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CHAPTER 7 • IMPLEMENTING STRATEGIES: MANAGEMENT AND OPERATIONS ISSUES 219

TABLE 7-4 Some Issues That May Require a Management Policy
• To offer extensive or limited management development workshops and seminars
• To centralize or decentralize employee-training activities
• To recruit through employment agencies, college campuses, and/or newspapers
• To promote from within or to hire from the outside
• To promote on the basis of merit or on the basis of seniority
• To tie executive compensation to long-term and/or annual objectives
• To offer numerous or few employee benefits
• To negotiate directly or indirectly with labor unions
• To delegate authority for large expenditures or to centrally retain this authority
• To allow much, some, or no overtime work
• To establish a high- or low-safety stock of inventory
• To use one or more suppliers
• To buy, lease, or rent new production equipment
• To greatly or somewhat stress quality control
• To establish many or only a few production standards
• To operate one, two, or three shifts
• To discourage using insider information for personal gain
• To discourage sexual harassment
• To discourage smoking at work
• To discourage insider trading
• To discourage moonlighting

Resource Allocation
Resource allocation is a central management activity that allows for strategy execution.
In organizations that do not use a strategic-management approach to decision making,
resource allocation is often based on political or personal factors. Strategic management
enables resources to be allocated according to priorities established by annual
objectives.
Nothing could be more detrimental to strategic management and to organizational
success than for resources to be allocated in ways not consistent with priorities indicated
by approved annual objectives.
All organizations have at least four types of resources that can be used to achieve
desired objectives: financial resources, physical resources, human resources, and techno-
logical resources. Allocating resources to particular divisions and departments does not
mean that strategies will be successfully implemented. A number of factors commonly
prohibit effective resource allocation, including an overprotection of resources, too great
an emphasis on short-run financial criteria, organizational politics, vague strategy targets,
a reluctance to take risks, and a lack of sufficient knowledge.
Below the corporate level, there often exists an absence of systematic thinking about
resources allocated and strategies of the firm. Yavitz and Newman explain why:

Managers normally have many more tasks than they can do. Managers must
allocate time and resources among these tasks. Pressure builds up. Expenses are
too high. The CEO wants a good financial report for the third quarter. Strategy
formulation and implementation activities often get deferred. Today’s problems
soak up available energies and resources. Scrambled accounts and budgets fail to
reveal the shift in allocation away from strategic needs to currently squeaking
wheels. 3

The real value of any resource allocation program lies in the resulting accomplishment
of an organization’s objectives. Effective resource allocation does not guarantee successful
strategy implementation because programs, personnel, controls, and commitment must
breathe life into the resources provided. Strategic management itself is sometimes referred
to as a “resource allocation process.”