Group 3
Mayra Garcia
Lindsey Pacatte
David Hayward
Garrett Matthews
Nick Watkins
Cory Logan
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Strategy is best carried out when everyone is
on board with it
Everyone, from top management down to
front line employees, need to understand why
they are implementing change
Implementation can be hindered if people do
not understand why things are being changed
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Employees must understand why changes are
being made
Build execution into strategy from the start
Reach for fair process in policy
implementation of new strategies
•
Lubber liquid coolants example
– choosing right coolant is a delicate process
– strategy to eliminate complexity & costs
– sales process was dramatically simplified
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Strategic move was doomed from the start
◦ sales reps saw the shift as a direct threat
◦ felt their contributions went unappreciated
◦ worked against the expert system
◦ deal with management risk up front
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What is Fair Process?
◦ Means Procedural Justice or the fairness of the
steps or processes taken to resolve a dispute or
allocate resources
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How does this Procedural Justice affect
business?
◦ People who believe what they are doing is right will
be more effective and efficient
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In essence Fair Process is management’s
expression of procedural justice
We see that when Fair Process is implemented
in the strategy-making process, the
employees can believe that upper
management is trustworthy
Strategy
Formulation
Process
Fair Process
Attitudes
Trust and
Commitment
Behavior
Strategy
Execution
Voluntary
Cooperation
Exceeds
Expectations
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1st Principle
Engagement
Involving individuals in the strategic decisions
Communicates respect for Individuals
Sharpens everyone’s thinking
Results in better strategic decisions
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2nd Principle
Explanation
Understand why final strategic decisions are
made
Allows employees to trust manager’s
intentions
Powerful feedback loop
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3rd Principle
Expectation Clarity
State clearly the new rules of the game
To achieve fair process matters most about
clarity
Must to taken together lead to judgment of
fair process.
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Elevator Systems Manufacturer
◦ Elco’s Chester and High Park plant
◦ 1980s, sales in the elevator industry had declined
◦ Office space lead to a vacancy rate of 20%
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Solution
◦ Create and execute a blue ocean strategy
◦ Offer buyers a leap in value while lowering cost
◦ Replace its batch-manufacturing system with a
cellular approach
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The Process
◦ Install system at the Elco’s Chester plan first
 Had decertified their own unions
 Ideal work force for the change
 Expected a positive spillover effect on High Park
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The results
◦ Elco’s Chester Plant
 Change led to disorder and rebellion
 Cost and quality were in free fall
 Wanted to unionize
◦ High Park
 Accepted the strategic shift
 Felt they were treated fairly
 Willingly participated in the execution
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A closer look- Elco managers violated all 3
principles of fair process
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Failed to engage employees in the decision
Manager was always absent
Managers didn’t explain why the decision was made
Managers also neglected to make clear what was
expected under the new process
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Elco’s Chester
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Process undermined employees’ trust
Only saw negative side
Fights erupted
Employee’s rejected the transformation
High Park
◦ Introduced consultants to employees
◦ Held plant-wide meetings
◦ Calmed employees from the thought of layoffs
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Why does fair process matter?
Why is fair process important in shaping
people’s attitudes and behavior?
Why does the observance or violation of fair
process in strategy making have the power to
make or break a strategy’s execution?
Fair Process
Violation of Fair Process
Intellectual & Emotional Recognition
Intellectual & Emotional Indignation
Trust & Commitment
Distrust & Resentment
Voluntary Cooperation in Strategy
Execution
Refusal to Execute Strategy
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Intellectual and Emotional Recognition
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Trust and Commitment
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Voluntary Cooperation in Strategy Execution
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Intellectual and Emotional Indignation
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Distrust and Resentment
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Refusal to Execute Strategy
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Commitment, trust, and voluntary
cooperation are not merely attitudes or
behaviors; they are intangible capital
Trust brings heightened confidence in one
another’s intentions and actions
Commitment enables people to override
personal self-interest in the interest of the
company
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Commitment, trust, and voluntary
cooperation allow companies to stand apart
in the speed, quality, and consistency of their
execution and to implement strategic shifts
fast at low cost
The question raised by management is how
to create trust, voluntary cooperation, and
commitment deep within the organization