Strategic Management Prof. Dr. Majed El-Farra 2012 1 Strategic Implementation Requirements for...
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Transcript of Strategic Management Prof. Dr. Majed El-Farra 2012 1 Strategic Implementation Requirements for...
Strategic Management Prof. Dr. Majed El-Farra 2012
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Strategic Implementation
Requirements for Strategic Implementation
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Strategy implementation- the sum total of all activities and choices required for the execution of a strategic plan
1. Who are the people to carry out the strategic plan?
2. What must be done to align company operations in the intended direction?
3. How is everyone going to work together to do what is needed?
Strategic Management Prof. Dr. Majed El-Farra 2012
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Common Strategy Implementation Problems1. Took more time than planned2. Unanticipated major problems3. Poor coordination4. Competing activities and crises created distractions5. Employees with insufficient capabilities6. Poor subordinate training7. Uncontrollable external environmental factors8. Poor departmental leadership and direction9. Inadequately defined implementation tasks and
activities10. Inefficient information system to monitor activities
Strategic Management Prof. Dr. Majed El-Farra 2012
Strategic Management Prof. Dr. Majed El-Farra 2012
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Strategy Implementation Effective strategic implementation requires
the follows:1- Organizational structure appropriateness. 2- Sound leadership of the company.3- Effective motivational system4- Annual objectives5- Functional strategies6- Clear budget7- Detailed action plan
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Prentice Hall, Inc. ©2012
6-5
Criticisms of SWOT analysis1. Generates lengthy lists2. Uses no weights to reflect priorities3. Uses ambiguous/vague words and phrases4. Same factor can be in 2 categories5. No obligation to verify opinion with data or
analysis6. Requires only a single level of analysis7. No logical link to strategy implementation
Strategic Management Prof. Dr. Majed El-Farra 2012
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Communicating Strategy
Strategy must be clearly understood.It provides employees with general
guidance to make decision.
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Strategic Management Prof. Dr. Majed El-Farra 2012
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Strategy & Structure
Definition of Organizational Structure:The structure can either facilitate or
inhibit strategy implementation. Chandler says: Changes in strategy
ultimately lead to changes in the organization’s structure.
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Types of organizational structure
1- Functional2- Geographical3- Divisional4- Customer-based5- Matrix
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Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–9
Departmentalization by Type Functional
Grouping jobs by functions performed
Product Grouping jobs by
product line Geographic
Grouping jobs on the basis of territory or geography
Process Grouping jobs on
the basis of product or customer flow
Customer Grouping jobs by
type of customer and needs
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–10Figure 10.2aFigure 10.2a
Functional Departmentalization
• Advantages
• Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations
• Coordination within functional area
• In-depth specialization
• Disadvantages
• Poor communication across functional areas
• Limited view of organizational goals
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–11Figure 10.2bFigure 10.2b
Geographical Departmentalization
• Advantages
•More effective and efficient handling of specific regional issues that arise
•Serve needs of unique geographic markets better
• Disadvantages
•Duplication of functions
•Can feel isolated from other organizational areas
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–12Figure 10.2cFigure 10.2c
Product Departmentalization
+ Allows specialization in particular products and services
+ Managers can become experts in their industry
+ Closer to customers
– Duplication of functions
– Limited view of organizational goalsSource: Bombardier Annual Report.
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–13Figure 10.2dFigure 10.2d
Process Departmentalization
+More efficient flow of work activities
–Can only be used with certain types of products
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–14Figure 10.2dFigure 10.2d
Customer Departmentalization
+ Customers’ needs and problems can be met by specialists
- Duplication of functions
- Limited view of organizational goals
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An assessment of Org. Structure
No structure is appropriate for all situations.
Appropriate structure may change as the organization develops.
Examples require structure change:
Introducing new strategy, having problems in achieving its objectives, leadership changes.
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Strategic Management Prof. Dr. Majed El-Farra 2012
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Symptoms of an ineffective org. Structure
According to P. Drucker:1- Too many management levels make
cooperation and communication difficult2- Too many meetings attended by too
many.3- Too much attentions are given to resolve
interdepartmental conflict.4- Excessive decision making at top
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Evolution of organizational structure: Alfred D. Chandler
1. Changing strategy.2. Administrative problems leading to
decline performance.3. Revised structure subsequent return
to economic health.
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Strategic Management Prof. Dr. Majed El-Farra 2012
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Structural adjustments: Chandler
When does it happen?1. Market expansion.2. Product line diversification.3. Vertical integration.
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Strategic Management Prof. Dr. Majed El-Farra 2012
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Relationship between strategy and Org. Structure
The process of matching structure to strategy is complex and should be undertaken with a thorough understanding of:
1. the historical development of the organizational structure.
2.The requirements of the organization’s environment and technology.
3.The political relationships that might be affected inside the organization.
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Strategic Management Prof. Dr. Majed El-Farra 2012
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Organizational Culture
. Culture: Refers to the values and patterns of belief and behavior that are accepted and practiced by the members of a particular organizations
Org. culture change as environment changes.
The founder and Top management shape the org. culture.
Change in strategy requires change in culture.
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Organizational Leadership
The leader is an individual who is able to influence the attitudes and opinion of others by motivation and guiding.
The leader must have a clear vision.Different strategies need different skills.
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Strategy and Motivational systems
Organizational reward system influence the entire organizational climate.
Organizational rewards include all types of rewards, tangible and intangible.
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Deployment of Resources through Budgeting
Budgeting: Is the process of allocating resources to be employed to achieve objectives.
Budget should be directly linked to strategy implementation.
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Developing functional Strategies
Functional Strategies describe the methods and means at functional level to achieve corporate strategies and business unit strategies.
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