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STRATEGIC MANAGEMENT & BUSINESS POLICY13TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
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Prentice Hall, Inc. 2012 10-2
Integration Managers
Prepare a competitive profile of the company interms of its strengths and weaknesses
Draft a profile of what the ideal combined companyshould look like
Develop action plans to close the gap betweenactual and ideal
Establish training programs to unit the combinedcompany and make it more competitive
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Prentice Hall, Inc. 2012 10-3
Successful Integration Managers
Deep knowledge of the acquiring company
Flexible management style
Ability to work in cross-functional teams
Willingness to work independently
Sufficient emotional and cultural intelligence to
work in a diverse environment
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Prentice Hall, Inc. 2012 10-4
Staffing Follows Strategy
Training and development
Executive types
Dynamic industry expert
Analytical portfolio manager
Cautious profit planner
Turnaround specialist
Professional liquidator
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A corporation following a concentration strategy emphasizing vertical or
horizontal growth would probably want an aggressive new chief executivewith a great deal of experience in that particular industrya dynamic
industry expert.
A diversification strategy, in contrast, might call for someone with an analytical
mind who is highly knowledgeable in other industries and can manage
diverse product linesan analytical portfolio manager.A corporation choosing to follow a stability strategy would probably want as its
CEO a cautious profit planner, a person with a conservative style, a
production or engineering background, and experience with controlling
budgets, capital expenditures, inventories, and standardization procedures.
Weak companies in a relatively attractive industry tend to turn to a type ofchallenge oriented executive known as a turnaround specialist to save the
company.
If a company cannot be saved, a professional liquidator might be called on by abankruptcy court to close the firm and liquidate its assets.
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Prentice Hall, Inc. 2012 10-6
Selection and Management Development
Executive succession- replacing a key top manager
Succession planning
Identifying candidates below the top layer ofmanagement
Measuring internal candidates against externalcandidates
Providing financial incentives
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Prentice Hall, Inc. 2012 10-7
Identifying Abilities and Potential
Performance appraisal system identifies goodperformers with promotion potential
Assessment centers evaluates a persons suitabilityfor an advanced position
Job rotation- ensures employees are gaining a mix of
experience to prepare them for futureresponsibilities
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Prentice Hall, Inc. 2012 10-8
Problems in Retrenchment
Downsizing the planned eliminated of positions orjobs
Can damage the learning capacity of anorganization
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Prentice Hall, Inc. 2012 10-9
Successful Downsizing
Eliminate unnecessary work instead of makingacross the board cuts
Contract out work that others can do cheaper
Plan for long-run efficiencies
Communicate the reasons for actions
Invest in the remaining employees Develop value added jobs to balance out job
elimination
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Prentice Hall, Inc. 2012 10-10
International Issues in Staffing
Culture differences
Management styles
Human resource practices
Suboptimization
Communication and coordination
Lack of international management with experience
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Prentice Hall, Inc. 2012 10-11
Implementation involves leading andcoachingpeople to use their abilities and skills mosteffectively and efficiently to achieveorganizational objectives
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Prentice Hall, Inc. 2012 10-12
Managing Corporate Culture
Strong cultures are resistant to change Optimal culture supports mission and
strategies
Change in strategy should be followed bychange in culture
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Prentice Hall, Inc. 2012 10-13
Accessing Strategy-Culture Compatibility
1. Is the proposed strategy compatible with thecompanys current culture
2. Can the culture be easily modified to make it morecompatible with the new strategy
3. Is management willing and able to make majororganizational changes and accept probable delays
and a likely increase in costs4. Is management still committed to implementing the
strategy
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Prentice Hall, Inc. 2012 10-14
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Prentice Hall, Inc. 2012 10-15
Managing Cultural Change ThroughCommunication
CEO and top management communicated the
strategic vision throughout the organization
Current performance was compared to competitionand constantly updated
Vision was translated into key elements needed to
accomplish the vision
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Prentice Hall, Inc. 2012 10-16
Managing Diverse Cultures Following anAcquisition
Methods of managing two different cultures
Integration- balanced give and take of cultures
Assimilation- domination of one culture over theother
Separation of the two cultures
Assimilation- disintegration of one culture resultingfrom pressure form the other to impose its cultureand practices
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Prentice Hall, Inc. 2012 10-17
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Prentice Hall, Inc. 2012 10-18
Action plan- what actions are going to be taken, bywhom, during what time frame, and with whatexpected results
1. Specific actions to be taken to make the program operational2. Dates to begin and end each action
3. Person responsible for carrying out each action
4. Person responsible for monitoring the timeliness andeffectiveness of each action
5. Expected financial and physical consequences of each action
6. Contingency plans
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Prentice Hall, Inc. 2012 10-19
Importance of Action plans
Serve as a link between strategy formulation andevaluation and control
Specifies what needs to be done differently fromcurrent operations
Evaluation and control processes appraiseperformance and identify remedial actions
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Prentice Hall, Inc. 2012 10-20
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Prentice Hall, Inc. 2012 10-22
Management by Objectives (MBO)- encouragesparticipative decision making through shared goalsetting and performance assessment based onachieving stated objectives
Establishing and communicating organizationalobjectives
Setting individual objectives
Developing an action plan to achieve objectives Performance review (periodic and annual)
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Prentice Hall, Inc. 2012 10-23
Total Quality Management (TQM)- philosophy thatis committed to customer satisfaction andcontinuous improvement
Objectives1. Better, less variable quality of the product and service
2. Quicker less variable response in processes to customerneeds
3. Greater flexibility in adjusting to customers shiftingrequirements
4. Lower cost through quality improvement and elimination ofnon-value added work
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Prentice Hall, Inc. 2012 10-24
Essential Ingredients
1. Intense focus on customer satisfaction
2. Internal as well as external customers
3. Accurate measurement of every critical variable ina companys operations
4. Continuous improvement of products and services
5. New work relationships based on trust andteamwork
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Prentice Hall, Inc. 2012 10-25
Dimensions of National Culture
1. Power distance
2. Uncertainty avoidance
3. Individualism-collectivism
4. Masculinity-femininity
5. Long-term orientation
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High- and Low-Context Cultures
High Context
Information resides in
context
Emphasis on background,
basic values, societalstatus
Less emphasis on legal
paperwork
Focus on personal
reputation
Saudi Arabia, Japan
Low Context Messages are explicit and
specific
Words carry all information
Reliance on legalpaperwork
Focus on non-personaldocumentation of credibility
Switzerland, U.S.,
Germany
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High- and
Low-Context Cultures
Factor/Dimension High Context Low Context
Lawyers Less Important Very Important
A persons word Is his/her bond Is not reliableget it in writing
Responsibility for
Organizational error
Taken by highest level Pushed to the lowest level
Space People breathe on each
other
Private space maintained
Time Polychronic Monochronic
Competitive Bidding Infrequent Common
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Background Information
Dr. Geert Hofstede Dutch social psychologist
Worked from 1967 1973 as apsychologist for IBM
Collected and analyzed data on values
and norms from 116,000 IBMemployees in 40 countries
Based on these results, he developed amodel that identifies four primary
dimensions to culture. He later added afifth dimension.
Currently Director (Emeritus) of theInstitute for Research on InterculturalCooperation (IRIC)
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Hofstedes Cultural Typology
Power Distance
Individualism/Collectivism
Masculinity Uncertainty Avoidance
Long-term Orientation
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Ind iv idual ism
Low Power
Distance
Mascul in i ty
Low Uncer ta inty
Avo idance
Sho rt Term
Orientat ion
Col lect iv ism
High Power
Distance
Feminini ty
High Uncertainty
Avo idance
Long Term
Orientat ion
Hofstedes Model of National Culture
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Individualism CollectivismIndividual freedom
and self expression
are valued within a
society.
Culture that
values the
group over the
individual.
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Low Power
Distance
High Power
DistanceEquality and opportunity for
all is emphasized. Society
tries to reduce differences
between rich and poor with
social programs and taxes.
Inequalities of power
and wealth have been
allowed to grow within
the society. Wide gapbetween rich and poor.
Power Distancea societys acceptance of
differences in the well being of citizens due to
differences in heritage, and physical andintellectual capabilities.
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Culture Map
for Power
Distance and
Individualism
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Masculinity or achievement orientation
focused on the degree to which society
values assertiveness, performance, andsuccess.
Society is results
oriented stressing
success, money
and possessions.
Nurturing-oriented
where quality of life,
personal relationships
and service arevalued.
Masculinity Femininity
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CultureMap for
Uncertainty
Avoidanceand
Masculinity-Femininity
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Uncertainty Avoidance the degree to which a
society is willing to tolerate uncertainty andrisk.
Societyvaluesdiversity,tolerates
differencesin personalbeliefs andactions
More rigid society,
high conformity to
norms is
expected;structure and
rules provide
security
Low Uncertainty
Avoidance
High Uncertainty
Avoidance
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Culture Mapfor Power
Distance andUncertainty
Orientation
Long-term orientation focuses on the
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Long term orientation focuses on the
degree to which a society embraces
devotion to traditional, forward thinking
values.
Society valuesthrift, persistence,planning for the
future.
Society that valuespersonal stabilityand happiness andliving for the
present.
Long-term
orientation
Short-term
orientation
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Prentice Hall, Inc. 2012 10-39
PowerPoint created by:
Ronald Heimler
Dowling College- MBA
Georgetown University- BS Business
Administration Adjunct Professor- LIM College, NY
Adjunct Professor- Long IslandUniversity, NY
Lecturer- California State PolytechnicUniversity, Pomona, CA
President- Walter Heimler, Inc
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All rights reserved. No part of this publication may be reproduced,stored in a retrieval system, or transmitted, in any form or by any
means, electronic, mechanical, photocopying, recording, or otherwise,without the prior written permission of the publisher. Printed in the
United States of America.
Copyright 2012 Pearson Education, Inc.publishing as Prentice Hall
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