CHAPTER 10 Strategy
Implementation: Staffing &
Directing
STRATEGIC MANAGEMENT & BUSINESS POLICY
10TH EDITION
THOMAS L. WHEELEN
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J. DAVID HUNGER
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Staffing & Directing
Success is ;
well – executed strategy implementation
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Staffing & Directing
Staffing –
Hiring new people with new skills; firing
people w/ inappropriate skills; training
existing employees to learn new skills
Leading –
Specifying clear performance
objectives and promoting teamoriented corporate culture
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Staffing & Directing
Staffing follows strategy –
Having formulated a new strategy, a corporation
may find that it needs to either hire different people
or retrain and develop current employees to
implement new strategy
–It is known that; Training & Development
results in :
•Higher productivity
•Reduction in waste
•Overall cost savings
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Staffing & Directing
 A study in UK found that 71% of leading companies
rated staff learning and training as important
compared to 62% of the other companies
 Another study in US revealed that corporations with
training programs had 19% higher productivity than
those without such programs
 Motorola estimates that every $1 it spends on
training delivers $30 in productivity gains within three
years
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Staffing & Directing
It is possible that a current CEO may not be
appropriate to implement a new strategy.
Matching manager to strategy
Executives with a particular mix of
skills and experiences may be
classified as an
EXECUTIVE TYPE
and paired with a specific corporate
strategy
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Staffing & Directing
Staffing follows strategy –
Executive type
•Dynamic industry expert
•Analytical portfolio manager
•Cautious profit planner
•Turnaround specialist
•Professional liquidator
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Staffing & Directing
Executive Types –
•Dynamic industry expert
A corporation following a concentration
strategy emphasizing vertical or horizontal
growth would probably want an aggressive
new CEO with a great deal of experience in
that particular industry
•Analytical portfolio manager
A diversification strategy might call for
someone with an analytical mind who is
highly knowledgeable in other industries and
can manage diverse product lines
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Staffing & Directing
•Cautious profit planner
A corporation choosing to follow a stability
strategy would probably want its CEO as a
cautious profit planner
•Turnaround specialists
Weak companies in a relatively attractive
industry tend to turn to a type of challengeoriented executive
•Professional liquidator
If a company cannot be saved, a professional
liquidator might be called on by a bankruptcy
court
the firm and liquidate its assets
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Staffing & Directing
Selection & Management Development
Executive Succession (it is an eventuality)
Insiders vs Outsiders
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Staffing & Directing
Companies who uses relay executive succession
(insiders), have significantly higher performance
than those that hire an outsider
Prosperous firms tend to look outside for CEO
candidates only if they have no obvious internal
candidates. Hiring an outsider to be a CEO is a
risky gamble.
On the other hand; firms in trouble
overwhelmingly choose outsiders to lead
them. Boards realize that the best way to
force a change in strategy is to hire a new
CEO who has no connections to the
current strategy.
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Staffing & Directing
Selection & Management Development –
Identifying Abilities and Potential
•Performance appraisal system
•Assessment centers
•Job rotation
Recent studies are suggesting that female
executives score higher than man on motivating
others, fostering communication, producing
high-quality work, and listening to others,
while there is no difference between them in
strategic planning or analyzing issues
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Staffing & Directing
Retrenchment strategy–
–Downsizing (sometimes called rightsizing)
•Eliminate unnecessary work
•Contract out work for cost savings (outsource)
•Plan for long-run efficiencies
•Communicate reasons for action
•Invest in remaining employees
•Develop value-added jobs (cancel outsourcing)
But ;
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Problems in Downsizing –
•What is the distinction between cutting the fat or cutting the
muscle. A study of downsizing automobile related US
companies revealed that at 20 out of 30 companies, either
the wrong jobs were eliminated or blanket offers of early
retirement prompted very valuable managers to leave.
•Downsizing can seriously damage the learning capacity of
organizations and creativity drops significantly.
•Cost conscious executives tend to defer maintenance,
skimp on training, delay new product introductions and avoid
risky new businesses – all of which leads to lower sales and
eventually to lower profits.
•A situation can develop in which retrenchment feeds on
itself and acts further weaken instead of strengthen the
company.
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Staffing & Directing
Problems in Downsizing –
Successful downsizing firms undertake a
strategic reorientation, not just a bloodletting of
employees.
Research shows that;
when companies use downsizing
as part of a larger restructuring program to
narrow company focus,
they enjoy better performance
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Staffing & Directing
International issues in staffing
If a corporation is to extend its operations to
another country,
it should hire and promote people from;
-Country of origin, (problems of culture and bureaucracy)
-Host country, (sub optimization)
-International orientation regardless of their
country of origin or host country assignment.
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Staffing & Directing
Managing Corporate Culture
-A company is a culture (Weick)
-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
-There is no best corporate culture. An optimal culture is
one that best supports the mission and strategy of the
company of which it is a part.
-Unless strategy is in complete agreement with the culture,
any significant change in strategy should be followed by a
modification of the organization’s culture.
-Although corporate culture can be changed, it may often
take a long time, and it requires much effort.
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Staffing & Directing
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Assessing “Strategy – Culture” Compatibility
Managing Corporate Culture
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
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Staffing & Directing
Managing Diverse Cultures–
–Integration
–Assimilation
–Separation
–Deculturation
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Action Plan Example
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Staffing & Directing
Management By Objectives –
Goal-Setting Theory
Proposes that setting goals that are accepted,
specific, and challenging yet achievable will
result in higher performance than having no or
easy goals.
Benefits of Participation in Goal-Setting
•Increases the acceptance of goals.
•Fosters commitment to difficult, public goals.
•Provides for self-feedback (internal locus of control)
that guides behavior and motivates performance (selfefficacy).
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Management by Objectives
1
Setting Goals
2
Planning Action
3
Implementing Plans
4
Reviewing Performance
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Staffing & Directing
Management By Objectives –
–Establish objectives
–Setting individual objectives
–Action plan
–Periodic performance review
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Staffing & Directing
Total Quality Management (TQM) :
An operational philosophy committed to
-- customer satisfaction and
-- continuous improvement.
–Better, less variable quality
–Quicker, less variable response in processes
–Greater flexibility in adjusting to customer’s shifting
requirements
–Lower cost and elimination of non-value-adding
jobs
According to TQM, faulty processes, not poorly
motivated employees, are the cause of defects
in quality.
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Total Quality Management (TQM)
TQM emphasizes prevention, not correcting.
Inspection for quality still takes place, but the
emphasis is on improving the process to prevent
errors and deficiencies.
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Staffing & Directing
Total Quality Management (TQM) –
TQM INVOLVES A SIGNIFICANT CHANGE
IN CORPORATE CULTURE
–Intense focus on customer satisfaction
–Internal as well as external customers
–Accurate measurement
–continuous improvement
–Trust and teamwork
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Staffing & Directing
International considerations in Leading –
HOFSTEDE - GLOBE
–Power distance (PD)
–Uncertainty avoidance (UA)
–Individualism-collectivism (I-C)
–Masculinity-femininity (M-F)
–Long-term orientation (LT)
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International considerations in Leading –
–Power distance (PD)
Malaysia and Mexico scored highest, Germany and
Austria scored lowest. People in countries scoring
high on this dimension tend to prefer autocratic to
more participative management.
MBO, originated from USA, succeeded in Germany,
because the idea of replacing the arbitrary authority
of the boss with the impersonal authority of
mutually agreed-upon objectives fits the lower
power distance.
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Staffing & Directing
International considerations in Leading –
–Uncertainty avoidance (UA)
Switzerland and Japan scored highest on disliking
ambiguity, whereas USA and Singapore scored
lowest. People in nations scoring high tend to want
career stability, formal rules, clear cut measures of
performance, communication should be clear and
explicit, based on facts, meetings should be
planned in advance and have clear agendas.
In contrast in Greece and Russia, people are not
used to structured communication and prefer more
open-ended meetings.
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Staffing & Directing
International considerations in Leading –
–Individualism-collectivism (I-C)
USA and Canada scored highest, Mexico and
Guatemala scored lowest. People in nations scoring
high tend to value individual success through
competition, whereas people scoring low tend to
value group success through collective
cooperation.
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Staffing & Directing
International considerations in Leading –
–Masculinity-femininity (M-F)
It is the extent to which society is oriented toward
money and things (masculine) or toward people
(feminine). Japan an Mexico scored highest (on
masculinity therefore lowest on femininity), France
and Sweden scored lowest (on masculinity
therefore highest on femininity)
People in nations scoring high tend to value clearly
defined sex roles where men dominate and to
emphasize performance and independence,
whereas people scoring low tend to value equality
of the sexes where power is shared and to
emphasize the quality of life and interdependence
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