SHA553: Strategic Hospitality Management III: Implementing Strategy

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. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners.
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SHA553: Strategic Hospitality Management III:
Implementing Strategy
Copyright 2012 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners.
2
Cornell School of Hotel Administration
Strategic Hospitality Management III: Implementing Strategy
Welcome to . The focus of this course, produced in Strategic Hospitality Management III: Implementing Strategy
partnership with the , is on moving from strategy formulation to strategy Cornell School of Hotel Administration
implementation, that is, on turning strategy into action. The course answers the question, "What is implementation?", and
examines implementation in relation to both the formulation and the evaluation of strategies. In this course, discover key
building blocks needed for implementation, including the creation of effective action-planning objectives and the
establishment of productive alliances with other organizational stakeholders, both internal and external to the organization.
Explore why strategies fail in their implementation, and find out how to use strategic control systems to make
implementation more effective.
When you have completed this course, you will be able to:
Use process tools to implement strategy at your hotel
Manage internal and external relationships to support strategy implementation
Use strategic control systems to effectively monitor and revise your strategy
Meet the Course Author
The course author is the world-renowned faculty member who developed this course.
Click to listen to Professor Enz's
course welcome
Transcript: Author's Welcome
My name is Cathy Enz, and I'm a faculty member at the Cornell School of Hotel Administration, where I teach courses in
strategic management and competitive positioning. Welcome. In this course, we will answer the question, what is
strategy implementation? And examine the linkage between strategy implementation and the formulation and evaluation
of strategies. The key building blocks needed for implementation include the creation of effective action-planning
objectives and the establishment of productive relationships with external organizational partners and employees. We
will explore why strategies fail in their implementation and describe strategic control systems used to make
implementation more effective. So let's dive in and explore strategy implementation in detail.
It only Before you begin, please customize your profile and choose what notifications you would like to receive.
takes a couple of minutes, and helps you communicate classmates and instructor. with your Please also check the
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Start Course
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MODULE OVERVIEW
Module 1: The Process Side of Implementation
In this module, explore strategy implementation, the second stage of the strategy process model. Develop an appreciation
for the differences between the activities of strategy formulation and those of implementation. Learn how organizations
can progress from one stage to the next without getting stalled in transition. Take a critical look back at the results of
strategy formulation, and then look forward by establishing goals and objectives. Finally, create an action plan. Build your
plan on a foundation of clearly articulated objectives, and learn to be increasingly specific about how you'll realize your
goals as you progress.
When you have completed this module, you will be able to:
Describe the strategy-implementation process
Analyze the results of strategy formulation
Recognize and address problems associated with the knowing-doing gap
Develop effective objectives for your organization that align with its mission and strategy
Write an implementation action plan
About the Course Project
This course includes a project designed to help you apply your new tools and skills to strategy implementation at your
organization. The project asks you to create an action plan for the implementation of a revenue-building strategy, analyze
and propose partnerships with external stakeholders, work on partnering with internal stakeholders, and recommend
strategic controls for evaluating the results of your strategy implementation.
The project is a valuable component of the course experience. Working on the project will help you absorb and retain the
concepts presented in the course. In addition, the completed project document will be a valuable take-away. It can serve
as a step-by-step guide to strategy implementation at your organization as well as a reference for the specific approaches
to the strategy process. In addition to the course project, the online discussions included in this course represent valuable
opportunities for you to deepen your understanding of what you have learned, and your participation in them is good
preparation for the work you will do in the context of the project. Be sure to join these important online collaborations.
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TOPIC OVERVIEW
Topic 1.1: From Formulation to Implementation
The strategy formulation stage involves setting your corporate direction, completing internal and external analyses, and
selecting strategies. At the conclusion of these activities, your challenge is to make your strategies real. This is
accomplished through strategy implementation.
Strategy implementation is the second major stage in the strategy process model, and the point at which you convert your
plans into action. At this point in the process, you find out that although strategies themselves may appear simple, their
execution is often not. In this topic, discover how to make the transition from formulation to implementation. Take a critical
look back at the decisions and results of the formulation stage, take steps to avoid lapsing into inaction, and get ready to
begin.
When you have completed this topic, you will be able to:
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The Implementation Process
An illustrated presentation with audio appears below, along with a text transcript. Use these resources to enhance your
understanding of the meaning of strategy implementation.
Transcript: The Implementation Process
Strategy implementation is the process of carrying out a formulated strategy; that is, implementation is the process of
converting a strategic plan into action. A model of the strategic management process includes strategy formulation,
implementation, and evaluation. The typical sequence of activities begins with strategy formulation. At the conclusion of
the strategy-formulation stage in the strategic management process, a firm should have performed an analysis of the
broad and operating environments of the organization, and an analysis of internal resources. It should have accomplished
a strategic direction reflected in mission statements and organizational visions and formulated both business-level and
corporate strategies.
Before you go further, are the analyses complete and correct? Are you satisfied that your strategic direction is appropriate
for the industry and the broad environment? When you are confident that the results of strategy formulation are sound,
then you can move on to implementation.
At the point at which you begin implementation, strategy formulation should be complete, and you should have a plan of
action for the company. However, during the strategic management process, as new information is gathered and
assumptions change, organizations often cycle back to earlier activities. For instance, a company may discover rather
quickly or even over a longer period of time that a proposed strategy cannot be implemented feasibly. In other words,
organizations may learn from their own past actions and from environmental forces, and they may modify their behavior in
response.
Implementation involves an ongoing series of decisions and actions that are intended to carry out a strategic plan. More
specifically, it involves establishing specific goals and objectives and managing stakeholder relationships and
organizational resources, all in a manner that moves the business toward the successful execution of its strategies. We
will focus on two aspects of strategy implementation: the establishment of goals and objectives and the allocation of
resources and the building of relationships.
Let's start with establishing goals and objectives. At the implementation stage, the company develops specific tactics for
executing its strategies. The goal of these more specific and measurable activities is to enable your organization to do
what needs to be done to achieve its vision and broad goals.
Specific goals and objectives are established in an effort to bring the concepts found in the vision statement to life to a
level that managers and employees can influence and control. As time passes and operating objectives are met, then the
broader goals will be met as well, and ultimately the vision will begin to be realized.
Allocating resources and building relationships. Strategy implementation has to do with building competencies,
capabilities, and resource strengths to carry out the strategy. The company must install information, communication, and
operating systems that enable employees to carry out their roles successfully, day in and day out. It must create a
strategy-supportive work environment and corporate culture, tying rewards and incentives to the achievement of
performance objectives.
Partnerships can also help an organization implement its strategies, by allowing firms to gain access to valuable and
unique resources. Partners external to the firm often provide complementary skills that increase the speed with which a
firm can accomplish its objectives, enter a new market, block competitors, or share costs and risks. If two companies each
have strengths in different areas, by combining those strengths they can effectively accomplish their strategic objectives
with limited resources.
It's often said that individuals strategize well, but implement poorly. Implementation is a key aspect of successful strategy,
and, as we'll see, the two areas we'll focus on are the establishing of goals and objectives-putting broader ideas into
action-and building strong relationships with a host of important partners.
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How to Check Your Analysis
Before you begin the implementation stage of the strategic management process, you should take the time to re-examine
the decisions and findings of the strategy-formulation stage. Pause. Take another look at your vision or business
definition. Be certain that you really understand your competitive position and that your competitor analysis is accurate.
Verify that you have identified the key success factors for your industry and that you have analyzed your organization
according to those factors. Take another critical look at your corporate- and business-level strategies. Will your plan
enable you to take advantage of your strengths and to diminish your weaknesses while leveraging opportunities and
avoiding threats?
to help you to evaluate your formulation of strategy and to prepare yourself to move into Here's a handy checklist
implementation.
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Moving into Action
Once you have completed all aspects of strategy formulation and double-checked your results, you are ready to go
forward with implementing your plan. Do you know how to move from planning to action? At this stage of the process,
even accomplished strategists often fail to take the next vital step of transforming strategies into concrete reality.
Researchers attribute this hesitation to what is referred to as a knowing-doing
gap , an organizational problem that causes processes like this one to stall. In this gap, talk and planning take the place
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of action, and the organization finds itself unable to move beyond discussion.
One of the barriers to turning knowing into doing is the tendency to do things the way they've always been done-even if
the old management practices held to are not particularly effective. A second barrier is the presence of an environment of
pervasive fear and distrust where employees believe they might be punished for acting on their knowledge. To move
beyond knowing into doing, employees must believe that their knowledge and input is valued by their organization.
The knowing-doing gap is likely to become a problem as implementation is about to begin, particularly if the team is
uncertain about how to approach that implementation. To preserve the momentum of the process, it is helpful to have
some guidelines for action. Two major milestones for moving ahead are
Determination of the goals and objectives needed to support the strategy
Building of competencies, capabilities, and resource strengths needed to carry out the strategy
In general, to be successful, the organization must configure itself so as to succeed. It must communicate its vision and
strategy to all its employees. It must create a strategy-supportive work environment (including information, communication,
and operating systems) and corporate culture. In addition, it must create performance objectives that support its strategy,
and it must tie employee rewards and incentives to the achievement of those performance objectives. The organization
must enable employees to understand their roles and to carry them out capably.
Managers in the various functional areas of the organization are largely responsible for enacting corporate and business
strategies. Therefore, the development of functional-level strategies is critical to the implementation of strategy.
Functional-level strategies are specific and short term, and they help employees understand what they must do to realize
the broader long-term aspirations of the corporation.
To be effective, functional-level resource-management strategies must be consistent with the strategies of the business
and must be communicated to all other functions guided by them.
Good strategies fail when organizations lack the ability to convert what they know into what they do.
Pfeffer, J., & Sutton, R. I. (2000). Boston:
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The knowing-doing gap: How smart companies turn knowledge into action.
Harvard Business School Press.
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TOPIC OVERVIEW
Topic 1.2: Aligned for Action
The implementation of strategy is stage two of the strategy process model. Some organizations have trouble making the
transition from the initial, formulation stage to implementation-that is, they find it difficult to take action. Will you be able to
implement your strategy? Use the tools and resources provided here to develop a clear and actionable plan to implement
your strategies. The action plan is a key element for effective implementation.
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3.
1.
2.
3.
4.
5.
Developing Objectives
The implementation stage of the strategic management process demands that organizations develop operational
objectives and establish strategic priorities. Here are some guidelines for developing objectives at your firm.
From this diagram you can see that a corporate objective, in this case organizational growth, must be supported by
objectives for regional or general managers, which in turn must be supported by objectives for executive committees and,
finally, by the objectives of departmental managers. These objectives must be consistent with each other and with the
mission.
Gather source materials
First, gather the source materials you'll wish to consult as you create your objectives. These include the results
of many of the activities your firm should have completed during the strategy-formulation stage. For example, it
is advisable to consult your direction-setting statements (vision, mission, objectives), your corporate-level
strategy, your business-level strategy, and your internal and external analyses. (If you need more information
about these elements of strategy formulation, please see the glossary.
Revisit your SWOT analysis
The objectives you create should enable your organization to take advantage of the internal strengths and
environmental opportunities it has identified. Additionally, these objectives should downplay internal
weaknesses and neutralize environmental threats. Take this opportunity to explore your strategic opportunities
further and to address any major concerns your organization might have about the strategy it is about to
implement.
Make sure your objectives are SMART
You are probably familiar with the SMART set of guidelines for developing objectives:
Specific
Measurable
Achievable
Results-based
Time specific
The objectives you create should be SMART. If your objectives are not specific, achievable, and results-based,
you'll find they are of little use to you. Furthermore, if you haven't created your objectives with the SMART
guidelines in mind, you may find yourself revising and re-revising these objectives at the point at which you
must incorporate them into an action plan. For this plan, you objectives must be time specific and measurable.
(More about creating the action plan is coming up.)
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3.
1.
2.
3.
4.
4.
5.
Consider the following list of objectives developed by a spa to support its strategy:
Increase treatment and retail revenues by 15% by the end of the fiscal year
Improve and increase flow of information throughout department and with other departments by the end
of the quarter
Increase the customization of services by November 1
Improve condition of supplies and equipment by fiscal-year end
These are examples of well-written objectives that can be (and have been) incorporated into an action plan
with good results.
Consider your available resources
When you develop your own list of objectives, you will want to review them from the standpoint of
organizational resources. What is required to implement each of the objectives? Is it reasonable to expect the
organization to allocate its resources to accomplish them?
Consider organizational fit
Finally, review the objectives for fit. Do your objectives fit your organization in terms of its strengths,
competencies, and culture? Are they consistent with your mission? If not, can you adjust them so they will be?
Your objectives, like those pictured in the pyramid graphic, should flow logically, maintaining consistency with
each other and with your strategic direction. Be sure you are satisfied with your objectives, individually and as
a set, before you begin to create an action plan.
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How to Write an Action Plan
Write an Action Plan
Develop objectives
Prioritize objectives
Assign actions to the
prioritized objectives
Fine-tune your plan
The process of writing an action plan consists of four main steps. The first step is to create objectives (guidelines for
developing objectives are provided on the previous course page). The second step is to prioritize your objectives. Here,
indicate which things managers should do now and which later, and which things they should attend to personally rather
than delegate.
Step three is to assign actions to the prioritized objectives. This will result in an action plan. For this step, you can use a
tool like the action-planning template provided here.
The template provides space for you to list your objectives and to indicate the actions you recommend to support each
one. It also provides a column for you to specify the measurements you'll use to assess your success and determine,
ultimately, whether you met the objective.
The final step is to fine-tune the action plan you've developed. To do this, ask questions like the following:
Does the action plan specifically address concerns the organization has? If not, how can I make it more relevant to
the organization?
Am I certain that the roles of key internal and external stakeholders are well specified?
Does the organization have the needed resources to carry out this plan, and how should it get them if it doesn't?
Does the organization have the needed systems, structures, and processes to carry out this plan, and how should it
get them if it doesn't?
Have I specified the appropriate time frame for the realization of the entire plan?
Does this plan anticipate the roadblocks the organization could encounter, and does it suggest ways to deal with
them? Does it take risk into account?
Are the desired outcomes or changes the organization expects well specified?
Is the plan specific about how the organization will measure its success?
Will this action plan continue to be viable as the industry and broad environment change? What can be done to
help ensure its viability?
This simple, four-step method can result in an effective action plan. For best results, please download the following tools
designed to guide you through the process.
, including an action-planning template. Download instructions for writing an action plan Download an example of an action
plan.
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Viewpoint: Ali Kasciki on Implementing Strategy
Hear what Ali Kasciki of the Montage
Beverly Hills Hotel has to say about
how to implement a strategy.
At the strategy-implementation stage, the organization takes broad objectives conceived in the formulation stage and
translates them into concrete actions. This requires communication among three levels of the organization: senior
management, middle management, and line staff.
These individuals have a good understanding of environmental and economic issues-of the Senior management
broad picture in general.
These individuals know what resources are available. Middle management.
. These are the employees who get the day-to-day work done. They are the closest to customers: Line employees
the room attendants go into guest rooms, the servers see what the guests are eating, and the stewards wash
guests' plates.
Senior management understands what the broad environmental issues are; middle management knows what resources
are available and what the organization is capable of delivering; and the line staff is closest to the guests and, in some
sense, knows them best. As the whole team moves into strategy implementation, those at the midlevel must develop a
plan to work with the lowest level on delivering exactly what is needed, while senior management has to envision how to
make it all happen.
One person who understands this process very well is Ali Kasciki, managing director of the Montage Beverly Hills. We
asked him to describe his approach to implementing strategy.
Transcript: Viewpoint: Ali Kasciki on Implementing Strategy
If I really look to the entire strategy and vision-creation process-and once we have really created the vision, once we have
communicated the vision, once everybody understood that vision and once they emotionally embraced that, really
genuinely believed into that vision-then it comes to a point of implementing that vision. And at the end of the day it is the
individuals who are going to be delivering the service are going to be in the front line of the implementation process. The
upper management really sets the strategy direction, and here are the individuals who get the day-to-day work done.
Those who are in more of an operating model are the ones who are going to make sure that this vision is implemented.
And there is no mechanical dictation saying that this is what we believe, and, you go into it and go and do it exactly the
way you've been told to do. There has to be a buy-in process to it, and it has to be a very strong buy-in process. And
individuals who are buying into it have to understand the means available to them to make sure that it works. And the best
way of doing it, in my opinion, is asking individuals and creating teams that come together and say that this is the most
effective way of getting this work done, and these teams then setting an objective amongst themselves, saying that this is
how we can get it done within the time frame effectively.
I believe that strategy creation- the crafting a strategy and implementing a strategy-is not two separate processes. I
believe it is one process. However, when it comes to implementation, the entire process has to be broken into small
pieces. Assume for one second it's a loaf of bread. In order to consume it, we need to break it into small slices, small
pieces. And if you don't break it into small pieces, it is going to be very difficult for the individuals who are going to be
helping you to implement it to grasp it and to come to terms with it. And I believe small steps-broken into several different
action steps, cascading down from the upper management to a very low level-that it's going to be implemented in a very
clear meticulous way, broken down. And they all are linked to each other. They are not independent, but they are
interdependent little pieces that link to each other. So, strategy is clearly articulated, communicated, embraced: now
broken into small pieces, and each piece getting smaller and smaller as it is going down, cascading. Eventually, the last
part, it does it. It's a very small final cherry on top; however, the individuals who are doing it do not notice it's a very small
cherry on top, but they look at the entire process and it all comes together in a loop.
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Module 1 Wrap-Up
In this module, you have examined the first aspect of strategy implementation: establishing goals and objectives. You
have seen how implementation differs from strategy formulation, and you've learned how to move your organization from
formulation toward implementation without getting stalled in transition. You have gained the tools you need to create
strong, actionable objectives, and you've completed an action plan.
Having completed this module, you should now be able to:
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MODULE OVERVIEW
Module 2: Stakeholders and Partnerships
This module looks at the role of stakeholders in the implementation of strategies. Discover how to evaluate external
stakeholders according to their strategic value to the organization. Then look at ways to select partners for
interorganizational relationships, and ways to design and manage those partnerships. Finally, consider how to foster the
support of internal stakeholders-employees-and successfully involve them in the implementation of the organization's
strategy. The information and activities provided are designed to move organizations toward the successful execution of
their strategies, consistent with their strategic direction.
Provide examples of significant interorganizational relationships
Identify and analyze potential external partners
List actions that increase the likelihood of successful partnerships
Provide examples of the types of partnerships firms can create with external stakeholders
Formulate a proposal to partner with a key stakeholder
Explain why the concept of the cycle of mistrust is relevant to strategy implementation
Recommend approaches to fostering support among internal stakeholders
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TOPIC OVERVIEW
Topic 2.1: Choosing Stakeholders for Partners
Stakeholder groups include employees and others within the organization, as well as customers, suppliers, competitors,
government agencies and administrators, labor unions, communities, activist groups, the media, and financial
intermediaries. These stakeholder groups are quite different from one another, and they also differ in their strategic
importance to the organization. Even within stakeholder groups, the strategic importance of subgroups (specific suppliers
or agencies) and individuals can vary significantly from one to the next. Therefore, organizations need to consider their
stakeholders carefully to determine the types of relationships to pursue with each of them. Deciding when and with whom
to partner are managerial decisions that have a significant impact on the outcome of an implementation.
In this topic, we look at who the organization's stakeholders are and how to determine the strategic importance of each
stakeholder group. This is good preparation for tackling the issue of how to build and manage partnerships.
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Partnerships and Mergers
Strategic approaches to growth include the formation of interorganizational partnerships such as joint ventures and
alliances, as well as the combining of organizations through mergers and acquisitions. Let's look at the various types of
partnerships, as well as mergers and acquisitions, to find out more about these relationships and how they are important
to strategy implementation.
A occurs when two merger
organizations combine into one.
An is a specific type acquisition
of merger in which an organization
does one of the following:
buys another organization
outright from its owners
buys a controlling interest
in another organization's
stock
An interorganizational
is an approach to relationship
cooperation among independent
firms.
Mergers and Acquisitions
Some firms seek to acquire skills and resources by purchasing or merging with other firms. A merger occurs when two
organizations combine into one. An acquisition is a specific type of merger in which one organization either buys the other
outright from its owners or buys a controlling interest in the other's stock. Acquisitions are a relatively quick way for firms to
enter new markets; acquire new products, services, knowledge, or skills; learn new resource-conversion processes;
vertically integrate; broaden markets geographically; or fill gaps in the corporate portfolio. Mergers are considered a
corporate-level growth strategy but can also be viewed as an approach to implementing strategy.
Interorganizational Relationships
Interorganizational relationships include joint ventures, networks, consortia, alliances, trade groups, and interlocking
directorates. Unlike mergers, interorganizational relationships are approaches to cooperation among independent firms in
which these firms share some or all of their resources. Let's take a look at some types of interorganizational relationships.
When two or more firms engage in a , they each pool a portion of their resources to create a separate joint venture
jointly-owned entity. Joint ventures are used to pursue a wide variety of strategic objectives. Often, the objective is either
to gain access to international markets or to pursue projects that were not mainstream to either organization individually.
For example, organizations may form joint ventures to gain scale economies or to develop new services.
An , on the other hand, is an arrangement between two or more firms that establishes an exchange relationship alliance
but does not involve joint ownership. Alliances do not always involve the creation of a new entity; they can be informal.
Some types of alliance are:
- an arrangement whereby an organization gains the right to enter a market in exchange Licensing arrangement
for a fee or royalty.
- a hub-and-wheel configuration where a focal firm organizes the interdependencies of a complex array of Network
firms. Networks are formed through the establishment of social, rather than legally binding contracts. Through
networks, property ownership, branding, and management of operations are shared among competitors.
- a group of firms with similar needs that band together to accomplish more than any one of them Consortium
could have accomplished on its own.
- an organization (typically nonprofit) formed by firms in the same industry to Trade group or trade association
collect and disseminate trade information, offer legal and technical advice, furnish industry-related training, and
provide a platform for collective lobbying. Trade associations are similar to consortia-they form within industries to
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collect and disseminate information, offer legal or accounting services, furnish training, and so on.
- an arrangement whereby either a) a director or executive of one firm sits on the board of Interlocking directorate
a second firm or b) two firms have directors who also serve on the board of a third firm.
The common characteristic behind these interorganizational relationships is that they are an effort to combine resources,
knowledge, or power to benefit their participants. Successful interorganizational relationships involve partnering and
resource sharing, and they can be an important source of sustainable competitive advantage.
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Ask the Industry Expert: Joe Lavin on Partnerships
Joe Lavin is founder and President of HarborStone Hospitality, an entrepreneurial venture that develops and owns hotels
and provides general consulting in the hospitality industry. Lavin was executive vice president and managing director of
Marriott International's Marriott ExecuStay, the company's corporate housing division, from 2002 through 2004. During his
tenure at ExecuStay, Lavin successfully introduced the corporate housing industry's first franchise program. From 1997
through 2001, Lavin served as senior vice president of franchising for Marriott's five limited-service brands. Under Lavin's
leadership, Marriott's franchising business achieved substantial growth, and currently composes 70% of Marriott's
limited-service portfolio.
In this presentation, Mr. Lavin shares his thoughts about partnerships in the hospitality industry. A text transcript has been
provided as an additional resource.
Transcript: Ask The Industry Expert: Joe Lavin on Partnerships
Why do acquisitions and mergers occur in the hospitality industry, and are they a good thing?
My observation is that acquisitions work much better than mergers. Acquisitions have a clear winner, a clear leader, and,
usually with the clash of cultures which inevitably occurs when there's the putting together of two companies, somebody
has to make the tough decisions and be in charge. And the mergers I've seen or acquisitions I've seen which are
unsuccessful or at least painful, maybe ultimately successful, are when it's unclear as to which culture is going to win.
There has to be a clear winner at the beginning. The most successful acquisition-it was billed as a merger, but I think
really it was an acquisition-was when Hilton bought Promus. And what Hilton got out of that was a very strong culture of
customer satisfaction, of franchising, of understanding owners, and of being in segments in which Hilton did not play. So
they picked up the limited-service segment with-well, they created Hilton Garden-but they picked up Hampton Inn, and
they also picked up Homewood Suites. They picked up Embassy Suites. These are all things that Hilton didn't have in its
portfolio. But it was clear when the acquisition occurred that Hilton was in charge, and as a result of that, I think they
pulled it through very well.
One acquisition that I was associated with in my career was when I was at Choice Hotels and we bought EconoLodge.
And while the product was not that different from our portfolio, the cultures of our companies were very, very different, and
it was a very painful process to get everybody integrated into the company. And, in fact, not everybody made it-there were
a number of people that fell by the wayside. But it was not done in a way that was comfortable, because it was unclear at
times which direction we were going to go.
What have we learned about how to be a good partner, and what are the rules of executing good strategy through
partners?
The most successful companies, whether they are managing or franchising with investors or partners, include them in the
decision-making that affects them-which sounds pretty basic. Of course you would do that, but, in many cases, it's not
done, or it's not done in a genuine way. And my belief is that you include-it doesn't mean that you have to take their advice
all the time, it doesn't mean that you have to agree with them-but you include those whose opinion you respect in your
planning, because it's going to affect them. And it's also going to be an opportunity for you to sell them on whatever it is
that you want to do. And if you can influence the leadership and the well-respected members of your franchise company
or your owner group to support you, then the support of the rest of the constituency is assured.
Sometimes you have to make compromises in order to get that, but at the end of the day, it creates a much better synergy
between the mother ship and the various components of it.
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Advantages and Disadvantages of Partnerships
Firms pursue partnerships because they convey benefits and advantages. However, they also bring disadvantages and
risks. In the hospitality industry, partnerships are a pervasive and increasingly popular form of business. Like many firms,
hospitality firms consider partnerships essential to competitive success. Let's take a look at the pros and cons of
partnerships.
Advantages
In general, one of the primary advantages of partnerships is resource sharing. Firms can secure resources such as
capital, skills, and even location relatively quickly through a well-considered partnership. In this way, partnerships can lead
to economies of scale through the sharing of physical facilities otherwise inaccessible.
Resource Complementarity
Firms interested in forming
partnerships may look for other firms
with complementary resources. For
example, consider the partnership
between Hard Rock Hotels and Sol
Melia. Sol Melia is a leading Latin
American hotel company. Hard Rock
Hotels, on the other hand, has a
parent company, The Rank Group,
based in London. Their partnership
provides both partners an entrance
into new geographic markets.
Another resource shared through partnership is knowledge. In fact, learning is one of the most important reasons to
pursue partnerships. Both partners gain opportunities to learn from each other when they work together.
Other benefits that can be obtained from partnerships include:
- Partnered firms with complementary skills can decrease the time it takes to bring their products Speed to market
to market, capturing first-mover advantages.
- Partnering with a foreign company is often the only practical way to gain access to a Foreign-market entry
foreign market.
- In many industries, high fixed costs sometimes require firms to find partners to expand Economies of scale
production volume with.
- Many types of partnerships enable two or more firms to share the risks and costs of a Risk and cost sharing
particular business endeavor.
- Partnering can provide firms the opportunity to pool their skills to develop new Product or service development
products and services.
- Interorganizational relationships often provide participants with the opportunity to learn from their Learning
partners (for example, a firm could learn about the manufacturing, product development, or human-resource
management appropriate to an unfamiliar country).
- The creation of partnerships can provide flexibility not found in, for instance, acquisitions. Strategic flexibility
21
Partnerships do not have to be as permanent, and they require a commitment of fewer internal resources, so
resources remain available for other uses.
- Partnerships can increase collective clout and can influence governments to adopt Collective political clout
policies favorable to their industries or circumstances.
- Working together, allied firms can gain the competencies and market Neutralizing or blocking competitors
power needed to neutralize or block the moves of a competitor.
Disadvantages
Partnership Disadvantages
Limited control
Possible culture clashes or
lack of organizational fit
Slowed decision making
Too many compromises
The possibility that one partner
may take advantage of another
Coordination costs
Skill leakage
There are disadvantages to partnerships as well. For example, though they may confer many benefits, the extent to which
they involve sharing profits and giving away critical know-how can be a disincentive. Due to the fact that each organization
in a partnership has only partial control over the activity it pursues with the others, and enjoys only a percentage of the
growth and/or profitability created, partnerships are necessarily limiting.
In addition, problems can arise due to the incompatibility of partners. Company culture clashes can erode cooperation
among firms and prevent true partnering from taking place, and a lack of organizational fit can lead to venture failure.
In some cases, the collective decision making required by joint ventures can be slow and result in too many compromises,
which is a disadvantage. In a partnership, there is the risk that a stronger partner may take advantage of a weaker partner,
or that one partner will become dependent on another. The transfer of skills ( ) from one organization to skill leakage
another could occur, making partnering an unattractive option. It's also possible that partners will realize an increase in
costs due to the costs of coordination.
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External Stakeholders
Click each of the external stakeholders below to learn more about them.
Click for a printer-friendly version. here
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computer, you can download it (free) from the Adobe Web site
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The Strategic Importance of External Stakeholders
External Stakeholders
Customers
Suppliers
Competitors
Government agencies
Government administrators
Labor unions
Communities
Activist groups
The media
Financial intermediaries
Managing external stakeholders is a key aspect of implementing strategy. To manage well, organizations must decide
which stakeholders to focus on. For this reason, a good strategic plan includes establishing the strategic priority of
stakeholders. Prioritizing stakeholders helps the organization both to determine the amount of attention to give each one
and to make decisions about which approaches to stakeholder management are most appropriate.
How is strategic importance decided? One factor to consider is formal power.
When stakeholders have a legal or contractual right to make decisions that affect some part of the organization, they are
strategically important. Regulatory agencies or governments are in this category, although there are challenges involved in
partnering directly with the government.
However, as a rule, stakeholders are important when they are able to exert economic or political power, and when they
have an influence on the environmental uncertainty facing the firm. In fact, these characteristics are related to each other:
stakeholders with greater economic or political power themselves have more influence over the environmental uncertainty
facing a firm (see the loop on the left-hand side of figure 1).
Figure 1. External stakeholders: components of strategic importance and options for management.
Finally, as we know from the discussion of partnership advantages, firms often seek partnerships to gain knowledge or
resources they want and don't possess. Therefore, it stands to reason that stakeholders possessing sought-after
knowledge or resources are also strategically important and are likely to be good candidates for partnerships.
Once you have established the strategic priority of your organization's external stakeholders, you'll be ready to look at
options for managing those stakeholders. Organizations use two basic postures in the management of external
stakeholders: partnering and buffering. Partnering activities enable companies to build bridges connecting them to their
stakeholders in the pursuit of common goals. For strategically important stakeholders, partnering is a good option (see the
high-importance pathway in figure 1).
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Buffering techniques are the more traditional approach to stakeholder management, and may be a good option for less
strategically important stakeholders (see the low-importance pathway in figure 1). Buffering techniques simply reduce
shocks and facilitate the satisfaction of stakeholder needs and demands. These techniques can include:
Public-relations efforts
Creating special departments to handle specific areas (e.g., legal, recruiting, purchasing)
Financial donations
Advertising efforts to ensure regulatory compliance
Marketing research
Buffering softens the jolts that might otherwise be felt as the organization interacts with members of its external
environment.
Later in the course, you have the opportunity to take a detailed look at how to build successful partnerships.
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TOPIC OVERVIEW
Topic 2.2: Building Successful Partnerships
While interorganizational relationships have both benefits and drawbacks, many firms have found that these partnerships
are essential to competitive success. Of course, partnerships are an essential form of business in the hospitality industry,
and, for many large hospitality firms, a variety of partnerships are managed simultaneously. Earlier in the course, you
were asked to prioritize your organizations stakeholders. Here, continue your study of partnerships by developing a plan to
build a partnership.
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Partnering with External Stakeholders
As part of your approach to strategy implementation, you may wish to build partnerships with strategically important
external stakeholders. Selecting a strategically important stakeholder is the first step. Building a strong partnership is the
next.
Here are some ways to involve or include specific types of external stakeholders in partnerships.
Customer
Involvement on teams to create or refine products and services
Appointments to board (interlocking directorate)
Supplier
Shared information systems
Involvement on design teams
Appointments to board (interlocking directorate)
Competitor
Joint ventures or consortia for research and development, manufacturing, marketing, and so on
Alliances to pursue common objectives
Trade associations for sharing information and collective lobbying
Informal price leadership or collusion (where legal)
Government
Jointly sponsored or government-sponsored research
Joint foreign-development projects
Appointment of retired government official to board
Local communities
Community-service programs
Sponsorship of special events
Cooperative training and educational programs
Joint employment programs
Activist groups
Consultation with representatives on sensitive issues
Joint development programs
Appointments to the board
The media
Exclusive interviews or early release of information
Inclusion in social events and other special treatment
Unions
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Contract clauses that link pay to performance
Joint committees on safety and other issues
Joint industry-labor panels
Inclusion on management committees
Financial intermediaries
Inclusion in management decisions requiring financing
Contracts and linkages with other clients of financier
Shared ownership of projects
These are some options you can consider as you think about designing partnerships with stakeholders.
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Managing Partnerships
Interorganizational relationships-partnerships-are increasingly important to strategic advantage. In fact, many large
hospitality firms manage multiple partnerships simultaneously. One of these firms, Accor, has developed partnerships with
major firms in transport, telephone and Internet, finance, and the food industry. The aim of Accor's joint strategy with its
partners is to increase market share in a profitable way; to share resources to cut costs and time; to increase the visibility
and recognition of their brands; and finally, to create value for customers by, for example, developing new services and
providing quick and easy access to existing products and services.
Accor selected businesses that offered potential synergies or that targeted the same mobile-customer base. As such, they
have partnered with businesses in transport, travel-related services, information, and leisure activities. The following are
two examples:
Transportation: Air France has formed a series of alliances with Accor, including a joint customer-loyalty program, a
project to develop services for Air France customers, and joint promotional campaigns.
Accor has a partnership with Orange Wi-Fi in France whereby hotel customers enjoy wireless broadband Internet
access in hotel lobbies, bars, and meeting rooms.
Partnerships that promise the greatest benefits may also present the greatest implementation challenges. To partner
successfully, it's important to select partners carefully and to plan and maintain each partnership with care.
Step One: Selection
A firm interested in forming a partnership should engage in careful systematic study to identify an alliance partner able to
provide the capabilities it needs. Firms should avoid the tendency to partner with other firms just because forming
alliances is a trend in the industry.
Step Two: Building a Partnership Plan
Once a potential partner is identified, the firm should develop a strategic plan for the relationship. This plan should
consolidate the partners' views about market potential, competitive trends, and potential threats. It should outline specific
objectives for each partner and clearly define each partner's role.
In creating the plan, the partners should ensure that all proposed joint projects are of value to both organizations. The plan
should communicate the expected benefits of the venture so that important internal and external stakeholders will
understand the role the partnership will play in the organization. Furthermore, the plan should anticipate cultural
differences and provide guidance or protocols for dealing with them. Finally, the plan should name the person responsible
for monitoring and maintaining the partnership as it develops.
Step Three: Maintaining the Partnership
In maintaining and managing the partnership, it's important to have regular meetings at all managerial levels. Top
managers should stay involved so middle managers will stay committed. As the partnership matures, it's important that
each partner maintain enough independence to develop its own area of expertise.
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Ask the Industry Expert: Why Build Partnerships?
An illustrated presentation with audio appears below, along with a text transcript. Use these resources to enhance your
understanding of building partnerships.
Transcript: Ask the Industry Expert: Why Build Partnerships?
Regarding strategy implementation, how important are partnerships with various stakeholders, both inside and
outside the hotel?
I think we live in a very complex world. It's a big, ugly, competitive environment. And the hotel has always been an organ
of the society. Society as we have defined it is substantially larger. It is no longer a small, provincial society; but it's a
large, global society. In order to make the strategy work, we really have to establish partnerships, because there is not
one organization that is going to have all the resources to make it work. There isn't enough money there, there isn't
enough labor there, there isn't enough resources out there for you to make your strategy work effectively, unless we
establish strategic alliances and partnerships.
Strategic alliances and partnerships are, in my opinion, broken into two parts: internal alliances, external alliances. An
internal alliance is really building a team and having everybody buy into it. An external alliance is something really new to
us and a new language. It is looking at the companies who represent-their brand, their culture represents- a similar image
to your organization and linking them with your organization. So sort of creating a bond with this organization. It's not an
outsourcing. Outsourcing is giving the work that you are either not capable of doing or it is too expensive for you to do to
someone else to do it. This one is establishing a partnership, so you are taking full advantage of what they are capable of
doing, and, in exchange, they are taking full advantage of what you are capable of doing.
For example, one of the relationships that I have established in the past was with Zegna, a men's clothing line. Very
fashionable, very cutting edge, very much within the same brand image as my organization, and their goal was to
penetrate into my customer base. My goal was to penetrate into their customer base-because they were identical-and
where the overlap was, eliminating it, and wherever we didn't overlap, make sure that it eventually overlaps.
Same thing is with Lexus, a car company. They wanted to penetrate into the luxury market, my customer base, and I
wanted the people who really buy their car to be my customers. Again, we looked into each other: how can we bring the
two organizations together?
So, there are opportunities out there. If you want to grow and you want to get your strategy implemented, you have to
really look for the strategic alliances. And the strategic alliances are in part of local government, the strategic alliances are
in part of local chamber of commerce, the strategic alliances are in part of the community and what is happening in the
community, the schools, etc. So you have to establish alliances.
You can no longer look at suppliers as a cost source, but you have to look at them as strategic partners. You may have to
get together with suppliers and make them grow certain vegetables or to grow certain things just for you. That will give you
a competitive advantage if they do that. You can actually help them! In certain cases I have seen organizations really
successfully lend money to their suppliers in order to upgrade their plants or improve their methods so in the long run they
could benefit out of it. So, in this global economy, I think strategic alliances, external strategic alliances, are essential to
making your strategy work.
What increases the likelihood of a successful partnership?
I think the most important part of a strategy partnership and how it becomes really effective is choosing the right partner
that represents your brand image and looking at it as a win-win rather than a win-lose or lose-win. It has to be win-win,
because my benefit has to be your benefit, and your benefit has to become my benefit.
And I think it's very different to a marriage-not looking at it as a marriage, because you are not entering "until death do us
part." This is something that, if you are finishing the partnership and death parts you, that's wonderful, but that partnership
is not meant to be for the next twenty, thirty, forty years. So don't enter into it thinking that it's going to be forever. Look at
it much more as a very romantic, exciting engagement period, where you are mesmerized and very happy, and you are
trying your very best for both parties to benefit from that relationship. And it is a temporary relationship because both
individuals outgrow each other. Both individuals go different directions. In the same token, organizations with their
strategies do change directions and move, and you are not responsible for their growth and responsible for their strategy
direction as they are not. As long as it suits your needs and it suits their needs, the partnership is effective. The minute
one partner becomes a burden to the other, it becomes a burden, and it becomes really ineffective.
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First of all, choose a very compatible partner. They have to represent the same client base as you do. That's the starting
point.
Is it possible to build a partnership with the community?
There is always an impact for your actions. There is always a social impact for anything you do. I have seen many hotels
that have been backed by the community or the local government to come and open there-because they need the
economical boost, they need the tax revenue it's going to generate, they need the excitement it's going to generate-yet
three or four years after opening, they have been looked at as organizations that brought in and are selling alcohol to
high-school students, dirtying the environment, increasing the traffic-there's always an impact. Impacts are going to be
present there.
So the question really is, in a community, how do you eliminate those impacts from happening? How do you really create
an organization that the community and the hotel work hand-in-hand together? And that requires first and foremost the
general manager's involvement in the community, the general manager buying into the role that he or she is there forever.
You cannot take a job in order to springboard to your next promotion, but you have to take every job like you are going to
last there forever.
And you get involved in the community. My advice would be, you find an activist in the community that's respected by
everybody, you find a translator in the community. Then you make that translator, that activist in the community, your
ambassador and your organ to get into that community. And, gradually, this individual really guides you through the
minefields and introduces you to the right stakeholders in that community-and that you get involved in the important things
that matter to that community.
And you find out what is important to that community-is it the schools that are important to that community? is it the health
care that's important to that community? is it the boost in retail revenue that's important to that community? Or is no
growth important to that community? Or is it the environmental leadership that's important to the community? These are all
very different priorities, very different issues requiring very different approaches. So you cannot come to a city or town or
country and immediately claim that you know as an outsider what is right for that. If you take your time to find out what is
right, it's too late. So you have to start with a shepherd that's going to guide you. And you have to find who is going to be
your shepherd in that community and identify that individual and get to work right away.
What about building partnerships with competitors?
When it comes to your competitors, I would actually look at and eliminate most probably the word competitor from the
language. The twenty-first century is no longer a competitive century. The twenty-first century most probably is much more
of a collaborative century. We are really no longer competitors to each other; we are most probably alternatives to each
other. It is the client is going to choose you one stay and, as an alternative, is going to choose somebody else. At the end
of the day, what is right for that community, what is right for that area, is really ultimately what is right. And by getting
together with your competitors and looking at them as collaborators, you can actually create a much better and much less
cutthroat environment, which will require much less of creating a hypercompetitive environment where everybody has to
cut each other's throat in order to be successful, but it also can become a win-win for everyone.
What about building partnerships with the government?
When it comes to government, it is again very essential that we are now talking, like they said, "all politics are local." I
think for a hotel, the government is local. I would leave the big picture of dealing with the federal government to the large
lobbyists. To me, the politics are local, the government is local, and I would look at the immediate area of the local
government. Whether it is a municipality, whether it is a local city government, and again, it starts with understanding,
what is the mission of that government? At the end of the day, we have to remember something very, very important, and
it took me some time to learn: governments are elected by local residents. Business generates revenue by people visiting
that; they don't vote. Governments are out to please the local residents. Whereas, they do it by the revenue generated by
people who do not live necessarily in that municipal or city area.
So, therefore, government has to clarify, or you need to understand from the government what their mission really is or
what their objective is, and then find a role for yourself to complement that objective. At the end of the day, what they are
interested in is for you to generate revenue-you not to bring any embarrassment or any bad publicity to that area-yet at the
same time to blend in perfectly and to balance those two objectives: while generating revenue, not to create any negative
impacts. That is a crucial thing for the hotel manager to understand, and then carve a niche for him or herself in that
society.
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TOPIC OVERVIEW
Topic 2.3: Fostering Support from Internal Stakeholders
In this topic, we look at ways to foster support from internal stakeholders, primarily employees. Employee support is
crucial to the success of many organizational initiatives, including implementation plans. Yet it is often difficult to gain
support from this key group. As a result, some organizations find that their employees do not provide them with the critical
feedback they need. This is a serious issue for the strategic manager, because without feedback he or she will be unable
to implement strategies effectively.
This topic presents an opportunity for you to consider how you will gain and keep the support of internal stakeholders
during the implementation process.
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The Cycle of Mistrust
An illustrated presentation with audio appears below, along with a text transcript. Use these resources to build your
understanding of how a manager's negative assumptions can lead to self-protective and even aggressive behavior on the
part of employees.
Transcript: The Cycle of Mistrust
Stakeholders and partners are important to the implementation of strategy. Let's talk about how to foster support from
internal stakeholders, primarily employees. Sometimes we fail to get the support we need to implement strategy because
of a cycle of mistrust. The cycle works something like this: imagine a workplace where a manager observes employees
who do not greet him warmly, are slow to provide service, don't maintain eye contact and responsiveness with the guest in
accordance with quality standards, and only do a very minimum amount of work. The manager might assume that the
workers are not motivated or service-oriented or even competent, and may even believe they're lazy and perhaps
dishonest. This is point one in the cycle of mistrust: negative assumptions.
The manager, who has negative assumptions about employees, then engages in self-protective behaviors, like feeling that
they need to control employee activities closely. When they delegate work, it might be accompanied by close instructions
and followed by equally close supervision. It's unlikely that the subordinate will be given any information beyond what is
essential to complete their specific tasks. Nor will he or she be permitted to make independent decisions on anything of
importance-even if it closely affects their own work.
When bosses don't trust subordinates to make decisions, they make the decisions for them. These are the self-protective
behaviors of point two in the figure.
How does this look to the subordinate? Will he or she feel a valued and important member of the team? It is far more likely
that the actions of the manager will reinforce a negative assumption that the employee holds. Employees will observe
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these actions, the lack of information sharing, and may feel devalued, becoming
alienated from the organization of which they are a part.
What the employee experiences shapes how they behave. Believing that they are not
valued, they may become unresponsive to guests and angry-what we call
self-protective behaviors at point five in the figure. These actions are observed by
management, and their responses only serve to reinforce the cycle of mistrust.
The inevitable result is heightened feelings of mistrust. Managers stereotype their subordinates, treating them much like
awkward, disaffected, and difficult teenagers. The employees view their bosses like domineering parents, always ready to
interfere with sharp criticism and harsh injunctions to do as they are told. Bosses believe subordinates have no ideas or
sense of initiative, rarely considering the possibility that their actions have convinced staff that neither their ideas nor
initiative are wanted. Employees are convinced that their leaders enjoy nothing better than making themselves look good
at other people's expense. In such an environment, mistrust grows steadily: the negative cycle continues without end.
The cumulative impact of fear is negative feelings about the organization, loss of trust or pride, an increase in political
behavior, petty reactions and sabotage of the organization, and unwillingness to give extra effort. The possibility exists of
making more mistakes and hiding those that are made and, over all, wrong implementation priorities.
The cycle of mistrust can impede our ability to effectively implement. One of the ways we can avoid the cycle of distrust is
to encourage employees to speak up when they see strategy implementation not working. Oftentimes folks don't speak up
because they're afraid of repercussions, or they are afraid that nothing will change, and, since they want to avoid conflict
or possibly even avoid damaging their relationship with their boss, they let it go. And that's terrible for the strategic
manager, because they are then unable to implement effective strategies.
So, referring back to the model, the starting point for building effective internal relationships is to change your
assumptions. So we begin by changing our assumptions about our employees, valuing their criticism, hearing out the
34
messenger's full message, and not reacting defensively; searching with the messenger for the ideas behind the scene,
and rewarding the messenger for identifying the fact that what we thought we wanted to do, our plan, doesn't fit with our
ability to get things done.
Finally, we want to seek out bad news, which is very difficult for a strategic manager to do, primarily because people are
afraid to tell you bad news, because, again, they don't want to harm their relationship, or they're afraid that they might lose
their own credibility by telling you, ironically, the truth. So you have to be much more aggressive about seeking out bad
news, asking questions, asking directly for feedback, and then not reacting with that spiral of negative assumptions when
you hear what you don't want to hear.
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Building Relationships without Fear
Issues and problems arise routinely in the course of strategy implementation, when plans are finally put into action.
Strategic managers rely on employees and others involved in implementation to communicate what they experience and
observe, and this communication is a crucial first step toward recognizing and resolving problems. If employees hesitate to
express their concerns or to give critical feedback, it jeopardizes the success of the implementation process.
Effect of negative assumptions and mistrust
Why would an employee decide not to voice concerns? In the workplace, people choose not to speak up for various
reasons. Some don't communicate problems because they believe there's no point in doing so-they think nothing will
change anyway. Others wish to avoid conflict, and so refrain from communicating anything they believe might lead to a
confrontation. Some employees may fear repercussions, for themselves or for others.
Some of the leading things people are afraid to lose are their credibility, their reputation, their likelihood of achieving
career or financial advancement, their good relationship with their bosses, and their self-esteem. They feel they risk
rejection, demotion, or losing their employment by raising their concerns with management.
If the workplace is characterized by negative assumptions and mistrust, employees may be particularly disinclined to
provide bad news or critical feedback, during strategy implementation or at any time. If managers allow mistrust in the
workplace to grow, negative feelings about the organization will grow there, too. Trust and pride among employees will
decrease. Employees won't demonstrate a willingness to make an extra effort, and they will make mistakes more
frequently. Often, in this situation, managers see the emergence of politically motivated behavior, and disgruntled
employees may even resort to sabotage. The presentation entitled The Cycle of Mistrust describes this situation in more
detail.
Importance of positive relationships
For these reasons and others, it's important for managers to build positive relationships with employees and encourage
open communication. Is it possible that members of your team fear that they may damage their relationship with you, lose
credibility, or even lose their jobs as a result of sharing bad news? Do they fear rejection as a result of providing negative
feedback? Be sure you know the answers to these questions before you begin your implementation process. Even if you
think you know the answers, you may wish to address these issues in the plans you create. Without open communication,
including criticism, it's difficult, if not impossible, to implement strategy successfully.
36
A Guide to Fostering Support
Several years ago, researchers found that the companies that were most successful in implementing their strategies had
created a company-wide "pervasive strategic vision" that included the full involvement of all of their employees . In those
1
firms, employees worked as a "coordinated system," directing their separate but interdependent efforts toward the goals of
the firm.
Just as it was important to communicate the organization's vision and mission to employees and other stakeholders during
direction setting, it's crucial that you communicate your strategy and action plan to them at the point of strategy
implementation. Employees working as a coordinated system will help you realize your goals. Those who believe their
feedback is valued will communicate it openly, providing guidance and support. Here are some dos and don'ts for your
implementation plan.
DO:
Communicate your strategy and your action plan to your employees. Make sure each employee understands the
overall plan and the role he or she will play in it.
Build consensus on the team for how to proceed. Ask questions and get feedback. And listen!
Develop strong alliances with those in the organization who are in a position to facilitate implementation.
Establish measures of progress and specific deadlines for accomplishing goals.
Recognize and reward those employees who reach implementation milestones.
DO NOT:
Let your implementation effort fall into the knowing-doing gap and become stalled. Urge and empower those
involved to get the implementation process moving and to keep it moving.
Tolerate an atmosphere of fear and mistrust in the organization. Take action to change your assumptions if you
need to and to create an atmosphere of mutual respect and open communication.
Remember, you can't move forward without the support of internal stakeholders. Make sure they are part of your plan.
Gluck, F. W., Kaufman, S. D., & Walleck, A. S. (1980). Strategic management for competitive advantage.
1
Harvard
(4), 154-161. Business Review 58
37
Module 2 Wrap-Up
In this module, you considered the role of stakeholders and the formation of partnerships in the implementation of
strategies. You evaluated external stakeholders according to their strategic value to the organization, and you learned to
appreciate the importance of internal stakeholders, whose input is so beneficial to implementation success. You selected
strategically important stakeholders for partnerships and designed appropriate relationships to form with them.
Having completed this module, you should now be able to:
38
MODULE OVERVIEW
Module 3: Strategic Control Systems
In this module, we consider the evaluation stage of the strategy process model, where strategic control systems are used
to measure performance and generate critical business intelligence. Organizations build control systems using feedback,
feedforward, behavioral, and accounting controls. They rely on feedforward controls to help them anticipate changes in the
external and internal environments, enabling them to make timely adjustments to strategic direction, organizational
strategies, and implementation. Feedback controls provide managers with information concerning outcomes from
organizational activities. Finally, organizations use behavioral controls to motivate employees to do things that the
organization would like them to do, even in the absence of direct supervision.
Explain the purpose of a strategic control system
Describe how a feedback control works
Describe how a feedforward control works
Describe how a behavioral control works
Explain how you can use strategic controls to evaluate your strategy
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TOPIC OVERVIEW
Topic 3.1: Feedback Controls
Strategic control systems are tools designed to help managers make resource-allocation decisions and identify problem
areas in the firm's operations. Feedback controls, one type of strategic control, are widely used in organizations of all
kinds. These controls help individuals within the organization focus on issues and problems that are of particular
importance to the future of the firm. Further, they help create an alignment of interests between managers and the firm
itself.
Some examples of feedback control systems include budgets, financial-ratio analyses, and audits.
In this topic, take a look at why firms develop strategic control systems and why they so often use feedback controls in
particular. When you have completed this topic, you will be able to:
40
Viewpoint: Joe Lavin on Performance Feedback
Joe Lavin, hospitality-franchising
visiting lecturer at Cornell, comments
on the importance of calculating and
tracking certain metrics as part of the
implementation process.
Professor Cathy Enz asked colleague Joe Lavin, hospitality-franchising visiting lecturer at Cornell's School of Hotel
Administration, about the role of performance feedback in strategy implementation.
Mr. Lavin is founder and President of HarborStone Hospitality, an entrepreneurial venture that develops and owns hotels
and provides general consulting in the hospitality industry. From 2002 through 2004, Lavin was executive vice president
and managing director of Marriott International's Marriott ExecuStay, the company's corporate housing division.
From 1997 through 2001, Lavin served as senior vice president of franchising for Marriott's five limited-service brands.
Under his leadership, Marriott's franchising business achieved substantial growth and currently composes 70% of
Marriott's limited-service portfolio.
Transcript: Viewpoint: Joe Lavin on Performance Feedback
Well, successful companies that I've been associated with measure far more than financial. Obviously financial success is
probably the number-one thing, but also, components of that are whether or not the people that work for you are happy to
work for you, are growing, are motivated to work; and, are your customers happy with your product? I think that keeping
track of those other metrics is just as important. At the end of the day, too, financial success-if you have unhappy
employees, if you have customers that are unsatisfied or with declining satisfaction-the financial results are surely to
follow. So, companies that keep an eye on all three of those at the same time tend to be more successful than those that
focus purely on the bottom line. The bottom-line focus tends to lead to short-term thinking. It tends to lead to, what are we
going to do to make ourselves look good for the quarter?
Some of those things are at odds with the long-term components of success, that is, the satisfaction of your employees
and your customers.
41
1.
2.
3.
Approaches to Strategic Control
The increasing numbers of diversified and vertically integrated organizations early in the twentieth century created a
demand for systems that could help management allocate resources where they were most needed. The E. I. du Pont de
Nemours Powder Company created one of the most enduring systems for controlling diversified businesses-one based on
return on investment (ROI). Using this summary measure of performance for each division, high-level managers could
identify problem areas and allocate resources to the most successful operations and divisions.
Since that time, the use of financial measures has gained wide acceptance and application. In many organizations,
financial measures have become the only important measures of success. However, the practice of relying primarily on
financial controls is problematic. According to some control experts, financial control measures based on accounting data
have three problems:
They're too late. The lag time between the organizational transactions themselves and the date that the financial
reports come out is too long.
They're too aggregated. This simply means that financial measures based on accounting data do not contain the
detail necessary to enable meaningful improvements to organizational processes.
They're too distorted to be relevant for managers' planning and control decisions. Distortion arises from the
variation among calculation methods used over time and across departments, divisions, and companies.
Rather than using financial controls exclusively, organizations should establish a more complete strategic control system
involving other types of controls. Types include feedback, feedforward, behavioral, and accounting controls.
The first step in developing a strategic control system is determining what needs to be controlled. It's possible to answer
this question by looking at the goals the firm has established. If one of the firm's goals is to have the highest level of
customer satisfaction, then its strategic control system must measure satisfaction. On the other hand, if the goal is to
maximize shareholder return, the strategic control system must measure the appropriate financials.
42
Feedback Controls
Even if you are unfamiliar with the term , you are probably using one (or more) in your organization. A feedback control
feedback control system exists anytime goals or objectives are established and actual results are then measured against
them. Varieties of these systems are everywhere. For example, budgets are feedback control systems because they
provide revenue and expense targets against which actual results are measured. A financial-ratio analysis involving a
comparison of current and past ROI is another example. An audit, in which firm conduct and outputs are measured
against established guidelines, typically by an independent auditor, is also a type of feedback control system.
"Feedback controls provide
managers with information
concerning outcomes from
organizational activities. Any
time goals or objectives are
established and actual results
are then measured against
them, a system of feedback
control exists."
Feedback control systems perform several important functions in organizations. Consider the example of the annual
budget. This budget creates specific targets that help guide managerial and even organizational decisions. Second, the
budget may help to motivate managers to pursue specific organizational interests as opposed to other interests, so that
they can stay within the constraints established by the budget. Also, with the budget in place, they know they will be held
accountable for their actions. Finally, budget reports make it clear to managers when corrective action might be required
(when there's a gap between targets and actuals, for instance). Therefore, with a budget to refer to, managers will be
more likely to spend their time dealing with issues and problems that are important to the future of the firm. A feedback
control system helps managers decide when and how to intervene in organizational processes by providing clear
indicators of those areas requiring further attention.
Let's look at how a feedback control system works.
A feedback control system.
This flowchart shows the activities associated with a feedback control system for strategic control. The starting point for
this control is actually in the strategy-formulation stage, when strategic direction is established (see lower left). The kind of
feedback control appropriate for your organization is related to your strategic direction, to who you are as an organization,
and to how you define success. You gain an even better sense of what kind of control to use as you move into the next
piece of the process, formulating your basic strategies. Then, as you develop implementation plans and processes, you
select the feedback controls that are the best fit with your needs and put them into place. This involves, of course, the
establishment of goals and objectives-the next piece of the process.
On the right side of the flowchart, a dotted line indicates the passing of time. This is the point in the process when you
collect actual data from operations. Eventually, you must measure and compare these data, your organizational
outcomes, with your goals. You must ultimately feed this comparison, your performance feedback, back into the strategic
management process as business intelligence. And the cycle continues.
43
1.
2.
3.
4.
5.
6.
7.
How to Build a Feedback Control System
Feedback controls are common components of strategic control systems. These controls guide managers, encouraging
them to focus on issues and problems that are of particular importance to the future of the firm.
Let's look at how firms develop feedback control systems. Here is a step-by-step approach.
. Ask yourself, if the organization achieves its vision, what will be different? You First, determine broad goals
may wish to answer this question from the perspective of the organization and of each of its key stakeholders,
such as customers, the local community, governmental agencies, suppliers, and employees. Doing so will help
you to determine what the organization is going to do for its most important stakeholders.
Examples of the kinds of broad goals an organization could establish to achieve its vision include: we want to
have the highest level of customer satisfaction; we want to give back to the community through
community-service programs; and we want to maximize shareholder return. Notice that these goals are
derived from the perspectives of various stakeholders.
Establish links between broad goals and organizational-resource areas or activities, and determine
. For example, if one of your broad which areas will be instrumental to achieving each of the broad goals
goals is to achieve a very high level of customer satisfaction, then you must determine the specific factors
leading to customer satisfaction, which may include a high-quality product, excellent customer service, good
value (price relative to features and quality), and excellent hands-on training or instructions. These things can
be measured through direct customer surveys or interviews, quality-measurement systems,
competitor-comparison surveys, careful observation of patterns of repeat business, or through the findings of
an outside research firm. Notice that the factors identified as important to customers include both resources (a
high-quality product) and activities (customer service, training, pricing).
In this second step, you identify factors to measure in step three.
for each of the factors identified in step two. Create a goal level and a date by which to achieve it
to a specific manager. Assign responsibility for each of the goals
. This step can be completed by the managers Develop an action plan for accomplishing each of the goals
assigned to the goals.
for the accomplishment of each goal. Allocate resources
. Create a specific plan to follow up with each manager. Follow up on the status of each action plan
44
TOPIC OVERVIEW
Topic 3.2: Feedforward and Behavioral Controls
This topic describes feedforward controls and behavioral controls. Feedforward controls help organizations deal with
major, unexpected occurrences that necessitate internal change. Using feedforward controls, organizations can anticipate
significant internal and external changes and respond in a timely way. Behavioral controls are closely linked to
functional-level strategies and include bureaucratic, clan, and process controls. Organizations create behavioral controls
as a part of implementation planning.
45
Feedforward Controls
Feedforward controls help managers anticipate what will happen in the external environment, so they can make timely
adjustments to organizational strategies and goals. Without feedforward controls in place, managers may fail to respond to
major, unexpected changes in the social, economic, technological, political, or organizational environments. These
unexpected changes are called , and they necessitate change within the organization. environmental discontinuities
Examples of environmental discontinuities include:
This might cause the firm to reevaluate its goals and expansion strategies. A merger between two competitors.
This might require a firm to improve its wage and benefits plans, which A serious problem with labor turnover.
would in turn affect its cost structure.
New regulations could influence new product-development plans. The advent of new industry regulations.
This could force a firm to reconsider developing a project or locating a store in a A shortage of skilled labor.
particular community.
The capacity to anticipate changes like these is of utmost importance to organizational strategy. These changes could
lead an organization to rethink the assumptions that underlie its vision, goals, and strategies, and, in some cases, that
underlie its structure and technology.
A feedforward control system.
"Feedforward controls
provide managers with
critical information about
changes in the external
environment, helping them
to anticipate changes in the
external and internal
environments. Using these
controls, managers are able
to make timely adjustments
to organizational strategies
and goals."
Feedforward control systems help firms manage environmental discontinuities by collecting information from both the
external environment (the broad and operating environments) and the internal environment (resources and strategies).
This process is called . Many firms use business-intelligence applications for this purpose, to provide strategic surveillance
46
accurate, real-time data. Information gained through strategic surveillance is incorporated into the business intelligence of
the firm, itself a vital part of the strategic management process and central to the formulation and implementation of
strategies.
Once the feedforward control collects information through strategic surveillance, the firm compiles it into a useable form.
Finally, the firm compares its findings with its current assumptions, a process called . Are those premise control
assumptions still valid? Premise control helps organizations avoid situations in which their established strategies and
goals are no longer appropriate.
Firms assign responsibility for the collection and dissemination of intelligence information to appropriate individuals, areas,
and levels in a deliberate manner. Typically, marketing departments are responsible for collecting information on
consumer tastes and preferences; sales departments manage most interactions with customers; middle managers collect
information about union activities; and public-relations departments typically deal with the media, special-interest groups,
and the general public.
Because discontinuities can arise from inside as well as from outside organizations, feedforward controls must have both
internal and external dimensions. If designed properly, they can alert firms to the kinds of discontinuities listed here. Even
in stable environments, where environmental discontinuities play only a minor role, feedforward controls are essential to
developing learning processes to enable organizations to move toward the accomplishment of their goals.
47
Behavioral Controls
Behavioral controls are one of several types of controls firms use to facilitate efficient operation-in this case, to motivate
employees to do things that they would like them to do. Behavioral controls work to encourage employees to comply with
organizational norms and procedures. There are three broad classes of behavioral controls, which operate singly or in
combination: bureaucratic controls, clan controls, and process controls.
Behavioral and accounting controls in relationship to the strategy process.
Bureaucratic Controls
Bureaucratic controls are the rules, procedures, and policies that guide the decisions and actions of employees.
Bureaucratic controls can be broad, like the company policies that guide employee behavior in general ways. They can
also be specific, like the procedures governing the process of check approval. The following are further examples of
bureaucratic controls:
The human-resource policies an organization follows, for example, those for equal-opportunity employment
The recommended way hotel front-desk staff respond to guest questions at check-in and whom they instruct guests
to approach for specific services
The procedures employees follow when assembling meals in a fast-food franchise
Bureaucratic controls, many of which are developed to ensure consistency of approach in common operational tasks, are
a major determinant of how well a firm implements its strategy.
Clan Controls
"Firms use behavioral controls
to motivate employees to do
things that the organization
would like them to do, even in
the absence of direct
supervision."
Whether firms hire employees according to the extent to which their personal work-related values match the organization's
values or whether firms persuade new hires to adopt their values through immersion and incentives, clan controls play an
important part in keeping organizational behavior in line with strategy. Clan controls are the behavioral controls most
closely linked to the concepts of organizational culture and ethics. Organizations establish clan controls through the use of
socialization processes they have designed to convey their values. These processes include training, mentoring, role
modeling, and orientation programs.
Process Controls
Process controls use immediate feedback to influence the work an employee does. The most informal of the behavioral
48
controls, they are also the most dynamic, because they constitute a real-time interface between employees and some
element of control. Some examples of process controls are:
A GPS system installed in a taxicab that provides instant feedback by signaling the driver that he has moved into
the wrong lane
A warning system in an airplane that signals the pilot when her aircraft has fallen to an unacceptably low altitude
Process controls do not simply relay an aggregate report at the end of an operation; instead, they engage with the person
performing the operation while the operation is still underway.
49
Working with Controls
Firms use control systems to measure and monitor their activities and to guide internal processes. Now that we've taken a
look at several types of control systems, let's consider how they all fit together.
Feedback control systems help companies control change processes by establishing goals and comparing actual
results against them. The outcomes gathered using feedback controls can feed the feedforward control, described
next.
Feedforward controls anticipate changes. Outcomes gathered by feedback controls become part of business
intelligence and are used by feedforward controls to make timely adjustments to strategic direction, organizational
strategies, and implementation strategies. Firms can feed revised strategies into behavioral and accounting
controls, described next.
Behavioral processes and accounting controls receive the revised strategies that result from feedforward analyses.
These controls manage and control change.
Firms can feed revised strategies resulting from feedforward controls into feedback controls, too, setting new goals to
measure performance against. Variations between firm performance and strategic goals become part of the business
intelligence moving forward.
A well-designed strategic control system should provide feedback for ongoing, iterative adjustments to direction, resource
allocation, and management priorities. It should also provide early warning of performance problems.
50
Module 3 Wrap-Up
This module explored how to use strategic control systems, including feedback, feedforward, and behavioral controls, to
evaluate the effectiveness of your strategies. It discussed using feedforward controls to make timely adjustments to
implementation strategies and feedback controls to check actuals against objectives. It examined three types of behavioral
controls you can use to motivate employees to behave in accordance with organizational strategy.
Having completed this module, you should be able to:
51
Course Wrap-Up
Upon reaching this page, you should have completed the following modules in the course:
Module 1: The Process Side of Implementation
Module 2: Stakeholders and Partnerships
Module 3: Strategic Control Systems
If you have completed these modules-congratulations! Let's review the course objectives.
Having completed this course, you should feel comfortable with your ability to do the following:
Use process tools to implement strategy at your hotel
Manage internal and external relationships to support strategy implementation
Use strategic control systems to effectively monitor and revise your strategy
52
Thank You and Farewell
Hello again. As we have seen in this course, the strategic management process does not end once a firm selects its
strategy. Translating strategy into action is the role of implementation and has been the focus of this course.
The transition from strategy formulation to strategy implementation requires shifting responsibility to operational concerns
and coordination among many individuals. We have seen in this course how execution fits in the strategic management
process and how important the day-to-day accomplishment of objectives are to making a strategy work. Developing
objectives and establishing accountability is essential, along with well-developed partnerships, both inside and outside the
organization. Managing relationships and organizational resources help move an organization toward successful
execution of its strategies, while the thinking-doing gap and distrust can make it harder to establish support for the
organization's strategy. As we conclude this course on putting strategy into action, keep in mind that successful strategy
formulation is not a guarantee of success. Strategy implementation is where the real work begins.
Finally, building control systems helps to assure that what is hoped for is accomplished and, if performance gaps exist,
that managers can take the feedback and work toward enhancing future performance. Best of luck.
53
Stay Connected
54
Glossary
accounting controls
Controls that ensure that the financial information provided to internal and external stakeholders is accurate
and follows generally accepted accounting practices.
acquisition
A form of merger whereby one firm acquires another firm, either through an outright purchase or through the
purchase of a controlling interest in its stock.
action plan
A plan in which specific actions are assigned to an organization's prioritized strategic objectives. This plan
also specifies the measures by which the effectiveness of implemented actions will be assessed.
alliance
An arrangement between two or more firms that establishes an exchange relationship without entailing joint
ownership.
behavioral controls
A special set of controls used to motivate employees to do things that the organization would like them to
do, even in the absence of direct supervision. These controls include bureaucratic controls, clan controls,
and process controls.
broad environment, macroenvironment also
The overall context in which the organization and its operating environment exist, including its sociocultural,
economic, political, and technological contexts.
buffering techniques
Composing the more traditional approach to stakeholder management, these techniques-including
public-relations efforts and financial donations, among others-soften the jolts that might otherwise be felt as
the organization interacts with members of its external environment.
bureaucratic controls
Rules, procedures, and policies that guide the behavior of organizational members.
business intelligence
The collection and analysis of information on markets, new technologies, customers, competitors, and broad
social trends, as well as information gained from internal sources.
business-level strategy
A strategy that addresses how a firm should compete within the horizons set by the corporate level.
clan controls
Socialization processes through which an individual comes to appreciate the values, abilities, and expected
behaviors of an organization.
coordination costs
Additional costs required to coordinate partnered firms.
corporate-level strategies
55
A strategy that defines a company's domain of activity through the selection of business areas where it will
compete, and which is formulated by the CEO and other top managers.
cycle of mistrust
A syndrome affecting some firms whereby suspicion between employees and management initiates a
vicious circle of unproductive and increasingly antagonistic behaviors.
direction, strategic
A firm's articulation of the purposes for which it exists and operates, especially through its vision and mission
statements.
environmental discontinuities
Unexpected changes in the social, economic, technological, political, or organizational environments around
a firm.
external analysis
Examination of the external environments, both operational and broad, in which an organization operates.
feedback controls
Controls whereby goals or objectives are established against which actual results are then measured.
feedforward controls
Controls that detect environmental discontinuities in the broad, operating, or internal environments, enabling
firms to make timely adjustments to organizational strategies and goals.
first-mover advantages
Advantages that come from a firm's being at the forefront of technological advances in its industry.
interlocking directorate
A business alliance whereby a director or executive of one firm sits on the board of a second firm or
whereby two firms have directors who also serve on the board of a third firm.
internal analysis
A part of the strategy process model in which the firm uses various methods to determine its value
proposition, competitive attributes, and competitive advantage.
interorganizational relationships
Relationships of cooperation between or among otherwise autonomous firms. Interorganizational
relationships include joint ventures, networks, consortia, alliances, trade groups, and interlocking
directorates.
joint venture
An entity created when two or more firms pool a portion of their resources to create a separate, jointly
owned entity.
knowing-doing gap
A phenomenon characterized by hesitation at the point at which plans and strategies must be implemented
through concrete organizational action.
merger
The combination of two formerly separate firms into a single organization.
56
mission statement
A short statement that describes an organization's scope and operations and outlines its purpose or intent.
objectives, strategic
Specific, achievable, and measurable goals, corresponding to a firm's strategic direction, which it is the
purpose of strategy implementation to meet.
operating environment
Narrow environment of stakeholders with whom an organization interacts on a regular basis, including
customers, suppliers, competitors, government agencies and administrators, local communities, activist
groups, unions, the media, and financial intermediaries.
organizational culture
System of shared values characterizing an organization and its employees.
partnership
A business form in which partners, whether individuals or businesses, contribute resources and share in the
rewards of a venture.
premise control
Use of information collected by the organization to examine assumptions that underlie organizational vision,
goals, and strategies.
process controls
Controls employing immediate feedback to regulate organizational processes.
skill leakage
The unwanted or disadvantageous transfer of skills from one organization to another.
SMART
An acronym that stands for specific, measurable, achievable, results-based, and time specific, objectives.
stakeholders
Groups or individuals who can significantly affect an organization's activities or who are significantly affected
by them. External stakeholders include customers, suppliers, competitors, government agencies, local
communities, the media, labor unions, and financial intermediaries. Internal stakeholders include employees.
strategic control system
A combination of control systems that enables managers to monitor, assess, and adjust the implementation
of organizational strategies.
strategic surveillance
The process of collecting information from the broad, operating, and internal environments, often by
feedforward controls.
strategy formulation
The initial stage of the strategic management process, which consists of internal and external analyses;
direction setting; and the generation, evaluation, and selection of strategies.
strategy implementation
57
Intermediate stage of the strategic management process, which includes establishing goals and objectives
that are aligned and fit with the strategy of the overall enterprise, managing the relationships with different
stakeholders and important players, and building control processes.
SWOT analysis
A method for performing internal and external analyses, in which company attributes and features of the
external environment are grouped into four categories: strengths, weaknesses, opportunities, and threats.
TOWS analysis
An extension of a SWOT analysis where the SWOT's four categories of observations are arranged on a
graph to enable the generation of strategies for action.
vision
A broad, abstract statement about the imagined or desired future of the organization.
58
1.
2.
3.
4.
5.
Course Files
Some of the pages in this course include files for you to download. We've made all of the downloadable files available
here for your convenience.
Course Project Part I
Course Project Part II
Course Project Part III
Course Project Part IV
Course Project Part V
Topic 1.1: From Formulation to Implementation
(66.3 KB pdf file) How to Check Your Analysis
Topic 1.2: Aligned for Action
How to Write an Action Plan , Template (74 KB .doc file)
How to Write an Action Plan , Example (65.7 KB pdf file)
Topic 2.1: Choosing Stakeholders for Partners
(132.4 KB pdf file) External Stakeholders
Topic 2.3: Fostering Support from Internal Stakeholders
(97.4 KB pdf file) A Guide to Fostering Support
Topic 3.2: Feedforward and Behavioral Controls
(260 KB pdf file) Working with Controls
59
Supplemental Reading List
The provides focused whitepapers and reports based on cutting-edge research. Center for Hospitality Research
Auster, E. R. (1987). International corporate linkages: Dynamic forms in changing environments. Columbia Journal of
World Business 22, 3-13.
Deal, T. E., & Kennedy, A. A. (1984). Corporate cultures: The rites and rituals of corporate life. Cambridge, MA: Perseus
Books.
Enz, Cathy A. (scheduled for publication in 2010) Strategic Hospitality Management: Cases and Concepts, 2nd Edition.
New York: Wiley Publishing.
Gluck, F. W., Kaufman, S. D., & Walleck, A. S. (1980). Strategic management for competitive advantage. Harvard
Business Review 58(4), 154-161.
Hagedoorn, J. (1993). Understanding the rationale of strategic technology partnering: Inter-organizational modes of
cooperation and sectoral differences. Strategic Management Journal 14, 371-385.
Harbison, J. R., & Pekar Jr., P. (1998). Smart alliances: A practical guide to repeatable success. San Francisco:
Jossey-Bass Publishers.
Harrigan, K. R. (1988). Joint ventures and competitive strategy. Strategic Management Journal 9, 141-58.
Harrison, J. S., & Enz, C. A. (2004). Hospitality strategic management: Concepts and cases. Hoboken, NJ: John Wiley &
Sons.
Hoag, B. G., Ritschard, H. V., & Cooper, C. L. (2002). Obstacles to effective organizational change: The underlying
reasons. Leadership & Organization Development Journal 23(1), 6-15.
Kaplan, R. S., & Norton, D. P. (1993). Putting the balanced scorecard to work. Harvard Business Review 71(5), 134-142.
McCutcheon, D., & Stuart, F. (2000). Issues in the choice of supplier alliance partners. Journal of Operations Management
18, 279-301.
Pfeffer, J., & Sutton, R. I. (2000). The knowing-doing gap: How smart companies turn knowledge into action. Boston:
Harvard Business School Press.
Porter, M. E. (1980). Competitive strategy: Techniques for analyzing industries and competitors. New York: The Free
Press.
Porter, M. E. (1987). From competitive advantage to corporate strategy. Harvard Business Review 65(3), 43-59.
Porter, M. E. (1996). What is strategy? Harvard Business Review 74(6), 61-78.
60

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