Generic goal hierachies

1
Generic goal hierachies

• Fred Wenstøp

2
Corporate strategy

• Decision maker
• Central executive officer (CEO)
• Decision contexts
• Strategic posture of the firm
• Strategic thrusts
• Resource allocation
• Managerial infrastructure
• Human resources
• Management of key personnel
• A. C. Hax and N. S. Majluf (1996). The Strategy
  Concept and Process, Prentice Hall

3
Corporate strategyGoal hierarchy

• Maximize the value of the firm
• Maximize the interests of the stakeholders
• Employees
• Customers - price, quality, environmentally safe
  products
• Shareholders - earnings/share
• Suppliers - of suppliers' sales to the firm
• Communities - work places, env. emissions
• Maximize growth - sales, employees, operation
  income
• Maximize market share
• Maximize profitability - ROA, ROE
• Maximize liquidity

4
Corporate strategyGoal hierarchy

• Sub-objective
• maximize the interests of employees
• Job satisfaction
• Job performance
• Turnover
• Absenteeism
• Motivation
• Job security
• Career prospects
• Psychological stress
• Safety health conditions
• Income

5
Functional strategyFinance

• Decision contexts
• Mergers and acquisitions
• Equity management and dividends policy
• Long term debt financing
• Working capital management
• Pension fund management
• Tax management
• Objectives
• Capital market Maximize price/earnings ratio,
  etc.
• Maximize profitability ROA, ROE, ROI
• Risk beta
• Cost of Capital (debt and equity)
• Growth of assets, earnings, sales

6
Functional strategyHuman Resources Management

• Decision contexts
• Selection, promotion, placement
• Appraisal
• Rewards
• Management development

• Objectives
• Maximize job satisfaction
• Maximize Job performance
• Minimize Turnover
• Minimize Absenteeism
• Maximize Motivation
• Maximize Job security
• Maximize Career prospects
• Minimize Psychological stress
• Maximize Safety health conditions
• Maximize Income

7
Functional strategyTechnology

• Decision contexts
• Selection of technologies
• Timing of new introduction
• Project selection

• Objectives
• Maximize RD productivity
• product performance / investment
• Maximize rate of return in RD investment
• Maximize rate of new product introduction
• Maximize royalties of sales of technologies
• Maximize level of technological competence

8
Functional strategyProcurement

• Decision contexts
• Selection, evaluation and development of
  suppliers
• Quality management of purchased goods
• Materials management of purchased goods
• Value analysis, price/cost analysis and
  standardization

• Objectives
• Minimize costs
• Maximize services performance
• of orders on time
• ave. delay on delinquent orders
• Maximize quality
• of orders meeting specifications, etc.

9
Functional strategyManufacturing

• Decision contexts
• Facilities, number of plants, size and location
• Capacity
• Choice of process technologies
• Product scope
• Quality management

• Objectives
• Minimize costs
• Maximize delivery reliability
• Maximize product quality
• Maximize flexibility to volume changes and new
  product introduction

10
Functional strategyMarketing

• Decision contexts
• Product strategy
• New product development and introduction
• Distribution strategy
• Price strategy
• Promotion strategy

• Objectives
• Maximize Product strategy
• sales growth, market share, relative market
  share, breadth of product line, market coverage
• Maximize Distribution strategy
• Efficiency of distribution channels, customer
  service levels, distribution costs, sales force
  productivity
• Maximize price strategy
• Price sensitivity
• Maximize promotion strategy
• product segmentation, brand acceptance