Strategic Information Systems Issues

1
Strategic Information Systems Issues

• Intranet
• Information network within an organization that
  also has access to the external worldwide
  Internet.
• Extranet
• Information network within an organization
  available to key suppliers and customers.

2
Internal Factor Analysis Summary (IFAS)
Internal Factors
Rating
Weighted Score
Weight
Comments
1
2
3
4
5
Strengths Weaknesses Total Weighted Score
1.00
3
Internal Factor Analysis Summary (IFAS)Maytag
as Example
Internal Factors
Rating
Weighted Score
Weight
Comments
Strengths Quality Maytag culture Experienced
top management Vertical integration Employee
relations Hoovers international
orientation Weaknesses Process-oriented
RD Distribution channels Financial
position Global positioning Manufacturing
facilities Total Weighted Score
1
2
3
4
5
Quality key to success Know appliances Dedicated
factories Good, but deteriorating Hoover name in
cleaners Slow on new products Superstores
replacing small dealers High debt load Hoover
weak outside the United Kingdom and
Australia Investing now
.75 .20 .40 .15 .45 .10 .10 .30 .40 .20
.15 .05 .10 .05 .15 .05 .05 .15 .20 .05
5 4 4 3 3 2 2 2 2 4
1.00
3.05
4

• Strategy Formulation Situation Analysis and
  Business Strategy

5
Situational Analysis

• Strategy formulation
• Strategic planning or long-range planning
• Develops mission, objectives, strategies and
  policies

6
Situational Analysis

• Situational Analysis
• Process of finding a strategic fit between
  external opportunities and internal strengths
  while working around external threats and
  internal weaknesses.

7
Strategic Factor Analysis Summary (SFAS)
5
1
2
3
4
6
Duration
Strategic Factors (Select the most important
opportunities/threats from EFAS, Table 3.4 and
the most important strengths and weaknesses from
IFAS, Table 4.2) Total Score
Rating
Weighted Score
INTERMEDIATE
Weight
Comments
SHORT
LONG
8
Strategic Factor Analysis Summary (SFAS) Maytag
as Example
Duration
Strategic Factors (Select the most important
opportunities/threats from EFAS, Table 3.4 and
the most important strengths and weaknesses from
IFAS, Table 4.2) S1 Quality Maytag culture
(S) S3 Hoovers international orientation
(S) W3 Financial position (W) W4 Global
positioning (W) O1 Economic integration
of European Community (O) O2 Demographics favor
quality (O) O5 Trend to super stores (O
T) T3 Whirlpool and Electrolux (T) T5 Japanese
appliance companies (T) Total Score
Rating
Weighted Score
INTERMEDIATE
Weight
Comments
SHORT
LONG
X X
X X X
X X X X
.10 .10 .10 .15 .10 .10 .10 .15 .10
5 3 2 2 4 5 2 3 2
.50 .30 .20 .30 .40 .50 .20 .45 .20
Quality key to success Name recognition High
debt Only in N.A., U.K., and Australia Acquisitio
n of Hoover Maytag quality Weak in this
channel Dominate industry Asian presence
1.00
3.05
9
TOWS Matrix
10
Cooperative Strategies
Obtain technology
Access to markets
Strategic Alliance
Reduce financial risk
Reduce political risk
Achieve competitive advantage
11
Continuum of Strategic Alliances
Mutual Service

Joint Venture

Value-Chain

Consortia
Licensing Arrangement
Partnership
Weak and Distant
Strong and Close
Source Suggested by R. M. Kanter, Collaborative
Advantage The Art of Alliances, Harvard
Business Review (July-August 1994), pp. 96108.
12

• Strategy Formulation
• Corporate Strategy

13
Corporate Strategy

• Three Key Issues
• Firms directional strategy
• Firms portfolio strategy
• Firms parenting strategy

14
Corporate Directional Strategies
15
Corporate Strategy

• Directional Strategy
• Orientation toward growth
• Expand, cut back, status quo?
• Concentrate within current industry, diversify
  into other industries?
• Growth and expansion through internal development
  or acquisitions, mergers, or strategic
  alliances?

16
Corporate Strategy

• Directional Strategy
• Three Grand Strategies
• Growth strategies
• Stability strategies
• Retrenchment strategies

17
Corporate Strategy

• Growth Strategies
• Most widely pursued strategies
• External mechanisms
• Mergers
• Transaction involving two or more firms in which
  stock is exchanged but only one firm survives.
• Acquisition
• Purchase of a firm that is absorbed as an
  operating subsidiary of the acquiring firm.
• Strategic Alliance
• Partnership of two or more firms to achieve
  strategically significant objectives that are
  mutually beneficial.

18
Corporate Strategy

• 2 Basic Growth Strategies
• Concentration
• Current product line in one industry
• Diversification
• Into other product lines in other industries

19
Corporate Strategy

• Basic Concentration Strategies
• Vertical growth
• Horizontal growth

20
Corporate Strategy

• Concentration
• Vertical growth
• Backward integration
• Forward integration

21
Corporate Strategy

• Concentration
• Horizontal Growth
• Horizontal integration

22
Corporate Strategy

• Basic Diversification Strategies
• Concentric Diversification
• Conglomerate Diversification

23
Corporate Strategy

• Diversification
• Concentric
• Growth into related industry
• Search for synergies

24
Corporate Strategy

• Diversification
• Conglomerate
• Growth into unrelated industry
• Concern with financial considerations

25
Corporate Strategy
Exporting Licensing Franchising Joint
Ventures Acquisitions Green-Field
Development Production Sharing Turnkey
Operations BOT Concept Management Contracts
International Entry Options
26
Corporate Strategy

• Stability Strategies
• Pause/proceed with caution
• No change
• Profit strategies

27
Corporate Strategy

• Retrenchment Strategies
• Turnaround
• Captive Company Strategy
• Selling out
• Bankruptcy
• Liquidation

28
Corporate Strategy

• Portfolio Analysis
• How much of our time and money should we spend on
  our best products to ensure that they continue to
  be successful?
• How much of our time and money should we spend
  developing new costly products, most of which
  will never be successful?

29
Corporate Strategy

• Portfolio Analysis
• BCG (Boston Consulting Group) Matrix
• Product life cycle and funding decisions
• Question marks
• Stars
• Cash cows
• Dogs

30
BCG Matrix
31
General Electrics Business Screen
Source Adapted from Strategic Management in GE,
Corporate Planning and Development, General
Electric Corporation. Used by permission of
General Electric Company.
32
International Portfolio Analysis

• 2 Factors
• Countrys attractiveness
• Market size, rate of growth, regulation
• Competitive strength
• Market share, product fit, contribution margin,
  market support

33
Portfolio Matrix for Plotting Products by Country
34
Corporate Strategy

• Portfolio Analysis
• Advantages
• Top management evaluates each of firms
  businesses individually
• Use of externally-oriented data to supplement
  management judgment
• Raises issue of cash flow availability
• Facilitates communication

35
Corporate Strategy

• Portfolio Analysis
• Disadvantages
• Difficult to define product/market segments
• Standard strategies can miss opportunities
• Illusion of scientific rigor
• Value-laden terms

36
Corporate Strategy

• Corporate Parenting
• Views the corporation in terms of resources and
  capabilities that can be used to build business
  unit value as well as generate synergies across
  business units.

37

• Strategy Implementation
• Organizing for Action

38
Strategy Implementation

• Strategy Implementation
• Sum total of the activities and choices required
  for the execution of a strategic plan.
• Process by which strategies and policies are put
  into action through programs, budgets, and
  procedures.

39
Strategy Implementation

• Implementation Process Questions
• Who are the people to carry out the strategic
  plan?
• What must be done to align operations with new
  direction?
• How is work going to be coordinated?

40
Strategy Implementation
More time than planned Unanticipated
problems Activities ineffectively
coordinated Crises deferred attention
away Employees w/o capabilities Inadequate
employee training Uncontrollable external
factors Inadequate leadership Poorly defined
tasks Inadequate information systems
Problems in Implementing Strategic plans
41
Strategy Implementation

• Programs
• Purpose is to make the strategy
  action-oriented.
• Compare proposed programs and activities with
  current programs and activities.

42
Strategy Implementation

• Programs
• Matrix of change
• Feasibility
• Sequence execution
• Location
• Pace and nature of change
• Stakeholder evaluations

43
Matrix of Change
44
Strategy Implementation

• Budgets
• Planning a budget is the last real check a firm
  has on the feasibility of the selected strategy.

45
Strategy Implementation

• Achieving Synergy
• Synergy
• If the return on investment (ROI) is greater than
  what the return would be if the division was an
  independent business.

46
Strategy Implementation

• 4 Forms of Synergy
• Shared know-how
• Shared tangible resources
• Economies of scale or scope
• Pooled negotiating power

47
Strategy Implementation

• Structure Follows Strategy
• Changes in corporate strategy lead to changes in
  organizational structure

48
Strategy Implementation

• Structure Follows Strategy
• New strategy is created
• New administrative problems emerge
• Economic performance declines
• New appropriate structure is invented
• Profit returns to its previous levels

49
Factors Differentiating Stage I, II, and III
Companies
Function Stage 1 Stage II Stage III 1. Sizing up
Major problems 2. Objectives 3. Strat
egy 4. Organization Major
characteristic of structure
Survival and growth dealing with short-term
operating problems. Personal and
subjective. Implicit and personal
exploitation of immediate opportunities seen by
owner-manager. One unit, one-man show.
Growth, rationalization, and expansion of
resources, providing for adequate attention to
product problems. Profits and meeting
functionally oriented budgets and performance
targets. Functionally oriented moves restricted
to one product scope exploitation of one basic
product or service field. One unit, functionally
specialized group.
Trusteeship in management and investment and
control of large, increasing, and diversified
resources. Also, important to diagnose and take
action on problems at division level. ROI,
profits, earnings per share. Growth and product
diversification exploitation of general business
opportunities. Multiunit general staff office
and decentralized operating divisions.
(Continued)
50
Factors Differentiating Stage I, II, and III
Companies
Function Stage 1 Stage II Stage III 5. (a)
Measurement and control 5. (b) Key
performance indicators 6. Reward-punishm
ent system
Personal, subjective control based on simple
accounting system and daily communication and
observation. Personal criteria, relationships
with owner, operating efficiency, ability to
solve operating problems. Informal, personal,
subjective used to maintain control and divide
small pool of resources to provide personal
incentives for key performers.
Control grows beyond one person assessment of
functional operations necessary structured
control systems evolve. Functional and internal
criteria such as sales, performance compared to
budget, size of empire, status in group, personal
relationships, etc. More structured usually
based to a greater extent on agreed policies as
opposed to personal opinion and relationships.
Complex formal system geared to comparative
assessment of performance measures, indicating
problems and opportunities and assessing
management ability of division managers. More
impersonal application of comparisons such as
profits, ROI, P/E ratio, sales, market share,
productivity, product leadership, personnel
development, employee attitudes, public
responsibility. Allotment by due process of a
wide variety of different rewards and punishments
on a formal and systematic basis. Companywide
policies usually apply to many different classes
of managers and workers with few major exceptions
for individual cases.
51
Changing Structural Characteristics of Modern
Corporation
Old Organizational Design New Organizational
Design One large corporation Mini-business units
cooperative relationships Vertical
communication Horizontal communication Centralized
top-down decision making Decentralized
participative decision making Vertical
integration Outsourcing virtual
organizations Work/quality teams Autonomous work
teams Functional work teams Cross-functional work
teams Minimal training Extensive
training Specialized job design focused on
individual Value-chain team-focused job design
52
Strategy Implementation

• Reengineering
• Radical design of business processes to achieve
  major gains in cost, service, or time. Effect
  way to implement a turnaround strategy.

53
Strategy Implementation

• Reengineering Principles
• Organize around outcomes, not tasks
• Have those who use the output perform the process
• Subsume information-processing work into the real
  work that produces the information
• Treat geographically dispersed resources as
  though they were centralized
• Link parallel activities instead of integrating
  their results
• Put decision point where work is performed and
  build control into the process
• Capture information once at the source

54
Strategy Implementation

• Job Design source of competitive advantage
• Job design
• Study of individual tasks to increase relevance
• Job enlargement
• Combining tasks
• Job rotation
• Increase variety of tasks
• Job enrichment
• More autonomy and control to workers

55

• Evaluation and Control

56
Evaluation and Control

• Evaluation Control
• Process that ensures that the company is
  achieving what it set out to accomplish.
  Compares performance with desired results.

57
Evaluation and Control
58
Evaluation and Control

• Evaluation Control Information
• Performance data and activity reports

59
Evaluation and Control

• Measuring Performance
• Performance end result of activity
• Measures depend on organizational unit
• Measures
• ROI
• Steering Controls
• SPC

60
Evaluation and Control

• Types of Control
• Behavior Controls
• Policies, rules, SOPs, directives
• Output Controls
• Objectives, targets, milestones
• Input Controls
• Resources, knowledge, skills, values

61
Evaluation and Control

• Activity-Based Costing
• ABC
• Allocating indirect and fixed costs to individual
  product lines based on the value-added activities
  going into that product

62
Evaluation and Control
Return on Investment (ROI)
Traditional Financial Measures
Earnings per Share (EPS)
Return on Equity (ROE)
63
Evaluation and Control

• Shareholder Value
• Present value of the anticipated future stream of
  cash flows plus the value of the company if
  liquidated.

64
Evaluation and Control

• Economic Value Added (EVA)
• EVA After tax operating income (investment in
  assets x weighted average cost of capital)

65
Evaluation and Control

• Market Value Added (MVA)
• Difference between the market value of a
  corporation and capital contributed by
  shareholders and lenders.

66
Evaluation and Control

• Balanced Scorecard
• Financial (How do we appear to shareholders?)
• Customer (How do customers view us?)
• Internal Business Perspective (What must we excel
  at?)
• Innovation and Learning (Can we continue to
  improve and create value?)

67
Evaluation and Control

• Benchmarking
• Identify the area or process to be examined
• Find output measures and obtain measurements
• Select best-in-class to benchmark against
• Calculate differences and determine reasons
• Develop tactical programs for closing gaps
• Implement programs and compare

68
Evaluation and Control

• Problems in Measuring Performance
• Short-term orientation
• Goal displacement
• Behavior substitution
• Suboptimization

69
Evaluation and Control

• Guidelines for Proper Control
• Minimum amount of information
• Monitor meaningful activities
• Timely
• Long-term and short-term
• Pinpointing exceptions
• Reward meeting or exceeding standards

70
Evaluation and Control

• Strategic Audit
• Type of management audit that is extremely useful
  as a diagnostic tool to pinpoint corporate-wide
  problem areas and to highlight organizational
  strengths and weaknesses.

71
Evaluation and Control

• Audit Steps
• Evaluate current performance results
• Review corporate governance
• Scan and assess the external environment
• Scan and assess the internal environment
• Analyze strategic factors using SWOT
• Generate and evaluate strategic alternatives
• Implement strategies
• Evaluate and control

72
Appendix 1 A Strategic Audit of a Corporation

• I. Current Situation
• A. Current Performance
• How did the corporation perform the past year
  overall in terms of return on investment, market
  share, and profitability?
• B. Strategic Posture
• What are the corporations current mission,
  objectives, strategies, and policies?
• Are they clearly stated or are they merely
  implied from performance?
• Mission What business(es) is the corporation in?
  Why?
• Objectives What are the corporate, business, and
  functional objectives? Are they consistent with
  each other, with the mission, and with the
  internal and external environments?

73
Appendix 1 B Strategic Audit of a Corporation

• Strategies What strategy or mix of strategies is
  the corporation following? Are they consistent
  with each other, with the mission and objectives,
  and with the internal and external environments?
• Policies What are they? Are they consistent with
  each other, with the mission and objectives, with
  the strategies, and with the internal and
  external environments?
• Do the current mission, objectives, strategies,
  and policies reflect the corporations
  international operations whether global or
  multi-domestic?
• II. Corporate Governance
• A. Board of Directors
• Who are they? Are they internal or external?
• Do they own significant shares of stock?

74
Appendix 3 A Strategic Audit of a Corporation

• Is the stock privately held or publicly traded?
  Are there different classes of stock with
  different voting rights?
• What do they contribute to the corporation in
  terms of knowledge, skills, background, and
  connections? If the corporation has international
  operations, do board members have international
  experience?
• How long have they served on the board?
• What is their level of involvement in strategic
  management? Do they merely rubber-stamp top
  managements proposals or do they actively
  participate and suggest future directions?

75
Appendix 4 A Strategic Audit of a Corporation

• B. Top Management
• What person or group constitutes top management?
• What are top managements chief characteristics
  in terms of knowledge, skills, background, and
  style? If the corporation has international
  operations, does top management have
  international experience? Are executives from
  acquired companies considered part of the top
  management team?
• Has top management been responsible for the
  corporations performance over the past few
  years? How many managers have been in their
  current position for less than 3 years? Were they
  internal promotions or external hires?
• Has it established a systematic approach to
  strategic management?
• What is its level of involvement in the strategic
  management process?
• How well does top management interact with lower
  level managers and with the board of directors?

76
Appendix 5 A Strategic Audit of a Corporation

• Are strategic decisions made ethically in a
  responsible manner?
• Is top management sufficiently skilled to cope
  with likely future challenges?
• III. External Environment Opportunities and
  Threats (SWOT)
• A. Societal Environment
• What general environmental forces are currently
  affecting both the corporation and the industries
  in which it competes? Which present current or
  future threats? Opportunities? See Table 3.1 on
  page 55.
• a) Economic
• b) Technological
• c) Political-legal
• d) Sociocultural
• Are these forces different in other regions of
  the world?

77
Appendix 6 A Strategic Audit of a Corporation

• B. Task Environment
• What forces drive industry competition? Are these
  forces the same globally or do they vary from
  country to country?
• a) Threat of new entrants
• b) Bargaining power of buyers
• c) Threat of substitute products or services
• d) Bargaining power of suppliers
• e) Rivalry among competing firms
• f) Relative power of unions, governments,
  special interest groups, etc.
• What key factors in the immediate environment
  (that is, customers, competitors, suppliers,
  creditors, labor unions, governments, trade
  associations, interest groups, local communities,
  and shareholders) are currently affecting the
  corporation? Which are current or future threats?
  Opportunities?

78
Appendix 7 A Strategic Audit of a Corporation

• C. Summary of External Factors
• Which of these forces and factors are the most
  important to the corporation and to the
  industries in which it competes at the present
  time? Which will be important in the future?
• IV. Internal Environment Strengths and
  Weaknesses (SWOT)
• A. Corporate Structure
• How is the corporation structured at present?
• a) Is the decision-making authority centralized
  around one group or decentralized to many units?
• b) Is it organized on the basis of functions,
  projects, geography, or some combination of
  these?
• Is the structure clearly understood by everyone
  in the corporation?

79
Appendix 8 A Strategic Audit of a Corporation

• Is the present structure consistent with
  corporate objectives, strategies, policies, and
  programs as well as with the firms international
  operations?
• In what ways does it compare with similar
  corporations?
• B. Corporate Culture
• Is there a well-defined or emerging culture
  composed of shared beliefs, expectations, and
  values?
• Is the culture consistent with the current
  objectives, strategies, policies, and programs?
• What is the cultures position on important
  issues facing the corporation (that is, on
  productivity, quality of performance,
  adaptability to changing conditions, and
  internationalization)?
• Is the culture compatible with the employees
  diversity of backgrounds?
• Does the company take into consideration the
  values of each nations culture in which the firm
  operates?

80
Appendix 9 A Strategic Audit of a Corporation

• C. Corporate Resources
• Marketing
• a) What are the corporations current marketing
  objectives, strategies, policies, and programs?
• i) Are they clearly stated, or merely implied
  from performance and/or budgets?
• ii) Are they consistent with the corporations
  mission, objectives, strategies, policies, and
  with internal and external environments?
• b) How well is the corporation performing in
  terms of analysis of market position and
  marketing mix (that is, product, price, place,
  and promotion) in both domestic and international
  markets? What percentage of sales comes from
  foreign operations?
• i) What trends emerge from this analysis?

81
Appendix 10A Strategic Audit of a Corporation
ii) What impact have these trends had on past
performance and how will they probably
affect future performance? iii) Does
this analysis support the corporations past and
pending strategic decisions? iv) Does
marketing provide the company with a
competitive advantage? c) How well
does this corporations marketing performance
compare with that of similar
corporations? d) Are marketing managers
using accepted marketing concepts and
techniques to evaluate and improve product
performance? (Consider product life cycle,
market segmentation, market research,
and product portfolios.) e) Does
marketing adjust to the conditions in each
country in which it operates?
82
Appendix 11 A Strategic Audit of a Corporation

• Finance
• a) What are the corporations current financial
  objectives, strategies, policies, and programs?
• i) Are they clearly stated or merely implied?
• ii) Are they consistent with the corporations
  mission, objectives, strategies, policies, and
  with internal and external environments?
• b) How well is the corporation performing in
  terms of financial analysis?
• i) What trends emerge from this analysis?
• ii) Are there any significant differences when
  statements are calculated in constant versus
  reported dollars?
• iii) What impact have these trends had on past
  performance and how will they probably affect
  future performance?

83
Appendix 12 A Strategic Audit of a Corporation

• iv) Does this analysis support the corporations
  past and pending strategic decisions?
• v) Does finance provide the company with a
  competitive advantage?
• c) How well does this corporations financial
  performance compare with that of similar
  corporations?
• d) Are financial managers using accepted
  financial concepts and techniques to evaluate and
  improve current corporate and divisional
  performance? (Consider financial leverage,
  capital budgeting, ratio analysis, and managing
  foreign currencies.)
• e) Does finance adjust to the conditions in each
  country in which the company operates?
• f) What is the role of the financial manager in
  the strategic management process?

84
Appendix 13 A Strategic Audit of a Corporation

• Research and Development (RD)
• a) What are the corporations current RD
  objectives, strategies, policies, and programs?
• i) Are they clearly stated, or merely implied
  from performance and/or budgets?
• ii) Are they consistent with the corporations
  mission, objectives, strategies, policies, and
  with internal and external environments?
• iii) What is the role of technology in corporate
  performance?
• iv) Is the mix of basic, applied, and engineering
  research appropriate given the corporate mission
  and strategies?
• v) Does RD provide the company with an advantage?

85
Appendix 14 A Strategic Audit of a Corporation

• b) What return is the corporation receiving from
  its investment in RD?
• c) Is the corporation competent in technology
  transfer? Does it use concurrent engineering and
  cross-functional work teams in product and
  process design?
• d) What role does technological discontinuity
  play in the companys products?
• e) How well does the corporations investment in
  RD compare with the investments of similar
  corporations?
• f) Does RD adjust to the conditions in each
  country in which the company operates?
• g) What is the role of the RD manager in the
  strategic management process?

86
Appendix 15 A Strategic Audit of a Corporation

• Operations and Logistics
• a) What are the corporations current
  manufacturing/service objectives, strategies,
  policies, and programs?
• i) Are they clearly stated, or merely implied
  from performance and/or budgets?
• ii) Are they consistent with the corporations
  mission, objectives, strategies, policies, and
  environments?
• b) What is the type and extent of operations
  capabilities of the corporation? How much is done
  domestically versus internationally? Is the
  amount of outsourcing appropriate to be
  competitive? Is purchasing being handled
  appropriately?
• i) If product-oriented, consider plant
  facilities, type of manufacturing system, age
  and type of equipment, degree and role of
  automation and/or robots, plant capacities and
  utilization, productivity ratings, availability
  and type of transportation.

87
Appendix 16 A Strategic Audit of a Corporation

• ii) If service-oriented, consider service
  facilities (hospital, theater, or school
  buildings), type of operations systems
  (continuous service over time to same clientele
  or intermittent service over time to varied
  clientele), age and type of supporting equipment,
  degree and role of automation and/or use of mass
  communication devices (diagnostic machinery,
  video-tape machines), facility capacities and
  utilization rates, efficiency ratings of
  professional/ service personnel, availability
  service personnel, and availability and type of
  transportation to bring service staff and
  clientele together.
• c) Are manufacturing or service facilities
  vulnerable to natural disasters, local or
  national strikes, reduction or limitation of
  resources from suppliers, substantial cost
  increases of materials, or nationalization by
  governments?

88
Appendix 17 A Strategic Audit of a Corporation

• d) Is there an appropriate mix of people and
  machines in manufacturing firms, or of support
  staff to professionals in service firms?
• e) How well does the corporation perform relative
  to the competition? Is it balancing inventory
  costs (warehousing) with logistical costs
  (just-in-time)? Consider costs per unit of labor,
  material, and overhead downtime inventory
  control management and/or scheduling of service
  staff production ratings facility utilization
  percentages and number of clients successfully
  treated by category (if service firm) or
  percentage of orders shipped on time (if product
  firm).
• i) What trends emerge from this analysis?
• ii) What impact have these trends had on past
  performance and how will they probably affect
  future performance?
• iii) Does this analysis support the corporations
  past and pending strategic decisions?

89
Appendix 18 A Strategic Audit of a Corporation

• iv) Does operations provide the company with a
  competitive advantage?
• f) Are operations managers using appropriate
  concepts and techniques to evaluate and improve
  current performance? Consider cost systems,
  quality control, reliability systems, inventory
  control management, personnel scheduling, TQM,
  learning curves, safety programs, and
  engineering programs that can improve efficiency
  of manufacturing or of service.
• g) Does operations adjust to the conditions in
  each country in which it has facilities?
• h) What is the role of the operations manager in
  the strategic management process?
• Human Resources Management (HRM)
• a) What are the corporations current HRM
  objectives, strategies, policies, and
  programs?

90
Appendix 19 A Strategic Audit of a Corporation

• i) Are they clearly stated, or merely implied
  from performance and/or budgets?
• ii) Are they consistent with the corporations
  mission, objectives, strategies, policies, and
  with internal and external environments?
• b) How well is the corporations HRM performing
  in terms of improving the fit between the
  individual employee and the job? Consider
  turnover, grievances, strikes, layoffs, employee
  training, and quality of work life.
• i) What trends emerge from this analysis?
• ii) What impact have these trends had on past
  performance and how will they probably affect
  future performance?
• iii) Does this analysis support the corporations
  past and pending strategic decisions?
• iv) Does HRM provide the company with a
  competitive advantage?

91
Appendix 20 A Strategic Audit of a Corporation

• c) How does this corporations HRM performance
  compare with that of similar corporations?
• d) Are HRM managers using appropriate concepts
  and techniques to evaluate and improve
  corporate performance? Consider the job analysis
  program, performance appraisal system,
  up-to-date job descriptions, training and
  development programs, attitude surveys, job
  design programs, quality of relationship with
  unions, and use of autonomous work teams.
• e) How well is the company managing the diversity
  of its workforce?
• f) Does HRM adjust to the conditions in each
  country in which the company operates? Does the
  company have a code of conduct for HRM in
  developing nations? Are employees receiving
  international assignments to prepare them for
  managerial positions?
• g) What is the role of the HRM manager in the
  strategic management process?

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Appendix 21 A Strategic Audit of a Corporation

• Information Systems (IS)
• a) What are the corporations current IS
  objectives, strategies, policies, and programs?
• i) Are they clearly stated, or merely implied
  from performance and/or budgets?
• ii) Are they consistent with the corporations
  mission, objectives, strategies, policies, and
  with internal and external environments?
• b) How well is the corporations IS performing in
  terms of providing a useful database, automating
  routine clerical operations, assisting managers
  in making routine decisions, and providing
  information necessary for strategic decisions?
• i) What trends emerge from this analysis?
• ii) What impact have these trends had on past
  performance and how will they probably affect
  future performance?

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Appendix 22 A Strategic Audit of a Corporation

• ii) What impact have these trends had on past
  performance and how will they probably affect
  future performance?
• iii) Does this analysis support the corporations
  past and pending strategic decisions?
• iv) Does IS provide the company with a
  competitive advantage?
• c) How does this corporations IS performance and
  stage of development compare with that of similar
  corporations?
• d) Are IS managers using appropriate concepts and
  techniques to evaluate and improve corporate
  performance? Do they know how to build and manage
  a complex database, conduct system analyses, and
  implement interactive decision-support systems?
• e) Does the company have a global IS? Does it
  have difficulty with getting data across national
  boundaries?
• f) What is the role of the IS manager in the
  strategic management process?

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Appendix 23 A Strategic Audit of a Corporation

• D. Summary of Internal Factors
• Which of these factors are the most important to
  the corporation and to the industries in which it
  competes at the present time? Which will be
  important in the future?
• V. Analysis of Strategic Factors (SWOT)
• A. Situational Analysis
• What are the most important internal and external
  factors (Strengths, Weaknesses, Opportunities,
  Threats) that strongly affect the corporations
  present and future performance? List five to ten
  strategic factors.
• B. Review of Mission and Objectives
• Are the current mission and objectives
  appropriate in light of the key strategic factors
  and problems?

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Appendix 24 A Strategic Audit of a Corporation

• Should the mission and objectives be changed? If
  so, how?
• If changed, what will the effects on the firm be?
• VI. Strategic Alternatives and Recommended
  Strategy
• A. Strategic Alternatives
• Can the current or revised objectives be met by
  the simple, more careful implementing of those
  strategies presently in use (for example,
  fine-tuning the strategies)?
• What are the major feasible alternative
  strategies available to this corporation? What
  are the pros and cons of each? Can corporate
  scenarios be developed and agreed upon?
• a) Consider cost leadership and differentiation
  as business strategies.

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Appendix 26 A Strategic Audit of a Corporation

• b) Consider stability, growth, and retrenchment
  as corporate strategies.
• c) Consider any functional strategic alternatives
  that might be needed for reinforcement of an
  important corporate or business strategic
  alternative.
• B. Recommended Strategy
• Specify which of the strategic alternatives you
  are recommending for the corporate, business, and
  functional levels of the corporation. Do you
  recommend different business or functional
  strategies for different units of the
  corporation?
• Justify your recommendation in terms of its
  ability to resolve both long- and short-term
  problems and effectively deal with the strategic
  factors.
• What policies should be developed or revised to
  guide effective implementation?

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Appendix 27 A Strategic Audit of a Corporation

• VII. Implementation
• A. What kinds of programs (for example,
  restructuring the corporation or instituting TQM)
  should be developed to implement the recommended
  strategy?
• Who should develop these programs?
• Who should be in charge of these programs?
• B. Are the programs financially feasible? Can pro
  forma budgets be developed and agreed upon? Are
  priorities and timetables appropriate to
  individual programs?
• C. Will new standard operating procedures need to
  be developed?

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Appendix 28 A Strategic Audit of a Corporation

• VIII. Evaluation and Control
• A. Is the current information system capable of
  providing sufficient feedback on implementation
  activities and performance? Can it measure
  critical success factors?
• Can performance results be pinpointed by area,
  unit, project, or function?
• Is the information timely?
• B. Are adequate control measures in place to
  ensure conformance with the recommended strategic
  plan?
• Are appropriate standards and measures being
  used?
• Are reward systems capable of recognizing and
  rewarding good performance?