The damage a lack of strategy has Essay Example

company, taking into consideration factors such as customer demands, competitory place, and internal capacity. It is important for each managerA to have a basic understanding of strategic planning for the development ofA strategic plans. Strategic Planning is a broad and complex issue that forms an indispensable nucleus of every organization. Corporate companies plan their various multi-level activities and make strategic decisions on how to use their resources to achieve objectives. These resources include funds, HR, installations, and technology. Jeffery Immelt, CEO of GE, emphasizes the company's priority to support its goals given limited resources. The installation and utilization of resources are essential in developing strategic decisions for the company.GE's strategic planning goal is to simultaneously increase savings and enhance customer benefits in the company. A fundamental step in acquiring strategic planning at GE includes:

1. Developing a major business strategy to build a strong competitive advantage.
2. Adapting the major business strategy in all markets where the company's products are available.
3. Adopting globalization as a key business strategy, integrating operations in all countries where business is conducted.

The effective strategic planning implemented by General Electric has contributed to an increase in its annual income. GE's strategic planning continues to be based on analyzing strengths, weaknesses, opportunities, and threats.

The key to GE civilization is its strong human resources, which provide a competitive advantage in the highly competitive healthcare industry. Technology plays a crucial role and presents numerous opportunities for GE. The company's strategic plan is influenced by its vision, mission, and general objectives, which the management must effectively communicate to its employees. The mission is a broader concept based on the company's vision.

According to Mintzberg, Lampel,

and Ahlstrand (2008), having a vision is important not only for entrepreneurs but also for niche participants and creative individuals in established organizations. They argue that it is crucial to go beyond previous perspectives and see strategy as a unique worldview. The mission statement gives the company a reason to exist. To ensure successful strategic planning, it is necessary to share the company's vision with stakeholders and cultivate a strong organizational culture. Strategies are developed to help achieve GE's goals and objectives, with the GE culture being an integral part of the strategic plan. As suggested by Mintzberg et al., when power is reflected in a mirror, culture becomes the contrasting image that is seen.

Strategy is a societal procedure deeply rooted in civilization. GE's Information Systems are designed to leverage the diverse resources within GE. Strategic planning involves developing and analyzing the company's mission, short and long term goals, strategies, and resources. This planning process occurs at both the business and product levels, beginning with analyzing the present and continuing to plan for the future. Strategic planning helps address future challenges and opportunities for the company, guiding decision-making and shaping GE's future. Effective strategic planning involves a thorough environmental analysis to identify changes in the environment and transform them into opportunities. It allows the company to manage or avoid negative environmental impacts. Using GE's Strategic plan, short and long term goals are established to achieve the company's long-term objectives. These goals prioritize essential changes.

Overall, GE has long-term goals for aspects such as earnings per share, return on investment, and size.

A mission statement defines a specific set of policies, plans, or management objectives for actions related

to the strategic plan.

Tactical plans have shorter time frames and a narrower scope compared to strategic projects.

Business plans support tactical plans and tools performance of daily, weekly, and monthly activities. These include policies, processes, procedures, and regulations.

Theory of the business

The theory of the business encompasses the fundamental assumptions on which the company is operated. It represents the formula for success. Drucker suggests that it is typically based on three broad premises.

The premises discussed pertain to the organization's external environment, which includes markets, clients, engineering, and society as a whole. These premises also address the organization's specific mission and the competences needed to achieve that mission. These competences determine where the organization must excel in order to maintain its leadership position.

GE Healthcare has a vision called "healthymagination" that aims to enhance healthcare worldwide by reducing costs, increasing access, and improving quality and efficiency. In line with this vision, GE Healthcare recently restructured its operations into five product divisions. As part of General Electric Company (NYSE: GE), GE Healthcare is headquartered in the United Kingdom and is a $17 billion unit. It employs over 46,000 individuals across more than 100 countries who are dedicated to serving healthcare professionals and patients (GE Healthcare, 2009). According to Drucker's perspective on creating a clear and valid theory of business, it requires years of hard work, thinking, and experimentation.

Every organization must have a valid theory in order to be successful, according to Drucker (1994). He mentions examples of companies like General Motors and IBM that have stumbled because their theory no longer works, while others like Marks and Spencer still have a successful theory. Drucker lists four specifications for a valid

theory:

1. All three sets of premises must align with reality.
2. The three categories of premises must align with each other.
3. The theory must be known and understood by everyone in the organization.
4. The theory of the business must be constantly tested.

GE achieves this by promoting discussion and communication throughout the organization. This encourages the sharing of best practices and innovative ideas from individuals.

GE promotes its senior directors and procedure leaders to communicate its vision, mission, and goals to all employees. This is consistently tested through business metrics, evaluations, and growth and profit numbers. According to its vision, Globalization is the key to a successful GE Business. GE Healthcare's strategy revolves around having operations and warehouses worldwide for a faster, cost-saving, and highly profitable process.

The healthcare industry also believes in the concept of "Change is constant". When changes have made the original assumptions of a theory obsolete, the theory itself becomes outdated. This often leads to a period of stagnation as competitors surpass the business and customers look for alternatives. Drucker argues that the only solution to this is to start thinking anew. In addition to becoming outdated, the theory of business or success formula sometimes simply dissolves.

According to Drucker, in the early stages of an organization, it is easy to remember and understand the underlying theory. However, as the organization becomes successful, this theory is often taken for granted. Over time, awareness of the theory diminishes, leading to carelessness and shortcuts being taken. Instead of following

the original doctrine that led to success, the organization resorts to current expedient methods. Eventually, the organization loses sight of the theory and only its remnants exist as a cultural norm. This results in the organization "remembering the answers but forgetting the question". To prevent this theory from becoming outdated or lost, Drucker suggests two safeguards:

1. Abandonment: Every three years, the organization should critically question everything it does, including products, services, policies, distribution, channels, etc. This questioning process should be fundamental and ask questions like "If we were not already doing it, would we do it now?" and "If something we have done has not worked, why not?". Without the courage to ask these questions, the organization will continue to allocate scarce resources, especially talented individuals, to tasks that they should not be doing.

2. Attention to non-customers: Drucker states an obvious yet important point that non-customers always outnumber customers. He suggests that organizations should not spend all their time researching only their existing customers because doing so only refines what they already know.Alternatively, discovering what non-customers are thinking, valuing or desiring is where the process of change begins. According to Drucker, this is the crucial difference between being customer-focused and being aware of the market. Drucker also suggests that other recognizable signs of change include rapid growth, which often indicates that the original ideas and strategies have become outdated.

According to Drucker, both unexpected success and unexpected failure should be closely examined as they can indicate a shift in the market. It is important not to dismiss these outcomes and carefully consider the underlying assumptions that may be incorrect. Drucker cautions against relying solely on genius

or magic solutions. Instead, he emphasizes the importance of hard work. Many CEOs tend to rely on diagnosis and analysis, but Drucker argues that achieving goals and rapid growth requires a serious reassessment of business theories.

Organizational Strategic Exchange Constituencies

GE Healthcare, a division of GE Technology Infrastructure and a unit of General Electric (GE), operates globally with more than 46,000 employees. Its headquarters are situated in Little Chalfont, Buckinghamshire, United Kingdom. John Dineen holds the position of CEO at GE Healthcare. It is worth mentioning that GE Healthcare became the first division of GE to establish its headquarters outside the United States. Prior to this significant move in 2004, there was finalization of a $9 billion deal in the United States.

GE Healthcare, formerly known as GE Medical Systems, acquired British company Amersham plc. Currently, GE Healthcare operates 6 main business units: Global Diagnostic Imaging, Clinical Systems, IT, Medical Diagnostics, Life Sciences, and Surgery. The approach taken by Berman, Wicks, Kotha, and Jones when discussing strategic stakeholder management, based on the previous work of Edward Freeman, is referred to as an Instrumental Approach. This approach holds that to maximize shareholder value in the long run, managers should focus on addressing stakeholder interactions.

Firms have a vested interest in the behaviors of their stakeholders as it is an integral part of overall strategic management. Effective stakeholder management is crucial for companies as it helps them achieve success in the marketplace.

Firms consider their stakeholders as part of the environment that needs to be managed in order to ensure profits, earnings, and ultimately provide returns to stakeholders. Paying attention to stakeholder issues can help a company avoid decisions that could cause

stakeholders to undermine or destroy its objectives. This possibility exists because stakeholders have control over resources that can facilitate or enhance the implementation of corporate decisions (Pfeifer, Salancik, 1978). Following the terminology used by Donaldson and Preston (1995) and Quinn (1995), our view of stakeholder relationships is based on their instrumental value and contingent on their importance for corporate financial success. Quinn and Jones (cited in Berman et al., 1999) stated that "Instrumental ethics comes into play as an addition to the principle of wealth maximization for the manager agent to adhere to".

The company's strategy includes stakeholder management, but it does not drive the strategy. It is assumed that ineffective ways of dealing with stakeholders and unnecessary resource allocation will be stopped. Stakeholder concerns only affect a firm's decision-making processes if they have strategic value. There are two variations of the strategic stakeholder management approach: the direct effects model and the moderation model. In the direct effects model, manager attitudes and actions towards stakeholders are believed to directly impact the firm's financial performance, regardless of the overall corporate strategy.

The corporate strategy is affected by the managerial orientation towards stakeholders in the moderation model, as it influences the relationship between strategy and financial performance. In the diagram above, the squared boxes represent the external constituencies of the business, while the oval circles represent the internal constituencies. The black straight arrows represent leadership, while the red curved pointers represent followership. The hospital customers lead the field engineers by presenting their issues.

The Fe's follow the client petitions and the client solutions as part of the Operations. When a medical portion stops working, the Fe's are notified and try

to repair it. If they fail, they submit an Order to the Customer Solutions team. This way, the FE's are assisting employees with their Orders. The Fe's also lead the "Quality squad" to maintain TAT and performance standards in order to resolve customer issues.

The quality squad ensures that employees adhere to the Six Sigma criteria set by GE. Consequently, employees must also adhere to the quality criteria. Employees are responsible for leading the IS based on procedural demands. Similarly, the IS leads IT in determining the necessary hardware and software technologies for the efficient operation of the business.

GE Healthcare follows six sigma criteria and emphasizes the importance of maintaining quality. IT plays a crucial role in the systems used, and any failure in IT can result in significant business loss. This includes telephone services, LAN connections, systems, software such as Oracle, mainframes, Siebel, Cognos, and various other IT devices that drive and maintain operations. IT also leads employees in completing their tasks.

Employees guide Suppliers to hold the parts delivered to the Hospitals, and in return, Suppliers follow the employees and provide the necessary services for the delivery. Suppliers also lead the asset management team to calculate demand, and Employees and suppliers collaborate to balance demand and supply.

A deficit of stock can have negative effects on the business as the site's temperature may decrease. Carrier services like FedEx, AirNet, Sonic, DHL, etc. are used by suppliers to deliver parts to the warehouses. Urgent requests, such as Nightlong delivery and one-day delivery, may be made based on the site's temperature. Carrier services are important external factors that play a crucial role. The delivery time,

also known as the Turnaround Time (TAT), influences customer satisfaction. Hospitals make decisions on whether to use GE or the competitor's products based on their performance.

Customer satisfaction is derived from Surveys and is crucial for the Quality squad to gauge the organization's standing according to client feedback. This guides the rhythm of the concern. Additionally, authorities set quality standards for medical solutions which are followed by hospitals in order to continue business.

The SECI Model in GE health care

In Ge Healthcare, I have observed that new employees gain a significant amount of knowledge about the organization and its procedures through both Tacit and Explicit forms of knowledge.

Let's look at how we use language and communication to navigate organizations. There is a process called socialization where new employees learn about the procedures, customs, slang, metaphors, culture, and methodology of an organization. They acquire this knowledge through silent understanding and social interaction. They quickly learn things like how to operate a fax machine and how to navigate different software programs while handling customer calls. This silent knowledge becomes explicit through externalization - we realize that the way we communicate, what we say and how we say it, is crucial in enhancing our organization's performance (Fredricks, 2009).

In my role as a procedure trainer, I often receive a flurry of inquiries about "Why this" and "Why that." Newly hired employees bring in a lot of information, but they may not fully understand it yet. They need to piece together all the information to build a solid understanding. Once I explain these mysteries to them, everything starts to make sense. Communication between people from different fields, such as Fe's and infirmaries,

sometimes involves externalization. We need to pay attention to the way we use language and discourse in order to lead organizations effectively (Fredricks, 2009).

The process of procedure preparation is primarily done through explicit means, where the theory of how the procedure works is explained in a conference room. For new employees, it may seem like an interesting history lesson until they actually start performing the operations. It is crucial to share explicit knowledge, as it helps people understand the basic concepts of their work. The education system itself also involves transferring explicit knowledge, with practicalities being addressed later in life. Communication between stakeholders mostly occurs through combination. Explicit knowledge is converted into practical working through the internalization process, which is the final stage of the cycle.

The agent finds it much easier to work on different packages and tools for the efficient running of the procedure as they gain more experience. Organizational knowledge creation theory aims to identify conditions that facilitate knowledge creation to enhance innovation and learning (Nonaka and Takeuchi 1995). The context for knowledge creation is Ba, a Japanese concept that can be roughly translated as "space". Ba is a shared space where new relationships emerge.

Knowledge is shared and acquired through various means within a Ba, whether it be physical, practical, or mental. GE Healthcare facilitates the creation of a Ba for its employees through team meetings, value chain functions, kaizens, and process reappraisals, allowing for the exchange of information and knowledge. This transfer also occurs between different stakeholders through process reviews, yearly reports, re-engineering projects, and customer feedback. Participation in a Ba involves engaging in knowledge creation, dialogue, adaptation, and organization of practices.

It also involves transcending one's own limited perspective or boundaries. The cyber Ba is a virtual space of interaction rather than a physical one. The cyber Ba is one of the advantages provided by IT.

As GE has global subsidiaries, in-person meetings are not feasible. Cyber Ba occurs through virtual meetings, screen sharing, and online messaging services. The cyber Ba can involve hundreds of individuals in the organization by utilizing information and communication technology. Ultimately, the exerting Ba supports individuals' internalization of explicit knowledge.

Conclusion

The significance of organizational-stakeholder relationships has consistently been a topic of interest in literature on organizational studies.

The significance of this topic is particularly relevant given the recent failures in administration that have impacted Enron, Tyco, and WorldCom. The overemphasis on shareholders has been criticized for neglecting other legitimate stakeholder groups. It is important to acknowledge that the central focus of analyzing any organizational relationship is the establishment, growth, and maintenance of relationships between exchange partners (Morgan and Hunt, 1994). This study investigates the factors determining the importance of stakeholder relationships and their role in determining whether relationships will continue. For managers, these findings suggest that an organization's ability to cultivate and maintain strong relationships with their key stakeholder groups enhances the likelihood of these relationships persisting (Christopher S, Miesing P, Parsons A, 2005).