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Corporate Strategic Tasks

Arnoldo C. Hax

The Central Issue for Top Management How to Add Value at the Corporate Level 1. Environmental scan at the corporate level: Assessing the external forces impacting the firm. The mission of the firm: Choosing competitive domains and the way to compete. Business segmentation: Selecting planning and organizational focuses. Horizontal strategy: Pursuing synergistic linkages across business units.

2. 3. 4.

The Central Issue for Top Management (cont’d.) d.)

5. 5. 6. 6. 7. 7. Vertical integration: Defining the boundaries of the firm. Corporate philosophy: Defining the relationship between the firm and its stakeholders. Strategic posture of the firm: Identifying strategic thrusts; corporate, business, and functional planning challenges; and corporate performance objectives. Portfolio management: Assigning priorities for for resource allocation and identifying oppor-

tunities for diversification and divestment. divestment.

8.

The Central Issue for Top Management (cont’d.) d.)

9. 9.

Organization and managerial infrastructure: Adjusting the organizational structures, managerial processes and systems, in consonance with the culture of the firm, to facilitate the implementation of strategy. Human resource management of key personnel: Selection, development, appraisal, reward, and promotion.

10. 10.

The Fundamental Elements of the Definition of Corporate Strategy - The Ten Tasks Tasks

Central Focus of Corporate Strategy The Firm Corporate Internal Scrutiny • Mission of the Firm • Business Segmentation • Horizontal Strategy • Vertical Integration • Corporate Philosophy Definition of Strengths & Weaknesses Corporate Environmental Scan • Economic outlook • Analysis of critical geographical locations and industrial sectors • Technological, human resources, political, social, and legal trends Identification of Opportunities & Threats

Strategic Posture of the Firm • Strategic Thrusts • Corporate Performance Objectives Resource Allocation Portfolio Management Managerial Infrastructure Organizational Structure & Administrative Systems Human Resources Management of Key Personnel

Environmental Scan at the Corporate Level
Environmental scan formalizes the process of understanding the external forces that are impacting the firm. There are three different types of analyses to support this process: economic overview, primary industrial sectors, and basic external factors.

Environmental Scan (cont’d.) d.)

The process for performing the environmental scan at the corporate level consists of the following steps: Step 1 - Definition of time frame Step 2 - Geographic segmentation Step 3 - Identification and analysis of economic factors factors Step 4 - Identification and analysis of primary primary

industrial sectors sectors
Step 5 - Analysis of basic external factors and and
definition of alternative planning scenarios scenarios
Step 6 - Identification of key opportunities and and
threats threats

Geographical Segmentation - NKK Materials Sector Sector

Existing Geographical Scope • Domestic Kanto (including Tokyo) Kansai (including Osaka) Hokkaido Tohoku Chubu (including Nagoya) Chugoku Shikoku Kyushu • China • Far East • ASEAN • Other Asia (including Oceania) • Middle East * U.S.A. • Latin America • Western Europe • Former Soviet Union • Africa New Geographical Scope • Eastern Europe

Source: Masayuki Tada, “Corporate Strategy for a Japanese Steel Manufacturing Company,” unpublished Masters thesis, Sloan School of Management, MT, 1993. This is not an official document of NKK Corporation.

Identification and Analysis of Economic Factors - NKK Materials Sector Sector

Past 1989 Japan Real GNP Growth (%) Inflation Rate (CPI) Unemployment Rate (%) Prime Rate (%) Growth in Private Housing Starts Growth in Private Investment in Plant & Equipment Growth in Public Investment in Infrastructure Crude Oil Price ($/Barrel) Yen Rate...
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