David Sm13 Ppt 07 Ge

Copyright © 2011 Pearson Education Ch 7 -1

Chapter 7Implementing Strategies: Management & Operations Issues

Strategic Management: Concepts & Cases

13th Edition

Global Edition

Fred David


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


Shift in responsibility

Nature of Strategy Implementation

Management Perspectives

Divisional or FunctionalManagers

Strategists


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 strategy-

supportive culture Adapt production/operations

processes Develop an effective human

resources function Downsize & furlough as

needed Link performance & pay to

strategies


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)


Annual Objectives

Horizontal consistency of objectives

Vertical consistency of objectives


Policies

Policies set boundaries, constraints, and limits on the kinds of administrative actions that can be taken to reward and sanction behavior


Resource Allocation

1. Financial resources

2. Physical resources

3. Human resources

4. Technological resources

Four Types of Resources


Managing Conflict

Conflict not always “bad”

Lack of conflict may signal apathy

Can energize opposing groups to action

May help managers identify problems


Managing Conflict

Approaches for managing and resolving conflict Avoidance Defusion Confrontation


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


Basic Forms of Structure

Functional Structure

Divisional Structure

Strategic Business Unit Structure (SBU)

Matrix Structure



Group tasks and activities by business function



Can be organized in one of four ways: By geographic area By product or service By customer By process


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


Matrix Structure

The most complex of all designs because it depends upon both vertical and horizontal flows of authority and communication


Matrix Structure


Restructuring, Reengineering, and E-engineering

Restructuring is called

Downsizing

Rightsizing

Delayering


Restructuring, Reengineering, and E-engineering

Cornerstones of Reengineering

Decentralization

Reciprocal interdependence

Information sharing


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?


Managing Resistance to Change

Force change strategy Educative change strategy Rational or self-interest change

strategy


Creating a Strategy-Supportive Culture

1. Formal statements of organizational philosophy

2. Design of physical spaces

3. Deliberate role modeling, teaching, and coaching

4. Explicit reward and status system

5. Stories, legends, myths, and parables


Creating a Strategy-Supportive Culture

6. What leaders pay attention to

7. Leader reactions to critical incidents and crises

8. Organizational design and structure

9. Organizational systems and procedures

10. Criteria for recruitment, selection, promotion, leveling off, retirement, and “excommunication” of people


Production/Operations Concerns

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


Production/Operations Decision ExamplesPlant size

Inventory / Inventory control

Quality control

Cost control

Technological innovation


Human Resource Concerns

Assessing staffing needs/costs

Furloughs

Developing performance incentives

ESOPs

Work–life balance issues

Matching managers with strategy


Corporate Wellness Programs

Wellness of employees has become a strategic issue for many firms


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David Sm13 Ppt 07 Ge

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