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  5. Effectiveness of Business Process Restructuring Based on a Medium-Term Management Plan and Motivated by the Creation of a Strategy Headquarters(S-HQ):Action Research for Innovation in Management Control Systems

2013 Vol.3
Effectiveness of Business Process Restructuring Based on a Medium-Term Management Plan and Motivated by the Creation of a Strategy Headquarters(S-HQ):Action Research for Innovation in Management Control Systems

2013/08/02

As the competitive environment for Japanese companies has become increasingly challenging, a growing number of companies have initiated reform of their headquarters, which is typically seen with the creation of a”corporate strategy headquarters.”In such reforms, attention tends to be directed toward downsizing of the headquarters, but another major goal is to strengthen capabilities in planning and executing strategies, or, in other words, to make a shift from the traditional bureaucratic headquarters (B-HQ) focusing on control and supervision to a”smart headquarters(S-HQ)”that leads the strategies for the entire company. Japanese companies create medium-term management plans that specify their strategies. Many plans, however, are prepared as an extension of past plans and lack strategic considerations. Strengthening a company’s strategic capabilities requires a strategy management system.
“Business process restructuring based on a medium-term management plan”is an effort to create a system for managing strategies centering on a medium-term management plan. In its business process restructuring based on a medium-term management plan, company A, a machinery manufacturer, created two-tier strategies, made strategies concrete by utilizing the balanced scorecard, and re-examined the company’s medium-term management plan during its implementation period. As a result, the management became more aware of the medium-term management plan, a swift review of the plan became possible, and the headquarters started to provide direction and support regarding the progress of business strategies. To regain competitiveness, each Japanese company needs not only to have a well-defined department in charge of strategies upon creating a corporate strategy headquarters, but also to improve the strategic competence of the entire company by re-examining its medium-term management plan.

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