Its organization is a highly centralized hierarchy organization and obtained the reputation as a lowest and highly predicable customer services by focusing on efficiency and execution with a lowlander the culture like a military operation that have been instilled by Casey. Context UPS has been revisited and adjusted the four scenarios in scenario-planning process that had been identified in 1997 to develop the strategic plan to go beyond 2007. Mike Skew who is CEO of UPS is faced with several key issues related to the strategic-planning and the scenario-planning process. The first issue is on the strategic-planning process.
His concern the strategic-planning process need to be changed for the future growth of UPS or the current process can be applied continuously. Current process have been managed while UPS have been growing and transforming to multi-billion-dollar largest provider. The second issue is about the scenario-planning process. He doubts the impact of the scenario-planning process to UPS and if it is really effective for the company. He cannot convince the scenarios that were identified in Horizon 2017 planning exercise are enough to identify the foundation for the future strategic plans for UPS. 1.
What are the strengths and weaknesses of scenario planning? Scenario Planning is a powerful armory in the strategic planning for organizations to prepare for its future. Especially it is useful to develop the strategies against to the possible negative events and changes in the world economy and organization’s industry. Managers can construct of scenarios what help to compensate for the usual errors in decision makings. The strength and weakness of scenario planning are as follows: Strength Multiple possibilities and several uncertainties might be occurred in future. Uncover both evitable and inevitable event
Creative and alternative solutions can be identified. Organization can consider about a long-term strategy and competition in its industry. Change mind-set. Weakness Take long time till completion. (Time consuming) Many stakeholders should be involved and it would cause resource issue. Lack of reality. Too abstract. 2. What is your evaluation of Pup’s 1997 scenario planning exercise? Its Horizon 2017 planning exercise? How do the two compare? The scenario planning exercise in 1997 was the started because top management of UPS felt the necessity for the strategy and preparation for compass future ender the increasing of intense competition.
In this session, the key focal issue about the future global business under the changing business circumstances was identified. Outcomes of this sessions are corporate charter, Backdrop for strategic decisions and mind-set change. Corporate charter define the future direction clearly and it was aligned to the competitive environment in 1997. The critical uncertainties and four scenarios are defined clearly the possible event that UPS would face. However, scenarios in 1997 were lack of realism. In addition, the early warning signals were not defined though the importance f early warning signal was recognized.
It means that exercise in 1997 did not have the step 5 “Monitoring the performance and take required adjustment” in “The Strategy-Making, Strategy-Executing Process”. 6th regional level (Daily operation) was not involved to this session. In Horizon 2017 planning exercise, the purpose to review and revise the scenario to fit to the changed competitive environment and to go beyond 2007. In this session, the scenario and the implications were extended to the regional levels. The participants were collected more broadly. Interview to identify key focal issue was made extensively. The early warning signal was defined but it was very loose.
The issue of Scenarios which identified in Horizon 2017 were very similar as Scenarios and some participants were doubtful to this activity. 3. What are the other key elements of Pup’s approach to strategic planning? In particular, what is your evaluation of: a. UPS charter? UPS charter defines which way UPS would like to go but the strategic vision need to be clarified. There is no strategic vision in this chatter. In “Our purpose” defines the reason of its business but it does not specify “where we are going”. Company’s aspirations for its future need to be involved to this charter. . The Centennial Plan? The three components identify the current issues that UPS faces and the corporate directions, as well. Both of three components and the four Strategic Imperatives well define about the actions to the future growth and provide framework for strategic planning. In addition the consensus was obtained among management. C. The Strategy Road Map? It is good the critical projects are defined and epitomized. The required resource for each projects are allocated by the committees. The strategy Road Map is insider about the scenario planning but it is not linked.
These two activities need to be linked to proceed effectively and efficiency. When a lot of strategic activities occurs simultaneously, there is high risk that all activities cannot be achieved and many resources have to spend time for the similar activities. 4. Why was John McDermott put in charge of “strategic integration”? Should he remain in that role? Because the champion from the proper position of company to monitor for the execution of the all strategic activities are required. This position needs to allocate the required resources for each projects efficiently ND timely.
In addition, the support the communication between CEO or other senior management and each project is required. He should remain in this role because in the hierarchy organization such as UPS, the instruction, supporting, monitoring and adjustment are required for the projects from the management who has the right to speak to all level of positions. 5. How does Pup’s strategic planning process compare with the approach at your organization? Our company’s strategic planning process is similar the scenario planning process as ones UPS had taken in 1997. Our company goes not focus on the daily operation in each region offices.
It more focus to the strategic planning the headquarters operations including the R&D and marketing process and manufacturing plant’s operation. As one of similarity in the strategic planning process between our company and UPS in 1 997, there is no early warning signal but our company review the sales performance in all resection quarterly. If the drop of the sales performance can be observed, our management people will adjust the strategic process, especially for the new products. Conclusion UPS has been growing in to a global provider of specialized transportation and egoistic service for 100 years without the strategic planning by sass’s.
In 1997, UPS implemented the scenario-planning process to prepare the father growth to be a global company. This exercise since 1 997 was finished without problem though there is no early warning signal and in 2004, UPS implemented another Scenario Planning: Horizon 2017 considered to the further future growth. Implementing process of the scenario-planning by UPS was basically good however UPS need to identify the vision fist. For the success of the scenario- planning, the clear vision specifying ” where company would like to go in future” by CEO is required.
