The TOWS matrix—A tool for situational analysis

This article has two main purposes. One is to review general considerations in strategic planning and the second to introduce the TOWS Matrix for matching the environmental threats and opportunities with the company's weaknesses and especially its strengths. These factors per se are not new; what is new is systematically identifying relationships between these factors and basing strategies on them. There is little doubt that strategic planning will gain greater prominence in the future. Any organization—whether military, product-oriented, service-oriented or even governmental—to remain effective, must use a rational approach toward anticipating, responding to and even altering the future environment.     

The business environment in the 1980s

Dr. Harold Linstone, the editor of ‘Technological Forecasting and Social Change’ holds that too often the future is too much discounted. This seems particularly true in the case of business corporations, which tend to pay lip service to long-range planning—especially when prospective studies point to threats rather than to opportunities.The author believes that truly long-range planning will rarely be operative until business corporations muster the political will to jointly write a scenario of their (interlinked) future, and to act accordingly. Illustratively and speculatively, such a scenario might read as follows:     

Earnings per share is a poor indicator of performance

One of the greatest dangers in corporate financial planning is failing to separate investment decision making from financial policy, because poor quality investments can appear to be desirable as a result of the particular financing vehicle employed. Management's focus of attention should not be rates of growth and earnings per share or return on net worth. Rather, the most important measure of corporate performance is the rate of return on total capital employed. The paper identifies the dangers of employing an earnings per share criterion for evaluating corporate performance, and suggests an alternative: focusing on a company's free cash flow, net operating profits after taxes minus the amount of new capital investment required in order to generate future profits. The author presents an analytical framework employing his free cash flow concept which can be applied to pricing and financing acquisitions.     

AN IMPROVED HEURISTIC FOR STAFFING TELEPHONE CALL CENTERS WITH LIMITED OPERATING HOURS

Many telephone call centers that experience cyclic and random customer demand adjust their staffing over the day in an attempt to provide a consistent target level of customer service. The standard and widely used staffing method, which we call the stationary independent period by period (SIPP) approach, divides the workday into planning periods and uses a series of stationary independent Erlang‐c queuing models—one for each planning period—to estimate minimum staffing needs. Our research evaluates and improves upon this commonly used heuristic for those telephone call centers with limited hours of operation during the workday. We show that the SIPP approach often suggests staffing that is substantially too low to achieve the targeted customer service levels (probability of customer delay) during critical periods. The major reasons for SIPP‘ s shortfall are as follows: (1) SIPP's failure to account for the time lag between the peak in customer demand and when system congestion actually peaks; and (2) SIPP’ s use of the planning period average arrival rate, thereby assuming that the arrival rate is constant during the period. We identify specific domains for which SIPP tends to suggest inadequate staffing. Based on an analysis of the factors that influence the magnitude of the lag in infinite server systems that start empty and idle, we propose and test two simple “lagged” SIPP modifications that, in most situations, consistently achieve the service target with only modest increases in staffing.     

Leadership in organisations: Meta,macro and micro

The study of leadership suffers from too many definitions, not too few. Much of this confusion springs from the fact that there are two fundamentally different perspectives on leadership. From these arise three common usages of the word. This article suggests that we recognise this diversity and abandon the search for a unique definition.The first perspective views leadership as “influence on individuals” without using power or authority. This “meta” leadership relates individuals to their environment through “visioning” — a complex interaction of perception, articulation, conviction and empathy (PACE).The second perspective views leadership as the “shaking and moving” of an organisation to face the future, cope with change and achieve results. It includes both the creation of a successful organisation, through “macro” leadership, and the accomplishment of specific jobs or tasks, through “micro” leadership.These three types of leadership — meta, macro and micro — are examined from the two perspectives. It is suggested that all three should be exercised by managers at all levels - no matter how junior.     

Strategy restoration

Discussions of strategic change generally assume that managers strive to break free from the constraints of their organization's past so that they can forge ahead into the future. However, some organizations instead opt to reinterpret and reenact abandoned strategies drawn from their own history. Such actions are largely unaccounted for in the literature on strategic change. Accordingly, we propose here a conceptualization of a distinct type of strategic change that we call “strategy restoration.” We first outline how strategy restoration fills a gap in current understandings of strategic change. We then elaborate conditions that motivate and enable organizations to pursue strategy restoration rather than other types of strategic change. Two components of the framework—organizational traditionality and memory—characterize the organization itself, and two—nostalgia and perceptions of the organization's authenticity—characterize the market in which the organization operates. The proposed conceptualization of strategy restoration and discussion of its underlying mechanisms carry implications for researchers and managers.     

Comprehensive planning for libraries

In the area of planning, the literature has been almost entirely concerned with planning in the business (i.e. profit) setting. Some literature does exist on planning in the nonprofit sector, but it usually deals with tactical planning of the short-term character. This is specially true in the area of libraries and many librarians have developed and do administer large, complex organization— where conprehensive, long range planning is almost completely untreated in the literature.The current paper discusses the various steps in the strategic planning process, and relates them to a situation in which comprehensive long range plans for a new health sciences library have been developed, and to a considerable degree, implemented. In this framework, the steps of developing purpose and objecives, forecasting and policy formulation, developing and choosing growth strategy, determining resource requirements and provions, developing an organizational structure, and control system utilization are discussed both in the general framework of comprehensive planning, and with respect to actual experience in the development of a health sciences library. The roles of tactical planning and the implementation of plans are also treated.     

A framework for production control in health care organizations

The paper presents a hierarchical framework for production control of hospitals which deals with the balance between service and efficiency, at all levels of planning and control. The framework is based on an analysis of the design requirements for hospital production control systems. These design requirements are translated into the control functions at different levels of planning required for hospital production control. The framework consists of five levels of planning and control: patient planning and control, patient group planning and control, resources planning and control, patient volumes planning and control and strategic planning, though this last level does not make part of production control as such. Each of the levels of the framework is further elaborated in terms of the decisions made regarding patient flows and resources, and the co-ordination of the different planning levels. Implications of the framework are discussed by describing some points where current practice deviates from assumptions made in our approach. Recommendations for future research and development of the planning framework are formulated.     

How the Rip Van Winkle approach helps oil executives plan

Restructuring has been the oil industry's response to stagnation in profits. After a steady period of profit growth the industry faces the challenge of decline. Currently it is adapting by getting back to basics, i.e. divesting assets and reducing staff; forming a closer understanding of its markets and uncovering new ones. Planning is now too important a strategic activity to be left solely to planners, and at Atlantic Richfield the most important response to restructuring has been the direct involvement of senior executives in the planning process.     

How corporate planning responds to uncertainty

This article is based upon an SSRC research project into the influence of computer methods on decision making. During this research, information on the planning systems of a cross-section of British industry was obtained.The paper illustrates how managers in these firms were coping with planning in the present conditions of extreme uncertainty about the future, combined with adverse economic and business conditions. Conventional planning theory, together with some modern observations on it, are briefly described and then the paper shows how, in the firms visited, the structure of planning was more complex than this theory.It goes on to show that today's critical conditions were not leading to management putting aside their plans and computer models and “muddling through’. They were actually leading to an acceleration in the adoption of formal planning and decision making methods but in a somewhat different manner to conventional planning theory.Seven different modes of planning were identified with integrated operational planning being the most common, possibly the most essential to survival and sometimes the only planning possible into today's conditions. A trend to extend the operational plan to 2 to 3 years and to reduce the firm's long range plan from 5 to 3 years was also observed.Long range plans were being considered as planning and decision making tools and not as blue-prints of the firm's future, as accurate long range forecasting was impossible. Three types of strategic planning were identified with that carried out at intervals probably being the most appropriate for medium sized firms in today's conditions.     

Alternate Routing Strategies in Batch Manufacturing: An Evaluation

Batch manufacturing firms are experiencing significant changes because of technological developments in work center design, such as flexible manufacturing systems (FMS) and planning/control tools like computer-aided process planning (CAPP). These new developments provide production managers with some solutions to a number of complex problems. For example, numerical-controlled (NC) machine center installations are effective in providing quality parts because of tight tolerance specifications built into the equipment. However, these highly efficient centers create bottlenecks that constrain shop throughput, since production planners tend to rely too much on them. To help improve manufacturing planning, we introduce an important element to the batch production scheduling component of CAPP's mission—evaluating possible alternate routes. Production scheduling encompasses job route selection as well as machine center assignment (loading), job releasing, and setting due dates. In this paper, three routing strategies requiring different levels of shop floor information are tested and evaluated using computer simulation. Shop performance is measured by total cost and traditional measures of job flow time, lateness, and tardiness.     

Parkinson,Peter and probability: Implications for productivity

Improving productivity and effectiveness in society and organizations is a need which is not being met satisfactorily in most countries. Goals of society and organizations are defined in circular and spiral terms, one leading to the other, as encouraging the development of individual capabilities, achieving greater effectiveness, attaining a better quality of life, and enhancing human dignity. Parkinson's Law, Peter's Principle and Robinson's Law (“in a bureaucracy, work alters upon advancement”) illustrate in satirical form many truths about why organizations and society are not increasing their levels of goal attainment. Clues for overcoming this adversity are the treatment of such laws as probability concepts to demonstrate that future performance of a specific organization cannot be predicted, and the recognition that unstated assumptions—we know how to apply accumulated knowledge and the research approach should be followed—need to be converted to much different explicit ones. Evidence demonstrating why this is so and what ought to be done is reviewed. A planning and design approach based on an orientation of purposes-target-results is presented, and some different change principles that result from the approach are described.     

Planning for strategic decision support systems

The emergence of Strategic Decision Support Systems has opened up new vistas for the true integration of formal models into the strategic planning process. However, with these new opportunities also come the need to develop planning mechanisms that will permit these sophisticated systems to achieve their potential. The process of strategic planning for Strategic Decision Support Systems that is described in this article serves to cast the organization's overall plans, strategies and strategic attributes into a framework that can be used to develop formal SDSS plans.     

The Social Construction of Planning Systems: A Strategic-Relational Institutionalist Approach

Abstract

This article reflects on a theoretical framework for the analysis of planning systems based on an institutionalist planning theory broadened with Jessop's strategic-relational approach. The aim is to explore the concept of the planning system with an actor—structure perspective so as to underline possible research consequences for analyses and comparisons of planning systems. The article highlights the interactions of actors and social institutional elements, clarifying the strategic-relational nature of a planning system and the dialectical process at the basis of its changes and evolutions.     

Tools and techniques of long-range planners

Long-range planning is concerned with the integration of predictions with corporate strategies. Both practitioners and scholars of management have frequently proposed approaches to planning that they believe to be helpful. The purpose of this paper is to report which techniques and tools and what approaches to planning are actually being used. It is hoped that this information will provide the executive or practitioner with a framework for evaluating his planning practices relative to other planners.This paper is divided into four parts. Part l provides information concerning the survey and data on which this article is based. Part ll deals with the planning process in approximately 400 business firms. Part lll examines the use of two planning tools—outside consultants and computers/mathematical models. The last section presents a summary and some general conclusions drawn from the analysis.     

Milton keynes: A model for regenerating our cities?

Milton Keynes is one of the most succesful of Britain's new towns. With new towns such as Peterborough and Telford, this can be seen as the latest stage of the New Town Movement which started at the end of World War II. Of these new towns, Milton Keynes is the largest and the most ambitious in its objectives. The problems facing the United Kingdom today are very much greater than when Milton Keynes was first started but, because of a flexible planning approach, the Development Corporation has responded to these changes and has established policies to assist in solving these problems. The key to this success is a more flexible and effective manufacturing base. Today we face unprecedented changes, unique in our history. Although manufacturing and services will provide the wealth to solve these problems, we will only succeed through co-operation between the private sector and local and national government. A study of Milton Keynes, its growth, objectives, successes and failures could provide a useful model for our future planning.     

A Resource‐Process Framework of New Service Development

Motivated by the increasing attention given to the operational importance of developing new services, this paper offers a theoretical framework that integrates both process‐ and resource‐oriented perspectives of new service development (NSD) by defining and organizing 45 practice constructs for NSD‐related practices and activities that occur in contemporary service firms. We employ a rigorous procedure whereby both quantitative and qualitative data were gathered through multiple rounds of interviews and card‐sorting exercises with senior service managers. This iterative refinement process helps ensure that the construct domains and definitions are consistent and that they are applicable across multiple service sectors. A primary contribution of this research is to provide precise operational definitions of theoretically important NSD practice constructs. Importantly, this study expands on the NSD literature by including both resource‐ and process‐centric perspectives within a single framework. A second contribution is to illustrate a general methodology for developing clear, concise, and consistent construct definitions that may be generally useful for production and operations management scholars interested in new construct development for emerging areas. Empirical results suggest that the resource‐process framework can help guide and organize future research on, and provide insight into, a more comprehensive view of new service development.     

Modeling Insurer‐Homeowner Interactions in Managing Natural Disaster Risk

The current system for managing natural disaster risk in the United States is problematic for both homeowners and insurers. Homeowners are often uninsured or underinsured against natural disaster losses, and typically do not invest in retrofits that can reduce losses. Insurers often do not want to insure against these losses, which are some of their biggest exposures and can cause an undesirably high chance of insolvency. There is a need to design an improved system that acknowledges the different perspectives of the stakeholders. In this article, we introduce a new modeling framework to help understand and manage the insurer's role in catastrophe risk management. The framework includes a new game‐theoretic optimization model of insurer decisions that interacts with a utility‐based homeowner decision model and is integrated with a regional catastrophe loss estimation model. Reinsurer and government roles are represented as bounds on the insurer‐insured interactions. We demonstrate the model for a full‐scale case study for hurricane risk to residential buildings in eastern North Carolina; present the results from the perspectives of all stakeholders—primary insurers, homeowners (insured and uninsured), and reinsurers; and examine the effect of key parameters on the results.     

Genesis of a research field: district,network, strategic network

This article summarizes the changes since the beginning of the 1980s in the scholarly approach to organizational and economic research on Italian firms. Beginning with the study of industrial districts, which sparked a major reconsideration of the conventional wisdom, most scholars focused primarily on the significance of firm geographical proximity while marginalizing issues related to firm structure and strategy. Nevertheless, industrial district research eventually led to the question of firm networks, in particular how to manage relational capabilities and cooperation, both of which affect a firm’s competitive position. This new analytical framework no longer dependent on either the single firm or an industrial sector has opened up new research perspectives that promise rich insights into socio-economic studies.     

Strategic leadership in organizational crises: A review and research agenda

Of all actors involved in managing an organizational crisis, strategic leaders play a particularly central role. However, the growing scholarship on the impact of strategic leaders in crisis situations is characterized by a high degree of fragmentation, considerably hindering the generation of parsimonious theory and practically useful insights. To address this issue, we conduct a systematic multidisciplinary literature review that spans the research streams on strategic leadership and organizational crises. For each type of strategic leader—Chief Executive Officer (CEO), top management team, and board of directors—we identify the different applied theoretical lenses and highlight commonalities and differences between studies and their insights. We use our review to derive an integrative conceptual framework that guides future research. Our exploratory review unveils that, while each type of strategic leader plays a significant role in a crisis context, the perspectives taken and the resulting evidence vary: as for the CEO, research focuses on social evaluations—for instance, based on the CEO's appearance—as well as agency-theoretic considerations—particularly, financial incentives. Regarding the top management team, research mostly adopts a managerial and organizational cognition lens, focusing on characteristics such as personality and human capital. Lastly, for the board of directors, agency-theoretic considerations again dominate the scholarly conversation, especially studies of board independence. Overall, we review and organize a rich but patchy research landscape, and we derive ample opportunities for novel theoretical and empirical inquiries into strategic leaders and their role in managing organizational crises.