Page 37 - Stakis Consolidated Teaching Note

employing good local managers who exercised close
control over output. The strategy adopted gave these local

managers as much autonomy as allowed them to control

the performance of their units. Individual staff were
motivated by a system of rewards supported by tight

central control. Head office costs were low. Advertising

was on a national basis and the company operated a

strategy of centrally directed product differentiation.

Stakis’ form of strategic planning was that in which the

organisation concentrated on a core business and became

a dominant force in its chosen industry through organic
development, related acquisition and expansion. In these

circumstances the characteristic head office approach was

strong leadership on strategy and a deep involvement in
planning and co-ordinating. Control of performance was

monitored via long and short term plans with the

emphasis on the long term. In effect, the management

style was ‘Strategic Control’. This approach was needed to
turn Stakis round. As David Michels recognised, this

company required an autocratic management with a

strong cost focus.

The business also had to focus on the future. Porter

argues that companies will not survive in the long term

unless they have a clear-cut competitive strategy. Ansoff
points out that there are choices of strategy available to

companies.