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238 PART 3 • STRATEGY IMPLEMENTATION

TABLE 7-12 Labor Cost-Saving Tactics
Salary freeze
Hiring freeze
Salary reductions
Reduce employee benefits
Raise employee contribution to health-care premiums
Reduce employee 401(k)/403(b) match
Reduce employee workweek
Mandatory furlough
Voluntary furlough
Hire temporary instead of full-time employees
Hire contract employees instead of full-time employees
Volunteer buyouts (Walt Disney is doing this)
Halt production for 3 days a week (Toyota Motor is doing this)
Layoffs
Early retirement
Reducing/eliminating bonuses

Source: Based on Dana Mattioli, “Employers Make Cuts Despite
Belief Upturn Is Near,” Wall Street Journal (April 23, 2009): B4.

The human resource department must develop performance incentives that clearly link
performance and pay to strategies. The process of empowering managers and employees
through their involvement in strategic-management activities yields the greatest benefits
when all organizational members understand clearly how they will benefit personally if the
firm does well. Linking company and personal benefits is a major new strategic responsi-
bility of human resource managers. Other new responsibilities for human resource
managers may include establishing and administering an employee stock ownership plan
(ESOP), instituting an effective child-care policy, and providing leadership for managers
and employees in a way that allows them to balance work and family.
A well-designed strategic-management system can fail if insufficient attention is
given to the human resource dimension. Human resource problems that arise when busi-
nesses implement strategies can usually be traced to one of three causes: (1) disruption of
social and political structures, (2) failure to match individuals’ aptitudes with implementa-
tion tasks, and (3) inadequate top management support for implementation activities. 22
Strategy implementation poses a threat to many managers and employees in an orga-
nization. New power and status relationships are anticipated and realized. New formal and
informal groups’ values, beliefs, and priorities may be largely unknown. Managers and
employees may become engaged in resistance behavior as their roles, prerogatives, and
power in the firm change. Disruption of social and political structures that accompany
strategy execution must be anticipated and considered during strategy formulation and
managed during strategy implementation.
A concern in matching managers with strategy is that jobs have specific and relatively
static responsibilities, although people are dynamic in their personal development.
Commonly used methods that match managers with strategies to be implemented include
transferring managers, developing leadership workshops, offering career development
activities, promotions, job enlargement, and job enrichment.
A number of other guidelines can help ensure that human relationships facilitate rather
than disrupt strategy-implementation efforts. Specifically, managers should do a lot of
chatting and informal questioning to stay abreast of how things are progressing and to
know when to intervene. Managers can build support for strategy-implementation efforts
by giving few orders, announcing few decisions, depending heavily on informal question-
ing, and seeking to probe and clarify until a consensus emerges. Key thrusts that succeed
should be rewarded generously and visibly.