Subject category:
Strategy and General Management
Published by:
INSEAD
Version: 01.2004
Length: 29 pages
Data source: Field research
Abstract
The case describes the strategic planning process and performance management system implemented at DSM, a global chemical company. In particular, it describes how the company''s value based business steering system is designed to create alignment between strategy formulation and execution through strategic value contracts. The case illustrates the performance management process in action at one of the business groups. It highlights managers'' dilemma between continuing to pursue the current business strategy which is in line with corporate strategy, versus responding to the financial pressures exerted by the new value based management approach which would require a radical change in strategy. The case allows students to discuss the various elements of DSM''s value based management (VBM)-inspired strategy and performance management processes, and how they impact one of the business groups'' efforts to improve performance. The class can analyse the strengths and weaknesses of the company''s approach to aligning its strategic planning and financial management processes by introducing strategic value contracts. Finally, the case shows how DSM distinguishes between performance indicators to monitor strategy implementation, and value drivers to measure economic value creation.
Location:
Industry:
Size:
18,000 employees, EUR6 billion turnaround
Other setting(s):
2003
About
Abstract
The case describes the strategic planning process and performance management system implemented at DSM, a global chemical company. In particular, it describes how the company''s value based business steering system is designed to create alignment between strategy formulation and execution through strategic value contracts. The case illustrates the performance management process in action at one of the business groups. It highlights managers'' dilemma between continuing to pursue the current business strategy which is in line with corporate strategy, versus responding to the financial pressures exerted by the new value based management approach which would require a radical change in strategy. The case allows students to discuss the various elements of DSM''s value based management (VBM)-inspired strategy and performance management processes, and how they impact one of the business groups'' efforts to improve performance. The class can analyse the strengths and weaknesses of the company''s approach to aligning its strategic planning and financial management processes by introducing strategic value contracts. Finally, the case shows how DSM distinguishes between performance indicators to monitor strategy implementation, and value drivers to measure economic value creation.
Settings
Location:
Industry:
Size:
18,000 employees, EUR6 billion turnaround
Other setting(s):
2003