Formal planning alone is not the best way for managers to develop strategy. Facts, figures, and forecasts are necessary; but managers also need an intuitive understanding of the organization, a feel for the business not unlike a potter's feel for the clay. Strategy is not just a plan for the future but also a pattern out of the past. Strategies are not always deliberate--they also emerge over time as organizations innovate and respond to their markets. By seeing patterns take shape in their environments, the best strategists find strategies as well as create them. McKinsey Award Winner.
Most great organizations are great because of the way they recruit and groom good people. It is necessary to muscle-build the organization: institute tough, aggressive, companywide upgrading. Start with some frank questions. What are hiring standards? Is there a nucleus of excellent talent to draw from? How are high-potential people identified? What are the performance problems?
This eight-step process for designing a distribution system calls for in-depth study of what services and conveniences the company's customers value and then segmentation of the market according to those values. At several crucial stages, the process requires getting outside checks and hard data for market segments, company objectives, and the projected costs of distribution outlets. The climax of the process is an off-site meeting at which top management tests its prejudices against evidence that researchers have gathered.
Does matrix management stifle or foster the development of new products? The arguments for and against matrices consist primarily of anecdotal success or failure stories. The issue is further obscured by the failure to recognize that there are different types of matrices. Data on the usage and effectiveness of three matrix structures (functional, balanced, and project matrices) were collected from 500 managers experienced in product development. The results indicate that matrices still are the dominant approach for completing development projects. However, while all three types of matrices have comparable usage rates, the project matrix is considered the most effective. Companies using matrix management should consider project matrices if they are trying to improve performance.
Examines a significant example of "technological pioneering"--the development of an emerging technology in pursuit of future commercial opportunity. In this case, the pioneer's efforts resulted in the birth of a major industry, the manufacture of videocassette recorders for the mass consumer market. The authors compare the actions of six firms that were pioneers in the development of this technology, two in the United States and four in Japan. Three firms, all Japanese, emerged in the late 1970s as the big winners in the growth of this new industry. However, this is not another case in which international differences in "competitiveness" were decisive. The real success story lies in the management practices of three pioneers, who just happened to be Japanese.
Having installed an activity-based system, the division is now exploring the insight provided by that system. In particular, it is studying the economics of lot-size process planning and product mix management.
Describes the potential acquisition of a downtown office building in Boston through a sealed bid auction. The prospective buyer analyzes in detail all elements of the income and expense statements, calculates the effect of all improvements, and imputes a purchase price on the property.
American Bank is developing a new system to compute product costs. The deregulated, more competitive environment for commercial banks has created both problems and opportunities for banking operations. In order to price existing products and assess the desirability of new product introduction, a system is needed to estimate the demands that each banking product places on the organization's resources.
Describes Manufacturing Resource Planning (MRP II), a production technique designed to couple business and financial plans with manufacturing plans. It is an important tool for aligning manufacturing with a company's overall strategy and goals. Describes MRPII, distinguishing it from its predecessor, Material Requirements Planning (MRP); discusses the technique's basic elements; and reports survey results that show the factors distinguishing the most successful adopters of the technique.
Caruso's Pizza is a small, entrepreneurial restaurant chain. The case considers expansion of an experimental pizza delivery system ("express delivery") that involves a major process innovation--producing pizzas to inventory rather than to order. The system promises faster delivery of higher quality pizza, but as yet is an unproven technology. By the end of the case, students will realize that delivery-only units and high order volume are required to make express delivery viable. One way of achieving this high order volume may be a one-phone-number system--a new computerized technology.
The division has recognized the inadequacies of its existing, traditional cost system for estimating product costs. Describes the innovative activity-based system that was developed to more accurately trace overhead costs to individual products. Provides students with the opportunity to critique a standard cost system and to assess the characteristics of the proposed system that traces costs to production activities.
After a record year in 1983, Murray Ohio's earnings declined in 1984. The company was faced with competition from cheap imports and was experiencing declining margins. Students are asked to analyze the company's 1984 financial statements and predict whether there is likely to be a change in the company's dividend policy.
Detailed description of the planning and control systems in use at Johnson & Johnson. Focuses on the actions of managers in one subsidiary in revising budget targets. Illustrates intensive strategic planning and financial planning process in a large, decentralized company. Includes interviews with the president and senior executives concerning benefits of the system. Raises issue of the role of formal control systems in decentralized organizations.
Manufacturers of packaged goods no longer can entice consumers through traditional "pull" marketing techniques - huge TV and other advertising campaigns and alluring packaging. So the trade has moved in to grab customers through "push" marketing techniques - especially coupons and trade deals. Unless manufacturers reverse this trend, they will risk crippling their own marketing productivity. Manufacturers have to understand the recent changes in society and consumer tastes that have caused the shift from pull to push marketing. They then can return to pull marketing by directing their attention to the small, varied segments that now make up the U.S. market.
A major reason why Japanese corporations succeed in global markets is the informed, hands-on market research they practice. When Japanese managers want information on customer needs or market response to a new product, they don't depend on market research professionals and the so-called scientific methods favored in the United States and Europe. Instead, they meet and talk directly with retailers, wholesalers, distributors, and brokers so that they can gain deep knowledge of their channels.