Strategic Management concep chap07

Strategic Management concep chap07

• 1.
  Chapter 7
• 2.
  Strategy implementation isan internal, operations-driven activity involving organizing, budgeting, motivation, culture building, supervising and leading to “make the strategy work” as intended!
• 3.
  • Its easierto say “going to do it” – Strategy Formulation • But more difficult to “do” something – Strategy Implementation Strategy ImplementationStrategy Formulation Requires coordination among many persons Requires coordination among a few individuals Requires motivation and leadership skills Requires good intuitive and analytical skills Primarily an operational processPrimarily an intellectual process Focuses on efficiencyFocuses on effectiveness Managing forces during the actionPositioning forces before the action
• 5.
  Implementing Strategy involves •Creating fits between way things are done & what it takes for effective strategy execution. • Executing strategy proficiently & efficiently. • Producing excellent results in timely manner
• 6.
  Transition to StrategyImplementation Shift in responsibility from strategists to divisional and functional managers thus Implementation problems may arise. Important Implementation Concerns Managers & employees motivated more by self-interests than organizational interests Need to involve divisional and functional managers in strategy formulation
• 7.
  Implementing Strategy involves 1.Building a firm capable of carrying out strategy successfully 2. Allocating ample resources to strategy-critical activities 3. Establishing strategy-supportive policies & procedures 4. Tying reward structure to achievement of results 5. Creating a strategy-supportive corporate culture 6. Exerting strategic leadership to influence motivation 7. Managing Change & Conflict
• 9.
  Establishing Annual Objectives •Basis for allocating resources • Mechanism for evaluating managers • Monitor progress toward long-term objectives • Establish organizational, divisional, and departmental priorities Devising Policies Policy refers to specific guidelines, methods, procedures, rules, forms and administrative policies established to support & encourage work toward stated goals. Policies are instruments for strategy implementation. • Basis for solving recurring problems • Sets boundaries, constraints, and limits on administrative actions • Sets expectations for managers and employees • Basis for management control and coordination
• 10.
  • Allows forstrategy execution • Sets allocation plan based on annual objectives • Allocation based on four types of resources: financial, physical, human, and technological • Function • Divisional • SBU Structure • Matrix Structure
• 11.
  Restructuring • Reducing sizeof firm Employees, Divisions or units, Hierarchical levels • Benchmarking against competitors Ratios out of line • Primary benefit = cost reduction • Downsizing, Rightsizing, Delayering Reengineering • Employee/customer well-being Redesign work, Redesign jobs, Redesign processes • Improvement in: Costs, Quality, Service, Speed Revising Reward & Incentive Programs • Pay-for-performance plans • Flexibility in compensation systems is necessary • Bonus system Annual objectives, Long-term objectives • Profit Sharing
• 12.
  • Raises anxiety/fear •Force change strategy • Educative change strategy • Rational or self-interest change strategy Most desirable • Customer & employee sensitivity to environment • Legal requirements • Earth has become a stakeholder for all firms • Preserve and conserve natural resources • Emphasis on developing environmental perspective
• 13.
  Creating a Strategy-SupportiveCulture • Determine changes in a firm’s culture that could benefit strategy • Weak linkages between strategic management and organizational culture can jeopardize performance and success • Senior executives must personally lead to create a strategy-supportive culture Matching Culture & Strategy Entails • Openness to new ideas • Challenging status quo • Energizing employees to make new strategy happen • Repeating new messages again & again • Rewarding people exhibiting new cultural norms • Creating events where all managers must listen
• 15.
  • Harmony isnormal and conflict is abnormal. • Conflicts and disagreements are the same. • Conflict is the result of “personality problems.” • Conflict and anger are the same thing. MISCONCEPTIONS ABOUT CONFLICT
• 16.
  SUBSTANCE PROCEDURES RELATIONSHIPS On-the-ground resourcesituation; concrete content of the conflict processes used to make the rules of interaction Relations between parties such as power, history, reputation
• 17.
  • Production processestypically constitute more than 70% of firm’s total assets • Decisions on: Plant size, Inventory/inventory control, Quality control, Cost control, Technological innovation • Assessing staffing needs and costs • Develop performance incentives • Employee Stock Ownership Plan (ESOPs) • Child-care policies • Work-life balance
• 18.
  • Strategy implementationmeans change • Successful implementation requires: • Support • Discipline • Motivation • Hard work