Chapter 11 - Strategic Implememt

Strategic Management and Business Policy
Chapter 11: Strategy Implementation
Copyright © 2018, 2015, 2012 Pearson Education, Inc. All Rights Reserved.
Learning Objectives (1 of 2)
11-1 Describe the major issues that impact

successful strategy implementation
11-2 Explain how you would develop programs,
budgets, and procedures to implement
strategic change
11-3 List the stages of corporate development and
the structure that characterizes each stage
11-4 Explain how matrix, network, and modular
structures are used implement strategy
10-2
Learning Objectives (2 of 2)
11-5 Discuss the issues related to centralization
versus decentralization in structuring
organizations
11-6 Explain the link between strategy and staffing
decisions
11-7 Discuss how leaders manage corporate culture

11-8 Utilize an action planning framework to
implement an organization’s MBO and
TQM initiatives
10-3
1. Organizing and Structure
10-4
Strategy Implementation (1 of 2)
• Strategy implementation
– the sum total of all activities and choices
required for the execution of a strategic plan
10-5
Strategy Implementation (2 of 2)
• Who are the people to carry out the
strategic plan?
• What must be done to align company
operations in the new intended direction?
• How is everyone going to work together to
do what is needed?
10-6
Ten Common Strategy
Implementation Problems (1 of 2)
1. Took more time than planned
2. Unanticipated major problems
3. Ineffective coordination
4. Competing activities and crises created
distractions
5. Employees with insufficient capabilities
10-7
10 Common Strategy
Implementation Problems (2 of 2)
6. Lower-level employees were inadequately
trained
7. Uncontrollable external environmental factors
8. Poor departmental leadership and direction
9. Key implementation tasks and activities were
poorly defined
10.The information system inadequately monitored
activities
10-8
Developing Programs, Budgets,
and Procedures
• Program
– a collection of tactics where a tactic is the
individual action taken by the organization as
an element of the effort to accomplish a plan
• The purpose of a program or a tactic is to

make a strategy action-oriented.
10-9
Timing Tactics: When to Compete
(1 of 2)
• Timing tactic
– deals with when a company implements a
strategy
• First mover
– first company to manufacture and sell a new
product or service
10-10
Timing Tactics: When to Compete
(2 of 2)
• Late movers
– may be able to imitate the technological
advances of others, keep risks down by waiting
until a new technological standard or market is
established, and take advantage of the first
mover’s natural inclination to ignore market
segments
10-11
Market Location Tactics:
Where to Compete
• Market location tactic
– deals with where a company implements a
strategy
• Offensive tactic
– usually takes place in an established competitor’s
market location
• Defensive tactic
– usually takes place in the firm’s own current
market position as a defense against possible
attack by a rival
10-12
Offensive Tactics
• Frontal assault
• Flanking maneuver
• Bypass attack
• Encirclement
• Guerilla warfare
10-13
Defensive Tactics
• Raise structural barriers
• Increase expected retaliation
• Lower the inducement for attack
10-14
Budgets and Procedures
• Planning a budget is the last real check a
corporation has on the feasibility of its selected
strategy.
• Procedures
– detail the various activities that must be carried
out to complete a corporation’s programs
– standard operating procedures
10-15
Achieving Synergy
• Synergy
– exists for a divisional corporation if the return
on investment is greater than what the return
would be if each division were an independent
business
10-16
Six Forms of Synergy
1. Shared know-how
2. Coordinated strategies
3. Shared tangible resources
4. Economies of scale or scope
5. Pooled negotiating power
6. New business creation
10-17
Structure Follows Strategy
• Structure Follows Strategy
– changes in corporate strategy lead to changes
in organizational structure
1. New strategy is created.

2. New administrative problems emerge.
3. Economic performance declines.
4. New appropriate structure is created.
5. Economic performance rises.
10-18
Stages of Corporate Development
I. Simple Structure
– Flexible and dynamic
II. Functional Structure
– Entrepreneur is replaced by a team of managers
III. Divisional Structure
– Management of diverse product lines in numerous
industries
– Decentralized decision making
IV. Beyond SBU’s
– Matrix
– Network
10-19
Blocks to Changing Stages
• Internal
– Lack of resources
– Lack of ability
– Refusal of top management to delegate
• External
– Economic conditions
– Labor shortages
– Lack of market growth
10-20
Blocks to Changing Stages
(Entrepreneurs)
• Loyalty to comrades
• Task oriented
• Single-mindedness
• Working in isolation
10-21
Table 10-2: Organizational Life Cycle
• Organizational life cycle
– describes how organizations grow, develop,
and decline
10-22
Flexible Types of
Organizational Structures (1 of 4)
• Matrix structures
– functional and product forms are combined
simultaneously at the same level of the
organization
10-23
Figure 11-1: Matrix Structure
10-24
Flexible Types of Organizational
Structures (2 of 4)
Conditions for matrix structures include:
• Ideas need to be cross-fertilized across
projects or products.
• Resources are scarce.
• Abilities to process information and to make
decisions needs to be improved.
10-25
Structures (3 of 4)
Three distinct phases of matrix structure
development include:
1. Temporary cross-functional task forces
2. Product/brand management
3. Mature matrix
10-26
Structures (4 of 4)
• Network Structure
– virtual elimination of in-house business
functions
• Virtual organization
– Composed of a series of project groups or
collaborations linked by constantly changing
non-hierarchical, cobweb-like electronic
networks
10-27
Figure 10-1: Network Structure Figure
10-28
Cellular/Modular Organization: A New
Type of Structure?
• Cellular/Modular Structure
– composed of cells (self-managing teams,
autonomous business units, etc.) which can
operate alone but which can interact with other
cells to produce a more potent and competent
business mechanism
• Beginning to appear in firms that are focused on
rapid product and service innovation.
10-29
Reengineering and
Strategy Implementation
• Reengineering
– the radical redesign of business processes to
achieve major gains in cost, service, or time
– effective program to implement a turnaround
strategy
10-30
Principles for Reengineering (1 of 2)
• Organize around outcomes, not tasks.
• Have those who use the output of the process
perform the process.
• Subsume information-processing work into real
work that produces information.
• Treat geographically-dispersed resources as
though they were centralized.
10-31
Principles for Reengineering (2 of 2)
• Link parallel activities instead of integrating
their results.
• Put the decision point where the work is
performed and build control into the
process.
• Capture information once and at the source.
10-32
Six Sigma
• Six Sigma
– analytical method for achieving near perfect
results on a production line
– emphasis on reducing product variance in
order to boost quality and efficiency
• Lean Six Sigma
– includes the removal of unnecessary steps in
any process and fixing those that remain
10-33
Process of Six Sigma
1. Define a process where results are poorer than
average.
2. Measure the process to determine current
performance.
3. Analyze the information to pinpoint where things
are going wrong.
4. Improve the process and eliminate the error.
5. Establish controls to prevent future defects from
occurring.
10-34
Designing Jobs to
Implement Strategy (1 of 2)
• Job design
– the study of individual tasks in an attempt to
make them more relevant to the company and
to the employees
• Job design techniques:
– Job enlargement
§ combining tasks to give a worker more of the same
type of duties to perform
– Job rotation
§ moving workers through several jobs to increase
variety
10-35
Designing Jobs to
Implement Strategy (2 of 2)
• Job characteristics
– using task characteristics to improve employee
motivation
• Job enrichment
– altering the jobs by giving the worker more
autonomy and control over activities
10-36
Centralization versus
Decentralization
• Product group structure
– enables the company to introduce and manage
a similar line of products around the world
– enables the corporation to centralize decision-
making along product lines and to reduce costs
• Geographic area structure

– allows the company to tailor products to
regional differences and to achieve regional
coordination
10-37
Figure 10-2: Geographic Area Structure
for an MNC
10-38
2. Staffing and Directing
1-
Integration Managers
• Prepare a competitive profile of the company in
terms of its strengths and weaknesses.
• Draft a profile of what the ideal combined
company should look like.
• Develop action plans to close the gap between
actual and ideal.
• Establish training programs to unit the combined
company and make it more competitive.
11-40
Staffing
Characteristics of successful integration
managers include:
1. Deep knowledge of the acquiring company
2. Flexible management style
3. Ability to work in cross-functional teams
4. Willingness to work independently
5. Sufficient emotional and cultural intelligence to
work in a diverse environment
11-41
Staffing Follows Strategy
• One way to implement a company’s business
strategy, such as overall low cost, is through
training and development.
• Executive characteristics influence strategic
outcomes for a corporation.
11-42
Matching the Manager to the Strategy
• Executive type
– executives with a particular mix of skills and
experiences
– paired with a specific corporate strategy
11-43
Executive Types
• Dynamic industry expert
• Analytical portfolio manager
• Cautious profit planner
• Turnaround specialist
• Professional liquidator
11-44
Selection and Management
Development
• Executive succession
– process of replacing a key top manag
• Succession planning
– identifying candidates below the top layer of
management
– measuring internal candidates against external
candidates
– providing financial incentives
11-45
Identifying Abilities and Potential
• Performance appraisal
– systems to identify good performers with
promotion potential
• Assessment centers
– evaluate a person’s suitability for an advanced
position
• Job rotation
– ensures employees are gaining a mix of
experience to prepare them for future
responsibilities
11-46
Problems in Retrenchment
• Downsizing
– the planned elimination of positions or jobs
– Also called “rightsizing” or “resizing”
• Can damage the learning capacity of an

organization
• Creativity drops significantly and becomes very
difficult to keep high performers from leaving the
company
11-47
Guidelines for Successful Downsizing
• Eliminate unnecessary work instead of making
across the board cuts
• Contract out work that others can do cheaper
• Plan for long-run efficiencies
• Communicate the reasons for actions
• Invest in the remaining employees
• Develop value-added jobs to balance out job
elimination
11-48
Leading
• Implementation
– involves leading and coaching people to use
their abilities and skills most effectively and
efficiently to achieve organizational objectives
• Without direction, people tend to do work

according to personal views of what tasks should
be done, how, and in what order.
11-49
Managing Corporate Culture
• Strong cultures are resistant to change.
• Optimal culture supports mission and strategies.
• Management must evaluate what a particular
change in strategy means to the corporate culture,
assess whether a change in culture is needed,
and decide whether an attempt to change the
culture is worth the likely costs.
11-50
Accessing Strategy-Culture
Compatibility (1 of 2)
• Is the proposed strategy compatible with the
company’s current culture?
• Can the culture be easily modified to make it more
compatible with the new strategy?
• Is management willing and able to make major
organizational changes and accept probable
delays and a likely increase in costs?
• Is management still committed to implementing
the strategy?
11-51
Figure 11-1: Assessing Strategy–Culture
Compatibility (2 of 2)
11-52
Managing Cultural Change
Through Communication
Companies in which major cultural changes have
successfully taken place had the following
characteristics in common:
• The CEO and other top managers had a strategic
vision of what the company could become and
communicated that vision to employees at all
levels.
• The vision was translated into the key elements
necessary to accomplish that vision.
11-53
Figure 11-2: Methods of Managing the
Culture of an Acquired Firm
11-54
Managing Diverse Cultures Following
an Acquisition (1 of 3)
The choice of which method to use should be based
on:
1. How much members of the acquired firm value
preserving their own culture
2. How attractive they perceive the culture of the
acquirer to be
11-55
• Integration
– involves relatively balanced give-and-take of
cultural and managerial practices between
merger partners
– no strong imposition of cultural change on
either company
• Assimilation
– involves domination of one organization over
the other
11-56
• Separation
– characterized by separation of the two
companies’ cultures
• Deculturation
– the disintegration of one company’s culture
resulting from unwanted and extreme pressure
from the other to impose its culture and
practices
11-57
Action Planning (1 of 2)
• Action plan
– states what actions are going to be taken, by
whom, during what time frame, and with what
expected results
11-58
Action Planning (2 of 2)
1. Specific actions to be taken to make the program
operational
2. Dates to begin and end each action
3. Person responsible for carrying out each action
4. Person responsible for monitoring the timeliness
and effectiveness of each action
5. Expected financial and physical consequences of
each action
6. Contingency plans
11-59
Importance of an Action Plan (1 of 2)
• Serves as a link between strategy formulation and

evaluation and control.
• Specifies what needs to be done differently from
current operations.
11-60
Importance of an Action Plan (2 of 2)
• Helps in both the appraisal of performance and
identification of any remedial actions
• Explicit assignment of responsibilities for
implementing and monitoring the programs may
contribute to better motivation
11-61
Table 11-1: Example of an Action Plan
11-62
Management by Objectives (1 of 2)
• Management by objectives (MBO)
– encourages participative decision-making
through shared goal setting and performance
assessment based on achieving stated
objectives
11-63
Management by Objectives (2 of 2)
The MBO process involves:
1. Establishing and communicating organizational
objectives
2. Setting individual objectives
3. Developing an action plan to achieve objectives
4. Periodically (at least quarterly) reviewing
performance
11-64
Total Quality Management (TQM)
(1 of 2)
• Total quality management (TQM)
– an operational philosophy committed to
customer satisfaction and continuous
improvement
– committed to quality/excellence and to being
the best in all functions
11-65
Total Quality Management (TQM)
(2 of 2)
TQM’s essential ingredients are:
1. Intense focus on customer satisfaction
2. Internal as well as external customers
3. Accurate measurement of every critical variable
in a company’s operations
4. Continuous improvement of products and
services
5. New work relationships based on trust and
teamwork
11-66

Chapter 11 - Strategic Implememt

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 11 - Strategic Implememt

Uploaded by

Copyright:

Available Formats

Strategic Management and Business Policy

Chapter 11: Strategy Implementation

11-1 Describe the major issues that impact

11-7 Discuss how leaders manage corporate culture

• The purpose of a program or a tactic is to

1. New strategy is created.

• Geographic area structure

• Can damage the learning capacity of an

• Without direction, people tend to do work

• Serves as a link between strategy formulation and

You might also like