Management and Organizational Behavior

Dr. Leigh Stelzer

Strategic Management, W&N Chap. 3 and Line of Sight

Objectives:

Line of sight alignment.

Recall our discussion of systems. Recognize that the organization exists within an environment that provides resources and makes demands for outputs including products and decisions. Strategic thinking is about how most effectively and efficiently to turn inputs into outputs to meet external demands and thrive in the environment.

The breakthrough in strategic thinking is the recognition that for the organization to be successful every aspect of the organization has to be aligned with the strategy. Thus, the question for every division and every activity is: Is it strategic? Does it contribute to the overall strategy of the firm?

Strategy used to be associated with long range planning. Now it is about focus.

Focus begins with a mission that stakes a claim: Says who we are and what we intend to accomplish. Sometimes called a vision.

The emphasis is on ability of the worker to use the mission as a guiding light for action. Activities that conform to the mission should be pursued and encouraged. Activities that don’t, departments that don’t, should be altered or eliminated.

Examples of Mission statements

Mission statements should be translatable into goal commitments. Goals are the actions that fulfill the mission. There needs to be a line of sight between the mission and the actions of departments and workers.

Mission reflects a SWOT analysis

Strengths and weaknesses of the firm. Internal analysis.

What is your business? What are you good at? What are your resources?

Opportunities and threats in the environment. External analysis.

Niche opportunities

How to characterize the environment demand structure. ( Gerloff and Jurkovich): W&N p.168

1. Complexity: number of elements in the environment

2. Diversity: variety of elements, distinct, segmented, organized and/or coordinated or not.

3. Dynamism: change, change over time, and change in the rate of change. Stable v. unstable

4. Munificence: environmental support for/hostility to the organization

General environment vs. Task environment is composed of people and organizations with which the firm is in direct contact.

How can a business achieve "line of sight" alignment of the business plan and the performance of workers?

The Ritz-Carlton with its emphasis on "quality is the business plan" has sought to achieve line of sight alignment. The following are the elements designed to achieve this alignment:

1. Credo, philosophy, mission:

You have to know and articulate the goals if you want to achieve them.

2. Behavioral or performance norms that reflect the goals:

You have to have performance norms that put into effect the goals.

The Ritz-Carlton has identified the situations and behaviors that lead to customer satisfaction. Quality is measured by customer satisfaction. The standards for employees are to create those situations and performances that enhance customer satisfaction.

3. Recruitment:

Emphasize recruiting the right people.

Make sure there is a "fit" between person and the job.

4. Training:

Train employees in the credo/philosophy that drives the company and the performance norms.

Emphasize that the front-line worker in touch with the client or customer is the one that makes quality happen.

Encourage the worker to visualize the customer (take on the role of the customer).

Encourage a professionalization of the worker, the worker is a proud owner of his work and is empowered to achieve the goal of quality.

5. Repetition: Constantly repeat the mission, credo, and behavioral norms using:

a. the morning line-up

b. peer review reminders

c. retraining

6. Rewards are aligned with the business goals. Key goal is that customer have a seamless experience

Rewards focus on performance that satisfies the customer. Also performance standards.