Implementing Strategies:

Management & Operations Issues Week 07

W. Rofianto, ST, MSi

� Formulation focuses on effectiveness

� Implementation focuses on efficiency

Nature of Strategy Implementation

Formulation vs. Implementation

Management Perspectives - Shift in responsibilityManagement Perspectives - Shift in responsibility

StrategistsDivisional or FunctionalManagers

Management

Issues

Resources

Organizational Structure

Restructuring

Annual Objectives

Policies

Management Issues

Rewards/Incentives

Supportive Culture

Production/Operations

Human Resources

Resistance to Change

Natural Environment

Purpose of Annual Objectives

� Basis for resource allocation

� Mechanism for management evaluation

� Metric for gauging progress on long-term objectives

� Establish priorities (organizational, divisional, and departmental)

Management Issues

departmental)

Management Issues

Four Types of Resources

1. Financial resources

2. Physical resources

3. Human resources

4. Technological resources

Managing Conflict

� Conflict not always “bad”

� No conflict may signal apathy

� Can energize opposing groups to action

� May help managers identify problems

Strategy-Structure Relationship

Basic Forms of Structure

� Functional Structure

� Divisional Structure

� Strategic Business Unit Structure (SBU)

� Matrix Structure

Typical Top Managers of a Large Firm

Sonoco Product’s SBU Organizational Chart

An Example Matrix Structure

Restructuring and Reengineering

Restructuring

� Downsizing

� Rightsizing

� Delayering

Reengineering

� Process management

� Process innovation

� Process redesign

Tests for Performance-Pay Plans

Linking Performance and Pay to Strategy

Seniority-based and performance-based approach

� Does the plan capture attention?

� Do employees understand the plan?� Do employees understand the plan?

� Do employees understand the plan?

� Does the plan pay out when it should?

� Is the company or unit performing better?

Managing Resistance to Change

� Force Change Strategy

� Educative Change Strategy

� Rational/Self-interest Change Strategy

Resistance to Change can be considered the single greatest threat to successful strategy implementation

� Rational/Self-interest Change Strategy

Rational/Self-interest Change Strategy

1. Invite employee participation

2. Motivation & incentive to change

3. Communication of change purpose

4. Giving & receiving feedback

Creating a Strategy-Supportive Culture

� Formal statements of organizational philosophy

� Designing physical spaces

� Role modeling, teaching and coaching by leaders

� Selection, promotion, retirement, reward and status system

� Stories, legends & Myths

Measure and control� Measure and control

� Leader reaction to critical incidents

� Organizational design and structure

� System and procedures

Production processes typically constitute more than 70% of firm’s total assets

Production/Operations Concerns

Production/Operations Decisions

� Plant size, equipment & Location

� Product Design & Packaging� Product Design & Packaging

� Shipping

� Job specialization, employee training & cross-training

� Inventory/Inventory control

� Standard & Quality control

� Cost control

� Technological innovation

Human Resource Strategic Responsibilities

� Assessing staffing needs/costs

� Developing performance incentives

� ESOPs (Employee Stock Ownership Plans)

� Work–life balance issues

� Diverse Workforce