![]() Piecemeal tactics can undermine strategy, but they are secondary. Main issues can be described as poor strategic management and lack of strategic approach, poor management of change and risk assessment techniques. Sharing common perceptions about a firm’s strategy was an important step toward coordinating implementation plans and managerial behavior (Drejer, 2002) Continental AG: Main Issues Internal problems involved “lack of awareness of the sources, poor management of internal competition and suppression of decentral innovative potential” (Wit & Meyer 2004, p. Thus, coherent and consistent actions were not taken by its production, marketing, personnel, distribution, and procurement managers in order to create a shared vision of the intended production scale. Depending on the sales volume that a firm anticipates, it adjusted its sales force, supplies and distribution, equipment, and facilities to match the scale of its production. These tasks were difficult to chive because Continental relied on “bureaucratic and centralistic structure and culture” (Wit & Meyer 2004, p. To evaluate a change in strategy, its results had to be anticipated and considered, along with changes in the business environment, with respect to matching resource capabilities, stakeholder concerns, and organizational goals. Pulling and pushing on these internal levers could also affect the firm’s performance (Mintzberg et al 2004). Some changes in variables were within a firm’s control, a consequence of prevailing operating policies and managerial decisions. Also, poor profits among some divisions and acquisition activity threatened the existence of Continental and its future. Takeovers had a negative impact on Continental and threaten its further growth and profitability. “Continental slipped into the red in just two years” (Wit & Meyer 2004, p. Background Informationĭuring 1990s, Continental AG was faced with fierce price wars caused by a strategic attempt to achieve fast growth through economy of scale. Also, recommendations will be given on how to improve and introduce change management. The paper aims to single out the main causes of failure and the effectiveness of the solutions developed by Continental. Upon close analysis, the rationale underlying incautious incrementalism may turn out to be as undiscriminating and impractical as a halfway compromise between contradictory opposites. Often, however, the use of incautious incrementalism in strategy formulation or design generates failure archetypes. Managers who believe that their firms are immune to the turbulent forces of global change do use strategic approach, especially at the implementation stage. Inability to do so will result in profit loss and low productivity, increase competition and dissatisfaction of staff. The case of the German-based company, Continental AG, demonstrates that a company has to adapt to new environment and foreshadow changes and new industrial demands. Companies are influenced by internal and external environments and have to adapt to new demands and requirements stipulated by the industry. Changes in strategy are not deliberate, they state, but emerge from a pattern of consistent decisions. ![]()
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