Each year, Honeywell asks each department to rate its own Strangtfis and meannesses and tttose of the flOher departments with which if interacts. The notion is that each department is a supplier t& some departments and ei customer of olher departments. II Honeywell engineers frequently underestimate the cost and completion time of new products, for example, Hierr "internal customers' (manufacturing, finance, and ■ sales) will be hurt.

George Stalk, a leading management consultant* suggests that winning companies are those that have achieved superior Iti-company capabilities, not just core competencies. ^ Every company must manage some basic processes, such as new-prodnet development, ^ales generation, and order fulfillment. Uath process creates value and requires interdepartmental teamwork. Although each depart mem may possess specific core competencies, the challenge is to develop superior competitive capability in managing the company's key processes. Stalk calls this atpahUiiies-baserf competition.

Coal Formulation

Once (he company has performed a SWQT analysis, ii can procecd to develop specific goals For the planning period. I'his stage of the process is caller! go;il formulation. Managers use the term goals to describe objectives that are specific witlt respect to rnag-niiudc and time.

Most business units pursue a mix of objectives including profitability. Siile* grow th, market share improvement, risk containment, innovation, and reputation. "I he business unit sets these objectives ¡md then manages by objectives (MHO). i-c»r an MHO system to work, the tjnit's objectives must meet four criteria:

I. Tin t in itxt he srrrttttged hierarchically, front the most m the least important - Foi} exam -pie, the business unit's key objective for the period may he to increase the rate of return o:i Investment. This can be accomplished try increasing the profit level and reducing the amount of invested capital Profit itself cart be increased by increasing revenue and reducing expenses. Revenue cart increased by Increasing market share and prices. By


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