Strategic management global cultural perspectives for profit and non profit

Strategic Management This page intentionally left blank Strategic Management Global Cultural Perspectives for Profit and Non-Profit Organizations Marios I Katsioloudes, Ph.D Professor of Management School of Business and Management American University of Sharjah United Arab Emirates AMSTERDAM  BOSTON  HEIDELBERG  LONDON NEW YORK  OXFORD  PARIS  SAN DIEGO SAN FRANCISCO  SINGAPORE  SYDNEY  TOKYO Butterworth Heinemann is an imprint of Elsevier Butterworth Heinemann is an imprint of Elsevier 30 Corporate Drive, Suite 400, Burlington, MA 01803, USA Linacre House, Jordan Hill, Oxford OX2 8DP, UK Copyright ß 2006, Elsevier Inc 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 Permissions may be sought directly from Elsevier’s Science & Technology Rights Department in Oxford, UK: phone: (þ44) 1865 843830, fax: (þ44) 1865 853333, You may also complete your request on line via the Elsevier homepage (http://elsevier.com), by selecting ‘‘Support & Contact’’ then ‘‘Copyright and Permission’’ and then ‘‘Obtaining Permissions.’’ Recognizing the importance of preserving what has been written, Elsevier prints its books on acid free paper whenever possible Library of Congress Cataloging in Publication Data Katsioloudes, Marios I Strategic management : global cultural perspectives for profit and non profit organizations / by Marios I Katsioloudes p cm Rev ed of: Global strategic planning Includes index ISBN 7506 7966 (pbk : alk paper) Strategic planning Nonprofit organizations Globalization I Katsioloudes, Marios I Global strategic planning II Title HD30 28 K3755 2006 658 4’012 dc22 2005024536 British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN 13: 978 75 067966 ISBN 10: 75 067966 For information on all Elsevier Butterworth Heinemann publications visit our Web site at www.books.elsevier.com Printed in the United States of America 05 06 07 08 09 10 10 This work is dedicated to the memory of my beloved parents, Ioannis and Vasiliki, and to my hometown of Famagusta, Cyprus, whose citizens have inspired and challenged me throughout my life This page intentionally left blank Foreword x Acknowledgments xiv Introduction xv PART ONE: AN OVERVIEW OF THE STRATEGIC PLANNING PROCESS 1 An Introduction to the Strategic Planning Process (SPP) Introduction The Importance of Strategic Management and Planning Dynamic Strategic Management Process Important Terms in Strategic Management Strategic Levels 14 Stakeholders and Stakeholder Management 20 Organizational Strategists 24 The Case for Planning 31 Cultural Influences on the Strategic Planning Process 31 The Strategic Importance of Understanding the Global Environment 32 Summary 33 Discussion Questions 33 Endnotes 34 Contemporary Issues in the Strategic Planning Process 37 Introduction 37 Diversity: The Changing Workplace 38 Corporate Social Responsibility and Ethics 39 Benchmarking 46 Technology as a Strategic Weapon 47 Small Business and Entrepreneurship 50 Strategic Management in Nonprofit and Public Organizations 59 Overview of Global Strategic Planning 61 Summary 62 Discussion Questions 63 Endnotes 63 Contents vii viii Contents PART TWO: STRATEGY FORMULATION 67 External Strategic Audit 69 Introduction 69 SWOT Analysis 69 Environmental Scanning and the Value of Information 73 The Role of the Environment 76 The Concept of Strategic Groups 77 Industry Analysis 82 Forecasting 88 Industry Financial Averages 92 Summary 94 Discussion Questions 94 Endnotes 95 Internal Strategic Audit 99 Introduction 99 SWOT Analysis 100 The Mckinsey 7-S Framework 104 The Balanced Scorecard 106 Porter’s Value Chain Approach 108 Functional Areas of the Business and Strategic Management 110 Organizational Structure 114 Organizational Culture 122 Financial Ratio Analysis 127 Summary 130 Discussion Questions 131 Endnotes 132 Strategic Options—Corporate Level 135 Introduction 135 Corporate Strategy 135 Growth Strategies 136 Stability Strategy 149 Retrenchment Strategies 150 Portfolio Management Approaches 152 Niche Strategy 157 Summary 159 Discussion Questions 160 Endnotes 160 Strategic Choice Options—Business and Functional Levels 165 Introduction 165 Business-Level Strategies 165 Porter’s Generic Competitive Strategies 170 The Importance of Risk Propensity in Strategic Decisions 176 The Impact of the Quality Movement 179 Functional Level Strategy 182 Summary 191 Discussion Questions 192 Endnotes 192 PART THREE: IMPLEMENTATION, EVALUATION AND CONTROL 197 Implementing Strategies in the Business and Functional Levels 199 Introduction 199 What Is Implementation? Why Is It So Important? 200 Programs, Budgets, and Procedures 202 Organization Structure as a Strategic Implementation Variable 204 Organizational Culture as a Strategic Implementation Variable 209 Managerial Leadership as a Strategic Implementation Variable 214 Summary 219 Discussion Questions 219 Endnotes 220 Evaluation and Control in Strategic Planning 223 Introduction 223 The Importance of Strategic Control 224 The Process of Evaluating Strategies 228 Six Evaluation and Control Process Steps 234 Summary 239 Discussion Questions 240 Endnotes 240 PART FOUR: THE STRATEGIC PLANNING PROCESS IN THE NONPROFIT SECTOR 243 A Strategic Planning Process (SPP) Model for the Nonprofit Sector 245 Introduction 245 Public-Private Distinctions and Strategic Management 248 Summary 266 Discussion Questions 267 Endnotes 267 10 Strategic Market for the Public and the Nonprofit Sectors 269 Introduction 269 The Importance of Strategic Marketing 270 Profit versus Nonprofit Marketing 271 Marketing Research 274 Identification of Competitors 279 Fund Raising as a Strategic Marketing Technique 281 Are Marketing, Selling, and Development the Same? 286 Is Marketing Needed in the Nonprofit Organization? 288 Orientation Toward Marketing 289 Advertising 296 The Marketing Plan 303 Summary 306 Discussion Questions 306 Endnotes 307 PART FIVE: THE GLOBAL ENVIRONMENT 309 11 A Framework of Global Strategic Planning 311 Introduction 311 Overview of Global Strategic Planning 312 Global Political Economy: Foreign Direct Investment (FDI), Trade, Financial Flow, and Technology Transfer 314 FDI Prospects 320 Prospects for Major Host and Home Countries 322 The Role of the Transnational Corporations (TNCs) 323 The Strategic Planner in a Global Multicultural Environment 327 Summary 330 Discussion Questions 330 Endnotes 331 12 Doing Business with Newly Emerging Market (NEM) Economies 333 Introduction 333 The Reform Process 335 Market Conditions and Strategic Management/Planning 356 Poland, Hungary, and the Czech Republic: Reform Process 368 Summary 372 Discussion Questions 372 Endnotes 373 Index 375 ix Contents What global market conditions have intensified the interest in transitional economies? What are the obstacles in penetrating the markets in transitional economies? Briefly describe and discuss the reform process in Russia, China, Brazil, and South Africa What are the strategic implications for foreign direct investment in each of the four transitional economies? What are the cultural characteristics in each of the four transitional economies? How these characteristics facilitate the strategic planning process? What is the impact of culture on the strategic planning process in these transitional economies? How does each of the four transitional economies attract FDIs based on the existing market conditions? Give reasons as to why Poland, Hungary, and the Czech Republic represent the furthest advances of all transitional economies in terms of the reform process Endnotes Farid Elashmawi and R Philip Harris, Multicultural Management 2000: Essential Cultural Insights for Global Business Success (Gulf Publishing Co., 1998) P R Harris and R T Moran, Managing Cultural Differences Leadership Strategies for a New World of Business (Butterworth Heinemann, 2001), p 373 The Economist, July 19, 1998, pp 19 21; also New York Times, August 23, 1998, WK6 See also www.columbusguides.co.uk/data/rus/rus490.asp Elashmawi and Harris, op cit., p 68 Mark A Groombridge, ‘‘The Case for China’s Accession to the WTO’’ Harvard Asia Quarterly (Spring 2000), pp 10 See www.tdctrade.com/main/china.htm# Elashmawi and Harris, ibid., p 269 270 See www.tdctrade.com/main/china.htm# See http://www.buybrazil.org/econ/html 10 See http://en.wikipedia.org/wiki/Brazil#Economy 11 Philip and Moran, ibid., p 269 12 Pablo Fonseca P dos Santos, ‘‘Brazil’s Remarkable Journey,’’ Finance and Development, A Quarterly Magazine of the IMF (June 2005) Volume 42, Number 13 Ibid., pp 429 430 14 The Investment Climate Statement 2000 South Africa; U.S State Department; 2000 15 Ibid 16 http://en.wikipedia.org/wiki/Economy of South Africa#Environment 17 Harris and Moran, ibid., p 437 438 18 See http://bizchina.chinadaily.com.cn/openews.shtml?id 354 19 http://Buybrazil.org/econ.html: Brazil: Economic Prospects 20 The Investment Climate Statement 2000 South Africa; U.S State Department, 2000 373 Doing Business with Newly Emerging Market (NEM) Economies 374 The Global Environment 21 http://en.wikipedia.org/wiki/Economy of South Africa 22 Roman Frydman et al., The Privatization Process in Central Europe (New York: Central European University Press, 1993) 23 http://www.nationmaster.com/encyclopedia/Economy of Poland 24 http://www.budapesthotels.com/touristguide/Economy.asp 25 http://www.cia.gov/cia/publications/factbook/geos/ez.html#Econ A AAA (American Automobile Association’s), 292 294 AACSB (American Assembly of Collegiate Schools of Business), 44 AARP (American Association of Retired Persons), 295 acculturation, 146, 147 Ackoff, Russell, 246 acquisitions, 139 147, 177 ACSA (Airports Company of South Africa), 353 activity ratios, 129 advertising, 290, 296 303 advisory board, 57 African Growth and Opportunity Act (AGOA), 355 African National Congress (ANC), 351 Afrikaners, 351 AGOA (African Growth and Opportunity Act), 355 airline industry, 171 172 Airports Company of South Africa (ACSA), 353 American Assembly of Collegiate Schools of Business (AACSB), 44 American Association of Retired Persons (AARP), 295 American Automobile Association’s (AAA), 292 294 American culture, 328 329 American Marketing Association, 111 American Society for Quality and Reliability, 180 181 ANC (African National Congress), 351 Antitrust Division of the Justice Department, 143 antitrust/monopolistic cases, 149 anti union discrimination, 366 Arab culture, 328 329 ASEAN (Association of Southeast Asian Nations), 343 Asian Wall Street Journal, 360 ASK A NURSE program, 61 Aspiration Statement, 45 assimilation, 147 Association of Southeast Asian Nations (ASEAN), 343 associations, 282 attention, 217 audits, see external strategic audits; internal strategic audits authority, 207, 263, 266 automobile manufacturing, 48 average inventory, 129 B Balanced Scorecard, 106 108 Behling, Orlando, 18 below average performance, 174 175 benchmarking, 46 47 Berkeley, George, 269 Berrard, Steven R., 215 board of directors, 24 26 Board of Trustees, 27 bonus offers, 294 borderless world concept, 312 Boston Consulting Group matrix, 153 155 Bowditch, James, 20 brand loyalties, 86 Brazil, 346 351, 361 363 budgets, 202 204, 249 building block functions, 206 Buono, Anthony, 20 bureaucratic management methods, 48 Bureau of Labor Statistics, 246 business, see small business Index 375 376 Index business ethics, 43 business level strategies, 165 170 business units and strategic business units (SBUs), 167 168 concept of strategic advantage, 168 170 overview, 165 167 business plan, 51 business unit level, 15 business units and strategic business units (SBUs), 167 168 Business Week’s Annual Design Awards, 186 buyers, bargaining power of, 87 88 C CAAA (Comprehensive Anti Apartheid Act of 1986), 352 capital budgeting, 188 189 capital requirements, 84 Carroll, Archie B., 39 Carroll, Lewis, 135 case for planning, 31 causal modeling, 90 cause effect relationship, 90 CEE countries, 322 Center for Business Ethics, 44 Central and Eastern Europe, 368 369 centralization, 206 centrally planned economies (CPE’s), 338 CEOs (chief executive officers), 28 involvement in marketing, 305 306 outside directors, 29 CEPA (Closer Economic Partnership Arrangement), 343, 345 CFOs (corporate chief financial officers), 178 charismatic leaders, 29 charities, 262 chief executive officers, see CEOs China, 342 346, 359 361 Civil Rights Act of 1964, 39 Closer Economic Partnership Arrangement (CEPA), 343, 345 coalition of interests, 260 261 codes of ethics, 210 coerciveness, 257 258 collaboration, 252, 256 collection period, 129 collection policies, 129 Columbia Pictures, 142 community awareness, 288 community institutions, 282 competitive advantages, 108 competitiveness, 312 Competitive Position, 155 Competitive Profile Matrix (CPM), 79 81 competitors, 86 identification of, 279 281 competitive analysis, 280 prioritizing and targeting competition, 280 281 of non profit organizations, 272 273 rivalry between, 86 87 strengths and weaknesses analyzed, 280 281 threats, 72 complex organizational structure, 256 Comprehensive Anti Apartheid Act of 1986 (CAAA), 352 computerized information systems, 277 concentric diversification, 143 conceptualizations, 18 conglomerate diversification, 142 conglomerate oriented growth, 202 consensus management, 219 constraints, 254 255 Consumer Reports, 42 contingency theory concepts, 204 continuous process technology, 48 contractual agreements, 182 control, see evaluation and control control process, 223 conversion process, 186 cooperation, 252 core periphery relations, 326, 331 corporate chief financial officers (CFOs), 178 corporate codes of ethics, 44 Corporate Criminal Liability legislation, 41 corporate level, 15, 136 corporate resource productivity, 183 corporate social responsibility (CSR), 39 41 corporate social responsiveness, 41 42 corporate strategy, 135 136 cost advantages, 85 cost/benefit analysis, 182 cost control, 204 cost leadership, 171 CPE’s (centrally planned economies), 338 CPM (Competitive Profile Matrix), 79 81 crisis management, 74 75 CRM (customer relationship management), 179 Crosby, Philip, 180 crosscultural environment, 312 cross training, 190 CSR (corporate social responsibility), 39 41 cultural influences on strategic planning process, 31 32 cultures, 50, 125; see also organizational culture currency exchange rates, 76 current ratio, 128 customer/brand loyalty, 173 customer perspective, 107 customer relationship management (CRM), 179 customer service, 123 cyclical fluctuations, 90 Czech Republic, 371 372 D Dakin, Stephen, da Silva, Luiz Ina´cio Lula, 349 debt ridden governments, 325 decentralization, 206, 207 deculturation, 147 de Klerk, F.W., 351, 352 De Loor, Joop, 364 Delphi Group procedure, 90 91 demand, creating, 272 Deming, W Edwards, 180 Deming Prize, 180 developed countries, 326 developing countries, 323 326 development, compared to marketing, 286 288 differentiation dimension, 174 differentiation strategy, 172 173 direct competition, 86 direct marketing, 172, 291, 292 discretionary responsibilities, 39 distinctive competencies, 101, 110 distribution channels, 85 distribution costs, 297 distribution policies, 184 diverse markets, 38 diversification, 140, 141 diversity among employees, 38 divestment, retrenchment via, 151 divisional resource productivity, 183 downsizing, 144 146, 190 Drucker, Peter, 13, 55, 191, 313 E earnings before interest and taxes (EBIT), 130 EBRD (European Bank for Reconstruction and Development), 336 Eckel, Norman, 18 economic decline, 76 economic growth, 76 economic order quantity (EOQ) formula, 186 economic responsibilities, 39 economies of scale, 84, 115 EFE (External Factor Evaluation) matrix, 81 82 efficiency measures, 262 Eisner, Michael, 99 Elashmawi, Farid, 336, 342 employees aftermath from downsizing, 144 empowered, 228 hiring, 59 resistance to change, 233 entrepreneurs successful characteristics of, 55 56 value to company’s strategy, 56 what they are, 54 55 entrepreneurship, whether different from small business, 54 environment, 76 77 environmental assessments, 256 environmental issues, 44 environmental legislation, 72 environmental opportunity, 71 environmental scanning, 31, 47, 74 EOQ (economic order quantity) formula, 186 EPA (United States Environmental Protection Agency), 72 equity measures, 262 eroding market share, 211 212 escalating commitment, 179 ethics, 42 46 European Bank for Reconstruction and Development (EBRD), 336 European Union, 62 evaluation and control, 19 20, 223 242 importance of strategic control, 224 228 intended and realized strategies, 224 225 renewal factor, 225 228 overview, 223 224 process of evaluating strategies, 228 234 measuring organizational performance, 230 232 strategy evaluation framework, 229 230 taking corrective actions, 232 234 steps in process, 234 239 comparing performance to standards, 237 238 determining reasons for deviations, 238 determining what to control, 234 236 measuring performance, 236 237 setting control standards, 236 taking corrective action, 238 239 Exchange Controls authorities, 367 executive branch, 352 export orientation, 325 external environmental, 312 External Factor Evaluation (EFE) matrix, 81 82 external growth acquisitions, 139 144 joint ventures, 147 149 mergers, 138 139 377 Index 378 Index external strategic audits, 69 97 concept of strategic groups, 77 82 Competitive Profile Matrix (CPM), 79 81 External Factor Evaluation (EFE) matrix, 81 82 overview, 77 79 environmental scanning and value of information, 73 75 forecasting, 88 92 overview, 88 89 qualitative forecasting methods, 90 92 quantitative forecasting methods, 89 90 industry analysis, 82 88 bargaining power of buyers and suppliers, 87 88 intensity of rivalry between competitors, 86 87 overview, 82 83 pressure from substitute products, 87 strategic implications of, 88 threat of new industry entrants, 83 85 industry financial averages, 92 97 overview, 69 role of environment, 76 77 macroeconomic environment, 76 77 overview, 76 political legal environment, 77 sociocultural environment, 77 SWOT analysis, 69 72 opportunities, 70 71 overview, 69 70 threats, 71 72 F failure of small business, 51 54 FCC (Federal Communications Commission), 143 FDA (Food & Drug Administration), 42 FDI, see foreign direct investment Federal Communications Commission (FCC), 143 Federal Trade Commission (FTC), 143 finance/accounting strategy, 188 189 finance and accounting functions, 112 financial analysis, 93 financial control, 53 financial interest/syndication rules, 143 financial ratio analysis, 127 134, 188 activity ratios, 129 leverage ratios, 130 134 liquidity ratios, 128 129 overview, 127 128 profitability ratios, 129 130 financing private organizations, 253 firm infrastructure, 109 fiscal policies, 350 Fiscal Responsibility Law, 349 Floyd, Steven, 19 focus strategy, 173 174 Food & Drug Administration (FDA), 42 force field analysis, 212 Ford, Henry, 99 forecasting, 88 92 overview, 88 89 qualitative methods, 90 92 quantitative methods, 89 90 foreign direct investment (FDI), 314 320 leading sources of, 323 prospects, 320 321 top destinations for, 322 323 founders of organizations, 124 Franco, Itmar, 347 Friedman, Milton, 37, 40 friendly takeovers, 146 FTC (Federal Trade Commission), 143 full page advertisers, 299 functional level strategy, 15 16, 182 196 finance/accounting strategy, 188 189 functional strategic decisions possibilities overview, 183 human resource strategy, 189 196 marketing strategy, 183 184 overview, 182 183 production/operations management strategy, 186 188 research and development strategy, 185 186 functional structure, 114 115 functions, 110 114 finance and accounting functions, 112 management function, 111 marketing function, 111 112 overview, 110 111 production/operations function, 112 113 research and development function, 113 114 fund raising, 281 286 G Galoob, Robert, 121 Galvin, Christopher, 217 218 Gates, Bill, 165 GATS (General Agreement on Trade in Services), 326 GDP (gross domestic product), 354 355, 359 GEM (Growth Enterprise Market), 346 General Agreement on Trade in Services (GATS), 326 General Electric, 318 General Electric Business Screen, 155 157 geographical structure, 117 Gimpel, Martin, global environment, 32 33 Global Inward FDI Stock, 320 global strategic planners/managers, 356 global strategic planning, 311 331 foreign direct investment (FDI) prospects, 320 321 global political economy, 314 320 overview, 61 66, 311 314 prospects for major host and home countries, 322 323 role of transnational corporations (TNCs), 323 327 strategic planner in global multicultural environment, 327 330 goals, 12 13, 261 263 goodwill, 291 government policy, 85 gray economy, 342 Gray Matters board game, 45 gross advertising revenue, 298 gross domestic product (GDP), 354 355, 359 groups, see strategic groups Growth Enterprise Market (GEM), 346 growth perspective, 107 growth strategies, 136 149 downsizing in an acquired company, 144 146 external growth acquisitions, 139 144 joint ventures, 147 149 mergers, 138 139 internal growth, 137 138 overview, 136 137 special case of organization culture in acquisitions, 146 147 H hands off management, 215 hands on management, 215 Harper, Stephen, 18 Harris, Philip R., 329, 336, 338, 342 Haub School of Business, 172 173 high context cultures, 356 high debt ratio, 189 high margin customers, 172 high performance culture, 237 high synergy organizations, 140 Hong Kong, 343, 345 347 Horizonte, Belo, 362 hospitality industry, 78 hospital strategies, 60 61 hostile takeovers, 139, 146 house advertising, 299 Huizenga, Wayne, 215 human resource management, 109, 111, 191, 213 214 human resource strategy, 189 196 Hungary, 370 371 I identity enhancing devices, 265 idle inventories, 187 IFE (Internal Factor Evaluation) matrix, 103 104 IMF (International Monetary Fund), 341 IMF led international support program, 348 impact of quality movement, 179 182 implementation, 19, 199 222, 229 managerial leadership as strategic implementation variable, 214 219 establishing leadership and implementation linkage, 216 217 influence of leaders, 215 216 value of participatory management in implementation, 217 219 organizational culture as strategic implementation variable, 209 214 cultural change to enhance implementation, 209 211 human resource implications of organizational culture, 213 214 total quality management implementation, 212 213 types of cultures supporting change, 211 212 organization structure as strategic implementation variable, 204 208 guidelines for finding structure to follow strategy, 205 208 organization chart, 205 overview, 199 202 programs, budgets, and procedures, 202 204 for small businesses, 58 tools for, 202 inbound logistics, 109 incentives, 264 265 industry analysis, 82 88, 108 bargaining power of buyers and suppliers, 87 88 intensity of rivalry between competitors, 86 87 overview, 82 83 pressure from substitute products, 87 strategic implications of, 88 threat of new industry entrants, 83 85 industry attractiveness, 155 industry growth rate, 153 inflation, 76 information gathering for marketing, 274 279 379 Index 380 Index deciding what organization needs to know, 274 275 organization identifies its market, 275 276 questionnaires and interviews, 277 279 trends and patterns, 276 277 information technology, 49 innovations, 190 In Search of Excellence, 142 institutional investors, 26 interactive planning, 246 interest rates, 76 internal business process perspective, 107 internal environment, 270, 312 Internal Factor Evaluation (IFE) matrix, 103 104 internal growth, 137 138 internal organizational variables, 110 internal processes, 261 265 authority limits, 263 goals, 261 263 incentives, 264 265 performance expectations, 263 264 internal strategic audits, 99 134 Balanced Scorecard, 106 108 financial ratio analysis, 127 134 activity ratios, 129 leverage ratios, 130 134 liquidity ratios, 128 129 overview, 127 128 profitability ratios, 129 130 functional areas of business and strategic management, 110 114 finance and accounting functions, 112 management function, 111 marketing function, 111 112 overview, 110 111 production/operations function, 112 113 research and development function, 113 114 Mckinsey S framework, 104 106 organizational culture, 122 127 culture and strategic change, 123 124 overview, 122 123 types of, 125 127 organizational structure, 114 122 functional structure, 114 115 geographical structure, 117 matrix structure, 117 120 network structure, 120 122 overview, 114 product structure, 116 117 overview, 99 Porter’s value chain approach, 108 110 SWOT analysis, 100 104 Internal Factor Evaluation (IFE) matrix, 103 104 overview, 100 strengths, 100 102 weaknesses, 102 103 internationalization, 62 international mineral production, 362 International Monetary Fund (IMF), 341 international patterns of trade flows, 324 Internet for advertising, 296 internal information source, 75 interviews, 277 279 intuition in strategy formulation, 17 19 intuitive decisions, 56 inventory control, 71, 129, 186, 187 investments, 188 J Jackson, Michael J., 215 Japanese culture, 328 329 JIT (just in time inventory), 187 Jiwei, Lou, 360 joint decision making teams, 215 joint ventures, 147 149 judicial branch, 352 just in time inventory (JIT), 187 K Kellogg School of Northwestern University, 60 Key Business Ratios, 128 L Labor Code, 365 labor management disputes, 366 labor relations, 191 Labor Relations Act, South Africa, 365 366 laissez faire approach, 40 LDC (less developed country), 49 LDO (three year budget directive law), 350 351 leadership, see managerial leadership learning organizations, 212 learning perspective, 107 108 legislative branch, 352 less developed country (LDC), 49 leverage ratios, 130 134, 189 liability insurance, 25 liberalization, 340 liquidation, retrenchment via, 151 152 liquidity ratios, 128 129 little big business syndrome, 51 low context cultures, 356 low low low low cost production, 171 debt ratio, 189 fare airlines, 171 synergy organizations, 140 M Mackenzie, R Alec, 3, macroeconomic environment, 76 77, 351 Malcolm Baldridge National Quality Award, 16, 179 180 Management by Objectives (MBO), 216 management by walking around (MBWA), 216 management function, 111 management information systems, 49 managerial leadership, 215; see also managers as strategic implementation variable, 214 219 establishing leadership and implementation linkage, 216 217 influence of leaders, 215 216 value of participatory management in implementation, 217 219 managerial universalism, 313 managers, 227 228; see also managerial leadership in benchmarking, 47 incompetence in small businesses, 52 in public organizations, 256 top, as strategy formulators, 28 30 Mandela, Nelson, 352 marginal stakeholder, 22 market conditions and strategic management/planning, 356 368 Brazil, 361 363 China, 359 361 Russia, 357 359 South Africa, 363 368 market dominance, 138 market driven economies (MDEs), 338 marketing, 109, 269 308 activities, 289 advertising, 296 303 budget, 304 compared to selling and development, 286 288 concepts, 289 fund raising, 281 286 identification of competitors, 279 281 competitive analysis, 280 prioritizing and targeting competition, 280 281 importance of, 270 271 marketing plan, 303 306 overview, 269 270 profit versus nonprofit marketing, 271 273 research for, 274 279, 303 strategies, 292 296 techniques, 290 292 whether needed in nonprofit organization, 288 289 marketing function, 111 112 marketing orientation, 286, 287, 289 marketing strategy, 183 184 market penetration strategy, 61 marketplace analysis, 281 markets, 249 254 market segmentation, 183 184 market share, 86, 269 Marshall, George C., 223 mass mailing, 293 mass privatization scheme, 341 mass production technology, 48 matrix structure, 117 120 Mbeki, Thabo, 353 MBO (Management by Objectives), 216 MBWA (management by walking around), 216 MCA, 139 Mckinsey S framework, 104 106 MDEs (market driven economies), 338 MDGs (Millennium Development Goals), 316 media coverage, 291 Megatrends, 10, 73 membership marketing, 295 mental imagery, 74 Mercado Comun Del Sur (MERCOSUR), 346 MERCOSUR (Mercado Comun Del Sur), 346 mergers, 138 139, 177 MFN (Most Favored Nation) trade, 342 migrant worker hostels, 364 migratory citizens, 364 Millennium Development Goals (MDGs), 316 mindset/organizational culture, 254 Mintzberg, Henry, 7, 224 mission, 11 moral schizophrenia, 44 Moran, Robert T., 329, 338 Morita, Akio, 313 314 Most Favored Nation (MFN) trade, 342 multilateral strategic management/planning, 336 338 multiple product firms, 152 multiple SBU firms, 168 Munro, David, 91 MyGMLink online service, 120 121 N NAFTA (North American Free Trade Agreement), 62, 346 381 Index 382 Index Naisbitt, John, 73 national culture, 32 NED, see Newly Emerging Democracies NEM, see Newly Emerging Market economies nemawashi, 210 networks, referral, 291 network structure, 120 122 Newly Emerging Democracies (NED), 333, 334 Newly Emerging Market (NEM) economies, 333 374 market conditions and strategic management/planning, 356 368 Brazil, 361 363 China, 359 361 Russia, 357 359 South Africa, 363 368 overview, 333 335 reform process, 335 356 Brazil, 346 351 Central and Eastern Europe, 368 369 China, 342 346 Czech Republic, 371 372 global analysis, 336 338 Hungary, 370 371 Poland, 369 370 Russian Federation, 338 342 South Africa, 351 356 Newly Independent States (NIS), 333, 334 newly industrializing countries (NICs), 338 newsletters, for advertising, 296 niche strategy, 157 163, 172 NICs (newly industrializing countries), 338 1997 Wyatt Survey, 24 NIS (Newly Independent States), 333, 334 nonprofit organizations (NPOs), 59 61, 269; see also public private distinctions and strategic management fund raising techniques, 283 marketing, 271 273 and strategic planning process, 245 248 nonsupportive stakeholder, 22 North American Free Trade Agreement (NAFTA), 62, 346 NPOs, see nonprofit organizations nuclear industry, Brazil, 362 OPIC (Overseas Private Investment Corporation), 355 opportunities, 70 71 organizational culture, 32, 100, 122 127, 208 culture and strategic change, 123 124 overview, 122 123 as strategic implementation variable, 209 214 cultural change to enhance implementation, 209 211 human resource implications of organizational culture, 213 214 total quality management implementation, 212 213 types of cultures supporting change, 211 212 types of, 125 127 organizational growth, 58 organizational health, 136 organizational performance, monitoring of, 223 organizational strategists, 24 31, 69, 88 89 board composition and stakeholder concerns, 25 27 board of directors, 24 26 subordinates as, 30 31 top managers as strategy formulators, 28 30 organizational structure, 114 122 functional structure, 114 115 geographical structure, 117 matrix structure, 117 120 network structure, 120 122 overview, 114 product structure, 116 117 organization structure, as strategic implementation variable, 204 208 guidelines for finding structure to follow strategy, 205 208 organization chart, 205 outbound logistics, 109 outplacement, 190 outsourcing, 120 121, 206 overall cost leadership strategy, 170 172 overhead expenses, 302 Overseas Private Investment Corporation (OPIC), 355 oversight bodies, 251 252, 264 ownership, 259 260 O objectives, 12 13, 235 control point, 235 236 long term and annual, 230 231 Ohmae, Kenichi, 312 operational control, 238 P participatory management, 200 201 patterns, 276 277 Pearce, John A., 15 performance appraisals, 216 217 performance expectations, 263 264 periodical indexes, 283 personality tests, 214 Peters, Tom, 208 Philip Morris, 17, 77 Poland, 369 370 Poland Hungary Czech Republic, 368 369 policy advocacy, 248 Polish tax system, 369 political influence, 255 256 political legal environment, 77 politicoeconomic/market/FDI conditions, 333 Porter, Michael, 82, 86, 108, 170 Porter’s generic competitive strategies, 170 176 differentiation strategy, 172 173 focus strategy, 173 174 overall cost leadership strategy, 170 172 overview, 170 sticking to middle, 174 176 using, 174 Porter’s value chain approach, 108 110 portfolio analysis, 136 portfolio management approaches, 152 157 Boston Consulting Group matrix, 153 155 General Electric Business Screen, 155 157 overview, 152 153 Pretoria/Witwatersand/Vereeniging (PWV), 364 price cutting, 86 price leadership, 171 price liberalization, 340 PricewaterhouseCoopers, 117 primary activities, 109, 205 206 printing costs, 297 private sector organizations, 254, 265 266 proactive strategies, 261 procedures, 203 process model, 31 procurement, 109 production, 15 production/operations function, 112 113 production/operations management strategy, 186 188 products positioning, 183 184 pricing, 171 quality of, 172 product structure, 116 117 professional development programs, 237 profitability ratios, 129 130 profit margins, 129, 157, 171 projected advertising revenue, 297 proxy measure of success, 261 public authority, 249 public means, 249 publicness, 249, 251 public organizations, 59 61, 248 scheduled interruptions, 263 scope of impact, 258 use coerciveness, 258 public private distinctions and strategic management, 248 266 constraints, 254 255 internal processes, 261 265 authority limits, 263 goals, 261 263 incentives, 264 265 performance expectations, 263 264 markets, 249 254 political influence, 255 256 strategy and environmental factors, 256 257 strategy and internal process factors, 265 266 strategy and transactional factors, 260 261 transactional factors, 257 260 coerciveness, 257 258 ownership, 259 260 public scrutiny, 258 259 scope of impact, 258 public relations, 291, 305 public scrutiny, 258 259 public sector organizations, 252 public sector strategic planning procedures, 266 public service announcements, 290 Putin, Vladimir, 357 PWV (Pretoria/Witwatersand/Vereeniging), 364 Q qualitative criteria, 231 qualitative forecasting methods, 90 92 quality, as marketing tool, 273 quality circles, 30, 180 quantitative analyses, 17 quantitative criteria, 231 quantitative forecasting methods, 89 90 questionnaires, 277 279 quick ratio, 128 R ratios activity, 129 leverage, 130 134 liquidity, 128 129 profitability, 129 130 raw materials, 362 reactive strategies, 261 Real Plan, 348 recruitment, 190 reengineering, 312 313, 330 383 Index 384 Index referral networks, 291 reform processes, 335 356 Brazil, 346 351 Central and Eastern Europe, 368 369 China, 342 346 Czech Republic, 371 372 global analysis, 336 338 Hungary, 370 371 Poland, 369 370 Russian Federation, 338 342 South Africa, 351 356 regional environment, 312 regression analysis, 90 relative market share/competitive position, 153 Republic of South Africa (RSA), 351 research, marketing, 274 279 deciding what organization needs to know, 274 275 organization identifies its market, 275 276 questionnaires and interviews, 277 279 trends and patterns, 276 277 research and development function, 113 114 research and development strategy, 185 186 retraining, 190, 205 retrenchment, 150 152 overview, 150 via divestment, 151 via liquidation, 151 152 via turnaround, 150 151 return on investment (ROI), 12, 129 130 return on quality (ROQ), 182 reward systems, 214 risk propensity, 176 182 risk taking, 211 rivalry between competitors, 86 87 robotization, 48 49 ROI (return on investment), 129 130 ROQ (return on quality), 182 RSA (Republic of South Africa), 351 Russia, 338 342, 357 359 Russo, J Edward, 18 S Sachs, Jeffrey, 316 SACU (Southern African Customs Union), 355, 366 SADC (Southern African Development Community), 355, 366 safety stock issue, 186 187 SBA (Small Business Administration), 51 SBUs (business units and strategic business units), 167 168 SBUs (strategic business units), 116, 152, 167 scenario writing, 91 Schoemaker, Paul, 18 Schools of Business, 60 scope of impact, 258 SCORE (Senior Corps of Retired Executives), 57 58 Securities and Exchange Commission (SEC), 27 selling, compared to marketing, 286 288 Senior Corps of Retired Executives (SCORE), 57 58 sensitive sectors, 369 separation, 147 7P’s marketing model, 303 304 Seven S’ framework, 104 shareholders, 26 shock therapy, 340 SIC (United States Standard Industrial Classification) code number, 92 single product firms, 152 single SBU firms, 168 skills, knowledge, and abilities (SKAs), 213 small batch technology, 48 small business, 50 59 overview, 50 51 reasons for failure of, 51 54 strategic planning in, 56 58 whether different from entrepreneurship, 54 whether to grow, 58 59 Small Business Administration (SBA), 51 Smith, Jack, 116 social marketing, 283 sociocultural environment, 77 SOE (state owned enterprises), 353 soft elements of an organization, 105 106 South Africa, 351 356, 363 368 Southern African Customs Union (SACU), 355, 366 Southern African Development Community (SADC), 355, 366 Soviet perestroika period, 338 SPP, see strategic planning process stability strategy, 149 150 stabilization fronts, 340 staff, 106 stakeholders, 272 concerns, 25 27 stakeholder management, 20 23 State Duma, 357 state owned enterprises (SOE), 353 State Property Management Committee, 341 state supported medical institutions, 60 statistical confidence intervals, 236 Stewart, John, 181 stiff price competition, 171 strategic advantage, 168 170 strategic analysis, 73 strategic audits, see external strategic audits; internal strategic audits strategic business units (SBUs), 116, 152, 167 strategic choice options, 165 196 business level strategies, 165 170 business units and strategic business units (SBUs), 167 168 concept of strategic advantage, 168 170 overview, 165 167 functional level strategy, 182 196 finance/accounting strategy, 188 189 functional strategic decisions possibilities overview, 183 human resource strategy, 189 196 marketing strategy, 183 184 overview, 182 183 production/operations management strategy, 186 188 research and development strategy, 185 186 impact of quality movement, 179 182 importance of risk propensity in strategic decisions, 176 182 overview, 165 Porter’s generic competitive strategies, 170 176 differentiation strategy, 172 173 focus strategy, 173 174 overall cost leadership strategy, 170 172 overview, 170 sticking to middle, 174 176 using, 174 strategic control, 225, 238 strategic groups, 77 82 Competitive Profile Matrix (CPM), 79 81 External Factor Evaluation (EFE) matrix, 81 82 overview, 77 79 strategic implementation, see implementation strategic initiative, 213 strategic leaders, see managerial leadership strategic management, 57 important terms in, 14 goals and objectives, 12 13 mission, 12 overview, strategy, 13 14 in private organizations, 264 in public organizations, 264 in public settings, 254 strategic managers, see managers strategic marketing, see marketing strategic monopoly, 347 strategic options corporate level, 135 163 corporate strategy, 135 136 growth, 136 149 downsizing in an acquired company, 144 146 external acquisitions, 139 144 external joint ventures, 147 149 external mergers, 138 139 internal, 137 138 overview, 136 137 special case of organization culture in acquisitions, 146 147 niche strategy, 157 163 overview, 135 portfolio management approaches, 152 157 Boston Consulting Group matrix, 153 155 General Electric Business Screen, 155 157 overview, 152 153 retrenchment, 150 152 overview, 150 via divestment, 151 via liquidation, 151 152 via turnaround, 150 151 stability strategy, 149 150 strategic planners, 74, 324 327, 328 strategic planning process (SPP), 36 case for planning, 31 cultural influences on, 31 32 dynamic strategic management process, and global environment, 32 33 importance of strategic management and planning, organizational strategists, 24 31 board of directors, 24 26 issues of board composition and stakeholder concerns, 25 27 subordinates as strategists, 30 31 top managers as strategy formulators, 28 30 overview, stakeholders and stakeholder management, 20 23 strategic levels, 14 20 business unit level, 15 corporate level, 15 functional level, 15 16 intuition in strategy formulation, 17 19 overview, 14 strategy evaluation and control, 19 20 strategy formulation, 16 17 strategy implementation, 19 385 Index 386 Index strategic positioning, 290 strategy and environmental factors, 256 257 strategy evaluation, 226 227 activities, 228, 233 long run focus, 226 monitoring, 228 short run focus, 226 strategy formulation, 16 17, 28, 37, 74, 81, 122, 229 strategy implementation, see implementation structures, 105 style of an organization, 106 subcontracted functions, 208 subcultures, 125 subordinates as strategists, 30 31 Sub Saharan Africa Infrastructure Fund, 356 substantial informal, 342 substitute products, pressure from, 87 success factors, 79 80 sunshine laws, 259 suppliers bargaining power of, 87 88 reliability of, 360 support activities, 109 switching costs, 84, 86 SWOT analysis, 16, 69 72, 100 104, 149, 280 Internal Factor Evaluation (IFE) matrix, 103 104 opportunities, 70 71 overview, 69 70, 100 strengths, 100 102 threats, 71 72 weaknesses, 102 103 synergy, 140, 166, 356 systems theory, 183 T target market share, 207 team atmosphere, 218 technological innovation, 49 technological processes, 48 technology cultural dimensions of technology transfer, 49 50 as strategic weapon, 47 50 telecommunications industry, and environmental uncertainty, 158 temporary employment, 190 third sector organizations, 251 mandates and obligations, 255 scheduled interruptions, 263 scope of impact, 258 threats, 71 72, 81 three year budget directive law, 350 351 three year budget directive law (LDO), 350 351 TIE (times interest earned), 130 time series analysis, 90 times interest earned (TIE), 130 TNCs (transnational corporations),323 327 Toffler, Alvin, 233 tolerances, 236 top managers, as strategy formulators, 28 30 total asset ratio, 130 total debt ratio, 130 total quality management (TQM), 179, 212 total weighted score, 81 82 Toxic Shock Syndrome (TSS), 42 TQM (total quality management), 179, 212 transactional factors, 257 260 coerciveness, 257 258 ownership, 259 260 public scrutiny, 258 259 scope of impact, 258 transnational corporations (TNCs), 323 327 trends, 276 277 TSS (Toxic Shock Syndrome), 42 turnaround, retrenchment via, 150 151 U UAW (United Auto Workers) union, 191 ubiquitously owned entity, 260 UN Conference on Trade and Development (UNCTAD), 314 315 United Auto Workers (UAW) union, 191 United States antitrust laws, 77 United States Environmental Protection Agency (EPA), 72 United States Small Business Administration, 58 United States Standard Industrial Classification (SIC) code number, 92 universal localism, 313 Urban Foundation, 364 V Value Added Tax (VAT), 371 value added telecommunication, 343 value gap analysis, 281 VAT (Value Added Tax), 371 Velvet Revolution, 371 visibility of marketing, 273 W Wall Street ethics, 44 Walton, Sam, 8, 124 Waterman, Robert, 225 226 watershed events, 352 Wexner, Leslie, 103 104 Wharton School of the University of Pennsylvania, 60 Woodward, Joan, 48 Woolridge, Bill, 19 word of mouth, 291 World Class Processing, 16 World Economic Development Congress, 352 World Trade Organization (WTO), 62, 343, 355, 360 World Wide Web, see Internet WTO (World Trade Organization), 62, 343, 355, 360 Y Yeltsin, Boris, 339, 340 341, 342, 357 387 Index [...]... grid-like format Among these thousands of books published on strategic planning, Global Strategic Planning; Cultural Perspectives for Profit and Nonprofit Organizations uniquely achieves a delicate balance between the theoretical and the practical, the quantitative, and the conceptual approaches The author of this well-organized and highly readable book presents all of the classical elements of strategic. .. Kennedy Formerly Chairman and Chief Executive Officer National Starch & Chemical Company xiii Foreword xiv Acknowledgments This second edition, under its new title Strategic Management: Global Cultural Perspectives for Profit and Nonprofit Organizations, would have been impossible to research, update, and bring to its present form if it weren’t for the... the SPP to nonprofits In that context, I differentiate between profit and nonprofit organizations in terms of the SPP, discuss reasons for nonprofit organizations engaging in strategic planning, and the importance of such roles as volunteers and boards of directors In Chapter 10,1 extend my coverage to the unique role that marketing plays in the nonprofit sector I address the ways that nonprofit organizations... and how they differ between profit and nonprofit organizations, and the strategic execution of fund-raising Part Five: The Strategic Planning Process (SPP) in the Global Environment consists of two chapters in which the nature of global competition and its implications to the SPP is presented In Chapter 11, I provide a framework for global strategic planning In Chapter 12, I address the strategic and. .. importantly, this book measures the impact of cultural, organizational, national, and global issues, whether in the for- profit or the nonprofit sector, and provides examples, exercises, and solutions to make this key part of international management and strategic planning easier and more successful Marios Katsioloudes, Ph.D Professor of Management School of Business and Management American University of Sharjah... addition, contribution of the global strategic planner to a successful strategic planning process is discussed within the framework of the multicultural environment This book’s approach to the strategic planning process is unique in that it goes beyond the traditional application for the for- profit sector by addressing issues for the nonprofit sector and global aspects of strategic planning Most importantly,... important for organizations (either for- profit or nonprofit) to engage actively and seriously in the SPP It is trite (yes, still true) change is more rapid than ever A strategic plan can and should be a template (i.e., a frame of reference) for an organization In a fast-changing world, opportunities are more numerous than before, challenges arise without notice, and instant global communications accelerate... acquisitions and joint ventures, and also those of each of the countries in which the firm operates) Thus, in a global enterprise there are organizational cultures, as well as both country- and regional-specific cultures A truly global organization (with a board and management composed of significant and broad-based diversity) is not merely aware of, but also understands and deals with the cultural issues... middle management) fail to focus on and achieve a deep understanding of these subjects and their importance, I believe that the SPP (and, even more importantly, the implementation of the plan itself), will ultimately fail Before I comment further on globalization, leadership, and culture, allow me to present some of my own views on strategic planning Never before has it been more important for organizations... types of information on the SPP for the forprofit sector, there is also a plethora of information regarding the process for the nonprofit sector Most importantly, what distinguishes this book from Introduction xv xvi Introduction other books on the market today, is the impact of culture (both national and organizational) from a global perspective and of .. .Strategic Management This page intentionally left blank Strategic Management Global Cultural Perspectives for Profit and Non -Profit Organizations Marios I Katsioloudes, Ph.D Professor of Management. .. Data Katsioloudes, Marios I Strategic management : global cultural perspectives for profit and non profit organizations / by Marios I Katsioloudes p cm Rev ed of: Global strategic planning Includes... rigid, structured, grid-like format Among these thousands of books published on strategic planning, Global Strategic Planning; Cultural Perspectives for Profit and Nonprofit Organizations uniquely