Strategy Implementation: Strategy Implementation Staffing and Directing Staffing: Staffing The implementation of new strategy often calls new HRM. It could require hiring of new skills or firing of inappropriate skills or training existing employees to learn new skills. If growth strategy is adopted than new employees need to be hired. Experienced people with necessary skills need to be found for newly created managerial positions. If growth is by acquisition, some of the managers of acquired Co. may need to be replaced. It may become very difficult to replace highly skilled and experienced managers. Many Co. appoint Integration managers to see through implementation process of acquisition. Characteristics of Integration Manager: Characteristics of Integration Manager Deep knowledge of acquiring company. Flexible management style. Ability to work in cross functional project teams. Willingness to work independently. Sufficient emotional and cultural knowledge of acquiring co. In case of retrenchment strategy, process is different. Staffing Follows Strategy: Staffing Follows Strategy Hiring and training requirement change:- Either hire new people or retrain current employees Like YMDP at Dabur, each management trainee goes through a rigorous training in many functions. One way to implement a co. strategy , such as overall low cost, is through training and development . Indian Cos. Like Tata group and Infosys give lots of emphasis to training. During downsizing, remaining people will have to be trained well to take care of jobs which others were doing . (GE’s aircraft group maintained market share) At Motorola every $1 invested on training delivers $30 in productivity gains in 03 years. PowerPoint Presentation: Matching the managers to the strategy:- A corporation following a concentration strategy, emphasizing vertical or horizontal growth would want aggressive CEO with lots of experience in that industry. A diversification strategy , calls a person with analytical mind (an analytical portfolio manager). Stability strategy, needs CEO a cautious profit planner. Weak company will need turnaround specialist. If a co. can not be saved, a professional liquidator might be called by a bankruptcy court to close the firm and liquidate its assets. Exercise: Exercise Find the CEOs of following companies for last 20 years and their specialization. TISCO TCS PepsiCo GE General Motors Goldman Sachs Proctor and Gamble Selection and Management Development: Selection and Management Development Insiders Versus Outsiders (Succession):- It is specially important for Cos that promotes from within. Cos known for being excellent training grounds for executive talent are HLL, TVS, Infosys. TCS, Citicorp, GE, HP, Microsoft etc. Many of the boards help CEO to create a succession plan. They measure inside candidates with outside candidates. Prosperous firms look out side only when no suitable candidates are available inside. Firms in trouble, however choose outsiders to lead them. Boards realize that the best way to force change in strategy is to hire new CEO with no connection to current strategy. Identifying Abilities and Potential: Identifying Abilities and Potential By establishing sound performance appraisal system. Using assessment centers. At these centers:- By special interviews. Management games. In basket exercises Leaderless group discussion Oral Presentation. Job rotation. Example:-How HP identifies potential executives? Problems in Retrenchment: Problems in Retrenchment Downsizing or right sizing, is planned elimination of position or jobs. Used to implement retrenchment strategy. If not done properly downsizing may result in loss. Hence only those people must be removed who are least productive. After the retrenchment less people will have to do the job of more people, hence some compensation must be given. Guidelines for Successful Downsizing: Guidelines for Successful Downsizing Eliminate unnecessary work instead of making across the board cut. Contract out work that others can do cheaper. Plan for long run efficiencies. Communicate the reason for actions. Invest in remaining employees. Develop value added jobs to balance out job elimination. (May be what suppliers are doing) International Issues in Staffing: International Issues in Staffing A complete package for one US executive working in another country will cost from $300,000 to $1000,000 annually. Still 10% to 20% return back without completing tenure because of job dissatisfaction or difficulty in adjusting. The common mistake is failing to educate the person about the customs in other country. This is because most HR managers do not have international exposure, hence they fail to design suitable training programme . PowerPoint Presentation: People who are deputed to other countries are to be trained on intercultural issues. Assignments must be as long as 5 years or more. Once the corporation is established into another country, it hires and promotes people from that country. Another approach is to use people of international orientation regardless of their country of origin. This is a widespread practice among European firms. Managing Corporate Culture: Managing Corporate Culture Culture exerts a powerful influence on the behaviour of employees. A problem of strong culture is that a change in any strategy will not be accepted if it goes against its culture. Mitsubishi corporation and its expansion in north America. There is no best culture, best is that which supports the mission and strategy of the company. PowerPoint Presentation: Assessing strategy- culture Compatibility Is the planned Strategy compatible with the current culture Tie changes into the culture Can the culture be modified to make it more compatible with the new strategy Introduce minor culture changing activities Is management willing to make major organizational changes and accept probable delays and likely increase in cost Manage around the culture by establishing new structural unit to implement the strategy Is management still committed to implementing the strategy Find joint-venture partners or contract with another co. to carry out the strategy Formulate the different strategy No No yes yes No yes No Managing Diverse Culture Following an Acquisition: Managing Diverse Culture Following an Acquisition Very important when the cultural gap between the acquired co. and acquiring co. is very wide. If cultural gap is not reduced fast, many valuable talent will live the company. There are 04 methods to managing these cultural differences and the choice of method will depend on:- How much members of acquired firm value preserving their own culture? How attractive they find the culture of acquirer? PowerPoint Presentation: Integration:- When acquirer’s culture is attractive and also acquired member value strongly their own, we must integrate. It merges two cultures in such a way that the separate culture of both are preserved. Partnership of equals. Assimilation:- Acquirer’s culture is found to be attractive but self culture is not valued. The acquired firm surrenders its culture and adopts the culture of acquiring Co. PowerPoint Presentation: Separation:- Acquirer's culture is not at all attractive but people give high value to own culture. They are structurally separated, without cultural exchange. Deculturation:- When acquirer’s culture is not attractive and self is also not valued. One of the Co. culture is disintegrated and the culture of other is imposed. This is most common and most destructive method of dealing with two different cultures. Assignment: Assignment All the students are to read case study titled “Admiral assimilates Maytag’s culture” What is the major difference between two cultures? How did Maytag company Present Mr. Hedley manage it? Action Planning: Action Planning It is the way to achieve strategic goals. Action plan states What actions are going to be taken By whom During what time frame With what expected result It serves as link between strategy formulation and evaluation and control. What needs to be done differently. It helps in appraisal of performance and identification of remedial action. Exercise: Exercise Identify at least one company which have recently adopted a new strategy. What action plan it made to implement at least one programme. Before doing this activity understand the action plan given at table 9-1 Other Methods to Implement Strategy: Other Methods to Implement Strategy Management By Objective (MBO). Total Quality Management:- It is an operational policy committed to customer satisfaction and continuous improvement. To be best in all functions. TQM aims to reduce cost and improve quality and hence can be used to implement low cost and differentiation strategies. TQM will be successful in those companies where commitment is from top management.