Strategic Management A New View Of Business Policy And Planning Pdf

strategic management a new view of business policy and planning pdf

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Papers published in the Proceedings are abridged because presenting papers at their full length could preclude subsequent journal publication. Please contact the author s directly for the full papers. This paper suggests that Business Policy is generally thought of as a course, not a field of study, and that such thinking is a limitation to its development.

Planning is something that has become a habit for many, in one or more areas of our lives. However, most of the time when we do things without planning we are taking huge risks, with results that often are discouraging or unsatisfying, at best. In few areas is planning as important as it is in business. In fact, it is so important that it has a unique title: strategic management. Strategic management, especially when done well, is important for a business' long-term success.

Strategic Planning Basics

Strategy at many companies is almost completely disconnected from execution. Establishing a dedicated unit to orchestrate both will help to bridge the divide. Most large organizations fail to achieve profitable growth—despite ambitious plans. Why the gap between intended and actual performance? How to close the breach between strategy formulation and execution? Create an office of strategy management OSM. Your OSM couples the units responsible for strategic planning with those performing the activities required to implement strategy—such as establishing budgets, communicating strategy to the workforce, and designing compensation systems that reward strategic performance.

The payoff for designing an effective OSM? A corporate strategy that delivers on its promises. Create and oversee your strategy management system.

Help the executive team select performance targets and identify required strategic initiatives. To maintain integrity of performance data, create and enforce uniform organization-wide metrics. Incorporate changes in corporate strategy into all documents and tools that the company uses to track strategic performance—such as strategy maps and the Balanced Scorecard.

Align the organization. Actively manage organizational alignment with corporate strategy. Institutionalize the use of a common strategic performance reporting system by all units. Communicate strategy. Through newsletters, CEO speeches, and other channels, communicate corporate strategy, targets, and initiatives to the workforce.

Coordinate with HR to ensure that education about the strategy management process is included in training programs. Review strategy. Organize and lead monthly strategy-review meetings, briefing the CEO about strategic concerns in advance.

Document needed adjustments to strategy and execution identified during meetings and follow up to ensure that changes are implemented.

Help the chief financial officer prepare strategy updates for board meetings. Refine strategy. Evaluate new strategic ideas coming from within the organization and convey promising ones to senior management. Manage strategic initiatives. Manage strategy-related initiatives that cross unit and functional lines, to ensure they receive sufficient resources and attention. Monitor progress of all strategic initiatives and report on them to top management.

Most companies have ambitious plans for growth. Few ever realize them. In their book Profit from the Core, Chris Zook and James Allen report that between and , seven out of eight companies in a global sample of 1, large corporations failed to achieve profitable growth.

That is, these companies were unable to deliver 5. Why is there such a persistent gap between ambition and performance? The gap arises, we believe, from a disconnect in most companies between strategy formulation and strategy execution.

If the employees who are closest to customers and who operate processes that create value are unaware of the strategy, they surely cannot help the organization implement it effectively. For the past 15 years, we have studied companies that have achieved performance breakthroughs by adopting the Balanced Scorecard and its associated tools to help them better communicate strategy to their employees and to guide and monitor the execution of that strategy.

Some companies, of course, have achieved better and longer-lasting improvements than others. The organizations that have managed to sustain their strategy focus have typically established a new unit at the corporate level to oversee all strategy related activities, an office of strategy management OSM , as we call it.

This might appear to be nothing more than a new name for the familiar strategic planning unit. But the two are quite different. The typical planning function facilitates the annual strategic planning process but takes little or no leadership role in seeing that the strategy gets executed. The OSM becomes the central point for coordinating all these tasks. It does not do all the work, but it facilitates the processes so that strategy execution gets accomplished in an integrated fashion across the enterprise.

In the following pages, we will describe how the concept of the office of strategy management came into being and how it has helped companies align key management processes to strategy. Although the companies we have studied use the Balanced Scorecard as the framework for their strategy management systems, we believe that the lessons we draw are also applicable to companies that do not use the Balanced Scorecard.

The process starts about midway through the fiscal year, when the CEO and the executive team get together to clarify their strategic vision and update the strategy. Sometime afterward, similar processes take place at the business and functional units, led by unit heads and other senior executives. Toward the end of the third quarter, the finance function takes the baton, finalizing corporate and unit budgets. Throughout the year, meanwhile, different teams and units have engaged in performance reviews, corporate communication, and knowledge sharing.

The problem with this approach is that the activities are carried out largely in isolation and without guidance from the enterprise strategy.

Periodic management meetings, corporate communication, and knowledge management are similarly not focused on strategy execution. What can companies do to change this state of affairs? The experience of the Chrysler Group first suggested to us that the answer lies in bringing all strategy-related activities into a single functional unit. After a string of innovative successes in the early s, Chrysler had hit a dry spell. Once the design phase had been completed and scorecards had been cascaded throughout the company, the strategy group maintained responsibility for the data collection and reporting processes for the scorecards.

Where Chrysler broke new ground was in the roles assumed by the strategy group. The group took the lead in preparing scorecard-related materials to communicate the strategy to the more than 90, employees. Russo began to brief Zetsche before each management meeting about issues that had been revealed through the scorecard reporting and that required management attention and action.

In his capacity as a member of the executive team, Russo followed up after each meeting to make sure that the required items were communicated and acted upon. As a result of this proactive involvement in agenda setting and follow-up, the responsibilities of the business strategy function expanded to incorporate many new cross-enterprise strategy execution processes.

The U. A central project team at the Pentagon headquarters, under the leadership of the Army chief of staff, developed the initial scorecard, which the Army called the Strategic Readiness System SRS. The project team also selected the software to be used for scorecard reporting and established systems and processes so that the scorecard would be regularly populated with valid, timely data.

In the next phase, the team helped to cascade scorecards to 13 major subcommands and subsequently to more than subsidiary commands throughout the world. The centralized project team provided training, consulting, software, and online support for the dispersed project teams.

It established and took ownership of a strategy communication program. The Army team created a Web site that was accessible from around the world in both classified and unclassified versions, developed an online portal and library containing information about the SRS, wrote articles about the initiative, published a bimonthly newsletter, conducted an annual conference, led periodic conference calls with SRS leaders at each command level, and conducted scorecard training, both in person and on the Web.

This extensive communication process was critical for educating soldiers and civilian employees and gaining their support for the new strategy. A unit with responsibility for the implementation of strategy becomes a convenient focal point for ideas that percolate up through the organization. The creation of a central office for strategy execution may appear to risk reinforcing top-down decision making and inhibiting local initiative, but it does just the opposite.

These emerging ideas can then be put on the agendas of quarterly and annual strategy reviews, with the best concepts being adopted and embedded in enterprise and business unit strategies. The OSM is a facilitating organization, not a dictating one. Most of the organizations we have studied follow the path Chrysler and the Army took: The Balanced Scorecard project team incrementally and organically assumes more and more responsibilities on its own initiative.

From these cases, we have learned what functions an effective OSM must perform and how an OSM must relate to other functions within the organization. As a consequence, a few organizations we advise have recently opted to make the creation of an OSM an early and integral part of their scorecard initiatives.

As the chief executive of the nonprofit that manages the supply of blood products for all of Canada except the province of Quebec, I instituted an office of strategy management to help me cope with three big challenges in implementing a strategic agenda.

First, I spend a great deal of time dealing with external demands and constituents. In addition to reporting to the board of directors of my organization, Canadian Blood Services CBS , I must also focus on the 12 Canadian provincial and territorial governments that provide its funding. So I have limited time and information with which to manage internal issues.

Also, while many people believe that chief executives wield direct and easy influence, the reality is that any CEO has a difficult time influencing his or her organization. I want to exert my influence indirectly and in a way that empowers my executives and creates an environment in which they can lead and manage their parts of the organization. My third challenge is staying informed. Information, particularly bad news, is filtered before it gets to me.

Before our OSM was implemented, we were spending way too much time debating the quality of our information—obviously an unwieldy way of executing strategy and a very time-intensive way of conducting management meetings. I see the Balanced Scorecard, managed by an office of strategy management, as a way of overcoming these three barriers to success. The Balanced Scorecard empowers executives, as opposed to invading their territory and undermining their authority.

It gives me performance management information that is aligned at all executive levels and appropriately validated before it comes to my attention. Much of management is a search for the truth. The Balanced Scorecard provides me with easy access to timely, unfiltered information about our strategy implementation. Because of my urgent need to accomplish change, I followed the unconventional route of establishing an office of strategy management at the outset of our Balanced Scorecard project.

I also wanted the OSM to report directly to me—that was a way to highlight the importance of this office to my strategic agenda. But the OSM needed other clearly defined linkages or relationships, too; I want change at CBS to come from within, not to be imposed from above. I did not create the new corporate-level OSM unit lightly. The OSM has primary responsibility for most of these processes, but not all.

For example, in , the OSM led the project team that developed the strategy maps and scorecards for the enterprise, our three operating divisions, and two support units—human resources and information technology. For example, the chief financial officer has primary responsibility for budgeting, with the OSM playing a coordinating role. We launched the OSM with three full-time individuals.

The OSM leader is a vice president and a member of the executive management team; her position in the organization is consistent with the importance we give this function.

She leads and facilitates the integration of strategy into all our core processes.

Strategic management : a new view of business policy and planning

Strategy at many companies is almost completely disconnected from execution. Establishing a dedicated unit to orchestrate both will help to bridge the divide. Most large organizations fail to achieve profitable growth—despite ambitious plans. Why the gap between intended and actual performance? How to close the breach between strategy formulation and execution? Create an office of strategy management OSM. Your OSM couples the units responsible for strategic planning with those performing the activities required to implement strategy—such as establishing budgets, communicating strategy to the workforce, and designing compensation systems that reward strategic performance.


In Strategic Management: A New View of Business Policy and Planning, edited by Daniel E. Schendel and Charles W. Hofer. Boston: Little, Brown and Company​.


The Office of Strategy Management

It is a disciplined effort that produces fundamental decisions and actions that shape and guide what an organization is, who it serves, what it does, and why it does it, with a focus on the future. Effective strategic planning articulates not only where an organization is going and the actions needed to make progress, but also how it will know if it is successful. What is a Strategic Plan? A strategic plan is a document used to communicate with the organization the organizations goals, the actions needed to achieve those goals and all of the other critical elements developed during the planning exercise. What is Strategic Management?

In the sense of the " art of the general", which included several subsets of skills including military tactics , siegecraft , logistics etc. From then until the 20th century, the word "strategy" came to denote "a comprehensive way to try to pursue political ends, including the threat or actual use of force, in a dialectic of wills" in a military conflict , in which both adversaries interact. Strategy is important because the resources available to achieve goals are usually limited. Strategy generally involves, setting goals and priorities, determining actions to achieve the goals, and mobilizing resources to execute the actions. Henry Mintzberg from McGill University defined strategy as a pattern in a stream of decisions to contrast with a view of strategy as planning, [5] while Henrik von Scheel defines the essence of strategy as the activities to deliver a unique mix of value — choosing to perform activities differently or to perform different activities than rivals.

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Although the term "strategic management" is bantered around a lot in the business world, it is not understood very well by most people. Essentially strategic management answers the questions of "Where do you want your business to go? A strategic management analogy is taking a trip during your vacation time. First you decide where you want to go - the natural beauty of Yellowstone or the bright lights of Las Vegas. Then you develop a strategy of how to get there - take an airplane which flights , drive your car which highways , etc.

Охранник покачал головой. Он долго смотрел ей вслед. И снова покачал головой, когда она скрылась из виду. Дойдя до конца туннеля, Сьюзан уткнулась в круглую сейфовую дверь с надписью СЕКРЕТНО - огромными буквами. Вздохнув, она просунула руку в углубление с цифровым замком и ввела свой личный код из пяти цифр. Через несколько секунд двенадцатитонная стальная махина начала поворачиваться. Она попыталась собраться с мыслями, но они упрямо возвращали ее к .

 Что это. - Стратмор только сделал вид, что звонил по телефону. Глаза Хейла расширились. Слова Сьюзан словно парализовали его, но через минуту он возобновил попытки высвободиться. - Он убьет. Я чувствую. Ведь я слишком много знаю.

Сначала она едва заметно вздрогнула, словно от озноба, и тут же ее захлестнула волна отчаяния. Приоткрыв дрожащие губы, она попыталась что-то сказать, но слов не последовало.

 - Скрестив на груди руки, он вышел из ее кабинета. Мидж горящими глазами смотрела ему вслед. - О нет, можешь, - прошептала .

Губы Стратмора приоткрылись, произнеся последнее в его жизни слово: Сьюзан.

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