally-based strategies are by far more valuable despite the risks as they are forced to stay focused on the customer and opportunity rather than becoming myopic and inward centric over time, losing focus and results as a result.
Compare and contrast action planning with Management by Objectives. How can MBO help improve the implementation of strategy?
Action plans in general define the logical sequence of steps to attain a shared goal or objective while Management by Objectives (MBO) seeks to define those activities an individual can take accountability and responsibility for. MBO programs typically have a time horizon associated with them, often indexing performance incentives to the attainment of objectives. In this regard, MBOs in general are more effective in assisting employees with internalizing their objectives. All organizations rely on a combination of these two forms of management approaches, with many concentrating on MBOs to motivate employees to attain individualized objectives that roll up to department, divisional and finally strategic objectives of the company. Action planning also provides this progression of goal attainment from the individual to the strategic level. The structured approach to action planning also makes its progress and status more trackable over time. Yet in many industries traceability is not as important as agility and responsiveness to change. When goals and objectives corporately are defined through MBO programs, there is significantly greater potential for greater agility as people responsible for goals will quickly change their direction to ensure the objectives are met. This is done in a coordinated, synchronized way to make sure the entire organization stays in step with each other, yet it does highlight how internalized goals make for a more agile organization. Of the two approaches, MBOs are by far more effective in driving change in an organization as they give contributors the opportunity to internalize objectives over the long-term.
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.
For the majority of organizations, strategy follows culture, as the latter is the most powerful force on expectations and performance of a company. Culture can either be a strong catalyst of growth or a bottleneck in terms of getting…
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