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Strategy formulation: corporate strategy
Strategy formulation: corporate strategy
Strategy formulation: corporate strategy
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Diagnosing Change
Review of Change Diagnostic Model (20 pts)
The Star Model was developed by Jay Galbraith to analyze an organization’s effectiveness by focusing on strategy, structure, process, rewards and people. Strategy is the direction and the basis for decisions that people will make. Structure is the authority given to people and the groupings of activities. Process is the coordinated activities throughout the organization. Rewards link individual’s actions to organizational objectives. People practices are the selection, development and management of individuals in the organization.1
Rational for Choice of Model (20 pts)
The Star Model is an appropriate choice for analyzing the changes that GE and United Airlines underwent because both companies made significant organizational changes for strategic advantage. Both companies implemented changes that touched many aspects of their organizations. The Star Model matches these companies’ changes by using a broad, comprehensive approach to analyze these changes.
General Electric
Strategy: The strategy GE pursued was that of realigning the business offerings that it had within its portfolio. The core of GE’s strategy is based on five pillars5: technological leadership, services acceleration, enduring customer relationships, resource allocation and globalization.
Structure: The GE 2006 Annual Report4 identifies the six segments of their organization as: Infrastructure, Commercial Finance, Healthcare, NBC Universal, Industrial, Plastics. GE chose to exit the Insurance segment of their organization.
Process and team integration: GE has developed an organization called GE Capital Services that specializes in the process of acquisition and integration. They h...
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2. UAL Corporation, 1993 Annual Report, p.2.
3. Gilson, S. (2001). Creating Value Through Corporate Restructuring. p451
4. Invest and Deliver GE 2006 Annual Report. Retrieved from http://www.ge.com/ar2006/mda_conop.htm
5. Brokaw, L. (2012). GE Talent Management: Aligning Hiring With Strategy. Retrieved from http://sloanreview.mit.edu/article/ge-talent-management-aligning-hiring-with-strategy/
6. Ashkenas, R. (1998). Making the Deal Real: How GE Capital Integrates Acquisitions. Retrieved from http://hbr.org/1998/01/making-the-deal-real-how-ge-capital-integrates-acquisitions/ar/1
7. Welch, J. (2001). Letter to Share Owners. Retrieved from http://www.ge.com/annual00/letter/page4.html
8. Sesack, B. (2013). Overcoming Staff Resistance to Change. Retrieved from http://www.pppmag.com/article/1281/March_2013/Overcoming_Staff_Resistance_to_Change/
fail (Cheng, 2012). Mergers and acquisitions are much common in these days and only a few of them are end up in successes. Even though mergers and acquisitions are not result much successes rate, many organizations are still preferring it because, it is used as a cooperative strategy but nowadays it is used for cooperative development. The cultural differences and merger integration can be considered as an important factor for the failure rate but this study mainly focused
Consultation and analysis of previous similar cases is important in handling a large merge of the magnitude presented here. From the way the new management of American Airline is handling the case, it is evident that that they must have consulted extensively and studied previous mergers. This is a major case study for mergers.
Gaughan, P. A., 2002. Mergers, Acquisitions, and Corporate restructuring. 3rd ed.New York: John Wiley & Sons, Inc.
General Electric Company (GE) is a diversified technology, media and financial services company. With products and services ranging from aircrafts engines, power generation, water processing and security technology to medical imaging, business and consumer financing, media content and industrial products, it serves in more than 100 countries. This analysis will use financial ratios to see just how GE is performing as a Fortune 500 company.
Northwest Airlines is one of the pioneers in the airline transportation industry and is ranked at the fourth largest air carrier in the United States today. The success of the carrier depends on the quality and reliability of the service at a reasonable price. Close competitors force Northwest to innovate their services by increasing efficiency. This essay will try to examine different perspectives in the services needed to successfully complete the company’s objectives. The analysis will explain historical and financial perspectives that may give a better understanding of the current market trend of the organization.
Chang, S. Suk, D. Failed takeovers, methods of payment, and bidder returns, Financial Review. 33 (2), May 1998.
Numerous definitions of strategy exist, in most circumstances strategy can loosely be explained as an overall plan of deployment of resources to ascertain a favourable position within a market (Zablah, Bellenger and Johnston 2004; Grant 1994, p 14). Further, imbedded in many successful organisations are strategies, the importance of which is to remain relevant in the market, and successful in the various attributes of business; profiteering, employee motivation, maintaining sustainable core competencies, effectiveness in operation, or efficiency in the conduction of operations. Therefore challenges involved in the formulation and implementation of a strategy can revolve around the overall external market, as well as internal
Gittell, J. H. (2003). The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance. New York: McGraw-Hill.
Thompson, A. A., Strickland, A. J., & Gamble, J. E. (2008). Crafting & executing strategy: The quest for competitive advantage (16th ed.). New York: McGraw-Hill Irwin.
Jack Welch was considered to be a man of his vision. He believed in his vision for GE and he passed that belief down throughout the company. He passion for his vision changed the culture and structure of GE. In this paper we will analyze how Jack Welch developed his strategic plan, how he used his personal, political and positional power to shape GE. We will also look at how Jack Welch organized, built and planned his teams in keeping with his vision. In the end will look at how this all affected the culture of GE.
McDougall, Gilles. (1995). The Economic Impact of Mergers and Acquisitions on Corporations. Retrieved on July 9th, 2006 from http://strategis.ic.gc.ca/epic/internet/ineas-aes.nsf/vwapj/wp04e.pdf/$FILE/wp04e.pdf
Ensign PC 2004, ‘A resource based view of interrelationships among organizational groups in the diversified firms’, Strategic Change, Vol. 13. pp. 125-137.
While personnel may be the driving force to achieve goals, they need to be supported with resources, time and any number of items; this evaluation is for management to determine where they can provide assistance to the people. Organizations will often fall short in this area and either not recognize or not want to accept it until documented with measures and evidence. By having the organization evaluated as a whole, it possibly gives credence to their employees that the organization is supportive of their efforts. In turn, employees should be giving maximum effort towards achieving strategic goals by performing tasks as required.
Beam (1995) defined traditional rewards systems as hierarchy-based, often tied to seniority or position rather than performance, where rewards were usually a product of promotion. Rewarding stability such as seniority or annual goals create organizations resistant to change (Lawler & Worley, 2006). According to research presented by Lawler and Worley (2006), Chen and Hsieh (2006) and Beam (1995), traditional reward systems are not effective at motivating employee performance or organizational excellence, and they often lead to complacent organizations not capable of the rapid change required to remain effective. As a result, traditional hierarchy-based systems have since been replaced with performance based models.
Additionally, understood the strategy implementation, actions made by firms that carry out the formulated strategy, including strategic controls, organizational design, and leadership. environmental