Motorola Company’s Strategic Management

Strategic management involves formulation, implementation, and evaluation of cross-functional decisions which assist in achieving the organizational objectives, as well as developing policies and plans, in order to achieve the set organizational objectives. It is therefore seen as the main key for an organization’s success (Lamp, 1984, ix)

It is for this reason, that the process is highly involved in the assessment of an organization’s successes, existing potential competitors, and in the reassessment and evaluation of each strategy annually or quarterly.

Alfred Chandler 1962 quoted strategic management as a discipline that brings about the idea of matching the organizations’ internal factors with external environmental circumstances. This core idea was later developed by the Business School General management Group to be commonly known as the SWOT analysis. This in short means the analysis of an organization’s strengths and weaknesses, assessed in the light of the opportunities and threats from the business environment (Drucker 1954).

The process has several elements which include adapting the organization to its business environment, providing directions, strategy formulation and planning, the implementation of these strategies, and their subsequent evaluation.

Planning is one of the main elements of strategic management, it starts with plan development, where the risks are clearly identified, mapped and their breakdown did. It is at this stage of evaluation that strategic factor analysis comes in, as it enables the company to identify their weak points their strengths, and what they need to borrow from their competitors.

In short strategy management involves strategy formulation which entails, determining the current position, determining where you want to go, and lastly how you are going to get there. Secondly, it involves strategy implementation and finally its evaluation (Ansoff 1965)

Different organizations face different types of risks and challenges in this case we shall base our emphasis on the Motorola company which has both internal and external types of challenges, as well as having some strengths. Internal strength factors include things like high employee morale, a low-cost structure including wages through having a lean workforce that is highly specialized as well as very high utilization of advanced technology like autonomation. Externally favoring factors are like, effective government industrial policy, economies of scale such as ease exportation of their products and good quality control techniques, a depreciating local currency thus encouraging export as well as a well established external market.

Functional strategy is commonly noticed in the Motorola company management this is because they place emphasis on new products, human resource strategy, financial and legal strategies. The company focuses on these both in the short term as well as in the long term.

The company also implements organizational strategy since it has criteria for monitoring its daily activities, and operates within the budget, but is not at liberty to adjust or create that budget.

It also adopts a corporate strategy and keeps a keen eye on the functions, production, and marketing strategies of other competitor firms, and through benchmarking ensures that it is well informed on what practices to adopt, which to emulate and which to drop ensuring it stays competitive in the global market of technology.

The company has reverted to a simper strategic structure driven by information technology and thorough research on what exactly the consumer wants. It has then embarked on achieving optimum customer satisfaction at the cheapest cost possible. The firm’s common goals are based on information sharing which brings light to knowledge management. The analysis is captured as a dynamic strategy.

The above strategies that involve the Motorola Company can be evaluated to help in measuring the effectiveness of the organization, this shows the strengths, weaknesses, opportunities, and threats of both internal and external to the organization, which form the core of the strategic factors affecting the organization.

Some of the strategies the company can improve on are, allocation of resources, remodeling of the company structure to improve communication, by for instance implementing the cross-functional team method, and delegating responsibility and authority concerning day to day tasks to junior and subordinate staff, in order to facilitate quicker decision making, thus allowing management to deal with more important issues, save time, improve the work rates of its employees as well as help them gain vital experience, that could be of very good use to the firm in future with an ever-growing competitive market which could result in further expansion.

In the evaluation of the strategies implemented, two different approaches were taken simultaneously and combined into one, they were:

  • Industrial-organizational approach: This approach involves the economic theory which focuses on, competitive rivalry, economies of scale, and proper and effective resource allocation.
  • The sociological approach: Bases its evaluation on human interactions and profit sub-optimality, widening rationality, and satisfying behavior.

The Table created was as follows:

Strategic Factor Analysis for Motorola
Strategic Audit Parameter Analysis Comments
(+) Factors (-) Factors
Current Situation The company is financially stable and made some very good pretax profits The exports suffered as we lost some of our market in Africa to Sagem.
Past corporate performance indexes The past performances of most of our products were very satisfactory. The product C118 did not sell as well as we had anticipated.
Strategies We decided to come up with a modem for browsing to which customers responded quite positively Our decision to come up with a cheaper
The more affordable phone did not sell as well as we had expected.
External Environment:

[Optional External Factor Analysis Summary, or EFAS]

The external factors mostly worked in our favor this year as most of our strategies were successful. The fact that the local currency depreciated enabled us to make more exports than originally anticipated. The poor infrastructure in some of the countries and the rise in oil prices increased transport costs forcing a scaling up of the original budget.
Internal Environment The salary increments given to the employees served as a good tonic resulting in very high employee morale as compared to what was reported last year. The buying of new equipment meant that production levels increased by about 20%. There were some product malfunctions reported especially with some of the batteries of the products.

References

Ansoff, Igor Corporate Strategy McGraw Hill, New York, 1965.

Buzzell, R. and Gale, B. The PIMS Principles: Linking Strategy to Performance, Free Press, New York, 1987.

David, F Strategic Management, Columbus:Merrill Publishing Company, 1989.

Drucker, Peter The Practice of Management, Harper and Row, New York, 1954.

Hamel, G. & Prahalad, C.K. Competing for the Future, Harvard Business School Press, Boston, 1994.

Lester, R. Made in America, MIT Commission on Industrial Productivity, Boston, 1989.