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STRATEGIC MANAGEMENT IN ACTION


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Contents

1.0 Introduction...........................................................................................................................................3
2.0 Case study 1 Hewlett Packard Strategy development process.........................................................3
2.1 Strategy development process Intended Strategy Strengths and Weaknesses...............................4
2.2 Strategy development process Emergent Strategy Strengths and Weakness................................4
2.3 Proposed strategy development process HP....................................................................................5
3.0 Case study 2 One Sony?.....................................................................................................................6
3.1 Organisation's configuration Structure, Systems and Strategy........................................................6
3.2 7S McKinsey's model One Sony?...................................................................................................7
3.4 Configuration dilemma One Sony?.................................................................................................8
4.0 Case Study 3 Leadership and Change Management Fiat and Chrysler...............................................9
4.1 Change Management and its Challenges Force Field Analysis.....................................................10
4.2 Types of Change by Sergio Machionne...........................................................................................10
4.3 Levers of Change.............................................................................................................................11
5.0 Conclusion...........................................................................................................................................12
References List..........................................................................................................................................14

1.0 Introduction

The management of every company is responsible for its performance and this makes it

important to strategize the management systems and to ensure that they all aim at improving the

performance of the organisation. Organisations create strategy maps to help them analyse their

plan for success. According to Johnston and Marshall (2016), there are many factors that are
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involved in the policy map whose main goal is to achieve the ultimate business goal. For

instance, leadership strategies, marketing strategy and corporate social responsibility (CSR) are

factors that helps the business in achieving is ultimate goals. The paper views several strategic

management processes and their effects on the respective businesses in the case studies. This

includes strategy development process, a configuration of management processes and the

leadership management strategies. The paper observes implication of the processes in strategic

management and offers the best strategy developed to each case.

2.0 Case study 1 Hewlett Packard Strategy development process

In 2012, Hewlett Packard's (HP's) profits were declining and it was losing its market

share despite having a high turnover of $120 billion. The main reason that attributed the decline

could be traced back to the aggravated disagreement within the board. They failed to agree on a

coherent strategy that would be used to ensure that the business was run smoothly. Since 2002,

the board was having disagreements with the CEOs, and they mostly leaked their discussions to

the public, thus creating a perfect opportunity for competitors to outdo them. They used their

political position to fire the CEOs if they failed to agree with their opinions. The board had used

the company as a way to create an avenue for their recognition by reaching out to the press and

this adversely affected the performance of the organisations.

2.1 Strategy development process Intended Strategy Strengths and Weaknesses

Intended strategy results from a formalised process and usually has a major impact on the

firm's performance. However, the specific impact on the company's performance is dependent on

the environmental factors and in the case study, performance of the company is dependent on the
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political factors (Hornstein 2015 p294). Under the intended strategy, the business has to consider

among other things the stakeholders and set a period of consultation. The application of this

strategy would see to it that HP stuck with one CEO for at least two years and that the board

comes up with a uniform decision that will be documented and used to run the company for at

least two years (Rothaermel 2015 p 65). The main advantage of the intended strategy is that there

is enough time to consult and this results in an insightful and robust strategy for the company. A

disadvantage of the intended strategy is that it requires full cooperation from the board members.

In HP, the intended strategy failed to be put in place because even if it is succinct, the boards are

usually on a mission to outdo each other and this will influence its application. In addition, the

intended strategy development usually focuses on externally imposed policy, and they might fail

to fall into the organisation's goals thus leading to their failure.

2.2 Strategy development process Emergent Strategy Strengths and Weakness

The emergent strategy is a process through which a company identifies the unexpected

outcomes from the implementation of a strategic management and then learns how to integrate

the unexpected outcomes into the company's future strategic plans (Zimmermann et al 2015

p1120). According to the case study, the emergent strategy major advantage is that it will ensure

that measures fitting the current market are taken, and it will change the company's trend (Belias

and Koustelios 2014 p34). For this strategy development to be successful in HP, logical

incrementalism should be adopted. The main shortcoming of the emergent strategy is that it

requires a firm management system that can make quick decisions. Although organisational

systems are the least influential they still play a role in the implementation of the strategy and in

HP, the organisational structure has supported the emergent approach.


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2.3 Proposed strategy development process HP

The situation at HP will be addressed using both deliberate and emergent development

strategies. The deliberate strategy will ensure that the stakeholders have to time to consider the

activities of the organisation and they will be ready to settle on specific terms that will be useful

for the good of the company. This way, the political matters that have curtailed administration in

the past will not influence the decision making process. On the other hand, the emergent strategy

will ensure that the company has the flexibility to adjust well to the current market environment

thus making the company competitive and relevant in the market (Battistella 2014 p 64). Slack

(2015) explains that the company can merge the two strategies by using the intended strategic

developments to make long-term decisions and they can use the emergent strategy to make short

term decisions. To ensure that the emergent strategy development is implemented correctly, the

organisation should revisit the vision and the goals of the company and ensure that the board

members support all of them. That way, they will make the decisions that will fit the company's

interests.
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3.0 Case study 2 One Sony?

Sony had been sinking when it appointed Kazuo Hirai as chief executive officer in 2012.

The company was losing its market shares to cheaper Asian electronic firms and a former CEO

had reduced the company's cost by cutting the workforce by about 20%. The case study explains

that to become One Sony, Hirai changed the organisational culture and promoted the "One

Sony" where all activities of the companies were interconnected (Cameron and Green, 2015

p43). The goal of One Sony would be achieved if Sony focused on strengthening the core

business of the company which included mobile devices, laptops, digital imaging, and games. By

placing all departments in the company under one management, the company would successfully

achieve the goal of One Sony.

3.1 Organisation's configuration Structure, Systems and Strategy

The organisational configuration comprises of its structure, systems and strategy and

responsible for the success of the business. The corporate structure consists of the firm's formal

configuration and its control mechanism (Harpal 2015 p 43). To become One Sony, the case

study elucidates that the company had to focus on strategic initiatives that involved improving

innovation in the integrated product areas (Cameron and Green 2015 p47). The organisational

system chosen by Hirai showed positive improvement of the operations when compared with the

previous management systems thus able to improve the system.


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3.2 7S McKinsey's model One Sony?

McKinsey's 7-S framework was developed by two consultants working for McKinsey

Company in the early 1980s and depicted that there are seven internal factors of a company that

need to be aligned to ensure that success of the organisation. The 7S are as follows
Strategy: One Sony can achieve this by benchmarking their operations against other companies

and they will be able to observe the failures of the competitors and capitalize on them (Singh

2013 p39).
System: The system needs to be changed as currently the staff is demoralised and they only do

the bare minimum. They should be given a chance to voice their opinion on how the work should

be shared and this way, their output will increase.


Structure: Sony should ensure that that the hierarchy creates responsibility and accountability to

the managers and this way, it will achieve its goals.


Shared values: It is important for Hirai to create a sustainable organisational culture that focuses

on creating One Sony through cooperation and careful consideration of the stakeholders goals

in the company.
Staff: Hirai should ensure that the staff are treated with respects as the success of the company

lies in their hands by ensuring quality work life.


Skills: The Company should re-evaluate the skills of its workers to make sure that the workers

hold their rightful positions and this will increase their productivity.
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Style: The style of leadership that will guarantee the creation of One Sony is transformational

as the company needs to completely change the existing culture (Singh 2013 p39).

3.4 Configuration dilemma One Sony?

According to the case study, when determining the company's structure the company

should take hierarchical over the network because much as the network structure promotes

knowledge exchange in the organisation, the formal hierarchies will ensure that there is control

and the company will be able to do what needs to be done (Sofat et al. 2015 p69). The hierarchal

system also ensures that someone is responsible for every department and this makes it easy to

track errors and to increase responsibility among the staff. According to Harper (2015), the

hierarchal system will ensure that the departments are assigned the managers that are

experienced in that department and they will be able to make the best decision thus increasing

the output. It will be also easy for employees in a department to exercise team work as they will

be given a specific role thus giving them a sense of belonging and usefulness in the company

(Choi et al. 2014 p 67). Between horizontal integration and vertical accountability, Hirai should

choose vertical accountability because it will promote maximum performance by subordinate

staff and that is where the organisation's main work lies. As stated in the case study, although

having a direct supervisor over staff members can appear degrading to some, it is the best way

that the company can achieve maximum output from the staff. Hirai can reduce the diminishing

effect by appointing managers who have a history of good interpersonal skills and this will

increase the cooperation of the workers. When comparing empowering and holding the ring,

empowering will ensure that the employees can initiate the much-needed innovation in the

company (Choi et al. 2014 p 69). The case study explains that the major problem facing the
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company is the lack of innovation among workers because when compared to competitors such

as apple and Samsung, the company is far behind and this trend has been at the expense of its

market share (Cameron and Green, 2015 p61). The case study explains further that the company

has already lost substantial market share and it will take everyones effort to bring it back to its

feet. It has been strict on mistakes made by workers and this has killed motivation among them

as they fear being punished for failed experiments. The company should take this risk and

provide the necessary requirements for promoting innovation among workers. It should also

create motivational offers to the employees and overlook the mistakes done when experimenting

in new products and this will improve the employees spirit. Lastly, on centralising versus

decentralising, the company should centralise the company to bring the effect of "One Sony" and

to promote standardisation of products and processes. This will be by merging all the companys

operations. The advantage of this configuration setup is that the company will benefit from the

economies of scales achieved from combining the factors of production among various

departments.

4.0 Case Study 3 Leadership and Change Management Fiat and Chrysler

The case study about Fiat and Chrysler explains that Sergio Marchionne had been

appointed CEO of Fiat and Chrysler at a time the company was experiencing losses (Hornstein

2015 p294). Although he had no direct experience in the automotive industry, his leadership

skills made it possible to change the situation in the company (Mirabeau and Maguire 2014

p1210). He observed that in Fiat, the managers expected the CEO to make all decisions and

when some duties were delegated to them they usually came up with excuses or explanations of

why they failed in a given task (Grant 2016 p98). By introducing different leadership strategies
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to both companies, Sergio was able to change the losses made by the company, and with time it

is possible that the two companies will be able to make profits again.

4.1 Change Management and its Challenges Force Field Analysis

A Force Field Analysis from the case study has been used to analyse the factors that need

to be addressed if the organisation wants to successfully implement change. In accordance to the

case study, Sergio had to implement a change in the leadership policies and he did this by

incorporating the force field analyses n the company. In the second stage, he defined the change

objective which was the leadership mode in both companies. The major challenge here was the

corporate culture that created laxity among managers (Belias and Koustelios 2014 p34). To

implement change, he sent off most of the managers and made a large number of the workforce

to retire early Hubbard et al. (2014). The case study also explains that Sergio faced a challenge of

demoralised workers and this this affected their output. Sergio successfully implemented Lewin's

stages of changes by unfreezing, he observed the need for changes and offered them the best way

to implement the changes through the change stage. On the refreezing stage, he developed new

methods that would ensure that the change stuck.

4.2 Types of Change by Sergio Machionne

Sergio implemented the transformational change as he involved the whole company from

the subordinate staff to the top management. Instead, he transformed the companies by bringing

in young and talented managers and giving them a lot of responsibilities. He held them

accountable for their actions, and this led to their cooperation and the improved performance of

the whole organisation (Belias and Koustelios 2014 p76). The transformational leadership used
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by Sergio helped him in analysing the problems experienced by the companies and formulating

ways of eradicating them. Through this change, he was able to create a positive change in the

managers as he allocated those duties and failed to give them an option of failing. He also

prepared them to be ready to take on responsibilities that did not initially belong to them (Slack

2015 p58). That way, the managers became accountable for the success of the company, and it

changed the overall company's image and with time, the two companies will be making positive

profits.

4.3 Levers of Change

Levers of change are used to incorporate different practices to the company (Rosen 2015

p13). On the first lever, he had to ensure that the current strategy of the company was no longer

effective (Simons 2013 p91). The case study explains that the employees were demoralised and

that Sergio needed to survey the company to determine the way forward. This gave him an

overview of the company's operations and the factors that needed to be changed. For instance, he

observed that the managed are relaxed and they passed or the decisions to the CEO (Hornstein,

H.A., 2015 p61). The managers also lacked cooperation amongst themselves as they used to

communicate through their secretaries instead of addressing each other directly. Sergio also

observed that the managers were not appointed on the basis of their leadership qualities but their

engineering background and much as this favoured their line of work, they failed to successfully

create a common goal for the workers under them (Alvesson, and Sveningsson 2015 p21). The

second lever of change was implemented by challenging the factors that were taken for granted

by the company and this included the laxative of the management Hill et al. (2014). Sergio had to

challenge the current administration system and after he verified that the problem laid in the
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organization culture, he realized that it would be hard to change the perception of the current

managers. He also observed that the managers who were not directly answerable to the company

were more productive as they made decisions of their own and planned to bring them aboard. On

the third lever of change, Sergio changed the operational processes and routines by sending off

most managers and bringing in fresh talent into the organisation, thus creating a different

organisational culture (Hornstein, 2015 p61). In his first lever of change he had consulted with

the workers and observed the changes they would like the company to address and he

successfully incorporated them into the system. As explained in the case study, he improved the

working conditions of the remaining workers after he gave almost two thousand workers an early

retirement. In the next lever of change, the changes implemented in the previous levels were

observed and adjusted to fit the company's goals (Hornstein 2015 p294). The case study explains

that he set high goals and although the team was unable to achieve most of them, the goals set

them in the right direction (Halkias et al., 2017 p12). In addition, he tried to create a balanced

work life for the employees by renovating the company to fit their requirements and the

company opened grocery stores and kindergarten to help their workers balance between their

work and family duties (Hornstein, 2015 p61). The power and the political systems where the

last to be changed and they cemented a new organisational culture that will help the company in

being profitable again. The same mode of change was applied to Chrysler and with time the two

companies will be highly profitable.

5.0 Conclusion

Strategic management is important in implementing changes in organisations especially

when they are not performing as expected. In the above case studies, the different companies

needed to have a strategic change management strategy that would enable them to change their
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fortunes. In the first case study, HP would experience the desired change if they combined the

intended strategy and the emergent strategy. The organisational configuration had to be adjusted

to ensure that it brought about the desired change in Sony as the CEO envisioned for the

company. In the third case study, it was evident that expense in a given field is not as paramount

as the ability to bring about leadership and change management. Strategic management ensures

that a company is able to achieve its goals and stay on the path required, but it is important for

the stakeholders of the organisation to be patient as change takes a long time to be implemented

in a company as depicted in the three case studies.

References List
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reconfigured groups. Journal of Cognitive Psychology, 26(1), pp.65-80.


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Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.
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