Preparation, coordination, and translation of strategy into specific tasks
Obviously, such a strategy exists. However, it should not be a confidential document, because how are employees and managers supposed to implement a strategy prepared and accepted by top management? Anticipating objections regarding the need to protect trade secrets, it can be stated that this problem can be effectively solved.
In most Polish enterprises, previous strategies were prepared by companies specifically hired for this purpose. They prepared hundreds of pages of studies, which were mostly an analysis of the existing or, worse, the past state, and in reality, referred to the future in quite general terms. An even greater problem was designating the entity responsible for executing the strategy, preparing a schedule for its implementation, and monitoring the degree of its practical application. In such a situation, the aforementioned responsibility fell on top management, which implemented this strategy in the privacy of their offices. Neither middle management nor, even more so, employees identified with this goal and the company’s mission, and in some situations, they quite unconsciously acted against the desired and outlined directions of development in the enterprise. A remedy for this situation seems to be the preparation of a strategy based on the balanced scorecard method. Without going into the details of its preparation, it consists of involving all company employees in preparing the goals (that are to be achieved) and the ways to achieve them. In the next stage, appropriate resources, responsible persons, and monitoring methods necessary for their proper implementation are assigned. Although this method may deceptively resemble the previously mentioned practice of most companies, it differs significantly from it in the involvement of middle management in the preparation and implementation of the strategy. Another quite common flaw in creating a strategy is a strong emphasis on structural or, using different nomenclature, organizational changes. This problem brings to mind the widely known but rarely used maxim: “strategy first, then structure.” The most recommended solution would be for the structure to result directly from processes; however, taking into account the fact that these processes cannot be determined everywhere and at the same time, only a mixed method can be applied: on one hand, the result of processes, and on the other, the goals and tasks of the strategy.
In enterprises, it is often forgotten that a strategy should not be given once and for all, but should be subject to constant modification resulting from the changing situation and predictions regarding the future. It is also necessary to remember the phenomenon of specific convergence, i.e., the similarity of strategies of different units, which in reality leads to the collapse of the source strategy. Another type of change in which Poczta Polska places its hopes for the better is the process of transformation into a holding company. One can even hear voices that this change will generate financial resources. The holding structure undoubtedly has a number of advantages, such as:
• competition between units within the holding
• growth of initiative and entrepreneurship of management, improvement of the decision-making system
• spreading economic risk across a specific number of distinct legal entities
• the possibility of privatizing some companies
• the superior holding company (parent) will not be liable for the obligations of subsidiaries
• facilitated internal control
• the parent company will have the ability to conduct a flexible capital policy through the resale of shares, admission of new shareholders, and influencing profitability through, among other things, pricing policy and rents
• subsidiaries can focus on operational activities and transform into profit centers
• facilitation of attracting domestic and foreign investors
• the board of the parent company and office directors can be focused on taking strategic actions
• restructuring actions will enable the reduction of overhead costs
• strengthening the prestige of the management staff of subsidiaries,
but it also carries the following risks:
• costs – registration fees when establishing subsidiaries, stamp and notary fees, fees for consulting services, training of management staff and supervisory board members, taxation of subsidiaries
• tax difficulties. A parent company that does not conduct business activity cannot deduct from income tax the tax on received dividends or other income from participation in the profits of subsidiaries
• in the absence of monitoring, the holding management may lose substantive supervision over subsidiaries
• against the background of wage differentiation in subsidiaries, there may be pressure to equalize them
• a deficit of appropriately qualified staff.
The article comes from the magazine “Logistyka” 5/2007.