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102 PART 2 • STRATEGY FORMULATION

Communication, perhaps the most important word in management, is a major component
in motivation. An organization’s system of communication determines whether strategies can
be implemented successfully. Good two-way communication is vital for gaining support for
departmental and divisional objectives and policies. Top-down communication can encourage
bottom-up communication. The strategic-management process becomes a lot easier when
subordinates are encouraged to discuss their concerns, reveal their problems, provide recom-
mendations, and give suggestions. A primary reason for instituting strategic management is to
build and support effective communication networks throughout the firm.

The manager of tomorrow must be able to get his people to commit themselves to the
business, whether they are machine operators or junior vice-presidents. The key
issue will be empowerment, a term whose strength suggests the need to get beyond
merely sharing a little information and a bit of decision making. 15

Staffing
The management function of staffing, also called personnel management or human resource
management, includes activities such as recruiting, interviewing, testing, selecting, orienting,
training, developing, caring for, evaluating, rewarding, disciplining, promoting, transferring,
demoting, and dismissing employees, as well as managing union relations.
Staffing activities play a major role in strategy-implementation efforts, and for this
reason, human resource managers are becoming more actively involved in the strategic-
management process. It is important to identify strengths and weaknesses in the staffing area.
The complexity and importance of human resource activities have increased to such a
degree that all but the smallest organizations now need a full-time human resource man-
ager. Numerous court cases that directly affect staffing activities are decided each day.
Organizations and individuals can be penalized severely for not following federal, state,
and local laws and guidelines related to staffing. Line managers simply cannot stay abreast
of all the legal developments and requirements regarding staffing. The human resources
department coordinates staffing decisions in the firm so that an organization as a whole
meets legal requirements. This department also provides needed consistency in administer-
ing company rules, wages, policies, and employee benefits as well as collective bargaining
with unions.
Human resource management is particularly challenging for international companies.
For example, the inability of spouses and children to adapt to new surroundings can be a
staffing problem in overseas transfers. The problems include premature returns, job perfor-
mance slumps, resignations, discharges, low morale, marital discord, and general discon-
tent. Firms such as Ford Motor and ExxonMobil screen and interview spouses and children
before assigning persons to overseas positions. 3M Corporation introduces children to
peers in the target country and offers spouses educational benefits.

Controlling
The controlling function of management includes all of those activities undertaken to ensure
that actual operations conform to planned operations. All managers in an organization have
controlling responsibilities, such as conducting performance evaluations and taking necessary
action to minimize inefficiencies. The controlling function of management is particularly
important for effective strategy evaluation. Controlling consists of four basic steps:
1. Establishing performance standards
2. Measuring individual and organizational performance
3. Comparing actual performance to planned performance standards
4. Taking corrective actions
Measuring individual performance is often conducted ineffectively or not at all in
organizations. Some reasons for this shortcoming are that evaluations can create confronta-
tions that most managers prefer to avoid, can take more time than most managers are
willing to give, and can require skills that many managers lack. No single approach to
measuring individual performance is without limitations. For this reason, an organization