Page 191 - Introduction to Business

CHAPTER 5 Managing and Organizing Business 165

Corporation chair Andrew S. Grove put it, “Great execution is necessary, but not
5
sufficient.” To some extent, good organizational planning involves a bit of dream-
ing, of thinking about how to make the future better, and then placing bets on that
vision. Clearly great business leaders from Andrew Carnegie (U.S. Steel) and Henry
Ford (Ford Motor Company) to Sam Walton (Wal-Mart Stores), Bill Gates
(Microsoft), and Michael Dell (Dell Computer) have almost always been both
superb visionaries and planners and superb hands-on managers. 6
Companies’ visions are frequently set forth in corporate mission statements, mission statement Statements spelling
which are statements that spell out the basic purpose of the enterprise. For exam- out the basic purpose of the enterprise
ple, the mission statement of Whirlpool Corporation, the world’s leading manufac-
turer and marketer of major home appliances with over $12 billion in annual sales,
says, “Every Home ...Everywhere. With Pride, Passion and Performance. We create
the world’s best home appliances, which make life easier and more enjoyable for all
people.” 7

Strategic Goals. The next step in the management planning process is trans-
lating the mission of the company into more specific long-term corporate goals,
known as strategic goals. If you were a top manager at Whirlpool Corporation, what strategic goals Long-term goals
might be a strategic goal you would set drawing on the company’s mission state- related to an organization’s mission
statement
ment? Clearly, given the desire of the company to have Whirlpool appliances in
“every home . . . everywhere,” having as one strategic goal the expansion of com-
pany sales and operations into international markets appears warranted.

Strategy Formulation. Having a company mission and then setting strategic
goals related to this mission is wonderful, but this only becomes meaningful if
some clear course of action can be established to achieve these goals. Formulating
the approach to achieving the strategic goals is called strategy formulation. strategy formulation The formulation of
Strategy formulation is not easy. While Whirlpool has established that it wants to the approach to achieving strategic
goals
go international, what does this mean? Does it mean simply manufacturing
Whirlpool appliances in upstate New York and selling them in Canada, or does it
involve setting up manufacturing facilities in faraway countries like India and China
and selling these products there? Does Whirlpool want to make and sell a wide vari-
ety of its products—refrigerators, ovens, clothes washers—in foreign countries or
concentrate on just one product? How should Whirlpool enter foreign markets, via
acquisitions of foreign companies, through joint ventures or alliances with other
companies, or by establishing new operations on its own in the foreign countries?
Answering these questions requires Whirlpool to do extensive environmental
and organizational analyses. An environmental analysis involves a company environmental analysis A strategic
scanning outside the firm, in its external environment, for both threats and scan by an organization for
external threats and opportunities
opportunities. For example, in late 2001, Whirlpool Corporation executives
learned that the Moulinex-Brandt Group, a large French conglomerate, had filed
for bankruptcy. Whirlpool was very interested because it knew that Moulinex-
Brandt owned 96 percent of the shares of a company called Polar S.A., a leading
major home appliance manufacturer in Poland. Since Whirlpool was interested
in expanding its operations in Poland and central Europe, this presented the
company with a real opportunity. In 2002, it made a successful bid in French
bankruptcy court of $43 million (including some assumption of debt) to pur-
chase Moulinex-Brandt’s controlling stake in Polar. With this purchase,
Whirlpool owned the leading brand name in laundry and refrigeration appli-
ances in Poland. 8
International opportunities exist for Whirlpool throughout the world. One area
that Whirlpool has recently become very interested in is China, the world’s largest

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