Organization’s Vital Systems

In an organization Information and control systems are considered as important which include reward systems, pay incentives, budgets for allocating resources, information technology systems, and the organization’s rules, policies and procedures. Changes in these systems are considered as major actions for putting plan of action. Managers can allocate resources from new product development to marketing if an action plan requires increased advertising but no new products. Managers and employees must also be rewarded for their new action plan and mak it a success.

In a food company top managers changed to top down cost controls in the company’s operating units and developed new systems for sharing resources to reduce purchasing, warehousing and transportation costs. To make sure that managers adhered to the new action plan of cooperation and efficiency higher management linked a substantial per cent of their bonuses directly to savings targets.

Division heads saved  Rupees 100 million in the first fiscal year. Top leaders also made changes in information systems by introducing a computerized network to track how much suppliers charge each strategic business unit.

Retailers such as Big Bazaar and hyper Market have made productive use of  information technology to support a low cost strategy by speeding up checkout, managing inventory and controlling distribution. In contrast another FMCG company has been poor on implementation because of weak information and control systems that leave unpopular merchandise on store shelves and fast moving items frequently out of stock.

Latest information technology can also be used to support different strategies such as customizing products and services to exact customer specification.

Boeing is using collaboration software that lets designers, suppliers and manufacturers around the world collaborate on everything from wings to seat back trays. Boeing hopes the new approach will revive its reputation as leader in aircraft design as well as make the entire process more efficient helping the company compete more effectively with Airbus.

The organization’s human resources are its employees. The human resource function recruits, selects, trains, transfers, promotes and lays off employees to achieve strategic goals.

Training employees can help them understand the purpose and importance of a new plan or help them develop the necessary specific skills and behaviours. New strategies involve change, which naturally generates some resistance. Sometimes employees may have to be let go and replaced.

One newspaper shifted from an  evening to a morning paper to compete with a large  newspaper from a nearby city. The new working style required a change from working days to working from 1 PM to about midnight or so. This was resulting in a resistance among department heads. In order to implement it, 80 per cent of the department heads had to be let go because they refused to cooperate. New people were recruited and placed in those positions and the morning newspaper strategy was a resounding success.

Implementation during bad  times for business

Many managers feel confident that they have found the right strategy to provide a competitive advantage but they are less optimistic about their ability to implement it. To implement they must have a global mind set, paying close attention to corporate culture, and embracing the Internet and other information technologies.

To fall in line on a global scale managers need to adopt a global mind set and be aware of varying implementation issues. Flexibility and openness emerge as mandatory leadership skills. Managers struggle to find the right mix to achieve the desired level of global integration.

Finally, the recruitment training, transfer, promotion and layoff  of international human resources create an array  of problems. One well respected multinational formed a task force  of employees to review and  revise work force policies in connection with a new strategy. Employees from different levels and functional areas met for months and sent out employee surveys  to all US based facilities to get wider input. The final draft was reviewed and approved by top executives. They were  surprised when the  streamlined work force manual, which reduced the number of policies from 120 to 10 core ones. Managers’ lack of a global mind set had let them to assume incorrectly that the international units would accept whatever was handed down from the US headquarters. Another multinational that used a worldwide task force for a similar process had much greater success with implementation.