The corporation’s life cycle is a path that a company undertakes during its period of existence. This path consists of several steps, which are birth, growth, maturity, decline, and death, each consequently changing another. However, some businesses demonstrate that the life cycle is not so uniform, as the stages of decline and growth may occur in the maturity stage (Foster, 2010, p. 132). Sometimes companies even go straight from growth to decline and death. There are several means of extending the corporation’s life cycle, the most used of which are diversification and acquisitions. Moreover, the implementation of new strategies must be helpful if it is successful.
Diversification is beneficial during the time of a changing economy (Verweire & Berghe, 2005, p. 74). Companies never know whether particular products or services will have growing sales in the future. Making additional offerings will ensure the business does not die during an economic crisis. The acquisitions of other businesses may help to survive the hard times when there is a low demand for the primary products of a corporation. The acquired business may keep high results, thus balancing the total revenues.
Strategy implementation is a set of steps taken by the company to turn a designed plan into action. It is exercised after the formulation of a strategy. There are three steps, which are programs, budgets, and procedures. Programs are defined by the actions that are required for reaching the goals set by the strategic plan. Budgeting considers the finances that should be spent on the whole project. Finally, the procedures are the actual step-by-step guide for making changes.
Three questions need to be addressed when dealing with strategy implementation. Firstly, there should be the identification of people who will handle the whole implementation process. Secondly, the actions must be defined that would change the existing operations of a company in agreement with the plan. Finally, there should be an understanding of how all the people would cooperate to reach the defined goals. It is usually considered that the amount of people required to implement a strategy is larger compared to its planning stage. Workers of each level should be part of the strategy implementation.
The performance appraisal system is one of the approaches to identifying and preparing employees for important positions. The HR department must identify people who would be the most likely candidates for a promotion (Attorney, 2007). There should be a training program designed for them so that they quickly find themselves comfortable in the new position. The training program should include the company’s strategy which they will deal with in the future. Assessment centers are another popular decision. Corporations use the services of other companies to test their employees for determining whether they would fit the position. Finally, job rotation is used to ensure that workers become skilled in several fields.
The corporate culture stands on three elements, which are beliefs, behaviors, and attitudes (Muscalu, 2014, p. 394). While the corporate culture is very important, it can sometimes stand in the way of successful strategy implementation. Thus, the strategy must be the primary concern, and the culture should be modified to support it.
The Armani fashion house is one of the companies that illustrates how the new strategy can change the corporate culture. The fashion industry cannot be called very eco-oriented. The manufacturing process leaves a lot of waste, as soil and rivers become filled with chemicals. However, currently, the interest in sustainability is rapidly increasing. Armani has developed a strategy to capture the market that consisted of the ecologically responsible consumers. Thus, they have created the faux fur line of clothing (Cuffe, 2016, par. 1). The corporate culture has changed along with this strategy. Nowadays, the fashion house does not utilize real fur in its collections. Thus, green technologies became a part of the company’s new culture as a response to the latest strategy. Armani would not be able to promote the faux fur products while offering items with the real one since customers would be confused and the new clothing would not receive their demand. This example proves that corporate culture should be flexible to fit the strategy.
Six Sigma is a method used for perfecting the manufacturing results. In other words, this method allows for reducing the number of products with defects. The concept was originally developed by Motorola company that focused on making cell phones (Wheelen & Hunger, 2012, p. 290). The primary interest of corporations when they use this method is to cut costs. When the number of defected products declines, it directly influences the revenues which could be gotten through sales. For instance, if the Armani fashion house uses Six Sigma, it can get more revenues since there will be more items produced. The method has five steps, which are targeted at defining, measuring, and analyzing the problem followed by the improvement of the situation and the establishment of control over the whole process to ensure there will be no such issues in the future.
References
Attorney, A. D. (2007). The performance appraisal handbook: Legal and practical rules for managers (2nd ed.). Berkley, CA: Nolo.
Cuffe, A. (2016). Fashion house Armani announces new fur-free direction after Humane Society collaboration. International Business Times. Web.
Foster, G. P. (2010). Half life: Extending the effective lifespan of the corporation through strategic management of industry diversification, globalization, merges, and acquisitions. New York, NY: APAC Press.
Muscalu, E. (2014). Organizational culture change in the organization. Revista Academiei Fortelor Terestre, 19(4). Web.
Verweire, K., & Berghe, L. (2004). Integrated performance management: A guide to strategy implementation. London, UK: SAGE Publications.
Wheelen, T. L., & Hunger, D. J. (2012). Strategic management and business policy: Toward global sustainability (13th ed.). New York, NY: Pearson Education, Inc.