Strategy Development and Implementation Case Study
Art Madsen, M.Ed.
A unique case study was presented in Cancun, Mexico in 1999 at the Cross-Cultural Consumer and Business Studies Research Symposium. It analyzed the inner dynamics at work in identifying, developing, implementing and evaluating grand strategies, but did so by utilizing a methodology which exposed the inter-cultural relationships of decision-makers, policy-developers and management staff in such a way as to clearly define control issues and produce recommendations. This study, written by Christine Vallaster of the University of Innsbruck in Austria, is entitled “Strategy Development and Implementation: A Case Study of an Asian/Western Multicultural Group” (1999). It describes the strategy options of CRUSH-U, INC., a world leader in demolition systems for the construction market. The study demonstrates, among other principles, that strategic choices are related to interactive opportunities and that these strategic options take the shape of ‘shared vision development’ on an intercultural (Asian/Western) basis in the case of CRUSH-U, INC. The case explores the difficulties experienced by the company during a major strategy shift and implementation of the new direction chosen. It provides insight into how to improve profitability, productivity, and competitive position by effectively implementing a jointly accepted and well understood strategy.
CRUSH-U, INC. had been doing quite well; but the management team wanted to re-energize this firm to conquer new markets and to realize even greater profits. The Western led group devised a tentative strategy called the master Supply Chain Management (SCM) Strategy. It was to be implemented by the firm’s Hong Kong based Logistic Center Asia (LCA) group. Five employees (2 European and 3 Chinese) were observed over a four-month period by three others (2 European and 1 Chinese). This latter group served as the research team responsible for gathering data and insights on how the new SCM Strategy was being received, interpreted and applied.
One of the key issues in the internal dynamics of this joint Swiss/Chinese firm dealt with the divergence of seriously misaligned partner alliance management cultures. At the beginning of the new strategic development and implementation process there was moderate agreement between the two cultural groups within CRUSH-U, INC. However, rumors, misinformation, and tension about strategic redirection began to erode the areas of shared or common perception of the changes underway. One member of the five-person group was dismissed and the LCA group fell into semi-disarray, partly due to cross-cultural misconceptions. When one person was fired, and the new rules were redefined clearly, the tension vanished and people moved forward in both groups toward achievement of the new SCM strategy that had been devised unilaterally in Europe, but refined in some ways in Hong Kong.
A distinct element of leadership had to be forthcoming before the new strategy could be implemented effectively. Communication was an essential element in ensuring compliance and there needed to be a driving force, across cultural lines, to increase what Vallaster (1999) calls “proactive problem solving.” The synergistic dynamics of intercultural communication were absolutely necessary to achieve harmony. But harmony alone was not enough to move CRUSH-U, INC forward on its new path. There had to be vertical integration, employee development, and group-wide consciousness, as well. These concepts are set forth in Pearse (2000) and are also alluded to in his Yahoo, Intel Corp, Macy’s and Mobile Media case studies.
The Vallaster (1999) paper analyzed many of these variables, but also concentrated on the decision-making process as it related to strategy implementation. Who was in a position of control within CRUSH-U, INC? At the outset, it seemed as if the Western Group was the master-mind of the new strategy establishing measurable objectives and balancing the Kaplan and Norton scorecard with a long term strategy linked to goals and actions over a lengthy period. But, the Hong Kong group offered ideas as well, although slowly at first. The Chinese contingent had to be coaxed to contribute their thinking, and they did so in spite of cultural constraints. This had nothing to do with Chinese ideas being inferior, just with a culturally imposed reluctance to express what turned out to be brilliant ideas.
The Vallaster study highlighted some of the difficulties encountered by the strategy implementation team as it went about its tasks bi-culturally. Marketing decisions had to be made within the context of the new strategy and both internal groups ultimately rose to the challenge of doing so in the higher interest of the Company itself. The economic crisis in Asia during the implementation process also complicated this case from an external perspective, adding tension to the equation, in spite of CRUSH-U’s previous profit history.
Interestingly, the Vallaster study concludes that affective factors (employee emotions and behavior) were as much to blame, or to praise, for the results achieved at various stages of this process, as communications and cultural factors. Fortunately, for CRUSH-U, INC, the new SCM Strategy culminated in what the case author calls “ a convergence of shared mental models” and the firm could move ahead both in Europe and in Asia.
Vallaster, C. “Strategy Development and Implementation: A Case Study of an Asian/Western Multicultural Group”, Proceedings of the Seventh Cross-Cultural and Business Studies Research Symposium, Hyatt Regency Cancun, Cancun Mexico, December 1999. http://marketing.byu.edu/htmlpages/ccrs/proceedings99/vallaster.htm
Sept 2001 / AFM