MGT 510 SEU Corporation to Meet High Performance Questions

User Generated

jny_2_fny

Business Finance

mgt 510

Saudi electronic university

MGT

Question Description

Help me study for my Management class. I’m stuck and don’t understand.

Critical Thinking: Strategic Recommendations

Managing the multi-business corporation to meet high performance expectations is problematic. Publicly traded companies are pressured to return favorable quarterly results and as corporations grow larger and more complex, it becomes harder to manage such corporations effectively. General Electric (GE) was once one of the most admired corporations in the world. Today, GE is facing a much-reduced outlook. For this week’s assignment, read the case study found in your textbook (Case 20): Restructuring General Electric.

Remember, a case study is a puzzle to be solved, so before reading and answering the specific case and study questions, develop your proposed solution by following these five steps:

  1. Read the case study to identify the key issues and underlying issues. These issues are the principles and concepts of the course area which apply to the situation described in the case study.
  2. Record the facts from the case study which are relevant to the principles and concepts of the course area issues. The case may have extraneous information not relevant to the current course area. Your ability to differentiate between relevant and irrelevant information is an important aspect of case analysis, as it will inform the focus of your answers.
  3. Describe in some detail the actions that would address or correct the situation.
  4. Consider how you would support your solution with examples from experience or current real-life examples or cases from textbooks.
  5. Complete this initial analysis and then read the discussion questions. Typically, you will already have the answers to the questions but with a broader consideration. At this point, you can add the details and/or analytical tools required to solve the case.

Case Study Questions:

  1. Why was GE considered to be such an exemplary organization? (Discuss GE’s management systems and performance.)
  2. Discuss the nature of GE’s corporate portfolio under Welch and Imelt. Did the nature of GE’s portfolio under Welch and Imelt provide superior results?
  3. If GE’s portfolio mix gave superior results, why was it necessary to restructure the portfolio?
  4. Why is GE’s performance no longer superior? What are the reasons for the collapse in GE’s financial performance during 2016-2018?
  5. What should be done to return GE to higher levels of performance? Does GE need to refocus? Which businesses or products would you recommend abandoning or divesting, if any? Does GE need to make additional acquisitions to supplement existing GE assets?

Your well-written paper should meet the following requirements:

  • Be 9 to 10 pages in length, which does not include the title page or required reference page, which are never a part of the content minimum requirements.
  • Use academic writing standards and APA style guidelines.
  • Support your submission with course material concepts, principles, and theories from the textbook and at least three scholarly, peer-reviewed journal articles unless the assignment calls for more.

Unformatted Attachment Preview

CONTEMPORARY STRATEGY ANALYSIS tenth edition Robert M. Grant John Wiley & Sons Ltd., 2019 Chapter 13 Implementing Corporate Strategy: Managing the Multibusiness Corporation 1 Implementing Corporate Strategy: Managing the Multibusiness Corporation OUTLINE • The Role of Corporate Management • Managing the Corporate Portfolio • Managing Linkages across Businesses • Managing Individual Businesses • Managing Change in the Multibusiness Corporation • Governance of Multibusiness Corporations Copyright © 2019 John Wiley & Sons, Inc. THE ROLE OF CORPORATE MANAGEMENT How does Corporate Management add Value to its Individual Businesses? • Managing the corporate portfolio —including acquisitions, divestments, and resource allocation • Managing linkages among businesses • Managing each individual business • Managing change Copyright © 2019 John Wiley & Sons, Inc. Berkshire Hathaway’s portfolio of businesses Insurance Energy General Re GEICO BH Primary BHRG Mid American Energy Northern Powergrid PacificCorp NV Energy Retail Nebraska Furniture Mart RC Willey Home Furnishings Borsheims Pampered Chef Pampered Chef Dairy Queen BERKSHIRE HATHAWAY INC. See’s Candy Media and Services Home Services of America Store Capital BH Media Business Wire NetJets © 2019 Robert M. Grant, www.contemporarystrategyanalysis.com Manufacturing Lubrizoil CTB International Fruit of the Loom Google Books Clayton Homes IMC Main Portfolio Investments • Heinz Kraft • Apple • Coca-Cola • Wells Fargo • American Express • Phillips 66 • Goldman Sachs • Delta Airlines MANAGING THE CORPORATE PORTFOLIO The Uses of Portfolio Planning Models in Strategy Formulation • Allocating resources—indicating both the investment requirements of different businesses and their likely returns • Formulating business-unit strategy—offering generic strategy recommendations (e.g.: “build”, “hold”, or “harvest”) • Setting performance targets—indicating likely performance outcomes in terms of cash flow and ROI • Portfolio balance—guiding business portfolio changes in order to achieve corporate goals such as a balanced cash flow by combining mature and growing businesses. Copyright © 2019 John Wiley & Sons, Inc. MANAGING THE CORPORATE PORTFOLIO Industry Attractiveness The GE/McKinsey Matrix High Medium Low Low Medium High Business Unit Position Industry Attractiveness Criteria - Market size - Market growth - Industry profitability - Inflation recovery - Overseas sales ratio Copyright © 2019 John Wiley & Sons, Inc. Business Unit Position - Market share (domestic, global, and relative) - Competitive position - Relative profitability MANAGING THE CORPORATE PORTFOLIO HIGH Earnings: low, unstable, growing Earnings: high stable, growing Cash flow: negative Cash flow: neutral Strategy: Strategy: invest for growth analyze the potential to develop the business into a “star” Earnings: LOW Annual real rate of market growth (%) The BCG Growth-Share Matrix ? low, unstable Earnings: high stable Cash flow: neutral or negative Cash flow: high stable Strategy: divest Strategy: milk HIGH LOW Relative market share Copyright © 2019 John Wiley & Sons, Inc. MANAGING THE CORPORATE PORTFOLIO Ashridge Portfolio Display: The Potential for Patenting Advantage LOW HEARTLAND BALLAST Potential for value destruction from misfit between needs of the business and patent’s corporate management style --typical legacy business: good fit high, but limited potential to add value EDGE OF HEARTLAND --businesses with high potential for adding value -- less value adding potential; more risk is of value destruction ALIEN TERRITORY VALUE TRAP --exit: no potential for value creation --lack of management fit limits potential to add value HIGH LOW HIGH Potential for parent to add value to the business © 2019 Robert M. Grant,www.contemporarystrategyanalysis.com MANAGING THE CORPORATE PORTFOLIO Do Portfolio Planning Models Help or Hinder Corporate Strategy Formulation? ADVANTAGES • Simplicity: Quick and easy to prepare • Big picture: Permits one page representation of the corporate portfolio & strategic positioning of each business • Analytically versatile: Applicable to businesses, products, countries, distribution channels. • Can be augmented: A useful point of departure for more sophisticated analysis Copyright © 2019 John Wiley & Sons, Inc. DISADVANTAGES • Simplicity: Oversimplifies the factors determining industry attractiveness and competitive advantage • Ambiguity: The positioning of a business depends critically upon how a market is defined • Ignores synergy: the analysis takes no account of any interdependencies between businesses MANAGING LINKAGES ACROSS BUSINESSES Sources of Synergy within the Multibusiness Corporation ▪ Shared corporate services: Centralizing services such as IT, HR, purchasing, research, facilities management exploits cost economies and develops capabilities ▪ Transferring skills between businesses: E.g. LVMH transfers brand management capabilities; P&G transfers technologies and product development skills across product sectors and across countries ▪ Sharing resources and activities: E.g. Virgin Group shares its brand across its businesses; Samsung Electronics’ globally dispersed design centers serve all its businesses BUT, Exploiting synergies is not costless: Transferring skills and sharing resources and activities tends to involve the corporate HQ in managing relationships between the businesses and complicates the appraisal of business performance Copyright © 2019 John Wiley & Sons, Inc. MANAGING INDIVIDUAL BUSINESSES The McKinsey Restructuring Pentagon Current market value 1 Current perceptions gap Company value as is 2 Strategic and operating opportunities RESTRUCTURING FRAMEWORK Potential value with internal improvements Copyright © 2019 John Wiley & Sons, Inc. Maximum raider opportunity 3 Disposal/acquisition opportunities 4 5 Optimal restructured value Total company opportunities Potential value with external improvements MANAGING INDIVIDUAL BUSINESSES Exxon’s Strategic Planning Process Economic Review Energy Review Stewardship Review Business Plans Discussion with contact director Financial Forecast Stewardship Basis Investment Reappraisals Annual Budget Approval by Mgmt. Committee Corporate Plan MANAGING INDIVIDUAL BUSINESSES Rethinking Strategic Planning Critiques of strategic planning: • Strategic planning systems don't make strategy—strategic planning a ritualistic process, but most strategic decisions are made outside the system • Weak execution—procedures for converting plans into actions are weak. Proposals for improving execution include: – Strategic milestones – Strategy maps – Replacing strategic planning units by “offices of strategy management” Copyright © 2019 John Wiley & Sons, Inc. MANAGING INDIVIDUAL BUSINESSES Performance Management and Financial Control • Multibusiness companies have a dual planning process: – Strategic planning: medium and long term – Financial planning : short-term • The two are closely linked. Strategic plan is a basis for: – Operating budget – Capital expenditure budget – Annual performance plans – Strategic milestones • Balance between strategic and financial control: – Varies by firm and sector – There’s a trade-off between the two—more of one means less of the other Copyright © 2019 John Wiley & Sons, Inc. 8 MANAGING INDIVIDUAL BUSINESSES Strategic Planning and Financial Control as Alternative Modes of Corporate Control Two basic approaches Input control Output control Monitoring and approving business level decisions Setting performance targets and monitoring their achievement Primarily through strategic planning system and capital expenditure approval system Primarily through performance management system, including operating budgets, scorecards, milestones, and HR appraisals Copyright © 2019 John Wiley & Sons, Inc. MANAGING INDIVIDUAL BUSINESSES Alternative Corporate Management Styles Strategic planning Financial control Business strategy formulation Strategy formulated by businesses; corporate HQ guides and coordinates Strategy formulated at business unit level; HQ exerts financial control Controlling performance Primarily strategic goals with medium- to long-term horizon Financial budgets set annual targets—monitored quarterly Advantages Exploits (a) linkages among businesses, (b) innovation, (c) long-term development Business unit autonomy conducive to initiative, responsiveness, and efficiency Disadvantages Loss of divisional autonomy and initiative Unitary strategic view Tendency to persist with failing strategies Short-term focus discourages innovation and long-term development Limited sharing of resources and capabilities Style suited to Companies with few closely related businesses Capital and technologyintensive sectors with large, long term investment projects Highly diversified companies with low relatedness among businesses Mature, low-tech sectors where investment projects small and short term Copyright © 2019 John Wiley & Sons, Inc. MANAGING`CHANGE IN THE MULTBUSINESS CORPORATION The Challenge of Leading Change ❑ The Problem: Counteracting Inertia – The bigger and more complex the company—the greater the forces of inertia ❑ Facilitating change: – Adaptive tension Imposing high performance expectation on individual and departments can create not just stress, but dynamism and responsiveness that counteracts complacency (e.g. Jack Welch at GE) – Institutionalizing change Shift focus of strategic planning from resource allocation to sensing and responding to external change (e.g. IBM) – New business development Incubating the new businesses that will ultimately replace the old (Amazon, Netflix, Nokia) – Top-down, large-scale development initiatives—the CEO as change leader e.g. Samsung Electronics; Haier Copyright © 2019 John Wiley & Sons, Inc. GOVERNANCE OF MULTBUSINESS CORPORATIONS The Challenge of Corporate Governance • What are the rights of shareholders? – To transfer shares, access company information, elect directors, share in the profits of the firm, vote on key strategic decisions – Despite potential for divisions to develop distinctive strategies and structures—corporate systems may impose uniformity. • What are the responsibilities of Company Boards? – To act in the best interests of the company and its shareholders – To oversee strategy, budgets, management performance, etc. • What’s gone wrong? – Failure by boards to prevent managers pursuing their interests rather than those of shareholders (e.g. excessive compensation) – Failure board to take account of social/national interest • What other problems do multidivisional corporations face? – Lack of decentralization of decision making to divisional managers – Standardization of management systems across divisions Copyright © 2019 John Wiley & Sons, Inc. GOVERNANCE OF MULTBUSINESS CORPORATIONS Highest Earning CEOs of US Companies 2016 Rank CEO Company Direct compensation ($m) 1 Thomas Rutledge Charter Communications 98 2 Leslie Moonves CBS 69 3 Robert A. Iger Walt Disney 41 4 David Zaslav Discovery Communications 37 5 Robert Kotick Activision Blizzard 33 6 Brian Roberts Comcast Corp. 33 7 Jeffrey L. Bewkes Time Warner 33 8 Virginia Rometty 32 9 Leonard Schleifer 10 Stephen Wynn IBM Regeneron Pharmaceuticals Wynn Resorts Ltd. Copyright © 2019 John Wiley & Sons, Inc. 28 28 Module 12: Implementing Strategy 1. Multi-Business Companies Over time, those who study strategic management, and even working managers, have used the terms implementation and execution interchangeably. While we have learned that these actions are hard to separate, these words do have distinct meanings, particularly when it comes to business and organizational management. In a Harvard Business Review article, Favaro (2015) drew attention to these words, articulating the difference between them, and how the confusion could be affecting outcomes. He noted that “ignoring or blurring the differences contributes to sloppy thinking, decision making, and action at all levels of an organization” (para. 2). Based on this definition, it appears it is all but impossible for a strategy to ever be fully implemented. This is because the assumptions that an organization makes about customers, technology, regulation, and competitors when formulating the strategy are in a constant state of flux. Implementation Implementation is what happens when we close the gap between where a company is and what the strategy calls for. Execution Execution is defined as “the decisions and activities a company undertakes in order to turn an implemented strategy into commercial success” (Favaro, 2015, para. 8). Strategy and implementation are It is his position that to achieve execution excellence is to almost always running in parallel, realize the best possible results a strategy and its rather than in sequence. implementation will allow (Favaro, 2015). Managers must treat strategies as constantly evolving and therefore should be continuously updating their strategies. When business leaders confuse strategy, implementation, and execution, they usually end up just running a company: doing things such as setting goals and targets; making plans and initiatives, but they achieve very little actual strategy, implementation, or execution (Favaro, 2015). One of the tools that can assist with strategy implementation, particularly for companies that have the challenge of being geographically dispersed, is the 7-S model—also referred to as the McKinsey 7-S. It’s a framework that represents an analysis framework for all the internal aspects of an organization to make it more effective in achieving its intended objective. The model illuminates seven internal aspects that need to be aligned if it is to be successful. Review this article to learn more about the 7-S model: The Mckinsey 7-S Framework Developed by Tom Peters and Robert Waterman, two consultants working for McKinsey in the 1980s, the 7-S framework helps align all the internal aspects of an organization to make it more effective, whether the organization is geographically widespread or operates in one location. If something within the organization is not working, it is quite possible that there are inconsistencies in or among some of the seven elements. Once these inconsistencies are revealed, the organization can then work to align the elements to ensure each is contributing to the shared goals and values. Leaders diagnosing and assessing the ability to implement strategies must consider that geographic distribution itself can greatly impact organizational culture and subcultures. Unlike those firms doing business domestically, MNEs have many additional factors that are affected by engaging in business overseas. These companies must consider such things as the culture of the host country and its religion, politics, and economy (including marketing, finance, and accounting), to name a few. To be successful internationally, MNEs must preempt some of the difficulties of doing business outside the “home” by developing a well-designed business strategy (David, 2016). For example, McDonald's has managed to succeed in Saudi Arabia by offering various culturally and religiously appropriate specialties. Not only does the fast-food giant respect Ramadan by restricting service during fasting periods during the holy month, but it also offers special menus at night. The chain adheres to local laws by segregating male and female diners. In many ways, expanding options and opportunities requires careful consideration, analysis, and a realignment of strategies and tactics in order to remain successful. The success of a strategy depends on three critical factors: careful implementation and monitoring; a realistic internal view of an organization’s core competencies and sustainable competitive advantages; and a firm’s alignment with the external environment. Organizations should know who they are, their current position, where they want to be in the future, and what they need to do to get there. The balanced scorecard (BSC) is a strategic, balanced system that organizations use for these purposes: • • • • Communicate what the organization is trying to accomplish. Align the day-to-day work with strategy. Measure and monitor progress toward strategic targets. Prioritize projects, products, and services. Strategy planning is never complete without evaluating whether the strategy was ultimately successful. We have studied the importance of creating a sound strategy implementation to the point of ultimately realizing that strategy. Implementing a bad strategy, however, often results in failure. Strategy evaluation is based on the firm’s metrics to determine if goals have been met. Click through the tabs to explore some areas to consider: Revenues: • • Financial reports: The formal record of an organization’s financial activities Revenue: The amount of money that a company receives for goods and services during a specific period Profits: The financial gain to a company, especially the difference between the amount earned and the amount spent in buying, operating, or producing a product or service Customer Satisfaction: A measure of how satisfied customers are with the products and/or services of a company Supplier Satisfaction: Supplier satisfaction is essential in managing buyer-supplier relationships. The satisfaction of the supplier can enhance information exchange between the buyer and the supplier. Industry Position: The ranking of a product or company relative to competitors in the same industry In all instances, the data collected may be the catalyst to initiate another round of strategy planning. The process of conducting external industry analysis and internal resource and capability assessment is the first step towards recognizing how to adapt the strategy. Reviewing business and corporate strategies in alignment with the organization’s vision and mission is imperative. Finally, assessing the strength of the implementation and the flexibility and adaptability of the firm is a solid step toward continuous improvement in the quest for competitive advantage. Watch this video to learn more about how to evaluate strategy execution: https://youtu.be/GanjyGmr25c Evaluating and analyzing the external environment and the company’s internal situation and performance to identify needed corrective adjustments is the trigger point for deciding whether to continue or change the company’s vision, objectives, strategy, and/or strategy execution methods. The success of a strategy depends on three critical factors: careful implementation and monitoring, a realistic internal view of an organization’s core competencies and sustainable competitive advantages, and a firm’s alignment with the external environment. An organization should know who it is, its current position, where it wants to be in the future, and what it needs to do to get there (David, 2016). 2. Corporate Leadership Consider what you have learned about corporate strategy so far, and you can see that the role of the corporate leader is clearly a challenge. Plus, the approaches to strategy implementation vary by industry and individual. Different levels of business unit control as compared to corporate control exist within corporate headquarters, where some take a hands-off role as an investor only. In other settings, the business unit follows the direction of the corporate headquarters to complete the day-to-day operations. We have followed the alignment of the business strategy, which should be supported by the corporate strategy and now we must consider how the corporate headquarters can facilitate and support implementation and execution of the strategic vision. A traditional approach to corporate control uses strategic planning or financial control. Companies that take a strategic planning approach have corporate headquarters lead business‐level planning. Companies that take a financial control approach have corporate headquarters monitor short-term financial performance but leave the business unit responsible for strategy formulation (David, 2016). Review the following chart to compare these approaches. Watch this video to learn more about developing a strategy and executing it proficiently: https://youtu.be/djfJDpxNCeE Strategy formulation is the process by which an organization chooses the most appropriate courses of action to achieve its defined goals. The managerial process of crafting and executing a company’s strategy is an ongoing, continuous process consisting of five integrated stages. Review this Alternative Corporate Management Styles chart to compare these styles. Business Strategy Description Advantages Disadvantages Strategic Planning Business unit autonomy Conducive to initiative, responsiveness, and efficiency Loss of divisional autonomy Financial Control Strategy formulated at the business unit level Conducive to initiative, responsiveness, and efficiency Short-term focus discourages innovation and long-term development Similar strategic approaches frequently deliver different results in performance between companies with the differentiator being identified as the quality of management and the dependent factor being the identification of successful approaches to corporate leadership (Dou, Alain, & Clerc, 2019; Rothaermel, 2017). These approaches focus on corporate leadership achieving the strategic plan through the coordination and development of the leadership teams. The leadership team should be integral in the strategic process and integrated throughout the business unit and the corporate structure with a shared understanding of the whole strategy plan. Research supports that organizations that develop their own leadership practices for strategy leadership avoid a mismatch in implementation and execution capabilities (David, 2016; Dou et al., 2019). Patagonia, Inc. is an apparel business that has developed its own approach to leadership teams specific to company needs (Chouinard, 2012). Review the following chart and consider the need to rethink strategic planning. Stronger leadership at all levels of the organization supports the coordination needed to perform the required business unit operations, plus lead strategic implementation of the strategic vision and plan. The clear indicator of more successful strategic management does not rest on one leader’s shoulders but rather on the corporate leader’s vision for the leadership culture within the organization. Since leaders must have the right capabilities to support the business strategy, the leadership culture that shares the importance of leadership teams in strategic planning may be better aligned for success (David, 2016). References Chouinard, Y. (2012). The responsible company. Ventura, CA: Patagonia Books. David, F. R. (2016). Strategic management: A competitive advantage approach, concepts and cases. Essex, UK: Pearson. Dou, H., Alain, J., & Clerc, P. (2019). Strategic intelligence for the future 2: A new strategic and operational approach. Hoboken, NJ: Wiley. Favaro, K. (2015, March 31). Defining strategy, implementation, and execution. Harvard Business Review. Retrieved from https://hbr.org/2015/03/defining-strategyimplementation-and-execution Grant, R. M. (2019). Contemporary strategy analysis (10th ed.). Hoboken, NJ: John Wiley & Sons. Rothaermel, F. T. (2017). Strategic management. New York, NY: McGraw Hill Education.
Purchase answer to see full attachment
Student has agreed that all tutoring, explanations, and answers provided by the tutor will be used to help in the learning process and in accordance with Studypool's honor code & terms of service.

Explanation & Answer

Attached. Please let me know if you have any questions or need revisions.

Introduction
General Electric: An Analysis
Paragraph 1
- General Electric (G.E.) was considered an ideal organization because of its readiness
and willingness to adopt unconventional management techniques
- According to Grant (2019), conglomerate types of businesses, comprising of either
unrelated or loosely associated entities, were unfashionable
Paragraph 2
- Jack Welch and Jeff Immelt were the CEOs of G.E. between 1982-2001 and 2001-2017,
respectively
- According to Grant (2019), Welch is acknowledged for eliminating the previously
established layers of hierarchy and introducing a rigorous and highly demanding
performance management system.
Paragraph 3
- Welch’s retirement ushered the way for Jeff Immelt, who would hold the helm for the
next 16 years
- Immelt’s primary achievement was restructuring G.E.’s business portfolio to return the
company to its former manufacturing base (Grant, 2019)


Running head: GENERAL ELECTRIC: AN ANALYSIS

General Electric: An Analysis
Name
Institution

1

GENERAL ELECTRIC: AN ANALYSIS

2

General Electric: An Analysis
Why G.E. was considered an exemplary organization
General Electric (G.E.) was considered an ideal organization because of its readiness and
willingness to adopt unconventional management techniques. According to Grant (2019),
conglomerate types of businesses, comprising of either unrelated or loosely...

QbpgbeUneel (12796)
University of Virginia

Similar Content

Related Tags