ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Strategic Management - Decisions, inertia, applications II

Updated on October 3, 2015

2. Strategic issues – critical in execution

2.1. Coordination and integration role of a general manager

The general manager is not just working on the strategy. He also has to execute it. He has to be the role-model. His employees will follow him. He has to take care about all parts of the value chain. Primary activities like production or after sales service and also supporting activities like HR and so on. Especially under start up conditions he has to care about so many areas. Later when the company has matured he will have his experts for each department which can sum it up for him.

For example if the marketing department wants to spend 3% more for advertisement the manager has to consider this first with the financial department. Do we have the budget? Is it really necessary? He has to make the final decision. While he is doing this he has to use the strategy as orientation.

2.2. Strategic Planning as a loop

Heisenberg uncertainty principle says that an object changes just by watching it. Nothing is static. Everything is changing. We also can use this principle in Strategic Planning. While we are planning from the scratch (from the scenario until its implementation…) we are always rethinking. There are always feedback loops. These loops influence our thoughts about the situation. For example we could find more key variables or we see more problems ahead. In text books it looks good to show strategic planning as a sequence. But in reality it is more a loop or furthermore a spiral or helix, its complexity is growing with every consideration.

Strategic Planning as a loop
Strategic Planning as a loop | Source

Strategic Planning - pros and cons


Western vs. Chinese Negotiation Styles

2.3. Constructive Ambiguity

Negotiations are used to solve conflicts, which are based on heterogeneous expectations. The term “Constructive Ambiguity” is usually used in politics, especially in a diplomatic context. It is an instrument to encourage progress in negotiations. The terms are deliberately not clear to avoid resistance towards a certain position and provide some flexibility in interpreting those terms (De Bruijn & Ten Heuvelhof 2010). The participants “adopt language that is vague and can, simultaneously, mean different things to different people”(Bell & Cavanaugh 1998, p. 1356). Results might be perceived very positive by each party (Fischhendler 2004).

While western countries often prefer transparency, ambiguity is a frequently used negotiation technique in China and other Asian countries (Gan 2014).

2.4. Intentional over-extension and political realities

Intentional over-extension of goals is an instrument of general managers. Raise the bar higher to get an acceptable result. People focus on this bar. In their minds 80% is also ok. But u want at least 100%. So u set the level to 120%. But within an organization goals are sometimes limited, because they just contain an internal point view. They might not consider the outside reality.

Overextended strategies are important for the survival of a company. As an example the European Central Bank (ECB) is checking banks regularly with a so called “stress test”. Here they want to ensure that banks are keeping the Basel III conditions in order to have a stable banking system. There a bank has to take care that every loan on the active side of the balance sheet has at least 8 % equity underlying on the passive side. This is an enormous amount of money (overextended) if we talk about company loans. But this way the next financial crisis could be coped with eventually.

Results of a stress test in 2014. Some banks in Italy and Greece failed completely.
Results of a stress test in 2014. Some banks in Italy and Greece failed completely. | Source


    0 of 8192 characters used
    Post Comment

    No comments yet.


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)