Business Strategy and Policy Lecture 29 1. Recap Nature of Strategy Analysis & Choice Comprehensive...
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Transcript of Business Strategy and Policy Lecture 29 1. Recap Nature of Strategy Analysis & Choice Comprehensive...
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Business Strategy and Policy
Lecture 29
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Recap
• Nature of Strategy Analysis & Choice
• Comprehensive Strategy-Formulation Framework
• SWOT Matrix• Strategic Position and Action Evaluation (SPACE)• BCG Matrix• IE Matrix• QSPM
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Today’s Lecture
• IMPLEMENTING STRATEGIES: MANAGEMENT AND OPERATIONS ISSUES Management Perspectives1. ANNUAL OBJECTIVES2. POLICIES3. RESOURCE ALLOCATION4. MANAGING CONFLICT5. MATCHING STRATEGY WITH STRUCTURE6. RESTRUCTURING, REENGINEERING, AND E-ENGINEERING7. LINKING PERFORMANCE AND PAY TO STRATEGIES8. MANAGING RESISTANCE TO CHANGE9. MANAGING THE NATURAL ENVIRONMENT10. CREATING A STRATEGY-SUPPORTIVE CULTURE11. PRODUCTION/OPERATIONS CONCERNS 12. HUMAN RESOURCE CONCERNS
Ch 7-4
• Formulation focuses on effectiveness
• Implementation focuses on efficiency
Nature of Strategy Implementation
Formulation vs. Implementation
Ch 7-5
• Shift in responsibility
Nature of Strategy Implementation
Management Perspectives
Division or FunctionalManagers
Strategists
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Management Issues
ManagementIssues
Resources
Organizational structure
Restructuring
Rewards/Incentives
Annual Objectives
Policies
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Management Issues (cont’d)
ManagementIssues
Supportive Culture
Production/Operations
Human Resources
Resistance to Change
Natural Environment
Ch 7-8
Management Issues
Purpose of Annual Objectives --
Basis for resource allocation
Mechanism for management evaluation
Metric for gauging progress on long-term objectives
Establish priorities (organizational, division, & departmental)
Ch 7-9
Management Issues
1. Financial resources
2. Physical resources
3. Human resources
4. Technological resources
4 Types of Resources
Ch 7-10
Management Issues
Conflict not always “bad”
No conflict may signal apathy
Can energize opposing groups to action
May help managers identify problems
Managing Conflict
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Managing Conflict
Conflict Management and Resolution
– Avoidance– Defusion– Confrontation
Avoidance includes such actions as ignoring the problem in hopes that the conflict will resolve itself or physically separating the conflicting individuals (or groups).
Defusion can include playing down differences between conflicting parties while accentuating similarities and common interests, compromising so that there is neither a clear winner nor loser, resorting to majority rule, appealing to a higher authority, or redesigning present positions.
Confrontation is exemplified by exchanging members of conflicting parties so that each can gain an appreciation of the other’s point of view, or holding a meeting at which conflicting parties present their views and work through their differences.
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New administrativeproblems emerge
New strategyIs formulated
Organizationalperformance
declines
Organizational performance
improves
New organizationalstructure is established
Chandler’s Strategy-Structure Relationship
Ch 7-13
Management Issues
Functional Structure
Divisional Structure
Strategic Business Unit Structure (SBU)
Matrix Structure
Basic Forms of Structure
Ch 7-14
Management Issues
Restructuring
Downsizing
Rightsizing
Delayering
Ch 7-15
Management Issues
Reengineering
Process management
Process innovation
Process redesign
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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?
Ch 7-17
Management Issues
Production/Operations Concerns
-- Production processes typically constitute more than 70% of the firm’s total assets
Ch 7-18
Management Issues
Production/Operations Decisions
Plant size
Inventory/Inventory control
Quality control
Cost control
Technological innovation
Ch 7-19
Management Issues
Human Resource Strategic Responsibilities
Assessing staffing needs/costs
Developing performance incentives
ESOP’s
Child-care policies
Work-life balance issues
Ch 7-20
Diversity Issues
CEO Company Age
Meg Whitman eBay 49
Andrea Jung Avon Products 47
Anne Mulcahy Xerox 52
Marjorie Magner Citigroup 56
Betsy Holden Kraft Foods 49
Ann Moore AOL Time Warner 57
Women CEO’s in U.S. 2005 (examples)
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Benefits of a Diverse Workforce
• Improves corporate culture• Improves employee morale• Leads to a higher retention of employees• Leads to easier recruitment of employees• Decreases complaints and litigation• Increases creativity• Decreases interpersonal conflict
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Benefits of a Diverse Workforce
• Enables the organization to move into emerging markets
• Improves client relations• Increases productivity• Improves the bottom line• Maximizes brand identity• Reduces training costs
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Summary• IMPLEMENTING STRATEGIES: MANAGEMENT AND OPERATIONS ISSUES
Management Perspectives1. ANNUAL OBJECTIVES2. POLICIES3. RESOURCE ALLOCATION4. MANAGING CONFLICT5. MATCHING STRATEGY WITH STRUCTURE6. RESTRUCTURING, REENGINEERING, AND E-ENGINEERING7. LINKING PERFORMANCE AND PAY TO STRATEGIES8. MANAGING RESISTANCE TO CHANGE9. MANAGING THE NATURAL ENVIRONMENT10. CREATING A STRATEGY-SUPPORTIVE CULTURE11. PRODUCTION/OPERATIONS CONCERNS 12. HUMAN RESOURCE CONCERNS
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Next Lecture
STRATEGY REVIEW, EVALUATION, AND CONTROL
• CHAPTER OUTLINE
– The Nature of Strategy Evaluation– A Strategy-Evaluation Framework– The Balanced Scorecard– Published Sources of Strategy-Evaluation Information– Characteristics of an Effective Evaluation System– Contingency Planning– Auditing– 21st Century Challenges in Strategic Management