Chapter 7 Implementing Strategies
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Transcript Chapter 7 Implementing Strategies
Chapter 7
Implementing Strategies: Management &
Operations Issues
Strategic Management:
Concepts & Cases
13th Edition
Fred David
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Publishing as Prentice Hall
Ch 7 -1
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Ch 7 -2
Strategy Formulation vs.
Implementation
Strategy Formulation
Positioning forces
before the action
Focus on effectiveness
Primarily intellectual
Requires good intuitive
and analytical skills
Requires coordination
among a few people
Strategy Implementation
Managing forces during
the action
Focus on efficiency
Primarily operational
Requires special
motivation and
leadership skills
Requires coordination
among many people
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Ch 7 -3
Nature of Strategy Implementation
Management Perspectives
Shift in responsibility
Strategists
Divisional or
Functional
Managers
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Ch 7 -4
Management Issues Central to
Strategy Implementation
Establish annual
objectives
Devise policies
Allocate resources
Alter existing
organizational structure
Restructure & reengineer
Revise reward & incentive
plans
Minimize resistance to
change
Match managers to strategy
Develop a strategysupportive culture
Adapt production/operations
processes
Develop an effective human
resources function
Downsize & furlough as
needed
Link performance & pay to
strategies
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Ch 7 -5
Purpose of Annual Objectives
Basis
for resource allocation
Mechanism
for management evaluation
Major
instrument for monitoring progress
toward achieving long-term objectives
Establish
priorities (organizational, divisional,
and departmental)
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Ch 7 -6
Annual Objectives
Horizontal consistency of objectives
Vertical consistency of objectives
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Ch 7 -7
Policies
Policies set boundaries, constraints,
and limits on the kinds of
administrative actions that can be
taken to reward and sanction
behavior
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Ch 7 -8
Resource Allocation
Four Types of Resources
1. Financial resources
2. Physical resources
3. Human resources
4. Technological resources
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Ch 7 -9
Managing Conflict
Conflict not always “bad”
Lack of conflict may signal apathy
Can energize opposing groups to action
May help managers identify problems
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Ch 7 -10
Managing Conflict
Approaches for managing and resolving
conflict
Avoidance
Defusion
Confrontation
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Ch 7 -11
Matching Structure with Strategy
Structure dictates how objectives
and policies will be established
Structure dictates how resources
will be allocated
Changes in strategy often lead to
changes in organizational structure
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Ch 7 -12
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Ch 7 -13
Basic Forms of Structure
Functional Structure
Divisional Structure
Strategic Business Unit Structure
(SBU)
Matrix Structure
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Ch 7 -14
Functional Structure
Group tasks and activities by
business function
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Ch 7 -15
Functional Structure
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Ch 7 -16
Divisional Structure
Can
be organized in one of four
ways:
By geographic area
By product or service
By customer
By process
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Ch 7 -17
Divisional Structure
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Ch 7 -18
Strategic Business Unit Structure
(SBU)
Group
similar divisions into
strategic business units and
delegate authority and
responsibility for each unit to a
senior executive who reports
directly to the chief executive
officer
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Ch 7 -19
Matrix Structure
The
most complex of all designs
because it depends upon both
vertical and horizontal flows of
authority and communication
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Ch 7 -20
Matrix Structure
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Ch 7 -21
Restructuring, Reengineering, and
E-engineering
Restructuring
is called
Downsizing
Rightsizing
Delayering
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Ch 7 -22
Restructuring, Reengineering, and
E-engineering
Cornerstones
of Reengineering
Decentralization
Reciprocal interdependence
Information sharing
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Ch 7 -23
Tests for Performance-Pay Plans
Does the plan capture attention?
Do employees understand the plan?
Is the plan improving communication?
Does the plan pay out when it should?
Is the company or unit performing better?
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Ch 7 -24
Managing Resistance to Change
Force change strategy
Educative change strategy
Rational or self-interest change
strategy
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Ch 7 -25
Creating a Strategy-Supportive Culture
1.
2.
3.
4.
5.
Formal statements of organizational
philosophy
Design of physical spaces
Deliberate role modeling, teaching,
and coaching
Explicit reward and status system
Stories, legends, myths, and parables
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Ch 7 -26
Creating a Strategy-Supportive Culture
6.
7.
8.
9.
10.
What leaders pay attention to
Leader reactions to critical incidents and
crises
Organizational design and structure
Organizational systems and procedures
Criteria for recruitment, selection,
promotion, leveling off, retirement, and
“excommunication” of people
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Ch 7 -27
Production/Operations Concerns
Production
processes typically
constitute more than 70% of a
firm’s total assets
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Ch 7 -28
Production/Operations Decision
Examples
Plant
size
Inventory
Quality
Cost
/ Inventory control
control
control
Technological
innovation
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Ch 7 -29
Human Resource Concerns
Assessing
staffing needs/costs
Furloughs
Developing
performance incentives
ESOPs
Work–life
balance issues
Matching
managers with strategy
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Ch 7 -30
Corporate Wellness Programs
Wellness of employees has
become a strategic issue for many
firms
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Ch 7 -31
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Ch 7 -32