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Homework Assignment 9.

Module Review Questions (PLG1) Weekly Assignment

Submitted to the Worldwide Campus

In Partial Fulfillment of the Requirements

For MGMT 436 Course

Jim Warnick

Embry-Riddle Aeronautical University

January Term 2018

1`. Discuss what leadership or staffing skills a Board of Directors should be looking for

when hiring a senior management person to implement a major strategic plan.

The member must be willing to challenge management when it is necessary

Should have a special expertise important to the company

Needs to be available outside of meetings to advise management of happenings

Should be an expert with respect to Global Business

Needs to be able to understand the firm’s key technologies and processes

Should be able to bring external contacts that could potentially bring value to the firm

Needs to have detail knowledge of what the firm’s industry is

Should have high visibility in their field

Should be very accomplished at representing the firm stakeholders

2. Describe the benefits MBO and TQM can bring to a new strategic plan.

The MBO connects a strategy to its performance. In order to use the MBO there must be specific

objectives, Examples of these are:

What is it you’re trying to achieve?

Who is working on it?

How are you going to measure it

When can the results be expected

The results from the MBO methods are considered to be a reliable means to determine if

a strategy is on course, or if revisions will need to be made

TQM- There are two elements:

Providing the best customer service as possible

The ongoing need to always be better with whatever you are doing

It is the constant focus on process improvements that should result in:

Lower Costs

3. Evaluate the part corporate culture can play when contemplating implementing a new

strategy in a firm, as a result of an acquisition. Describe briefly the corporate culture in

your Strategic Firm.

There are 4 methods of managing corporate culture of an acquired firm:

Integration- Equal merger of both cultures into a new corporate culture

Assimilation- Acquiring a firm’s culture and keeping it intact, but subservient to that of

acquiring the firm’s corporate culture

Separation- Conflicting cultures kept intact, but kept separate in different units

Deculturation- Force replacement of conflicting acquired firm’s culture with that of the

acquiring firm’s culture.

When attempting to implement a strategy a firm needs to examine how that strategy would fit

into the firm’s current corporate culture.

Changing a culture to fit a new strategy could be time consuming.

4. Discuss the 3 types of controls that a firm can use to evaluate a strategy. Explain

examples of each of these controls.

Output Controls- The end results are the key to measuring this control. Results are compared to

projected objectives. Examples are –MBO’s, revenue results, share of market, customer

satisfaction findings

Behavior Controls- The use of policies, rules, and procedures are used as guidelines with this

type of control. Examples are; Absentee rates, turnover issues, and following company policies.

Sometimes behavior controls are more subjective than objective

Input Controls- These controls tend to use people skills, motivational tools, abilities and values.

Examples are: number of college graduates, hours spent on personnel development courses, and

cross training accomplishments

5. Describe various measurements of corporate performance

Return on investment (ROI) - Result of dividing net income before taxes by the total amount

invested in the company (typically measured by total assets)

Earnings per Share (EPS) Dividing net earnings by the amount of common stock
Return of Equity (ROE) Involves dividing net income by total equity

Operating Cash Flow (OCF) The amount of money generated by a company before the cost of

financing and taxes, is a broad measure of a company’s funds

Free Cash Flow (FCF) The amount of money a new owner can take out of the firm without

harming the business

6. Describe a specific strategic incentive management method you would use for your strategic

Audit Firm

3 strategic incentive management methods:

Weighted-Factor method, Used for measuring and rewarding personnel working on SBU or

group projects where performance factors may vary according to the SBU’s involved.

Long Term evaluation method, Involved with rewarding management personnel working on

projects over a few years

Strategic Funds Method, Focuses on using developmental expenses as a way of working towards

future benefits to the firm