Dec 13, 2017 in Management

Policy and Strategy in Global Competition

4.1 Build/Continue a Capable Strategy Executing Organization

4.1.1 Define Strategy Critical Positions (include the names of team member and positions)

Every individual is important for the company as he/she adds to the fulfillment of the strategy of the Best Cost Provider. The success of a company depends on the competition and employee competence as well as the ability to complete the task associated with their position. The employees who have demonstrated the skills of carrying the company to a higher level within the competitive environment fill the above mentioned critical positions. 

Robert Mann (the Chief Financial Officer of Baldwin Enterprises) and Matthew Gee (the Chief Executive Officer of the same company) make decisions, which affect company’s competitiveness within the market. Only one misleading or erroneous judgment can send the company into a tailspin leading to the loss of market share, revenue, customer accessibility, and emergency loans. Company executives have been working closely with Shanna Cohen (the Board of Director) and are responsible for decision making, which causes the increase of shareholder value and strengthens our position within the competitive market.

4.1.2 Recruit, Train and Retain Talented Employees 

Nowadays, the HR manager has the recruiting budget of approximately $5,000 per employee. It provides an opportunity to recruit the most productive employees who will help our company to become profitable. Since the time when the company started to invest money in recruiting the best employees, we have noticed extreme productivity increase (a loss of $16 million turned into a profit of $16 million). Productivity increase is considered our current success. Each employee gets an 80 hour training a year, which proofs that our employees deserve to excel in their positions. They are also trained for the future company opportunities. The aim of the training is to improve employee retention.

4.1.3 Define the Critical Core of a Strategy and Distinctive Competencies

Our company has chosen the strategy to differentiate the products with the best cost and it seeks to become the best cost provider. However, differentiation is considered to be a sensor industry norm. The company also tries to remain competitive in the product pricing through weighing the options that may cause the best sales with the desirable price.

Our core competency is our high contribution margins that result from automation investments in Traditional and Low End product lines. These margins, which are higher than other competing industries, provided an opportunity to become the best cost providers through strategically powering the prices. Competencies help our company stay in business and allow us to compete with other top sensor companies within the market. Therefore, each segment of product line follows specific guidelines, which signify the important elements that help our products move off the shelves into the customers’ hands. In case these guidelines are placed into effect, we ensure customer satisfaction and access to the competitive market.

4.1.4 Match Organizational Structure to Strategy (4 points)

  • · Marketing takes responsibility for setting promo and sales budgets that result in the increase of customer accessibility and awareness. It has to deal with finance in order to ensure that the money is available and provides sales forecasts to production.
  • · Finance is responsible for decision making, which help to provide the company with the necessary operating capital. It also deals with making financial decisions, which aim to increase shareholder value. However, loans should be taken out to ensure that money is available for automation, and plant capacity increases to produce a substantially smaller sensor. One of our best interests is to float a bond to cover company improvements. Our company may suffer from the extra money that is saved from since now the company has more money to invest in marketing.
  • · HR is responsible for making decisions to recruit the best, most professional and capable employees that can fill the available positions within our company. Hiring productive, intelligent and capable employees help to increase company productivity. HR is engaged in setting the recruiting budget to an optimal level, which nowadays is $5000 per employee, and ensures high productivity. HR also schedules and sets the training hours per employee. We follow the idea that well trained employees may increase their competence and confidence. 

HR also controls the processing of performance evaluations and the administration of raises. Currently, these raises are set high at 5% allowing employees to know that their efforts are appreciated and help them stay with the company. Keeping professional, intelligent and qualified employees is crucial to our strategy execution. It is important to mention that we have to seek to reduce costs due to the fact that customers expect this and it has also become the part of our Best Cost Provider strategy. The best way to do it is to get more employee productivity. 

  • · Production is responsible for getting sales forecasts from marketing. It also works to ensure the fact that the number of produced sensors meets the expected demand. It is necessary to take into account any warehouse inventory as it helps to reduce the costs of extraordinary storage. Inventory can cost the company millions of dollars whereas a shortage may lead to a costly stock out. It is strategically necessary to produce an extra inventory in case a demand is expected to be higher than the previous year. For example, such things as greater investment in TQM programs that have the potential to increase the product demand should be taken into consideration. In case of investments, which are expected to result in a 7-8% demand increase, the company fails to produce extra and this increased demand cannot increase our profits if there is lack of sensors to sell.
  • · Research and development are crucial factors, which influence our company’s success and strategy. Research and development help the products be modern and make customers buy them irrespective the amount of production, product price and their marketing. In case they are too much out of the customer requirement and preference range, the company will be producing a product not valid for the customer needs. In short, the products will not be sold out. Research and development examine condition reports and customer survey scores within the industry. It is also responsible for analyzing the customer preferences in their sensor, which varies among the market segments. In order to be considered for purchase, products must take an ideal position in the market. Customers also require a particular sensor age. Research and development should make sure that the products are redesigned to the customer specifications, and that the new products come out at the right time and they are of ideal age for the customer. This is considered to be strategically advantageous for our company as well as it helps to keep it competitive. 

4.2 Link Budgets to Strategy 

Our company strategy focuses on the current expenditure increase on TQM. As a result, we have tremendously increased our TQM investments over the last years. In 2012, the company spent over $11 million in TQM spending, investing in Vendor/JIT, CPI Systems, Quality Initiative Training, UNEP Green Programs, Channel Support Systems, Quality Function Deployment, Benchmarking, Six Sigma, and GEMI TQEM Sustainability Initiatives. These investments pay a vital role in reducing administrative, material and labor costs. The previous year was our first year when the company significantly increased its product demand. We also stocked out of four of the five product lines. Moreover, three of them were producing at 200% capacity. These investments have resulted in huge reductions in administrative and material costs as well as labor costs. In addition, the company experienced an increase in its product demand.

Over the last two years, the company’s budget has allowed some increases in the marketing department. Most capacity in the size and production lines was sold off allowing a total company restructuring and enabling to get back to profitability. The company paid back long-term debt, and is increasing its stock value for shareholders and reducing the interest by about $12 million. Inventory reduction helped us save money, which was spent on marketing financing and more frequent research and development for our remaining product lines with the aim to bring them back to the positioning preferences and specifications of our customers. The company will experience the continuation of such increases in marketing and frequent research and development of the high-end product lines. 

4.3 Create/Continue Strategy-Supportive Procedures and Policies

In order to aid in the process of our company strategy execution, it is necessary to create procedures and policies that support our Best Cost Provider strategy. The process starts with a company handbook, which helps to establish acceptable and ethical behaviors for the company. Each employee has to receive a handbook copy, sign that he/she has got it, take a class on it, and state that the handbook will be adhered to. One of the handbook key policies will be a non-compete agreement that enables to protect company’s intellectual property, prevent employees from taking and leaving information related to the competitive strategy of our company. In case one of our employees leaves the company and decides to work for a rivaling sensor company, and leaves the information related to our projects or proposed pricing, a competitor may get an unfair advantage because of this employee.        

4.4 Institute/Continue Best Practices & Commitment to Continuous Improvement

To reinforce the material reduction, labor costs, and increase our product demand, we will continue our policy concerning the TQM program investment. Last year, our company made investments in such areas as benchmarking, TQM programs and green initiatives to reduce waste and ethical guidelines in order to boost our community social responsibility. These efforts provide an opportunity to allow Digby remain competitive within the market of specified businesses. The improvement of Digby’s strategic goals will also lead to the improvement of its position, to become more customer-accessible, while maintaining a company’s competitive advantage.

The guidelines of ethical behavior are associated with Digby’s ability to perform in any given production market. Ensuring the fact that the set guidelines are performed within Digby, provide us with the opportunity to continue to build the company’s respect by establishing company integrity. Maintaining practices can also call for periodic document audits which help management to provide the ethical guideline review and add or refine any new needed guidelines. 

4.5 Install/Continue Information and Operating Systems

The task of IT Department is to ensure that the best and the latest anti-virus software is installed on all the company computers. We also ensure that all servers, phone lines and databases use the latest software which helps to maintain effective and safe workflow. Hence, Digby is following an approach that the customer and employee safety is a top priority within the company. Digby will perform periodic maintenance on all servers and computers that run and maintain the core systems. It will create new avenues to make the daily process operations in each department safer. 

It is necessary for the IT department to continue to oversee the update installation for all software on all company servers and computers. It will help the company take a top position among the latest hacking trends which attempt to steal the customer information and business practices. Proper functioning of all training computers will help the HR department to provide decent training to new employees and the existing ones. Being on top of the information technology concerns and the latest software updates will help our company move further with larger goals in mind.  

4.6 Design/Continue a System of Strategy-Supportive Reward

Incentives for strategy adherence and rewards for meeting goals have been provided to our employees to keep them motivated. Keeping simple directions for incentives and avoiding making them complex is the way to meet the goals which are meant to be set and attained to progress within the company. In case they are complex and unattainable, the company will experience a failure.

After meeting the above mentioned goals, employees will be rewarded, as their performance helped to obtain these goals. As soon as the goals are achieved, new goals will be set to accomplish more within the company and increase the reward value. When employees are ensured that all of them have something to work toward and are offered some incentives when they reach the set goal, it helps to keep employees’ morale up and increases growing progress within the company.

An incentive pay will also be provided to departments and teams that meet set goals. Each department should work to meet the given goals, as it helps to stay focused and gives something to work towards. This strategy encourages the employees to work together instead of competing. Teams that do their best to meet the production goals will get incentive pay in addition to their regular pay. Incentive pay is paid once a week. These actions are considered to be supportive of a company culture. All incentive directions are explained and communicated by the management. 

4.7 Build/Continue a Strategy-Supportive Corporate Culture

Rewards, incentive programs and raises are going to become a part of the company culture, as it may help to keep Baldwin employees dedicated to their work. Each employee is treated as a valuable asset to our company growth and is highly respected. 

It will be important to build the culture within our company to continue the company’s growth. All of our employees hold an important position and follow the rules and regulations which ensure that our company philosophy is being followed within the corporate culture confines. Your place in business will determine your place in the community. Customers look for companies they can rely on.

4.8 Describe How Senior Managers Should Lead the Process of Strategic Management

Senior management is responsible for the department building up into a tip top shape. They are responsible for ensuring core competencies that are in place and bring the company into the next development phase. Senior management should be the effective leaders, as they lead the employees through new policies, procedures and planning to ensure that the department goals are met in a timely manner.

It is vital for the senior management to be supportive of any new changes and provide an excellent example for corporate culture subordinates. It will create a sense of partnership within the company. Senior management also takes the responsibility of ensuring their understanding of the company’s philosophy, as they should portray this philosophy for other employees. 

Leadership starts with senior management who understands and knows their role within the company. It is necessary to train the employees who work within their departments to ensure that all concepts and principles of a particular job are fulfilled and to rise above the challenges. It will ensure that each department does its best to run effectively. Senior management is also responsible for offering employee guidance, as they may sometimes fall behind and not fulfill their duties within the department. Such employees should understand that management is engaged in completing and holding back their departments. Senior management also has to show the example and to ensure that all company employees have the knowledge and know how to deal with and complete the task at hand.

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