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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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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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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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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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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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Problems in Retrenchment

Downsizing the planned eliminated of positions orjobs

Can damage the learning capacity of anorganization

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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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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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Implementation involves leading andcoachingpeople to use their abilities and skills mosteffectively and efficiently to achieveorganizational objectives

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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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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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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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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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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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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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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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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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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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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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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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