Chapter 10 – Implementation
10-1
Questions for Discussion
1. How does the concept “translate thought into action” bear on the relationship between business
strategy and operating strategy? Between long-term and short-term objectives?
Business strategy is strategy formulation. It is based on a sound analysis of the business’s internal and
external environment. However, currently they are still rather abstract (comparatively) notions of how
2. How do functional tactics differ from corporate and business strategies?
Functional tactics are the key, routine activities that must be undertaken in each functional area –
3. What key concerns must functional tactics address in marketing? Finance? POM? Personnel?
In the finance area functional tactics must address issues such as the kind of financing arrangement to
be used for expansion, providing financial help to key suppliers, and the firm’s dividend policy. In
4. What is “outsourcing?” Why has it become a key element in shaping functional tactics
within most business firms today?
Outsourcing is defined as obtaining work previously done by employees inside the
companies from sources outside the company. Functional activities long associated with
5. How do policies aid strategy implementation? Illustrate your answer.
allowable discretion within which operational personnel can execute business activities.
6. Use Exhibits 10.10 and 10.12 to explain five executive bonus compensation plans.
Chapter 10 – Implementation
10-2
© 2013 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Exhibit 10.10 describes the five types of executive bonus compensation plans and Exhibit 10.12
matches each plan to the strategic goal of the organization.
Stock option grants give the right to purchase stock in the future at a price set now. It is a good plan to
In a restricted stock plan, shares are given to executives who are prohibited from selling them for a
Chapter 10 – Implementation
10-3
When bonus income is deferred in a series of annual installments, the plan is called a golden
handcuff. This is a good plan to use when the goal is to reduce corporate turnover.
Golden parachutes give executives the right to collect the bonus if they lose their position due to
takeover, firing, retirement, or resignation. When the goal is to defend against unfriendly takeovers or
there is a need to evaluate suitors objectively, a golden parachute is useful.
7. Illustrate a policy, an objective, and a functional tactic in your personal career strategy.
A policy is a guide to action. A policy in a person’s career strategy could relate to behaving ethically
8. Why are short-term objectives needed when long-term objectives are already available?
Short-term objectives “operationalize” long-term objectives. In other words, while long-term
objectives)?