Saying your mission is to â€œasses and act through public/private partnerships to improve energy systemsâ€ is one thing; operational zing that mission for your managers is another. The firmâ€™s managers need long term strategic goals. For example, what exactly does that mission mean, for the next five years, in term of how many and what specific types of partnerships to form, with whom, and when?
Business managers need specificity. WebMDâ€™s sales director needs goals regarding the number of new medical related content providers vitamin firms, hospitals, HMOs it must sign up per year, as well as sales revenue targets. The business development manager needs goal regarding the number of new businesses â€“ such as using WebMd to help manage doctorsâ€™ offices online- he or she is to develop and sign. Similarly, a global financial power house like Citicorp canâ€™t function solely with the broad mission â€œto provide integrated, comprehensive financial services worldwide.â€ It needs specific goals, in areas including building shareholder value through growth in earnings- per-share; continuing its commitment to building customer oriented business worldwide; maintaining superior rates of return; building a strong balance worldwide; maintaining superior rates of return; building a strong balance sheet; and balancing the business by customer, product, and geography.
The firmâ€™s strategy is a bridge connecting where the company is today with where it wants to be tomorrow. The question is, â€œhow do we get from here to there?â€ A strategy is a course of action. It shows the enterprise will move from the business it is in now to the business it wants to be in (as stated in its vision, mission, and strategic goals), given its opportunities and threats and its internal strengths and weakness.
Employees canâ€™t and wonâ€™t implement strategies they donâ€™t buy into; therefore top companies craft strategies whose basic principles are easy to communicate. For example, the essence of Dellâ€™s strategy has always been â€œbe direct.â€ Wal-Martâ€™s strategy boils down to the familiar â€œlow prices, every day.â€
A knowledge of and commitment to the strategy helps ensure that employees make decisions consistent with the companyâ€™s needs. For example, the executive teamâ€™s deep understanding of Nokiaâ€™s strategy reportedly helps explain how the firm can make thousands of decisions each week so coherently.
Strategy implementation means translating the strategies into action and results â€“ by actually hiring (or firing) people, building (or closing) plants, and adding (or eliminating) products and product lines. In other words, strategy implementation involves drawing on and applying all the management functions: planning, organizing, staffing, leading, and controlling.
Strategies donâ€™t always succeed. For example, when General Motors sold the last of its Hughes Electronics assets, it was the end of a strategy put in place about 12 years earlier. In the 1980s, GM had bought both Electronic Data Systems and Hughes Electronics, with the idea of using these technology firms to automate and reinvigorate automobile production and sales. GM did make a big profit when it sold the companies. However, many believe the acquisitions were actually such a distraction that they helped push GMâ€™s market share down from about 60% to 28% in the interim Similarly, Procter & Gamble announced it was selling its remaining food business â€“ Jif, Crisco, and Folgerâ€™s coffee â€“ because management wants to concentrate on household and cosmetics products.
Managing strategy is an ongoing process. Competitors introduce new products, technological innovations make production processes obsolete and social trends demand for some products or services while boosting demand foe others. Strategic control keeps the companyâ€™s strategy up to date. It is the process of assessing progress toward strategic goals and taking corrective action as needed. Management monitors the extent to which the fi0rm is meeting its strategic goals, and asks why deviations exist. Management simultaneously scans the firmâ€™s strategic situation (competitors, technical advances, customer demographics, and so on) to see if it should make any adjustments. Strategic control addresses several important questions: for example, â€œAre all the resources of our firm contributing as planned to achieving our strategic goals?â€ What are the reasons for any discrepancies?â€ and, â€œDo changes in our situation suggest that we would revise our strategic plan?â€