MODERN STRATEGIC ANALYSIS Theme 4. Strategy implementation. Strategy of Growth

Aleksandr Kozlov
01/11/2016

Growth through creativity
Crisis of autonomy
Growth through direction
Growth through

delegation

Crisis of control

Growth through coordination

Crisis of mutual understanding

Evolution

revolution

Growth through collaboration

oriented, their energy is absorbed entirely in making and selling

products
Communication among employees is frequent and informal
Long hours of work are rewarded by modest salary
Control of activities comes from immediate marketplace feedback

about efficiencies of manufacturing
Increased number of employees can not be

managed through informal communication
New accounting procedures are needed
New employees are not so motivated as “pioneers”

to separate production and marketing
Accounting system for inventory, production and

purchasing are introduced
Budget and performance standards are adapted
Communication becomes more formal

between following procedures and taking initiative of their own
Necessity to

coordinate decisions with bosses slow down a decision-making process

to managers
Profit centers and bonuses are used to motivate managers
The

top executives at headquarters restrain themselves to managing by exceptions, based on periodic reports from the field

transferring and assigning of decision-making authority to the lower level

of hierarchy
Centralisation is the process of transferring and assigning of decision-making authority to the higher level of hierarchy

proposing redistribution of decision-making authority to the lower levels of

the same centralised and totally controlled structure
Delegation. A more extensive form of decentralisation, proposing the transfer of decision-making authority to the lower levels not wholly controlled
Devolution. The transfer of decision-making authority to autonomous units and groups

over a highly diversified field operations
Autonomous field managers prefer to

run their units without coordination with the rest of organisation

groups
Capital expenditures are very carefully weighted
Each product group is

treated as an investment center and evaluated on ROI basis
Certain technical functions such as data processing personnel training centralised at headquarter

is company set up by four former researchers in 2003.

The main product is specialised clothing for workers, operating in different types of aggressive environment: firemen, worker at oil processing plants etc. They started from two small rooms, the first for manufacturing of fabric and other one for sewing with five sewing machines. Five first years were very successful. The annual sales growth was close to 30 %, the owners were working hard like real team, supporting each other, keeping all management functions in their hands. In the year of 2008 staff of “Delta-M” achieved 70 employees, working in two workshops and designing bureau. In the year of 2007 happened unpleasant surprise: growth of sales in the second half of this year was close to zero. Team of owners applied to consulting company for advice.
During the first meeting after rituals of mutual presenting the consultant asked owners: “Who is responsible for sales?”. And was shocked by given answer, better to say, answers. It was like chorus : “It’s me!”. “What about designing?” – the same result .

Questions.
Identify the

stage of growth of “Delta-M”
Suggest the real reason for low growth of sales in the second half of the year of 2007.
Propose the actions to be done by owners of “Delta-M”