Strategic management and business policy

Strategic Management & Business Policy

Compare and contrast action planning with management by objectives. How can MBO help improve the implementation of strategy?

There are fundamental differences between each of these approaches to management, with action planning being more focused on nurturing and motivating employees extrinsically to change while Management by Objective (MBO) programs seek to change the employee internally. Studies suggest that combing each can deliver exceptional; innovation throughout an organization, providing ownership of the innovation process is internalized by key contributors to the organization over time (Wiley, Legge, 2006). MBOs then provide a vital link to providing employees with the opportunity to internalize their objectives over time. Both are necessary for an organization to become as innovative as their cultures allow for. Yet MBOs must be present to provide a means for employees to "own" and internalize the necessary tasks to create exceptional value for their companies.

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.

In the context of many organizations their cultures act as the central reference point for everything from how meetings are held to how people are spoken to, and certainly influence the level of innovation achieved (Markides, 2004). Cultures then can be either constraints or catalysts of growth for any company. It is in how they are defined that makes the difference. For any strategy to be effective however it must be in alignment with the cultural norms, values and expectations. For a strategy to be effectively executed it must focus on how to create significant value and change that everyone involved can accept. To do this, a strategy must align to a culture's given norms, values and expectations. Even when strategy changes culture, it must begin in the context of a cultural fit to be seen with credibility and trust.