STRATEGY

IMPLEMENTATION:
STAFFING &
DIRECTING
STRATEGIC MANAGEMENT
LEARNING OBJECTIVES
 Understand the link between strategy and staffing decisions
 Match the appropriate manager to the strategy
 Understand how to implement an effective downsizing program
 Discuss important issues in effectively staffing and directing international
expansion
 Assess and manage the corporate culture’s fit with a new strategy
 Decide when and if programs such as MBO and TQM are appropriate
methods of strategy implementation
 Formulate action plans
STAFFING
Focuses on the selection and use of employees

LEADING
Emphasizes the use of programs to better align employee
interests and attitudes with a new strategy
STAFFING
The implementation of new strategies and policies often calls for new human
resource management priorities and a different use of personnel.
Staffing issues can involve hiring new people with new skills, firing people
with inappropriate or substandard skills, and/or training existing employees to
learn new skills.
If growth strategies are to be implemented, new people may need to be hired
and trained.
INTEGRATION MANAGERS – to shepherd companies through the
implementation process. The job of the integrator is to prepare a competitive
profile of the combined company in terms of its strengths and weaknesses, draft
an ideal profile of what the combined company should look like, develop action
plans to close the gap between the actuality and the ideal, and establish training
programs to unite the combined company and to make it more competitive.

(1) a deep knowledge of the acquiring company,

(2) a flexible management style,
(3) an ability to work in cross-functional project teams,
(4) a willingness to work independently, and
(5) sufficient emotional and cultural intelligence to work well with people from all
backgrounds.
 If a corporation adopts a retrenchment strategy. A large
number of people may need to be laid off or fired (in
many instances, being laid off is the same as being fired);
and top management, as well as the divisional managers,
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.
STAFFING
FOLLOWS
STRATEGY
 Having formulated a new strategy, a
corporation may find that it needs to
either hire different people or retrain STAFFING
current employees to implement the FOLLOWS
new strategy.
STRATEGY
 Training is also important when
implementing a retrenchment strategy. Changing Hiring
Successful downsizing means that a and Training
company has to invest in its remaining Requirements
employees
 Executive characteristics influence strategic
outcomes for a corporation.16 It is possible that a
current CEO may not be appropriate to implement
a new strategy
STAFFING
 The most appropriate type of general manager FOLLOWS
needed to effectively implement a new corporate or
business strategy depends on the desired strategic
STRATEGY
direction of that firm or business unit.
 Executives with a particular mix of skills and Matching the
experiences may be classified as an executive type
and paired with a specific corporate strategy
Manager to
the Strategy
DYNAMIC INDUSTRY EXPERT - a corporation
following a concentration strategy emphasizing vertical or
horizontal growth would probably want an aggressive new
STAFFING
chief executive with a great deal of experience in that FOLLOWS
particular industry.
STRATEGY
ANALYTICAL PORTFOLIO MANAGER - call for Matching the
someone with an analytical mind who is highly knowledgeable
in other industries and can manage diverse product lines. Manager to
the Strategy
CAUTIOUS PROFIT PLANNER - a person with
a conservative style, a production or engineering
background, and experience with controlling budgets,
capital expenditures, inventories, and standardization STAFFING
procedures
FOLLOWS
STRATEGY
TURNAROUND SPECIALIST - Weak companies
in a relatively attractive industry tend to turn to a type
of challenge oriented executive to save the company. Matching the
Manager to
PROFESSIONAL LIQUIDATOR - might be the Strategy
called on by a bankruptcy court to close the firm and
liquidate its assets.
SELECTION AND
MANAGEMENT
DEVELOPMENT
 SELECTION
 Executive succession is the process of replacing a
key top manager. It is important that the firm plan for
AND
this eventuality. It is especially important for a MANAGEME
company that usually promotes from within to prepare
its current managers for promotion. NT
DEVELOPM
 TOP MANAGEMENT SUCCESSION are ENT
encouraging boards to help the CEO create a
succession plan, identifying succession candidates
below the top layer, measuring internal candidates Executive
against outside candidates to ensure the development Succession:
of a comprehensive set of skills, and providing Insiders versus
appropriate financial incentives.
Outsider
 SUCCESSION PLANNING has become the most
important topic discussed by boards of directors.
 SELECTION
 The outsiders tended to perform slightly worse than
insiders but had a very high variance in performance.
AND
Compared to that of insiders, the performance of MANAGEME
outsiders tended to be either very good or very poor.
NT
 The probability of an outsider being chosen to lead a
DEVELOPM
firm in difficulty increases if there is no internal heir ENT
apparent, if the last CEO was fired, and if the board of
directors is composed of a large percentage of
outsiders.
Executive
Succession:
 Boards realize that the best way to force a change in
Insiders versus
strategy is to hire a new CEO who has no connections Outsider
to the current strategy
 SELECTION
 PERFORMANCE APPRAISAL SYSTEM - to
AND
identify good performers with promotion potential. MANAGEME
NT
 A company should examine its human resource system
to ensure not only that people are being hired without
DEVELOPM
regard to their racial, ethnic, or religious background, ENT
but also that they are being identified for training and
promotion in the same manner.
Identifying
 Large organizations are using assessment centers to Abilities and
evaluate a person’s suitability for an advanced
position.
Potential
 SELECTION
 JOB ROTATION - moving people from one job to
AND
another; is also used in many large corporations to MANAGEME
ensure that employees are gaining the appropriate mix
of experiences to prepare them for future NT
responsibilities. DEVELOPM
ENT
 Rotating people among divisions is one way that a
corporation can improve the level of organizational
learning. Identifying
Abilities and
 the companies that grow internally attempt to transfer
important knowledge and skills throughout the
Potential
corporation in order to achieve some sort of synergy.
PROBLEMS IN
RETRENCHMENT
 sometimes called “rightsizing” or “resizing”
 refers to the planned elimination of positions or jobs
 used to implement retrenchment strategies
 financial community is likely to react favorably to announcements
of downsizing from a company in difficulty, such a program may
provide some short-term benefits such as raising the company’s
stock price
 can seriously damage the learning capacity of organization
 ELIMINATE
 Reduce the number of administrative levels rather UNNECESSARY
than the number of individual positions. WORK
 Look for interdependent relationships before
INSTEAD OF
eliminating activities.
MAKING
 Identify and protect core competencies.
ACROSS-THE-
BOARD CUTS:
CONTRACT
 Outsourcing may be cheaper than vertical
OUT WORK
integration. THAT OTHERS
CAN DO
CHEAPER
 Don’t simply eliminate all postponable expenses,
such as maintenance, R&D, and advertising, in the
unjustifiable hope that the environment will PLAN FOR
become more supportive. LONG-RUN
 Continue to hire, grow, and develop particularly in EFFICIENCIES:
critical areas.

 Tell employees not only why the company is

downsizing but also what the company is trying to COMMUNICATE
achieve. THE REASONS
 Promote educational programs. FOR ACTIONS:
 Additional training is needed to ensure that
everyone has the proper skills to deal with
expanded jobs and responsibilities. INVEST IN THE
 Empower key individuals/ groups and emphasize REMAINING
team building. Identify, protect, and mentor people EMPLOYEES:
who have leadership talent

 When no other jobs are currently available within

the organization to transfer employees to, DEVELOP VALUE-
management must consider other staffing ADDED JOBS TO
alternatives BALANCE OUT JOB
ELIMINATION:
INTERNATIONAL ISSUES IN
STAFFING
 Implementing a strategy of international expansion takes a lot of planning and
can be very expensive
 Because of cultural differences, managerial style and human resource practices
must be tailored to fit the particular situations in other countries.
 Because of the importance of cultural distinctions such as these, multinational
corporations (MNCs) are now putting more emphasis on intercultural training
for managers being sent on an assignment to a foreign country
 Once a corporation has established itself in another country, it hires and
promotes people from the host country into higher-level positions
 When making international assignments, they focus on transferring
knowledge and developing global leadership.

 They make foreign assignments to people whose technical skills are

matched or exceeded by their cross-cultural abilities.

 They end foreign assignments with a deliberate repatriation

process, with career guidance and jobs where the employees can
apply what they learned in their assignments
LEADING
Implementation also involves leading through coaching people to use their
abilities and skills most effectively and efficiently to achieve organizational
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.
This direction may take the form of management leadership, communicated
norms of behavior from the corporate culture, or agreements among workers in
autonomous work groups. It may be accomplished more formally through
action planning or through programs, such as Management By Objectives
and Total Quality Management.
MANAGING CORPORATE
CULTURE
Corporate culture has a strong tendency to resist change because its very
reason for existence often rests on preserving stable relationships and patterns
of behavior.
A problem for a strong culture is that a change in mission, objectives,
strategies, or policies is not likely to be successful if it is in opposition to the
accepted culture of the company
A key job of management involves managing corporate culture. In doing so,
management must evaluate what a particular change in strategy means to the
corporate culture, assess whether a change in culture is needed, and decide
whether an attempt to change the culture is worth the likely costs
ASSESSING
STRATEGY-
CULTURE
COMPATIBILITY
 Tie organizational changes into the Is the proposed
company’s culture by identifying how strategy
the new strategy will achieve the compatible with
mission better than the current the company’s
strategy does
current culture?
 By introducing a set of culture-changing Can the culture be
activities such as minor structural easily modified to
modifications, training and development make it more
activities, and/or hiring new managers who compatible with the
are more compatible with the new strategy. new strategy?
ASSESSING
STRATEGY-
CULTURE
COMPATIBILI
TY
Can the culture be
easily modified to
make it more
compatible with the
new strategy?
 Is management willing
 Manage around the culture by establishing a and able to make major
organizational changes
new structural unit to implement the new
and accept probable
strategy.
delays and a likely
increase in costs?

Is management
 If yes, find a joint venture partner or contract with still committed to
another company to carry out the strategy. If not, implementing the
formulate a different strategy.
strategy?
MANAGING CULTURAL
CHANGE THROUGH
COMMUNICATION
Communication is key to the effective management of change.

 Rationale for strategic changes should be communicated to workers not only in
newsletters and speeches, but also in training and development programs.
 Companies in which major cultural changes have successfully taken place had
the following characteristics in common:
 The CEO and other top managers had a strategic vision of what the company could become and
communicated that vision to employees at all levels.
 The vision was translated into the key elements necessary to accomplish that vision. For example,
if the vision called for the company to become a leader in quality or service, aspects of quality and
service were pinpointed for improvement, and appropriate measurement systems were developed
to monitor them
MANAGING
THE
CULTURE OF
AN
ACQUIRED
FIRM
There are four general methods of
managing two different cultures.
The choice of which method to
use should be based on (1) how
much members of the acquired
firm value preserving their own
culture and (2) how attractive
they perceive the culture of the
acquirer to be
 Involves a relatively balanced give-and-take
of cultural and managerial practices
METHODS OF
between the merger partners, and no strong MANAGING
imposition of cultural change on either THE
company. CULTURE OF
 It merges the two cultures in such a way that AN
the separate cultures of both firms are ACQUIRED
preserved in the resulting culture.
FIRM
 His goal was to form one successful auto
group from two very distinct companies. INTEGRATION
 Involves the domination of one organization
over the other.
METHODS OF
MANAGING
 The domination is not forced, but it is
welcomed by members of the acquired firm, THE
who may feel for many reasons that their CULTURE OF
culture and managerial practices have not AN
produced success. ACQUIRED
 The acquired firm surrenders its culture and FIRM
adopts the culture of the acquiring company.
 They expected to be treated with some
ASSIMILATION
respect for their skills in refrigeration
technology
 METHODS OF
MANAGING
THE
 Characterized by a separation of the two CULTURE OF
companies' cultures. They are structurally AN
separated, without cultural exchange. ACQUIRED
FIRM
SEPARATION
 Involves the disintegration of one company’s
culture resulting from unwanted and extreme METHODS OF
pressure from the other to impose its culture and MANAGING
practices.
THE
 This is the most common and most destructive
method of dealing with two different cultures. CULTURE OF
 It is often accompanied by much confusion, AN
conflict, resentment, and stress. ACQUIRED
 This is a primary reason why so many executives FIRM
tend to leave after their firm is acquired.
 Such a merger typically results in poor
DECULTURATION
performance by the acquired company and its
eventual divestment.
ACTION
PLANNING
States what actions are going to be taken, by whom, during
what time frame, and with what expected results.
THE RESULTING ACTION PLAN TO DEVELOP
A NEW ADVERTISING PROGRAM SHOULD
INCLUDE MUCH OF THE FOLLOWING
INFORMATION:
1. Specific actions to be taken to make the program operational
2. Dates to begin and end each action
3. Person (identified by name and title) responsible for carrying out each
action
4. Person responsible for monitoring the timeliness and effectiveness of
each action
5. Expected financial and physical consequences of each action
6. Contingency plans
AN EXAMPLE OF
AN ACTION PLAN
FOR A NEW
ADVERTISING AND
PROMOTION
PROGRAM
Take the example of a
company choosing forward
vertical integration through
the acquisition of a retailing
chain as its growth strategy.
Once it owns its own retail
outlets, it must integrate the
stores into the company. One
of the many programs it
would have to develop is a
new advertising program for
the stores
MANAGEMENT BY
OBJECTIVES
is a technique that encourages participative decision making through shared
goal setting at all organizational levels and performance assessment based on
the achievement of stated objectives.
The MBO process involves:
1. Establishing and communicating organizational objectives.
2. Setting individual objectives (through superior-subordinate interaction) that help
implement organizational ones.
3. Developing an action plan of activities needed to achieve the objectives.
4. Periodically (at least quarterly) reviewing performance as it relates to the objectives and
including the results in the annual performance appraisal
TOTAL QUALITY
MANAGEMENT
is an operational philosophy committed to customer satisfaction and continuous
improvement.
TQM is committed to quality/excellence and to being the best in all functions.
Because TQM aims to reduce costs and improve quality, it can be used as a
program to implement an overall low-cost or a differentiation business strategy.
TQM has four objectives:
1. Better, less variable quality of the product and service
2. Quicker, less variable response in processes to customer needs
3. Greater flexibility in adjusting to customers’ shifting requirements
4. Lower cost through quality improvement and elimination of non-value-adding work
TOTAL QUALITY
MANAGEMENT
The program involves a significant change in corporate culture,
requiring strong leadership from top management, employee
training, empowerment of lower-level employees (giving people
more control over their work), and teamwork in order to succeed in
a company.
TQM emphasizes prevention, not correction.
Inspection for quality still takes place, but the emphasis is on
improving the process to prevent errors and deficiencies.
 Everyone (not just people in the sales and
marketing departments) understands that their jobs AN INTENSE FOCUS
exist only because of customer needs. ON CUSTOMER
SATISFACTION

 An employee must be just as concerned

with pleasing the internal customer as in INTERNAL AS WELL
AS EXTERNAL
satisfying the external customer. CUSTOMERS
ACCURATE
 This means that employees have to be MEASUREMENT OF
trained in what to measure, how to measure, EVERY CRITICAL
and how to interpret the data. VARIABLE IN A
COMPANY’S
OPERATIONS
 Everyone realizes that operations need to be CONTINUOUS
continuously monitored to find ways to improve IMPROVEMENT OF
products and service. PRODUCTS AND
SERVICES

 An employee must be just as concerned

with pleasing the internal customer as in NEW WORK
RELATIONSHIPS
satisfying the external customer. BASED ON TRUST
AND TEAMWORK
INTERNATIONAL
CONSIDERATIONS
IN LEADING
1. POWER DISTANCE (PD)
 is the extent to which a society accepts an unequal
distribution of power in organizations.

2. UNCERTAINTY AVOIDANCE
(UA)
 is the extent to which a society feels threatened by uncertain and
ambiguous situations
3. INDIVIDUALISM-
COLLECTIVISM (I-C)
 is the extent to which a society values individual freedom and
independence of action compared with a tight social framework and
loyalty to the group.
4. MASCULINITY-FEMININITY
(M-F)
 is the extent to which society is oriented toward money and things
or toward people.
5. LONG-TERM ORIENTATION
(LT)
 is the extent to which society is oriented toward the long versus the short-term
SUMMARY
 Strategy is implemented by modifying structure (organizing), selecting the
appropriate people to carry out the strategy (staffing), and communicating
clearly how the strategy can be put into action (leading). A number of
programs, such as organizational and job design, reengineering, Six Sigma,
MBO, TQM, and action planning, can be used to implement a new strategy.
 Research on executive succession reveals that it is very risky to hire new top
managers from outside the corporation. Although this is often done when a
company is in trouble, it can be dangerous for a successful firm.
 This phenomenon occurs not because a star doesn’t suddenly become less
intelligent when switching firms, but because the star cannot take to the new
firm the firm-specific resources that contributed to her or his achievements at
the previous company.
 companies cannot obtain competitive advantage by hiring stars from the
outside. Instead, they should emphasize growing their own talent and
developing the infrastructure necessary for high performance.