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Able and Walden- Reconciling strategy

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Walden International, the proposed new parent company of Able, is a large multinational conglomerate. It is an extremely financially well-run company, with an emphasis on short-term, quarterly results. In fact, it is Walden's key value proposition to its stockholders that each quarter's sales and pretax profits will be greater than the prior year's corresponding quarter. Walden has a 35-year record of consecutive quarterly increases and absolutely every other corporate objective is subordinate to extending this streak indefinitely. Walden works very quickly re-engineering and consolidating the common functions of its acquisitions into its own administrative services. These functions include accounting, legal, engineering, and customer service. The savings that are realized through the elimination of these common services are usually passed on to the bottom line. Sometimes, if a good case can be made, those funds are reinvested in the new subsidiary.

One of the biggest obstacles to the implementation of a successful business strategy is the clash of value systems between a parent and subsidiary. These differences often manifest themselves in conflicts between the various levels of strategy: corporate, business, functional, and operating. Below are a number of the sticking points between Able and Walden. Discuss the steps you would take to address the issues.

How would you reconcile Able's need for building market share (long-term strategic business objective) with Walden's drive for year-to year quarterly increases in sales and pretax profit (short-term, corporate objective)?
Walden's success metrics of head count control, inventory management, inventory turnover, and days sales outstanding can be inhibitors to growth vitally needed by Able. What would you do to moderate these functional objectives and make them work for Able?

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How would you reconcile Able's need for building market share (long-term strategic business objective) with Walden's drive for year-to year quarterly increases in sales and pretax profit (short-term, corporate objective)?

The first step in reconciling the long term strategic business objective of Able with those of the shorter term objectives is to identify a common and conflict of interests in the two set of objectives via mutual discussion/ meeting/ brainstorming between the top brass of two firms. A clear cut, mutually beneficial and reconciled set of objectives can only be developed if the top management of two companies, ie, the parent and the subsidiary, sit together and try to identify common platform to start formulating plans for achieving these both set of objectives.

Walden's strategic think tank will need to formulate its shorter term targets related to maximizing shorter term profits to its stakeholders in such a manner so that it serves as a strong foundation for Able to achieve its longer term objectives. Walden's top brass need to ensure that there should be no conflict in terms of alignment of the short and long term objectives; otherwise its acquisition will not be successful. The conflict with the longer term vision of Able's management and employees can cause frustration among the employees of the acquired company, resulting in poor performance.

Walden will also need to realize that Able is a ailing organization with lots of ...

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Able and Walden- Reconciling strategy

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