Transcript Strategy Implementation - USF St. Petersburg Faculty Spotlight

Strategy Implementation
 What must we do to put the strategy in
place, execute it proficiently, and
produce good results?
 Creating FITS between strategy and
external environment and creating FITS
inside the organization
 Control, coordination, and motivation
issues
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Figure 10.1: The Eight Components
of the Strategy Execution Process
The Action Agenda
for Executing
Strategy
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Figure 10.2: The Three Components of
Building a Capable Organization
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Matching Organization Structure to Strategy
 Few hard and fast rules for organizing
 The One Big Rule: The role and purpose of the
organization structure is to support and
facilitate good strategy execution!
 Each firm’s structure is idiosyncratic, reflecting
 Prior arrangements and internal politics
 Executive judgments and preferences about how to
arrange reporting relationships
 How best to integrate and coordinate work effort of
different work groups and departments
CEO
Vice President
Vice President
Vice President
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What is Structure?
 How the firm is organized?
 Includes
Reporting relationships
How coordination is achieved
Authority
Degree of centralization
Degree of integration
Formalization
 Used to control, coordinate, and motivate
employees and the activities they perform
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Figure 10.3: Structuring the Work Effort to
Promote Successful Strategy Execution
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Important Implications of Structure
 Appropriate structure depends on the firm’s
strategy
 Changes in strategy typically require a new
structure
 New strategy often involves different skills,
different key activities, different staffing and
organizational requirements
 Hence, a new strategy signals a need to
reassess the organization structure
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Perspectives on Organizing
 All basic organization designs have strategy-
related strengths and weaknesses
 No ideal organization design exists
 To do a good job of matching structure to
strategy
 Pick a basic design
 Modify as needed
 Supplement with appropriate coordinating,
networking, and communication mechanisms to
support effective execution of the strategy
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Structural Arrangements: The Basics
Simple
Functional and process specialization
Geographic organization
Multidivisional
Strategic business units
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A Traditional Functional
Organizational Structure
General Manager
Research &
Development
Manufacturing
Engineering
Marketing
Human
Resources
Finance &
Accounting
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A Process-Oriented Functional
Structure
General Manager
Foundry &
Castings
Screw
Machining
Milling &
Grinding
Inspection
Finishing &
Heat Treating
Customer
Service
Loading &
Shipping
Billing &
Accounting
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Functional Structure for Cost
Leadership Strategy
• Operations is main function
• Process engineering is
•
•
•
General Manager
emphasized over R&D
Large centralized staff
Formalized procedures
Structure is mechanical, job
roles highly structured
Engineering
Centralized Staff
Accounting
Operations
Marketing
Personnel
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Functional Structure for
Differentiation Strategy
General Manager and
Limited Staff
R&D
New Product
R&D
Marketing
Marketing
Operations
Finance
Human
Resources
• Marketing is the main function for tracking new product ideas
• New product R&D is emphasized
• Most functions are decentralized
• Formalization is limited to foster change and promote new ideas
• Overall structure is organic; job roles are less structured
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A Geographic
Organizational Structure
CEO
Corporate
Staff
GM
GM
GM
GM
GM
North America
Latin America
Europe
Asia Pacific
Central Asia &
Africa
District
Staff
Engineering &
Prod. Design
Production
Marketing &
Distribution
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A Multidivisional Organizational
Structure
CEO
Corporate
Services
GM
Business A
GM
Business B
GM
Business C
Functional/Process
Departments
Functional/Process
Departments
Functional/Process
Departments
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An SBU Organization Structure
CEO
Corporate
Services
Group VP
SBU I
Group VP
SBU II
Group VP
SBU III
Strategically Related
Business Units
Strategically Related
Business Units
Strategically Related
Business Units
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Options to Supplement the
Basic Organization Structure
 Coordinating mechanisms
Cross-functional task forces, special
project teams, self-contained work
teams, etc…
 Instituting networking and
communications arrangements that
support implementation
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