Generic goal hierachies Fred Wenstp 3102021 Fred Wenstp
- Slides: 10
Generic goal hierachies Fred Wenstøp 3/10/2021 Fred Wenstøp: Hax & Majluf 1
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 3/10/2021 Fred Wenstøp: Hax & Majluf 2
Corporate strategy Goal hierarchy • Maximize the value of the firm – Maximize the interests of the stakeholders • • • – – 3/10/2021 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 Fred Wenstøp: Hax & Majluf 3
Corporate strategy Goal hierarchy • Sub-objective: maximize the interests of employees • • • 3/10/2021 Job satisfaction Job performance Turnover Absenteeism Motivation Job security Career prospects Psychological stress Safety health conditions Income Fred Wenstøp: Hax & Majluf 4
Functional strategy Finance • Decision contexts: – – – Mergers and acquisitions Equity management and dividends policy Long term debt financing Working capital management Pension fund management Tax management • Objectives – – – 3/10/2021 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 Fred Wenstøp: Hax & Majluf 5
Functional strategy Human Resources Management • Objectives • Decision contexts – Selection, promotion, placement – Appraisal – Rewards – Management development 3/10/2021 – – – – – 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 Fred Wenstøp: Hax & Majluf 6
Functional strategy Technology • Decision contexts • Objectives – Selection of technologies – Timing of new introduction – Project selection 3/10/2021 – Maximize R&D productivity • product performance / investment – Maximize rate of return in R&D investment – Maximize rate of new product introduction – Maximize royalties of sales of technologies – Maximize level of technological competence Fred Wenstøp: Hax & Majluf 7
Functional strategy Procurement • Decision contexts • Objectives – Selection, evaluation and development of suppliers – Quality management of purchased goods – Materials management of purchased goods – Value analysis, price/cost analysis and standardization 3/10/2021 – Minimize costs – Maximize services performance • % of orders on time • ave. delay on delinquent orders – Maximize quality Fred Wenstøp: Hax & Majluf • % of orders meeting specifications, etc. 8
Functional strategy Manufacturing • Decision contexts • Objectives – Facilities, number of plants, size and location – Capacity – Choice of process technologies – Product scope – Quality management 3/10/2021 – – Minimize costs Maximize delivery reliability Maximize product quality Maximize flexibility to volume changes and new product introduction Fred Wenstøp: Hax & Majluf 9
Functional strategy Marketing • Objectives • Decision contexts – Product strategy – New product development and introduction – Distribution strategy – Price strategy – Promotion strategy – 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 3/10/2021 Fred Wenstøp: Hax & Majluf 10