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Business Strategy Course Code: MGT 401


Course Teacher: M Akbar Ali, DIG of Police

Ronaldo Parente Chapter 1 Wheelen & Hunger 10ed 1 +8801711 806 888

Strategy Implemen tation:

Staffing and Directing

Understand the link between strategy and staffing decisions Match the appropriate manager to the strategy Understand how to implement an effective downsizing program Discuss the important issues in effectively staffing and directing international expansion Assess and mange the corporate cultures fit with a new strategy. Chapter 5 2 Formulate action plan.

Strategic Management Model

Environmental Scanning External
Societal Environment General Forces Task Environment Industry Analysis

Strategy Formulation
Reason for existence

Strategy Implementation

Evaluation and Control and Control

What results to accomplish by when

Plan to achieve the mission & objectives

Broad guidelines for decision making

Structure Chain of Command Culture Beliefs, Expectations, Values Resources Assets, Skills Competencies, Knowledge

Activities needed to accomplish a plan

Cost of the programs

Process to monitor performance and take corrective action

Sequence of steps needed to do the job



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Lecture 9 Ch10 (W/H) M Akbar Ali

Strategy Implementation
The implementation of new strategies and policies often calls for new HRM priorities and a different use of personnel. Such staffing issues can involve:
Hiring new people with new skills, Firing people with inappropriate skills, and/or Training existing employees to learn new skills.

Research finding
Companies with enlightened talent management policies and programs have higher returns on sales, investments, assets, and equity.

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Staffing follows Strategy

Growth Strategy
New people may need to be hired and trained. Experienced people may need to be found for promotion to newly created managerial positions.

1. Acquisition Strategy
May need to replace several managers in the acquired company. Executives quit the acquired company at higher-than-normal rates. 25% after 1st year, 35% after 2nd year, 48% after 3rd year, 55% after 4th year, 61& after 5 years. The turnover rate is higher in case of a foreign acquiring company 2. Merger Strategy Lose excess employees after a merger Highly skilled people to be retained:

Special Integration Managers 3. Retrenchment Strategy

A large number of people may be laid off or fired.

Staffing follows strategy:

Changing Hiring and Training Requirements
To implement the new strategy, a corporation may find that it needs to either hire different people or retrain current employees. Training and development
One way to implement a companys business strategy, such as overall low cost, is through training & development ASTD: the average annual expenditure per employee on corporate t & d is 1,000$ per employee.

A study of 155 US manufacturing firms revealed that firms with training programs had 19% higher productivity Another study found that a doubling of formal training per employee resulted in a 7% reduction in scrap Training is especially important for a differentiation strategy emphasizing quality or customer service. 6

Matching the Manager to the Strategy Executive type - executives with a particular mix of skills and experiences

Chief Executive Types:

Dynamic industry expert
for company following concentration strategy emphasizing vertical and horizontal growth would need an aggressive new CEO with a great deal of experience in that particular industry.

Analytical portfolio manager

for company following diversification strategy might call for someone with an analytical mind who is highly knowledgeable in other industries and can manage diverse product lines

Cautious profit planner

for company following stability strategy would probably want a person with a conservative style, a production or engineering background, and experience with controlling budgets, capital expenditures, inventories, and standardization procedures.

Turnaround specialist
for company following a turnaround strategy would need a challenge oriented to save the company.

Professional liquidator
for company following liquidation strategy might be called on by a bankruptcy court to close the firm and liquidates its assets.

Chief Executive Types and overall strategy:

Successful prospector firms tended to be headed by CEOs from research/engineering and general management background. High performance defenders tended to have CEOs with accounting/finance, manufacturing production, and general management experience. Analyzers tend to have CEOs with a marketing/sales background.

Matching Chief Executive Types with Strategy

Business Strength/Competitive Position Strong Average Weak

Retrenchment Save Company Turnaround Specialist

GrowthConcentration Dynamic Industry Expert

Industry Attractiveness

Cautious Profit Planner

GrowthDiversification Analytical Portfolio Manager

Retrenchment Close Company Professional Liquidator

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Selection and Management Development

Executive Succession
Process of replacing a key top manager.
Boards help CEO develop succession plan Identify succession candidates below top layer Measuring internal candidates against external candidates Appropriate financial incentives

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Identifying Abilities & Potential:

Establish a sound performance appraisal system Identify managers talents and behavioral tendencies so that he/she could be placed with a likely fit to a given competitive strategy Companies select them to be in the executive development training program Special training, leadership experience, and mentorship Combination of development assignments, classroom training, coaching, and participation in special project teams to enable employees to continuously learn and develop. Assessment centers A management assessment center is a two or three-day simulation in which 10 to 12 candidates perform realistic management tasks under the observation of experts who appraise each candidates potential.
Special interviews, management games, in-basket exercise, leaderless group discussions, case analysis, decision-making exercises, and oral presentation

Used to evaluate a persons suitability for an advanced position. Job rotation Used to ensure that employees are gaining the appropriate mix of experiences to prepare them for future responsibilities.


Problems in Retrenchment:
Downsizing (rightsizing)
Planned elimination of positions or jobs Used in retrenchment strategies

Guidelines for Downsizing:

Eliminate unnecessary work vs. making across-the-board cuts Contract out work for efficiencies Plan for long-run efficiencies Communicate reasons for action Invest in the remaining employees Develop valued-added jobs to balance out job elimination

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International issues in staffing:

Considerable planning Can be very costly: $3,00,000 to 1 million annually per executive. Cultural differences must be considered Experience through international assignments

Effective management of foreign assignments:

Focus on transferring knowledge and developing global leadership Foreign assignments to people with technical skills matched or exceeded by cross-cultural abilities Deliberate repatriation at end of assignment with career guidance and jobs

Strategy-Culture Compatibility:
Consider the following:
Is the planned strategy compatible with the firms current culture? Can the culture be easily modified to make it more compatible with new strategy? Is management willing to make major organizational changes? Is management committed to implementing the strategy?

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Assessing StrategyCulture Compatibility

Is the planned strategy compatible with the current culture? No Yes

Tie changes into the culture. Yes

Can the culture be modified to make it more compatible with the new strategy?

Is management willing and able to make major organizational changes and accept probable delays No Yes


Manage around the culture by establishing a new structural unit to implement the new strategy.

Is management still committed to implementing the strategy? No

Find a joint-venture partner or contract with another company to carry out the strategy.

Formulate a different strategy

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Managing different cultures: Integration: Give-and-take of culture

Frances Renault and Japans Nissan Motor Company: CEO Carlos Ghosn

Assimilation: Domination of one culture over other.

Not forced, but welcomed by the members of the acquired firm Maytags (now part of Whirlpool) purchase of Admiral.

Separation: Structurally separated without cultural change

Boeings acquisition of McDonnell-Douglas, but keeping it separate to protect its strong culture

Deculturation: Disintegration of one companys culture

resulting from unwanted and extreme pressure from the other to impose its culture and practices AT&T acquired NCR Corporation in 1990.
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Managing the Culture of an Acquired Firm

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Strategy Implementation
Action Plan
States what actions are going to be taken, by whom, during what time frame, and with what expected results. Elements
List specific actions. List dates to begin and end each action. Name person responsible for each action. Name person responsible for monitoring timelines and effectiveness of each action. Estimate expected financial and physical consequences of each action. Develop contingency plans.

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Review Questions
Lecture 18
1. a. Explain executive succession. b. What are the ways for Identifying abilities & potential? c. What is the differences between downsizing and rightsizing? 2. a. What actions you must undertake to implement a strategy? b. What staffing strategies you have to follow to implement your companys changed strategies? c. What are the types CEOs you need for different strategies? 3. a. Suppose you have acquired a foreign company. How best you can manage the cultural differences of the acquired company with your own? b. How can you assess that your new company strategy is compatible with your companys culture? c. Suppose you have acquired a foreign company. How will you manage the cultural differences of the acquired company with these two matrix:
i. How much the members of the acquired firm value preservation of their own firm ii. Perception of the attractiveness of the acquirer company