Mastering the Management System
1. Executive Summary for this reading.
This reading discusses issues that companies have with following through with their strategies. Companies tend to reach a plateau and have problems reaching the next level of success. The authors present specific guidelines for management to follow so that they may avoid this stand-still or recover from it. It is critical that companies learn to balance operational concerns with long-term strategies. Too often, companies let day-to-day operational issues blind them to what they should be doing to ensure long-term success.
Robert Kaplan and David Norton discuss the stages necessary in order to create a closed-loop management system between operations and strategy. This system consists of 5 stages that include strategy development, translating the strategy, planning operations, monitoring and learning and finally testing the strategy.
This article also gives specific examples of each stage and the processes within the stages. The reading is basically a step-by-step guideline for management to implement strategy for future success while managing day-to-day operations. .
2. Which are the three most critical issues of this reading? Please explain why? and analyze, and discuss in great detail …
One of the most critical issues of this reading is the handling of this system. The authors state that often the breakdown of companies often occurs right at the beginning. Management fails to translate their strategies into goals that next level management can try to achieve. Many of them struggle because they do not link objectives to tools that support their goals. Following the Closed-Loop Management System and handling it correctly can be the blueprint necessary for successful implementation of strategy.
Another critical issue of this reading is the issue of competing with other businesses. Within Stage 1, Develop the Strategy, management must ask certain questions; among them “How can we best compete?” Too many times businesses show up in the market with great ideas but do not have the best strategies as to how to make a name for themselves in the market. Managers must decide on a course of action that will distinguish the company from its competitors. This includes deciding which markets to target, which technologies will help them achieve these goals and many other questions. The authors note that there are many frameworks and models management can use to form such strategies. Examples are Michael Porter’s competitive advantage model and The Blue Ocean Approach, to name some.
A third critical issue is the adapting of the strategy. Stated in the article, management may discover from time to time that some assumptions in their strategies are flawed. When this happens it is up to them to reexamine and adapt their strategies to suite current situations. Trying to fit the wrong strategy can be frustrating and often leads nowhere. In these situations, management must decide whether their current strategy can be improved and made to adapt to the situation or if a totally new strategy is needed. .
3. Which are the three most relevant lessons learned of this reading? Please explain why? and analyze, and discuss in great detail
The first most relevant lesson learned from this reading is that it is important to identify and examine the key issues that a business faces. The management team must study the industry’s economics using certain models. We often hear of models such as Michael Porter’s five forces model, however a new and important concept that most do not think of is described as a PESTEL analysis. In this analysis, management teams must assess external environments including interest rates, currency movements, input prices, regulations and corporate social responsibility expectations. The PESTEL analysis includes reviews of specific areas: political, economic, social, technological, environmental and legal....
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