IMPLEMENTING STRATEGIES: SINGLE & MULTI-INDUSTRY/ COUNTRY ISSUES BUS 189 SPRING 2007 DR. MARK FRUIN

NOKIA’S WOES SLOW TO RESPOND TO CUSTOMERS AND INNOVATE AS COMPANY GREW –NOKIA HAD ELECTED TO DECENTRALIZE DECISIONS ON NEW PRODUCT DEVELOPMNT –HEADQUARTERS IN ESPOO, FINLAND WAS REMOTE FROM GLOBAL DEVELOPMENTS –NOKIA’S CEO, JORMA OLLILA, ANNOUNCES NEW CORPORATE STRUCTURE: 4 DIVISIONS MOBILE PHONE MULTIMEDIA NETWORKS ENTERPRISE SOLUTIONS (INTRANET)

ORGANIZATIONAL DESIGN AND STRATEGY IMPLEMENTATION ORGANIZATIONAL DESIGN INCLUDES 3 ELEMENTS: –ORGANIZATIONAL STRUCTURE SPECIALIZATION, COORDINATION & INTEGRATION –CONTROL SYSTEMS INCENTIVES, MEASURING & MONITORING –ORGANIZATIONAL CULTURE COLLECTION OF VALUES, NORMS & BELIEFS CLIFFORD GEERTZ: WORLDVIEW, VALUES & ETHOS

ORG STRUCT BUILDING BLOCKS GROUPING TASKS, FUNCTIONS & DIVISIONS –GROUPINGS VS BUREAUCRACY/COORD COSTS ALLOCATING AUTHORITY& RESPONSIBILITY –HIERARCH & SPAN OF CONTROL –TALL OR FLAT –MINIMUM CHAIN OF COMMAND AND CENTRALIZATION VS DECENTRALIZATION INTEGRATING/INTEGRATION MECHANISMS –FACE-TO-FACE/DIRECT CONTACT/(INTERNET) –LIAISON ROLES –TEAMS

CONTROL SYSTEMS WHAT IS CONTROL? GETTING DONE WHAT YOU WANT TO GET DONE –MEASURE, MONITOR, MANAGE; PDCA CYCLES CONTROL & EFFICIENCY: 3M CONTROL & QUALITY: 3M CONTROL & INNOVATION: 3M CONTROL & CUSTOMER RESPONSIVENESS: 3M

LEVELS OF CONTROL (BOARDS OF DIRECTORS) –TO CONTROL, NEED HIGH QUALITY INFO CORPORATE-LEVEL MANAGERS DIVISION-LEVEL MANAGERS FUNCTIONAL-LEVEL MANAGERS FIRST-LEVEL/FRONTLINE MANAGERS

TYPES OF CONTROL PERSONAL CONTROL (FACE-TO-FACE) OUTPUT CONTROL –DON’T CONTROL PROCESS, JUST OUTPUTS –E.G., WITH SUPPLIERS BEHAVIORAL CONTROL –RULES & PROCEDURES (PHYSICAL CONTROL TO ACHIEVE MENTAL CONTROL; MBO) (IDEOLOGICAL/PRINCIPLES CONTROL) –TRUE BELIEVERS CAN BE LEFT ON THEIR OWN (EMOTIONAL (INTELLIGENCE) CONTROL) –HOOK, LINE & SINKER –WEBER & TYPES OF AUTHORITY (TRADITIONAL, BUREAUCRATIC (LEGAL), & CHARISMATIC

ORGANIZATIONAL CUTURE VISION, MISSION & GOALS VALUES, NORMS & BELIEFS FOR THE LONG-, MID-, & SHORT-TERM ORGANIZATIONAL SOCIALIZATION = HOW LEARN CULTURE STRATEGIC LEADERSHIP & SYNC WITH ORG CULTURE

ADAPTIVE CULTURE BECAUSE ENVIRONMENT CHANGES, ORGANIZATION MUST CHANGE (AS MUST CONTROL SYSTEMS & TYPES OF CONTROL) PETERS & WATERMAN’S IN SEARCH OF EXCELLENCE –BIAS FOR ACTION: BE ENTREPRENEURIAL –NATURE OF MISSION: STICK TO THE KNITTING –HOW TO MOVE A FIRM: MOTIVATE & MOVE

PUTTING IT ALL TOGETHER PP GOOD ORG DESIGN, CONTROL SYS& CULTURE SHOULD LEAD TO ABILITIES/CAPABILITIES TO EXECUTE EITHER A SUCCESSFUL –COST LEADERSHIP STRATEGY –DIFFERENTIATION STRATEGY

ROLE OF SPACE/GEOGRAPHY AS FIRM SCOPE AND SPREAD GROW, RELATIVELY FEW ALTERNATIVES (as long as stand-alone firms are the model) CLASSICAL M-FORM VS. MORE RECENT M-FORM W/GLOBAL FUNCTIONS (P. 439) REGIONAL HEADQUARTERS MODEL MATRIX (WWII PROJECTS-->CIVILIANIZE) PRODUCT LINE FOCUS USE PRODUCT- TEAM/CROSS FUNCTIONAL APPROACH

RESTRUCTURE & REENGINEER BECAUSE ENVIRONMENT CHANGES, ADAPTIVE CHANGE NOT SUFFICIENT THUS, RESTRUCTURING & REENGINEERING RESTRUCTURING –STREAMLINE, DOWNSIZE & RIGHTSIZE REENGINEERING –PROCESS REDESIGN & IMPROVEMENT –PROCESS MEANS ACTIVITY CHAIN THAT DELIVERS GOODS & SERVICES TO CUSTOMERS

IMPLEMENTING STRATEGIES IN FIRMS THAT COMPETE ACROSS INDUSTRIES & COUNTRIES BUS 189 CHAPTER 13 SPRING 2007

M-FORM STRUCTURE THE AMERICAN WAY OF BIG BUSINESS AMERICA’S MOST IMPORTANT ORGANIZATIONAL INNOVATION CHARACTERISTICS –SEPARATE LONG-TERM & SHORTER-TERM DECISIONS: STRATEGIC & OPERATIONAL MGMT –EVERY DIVISION: OWN MANAGEMENT & COMPLETE SET OF RESOURCES & CAPABILITIES –DIVISIONS COMPETE FOR RESOURCES –HEADQUARTERS REWARDS & PUNISHES PLUS TRIES TO FIND SYNERGIES TO JUSTIFY “WHOLE GREATER THAN”

PROBLEMS W/ M-FIRM STAND-ALONE MENTALITY DUPLICATION OF RESOURCES DIVISIONS COMPETE INSTEAD OF COOPERATE TRANSFER PRICING DISTORTION OF INFORMATION PULL APART INSTEAD OF PULLING TOGETHER

CORP STRATEGY, STRUCTURE & CONTROL P. 461 TABLE INTERRELATIONSHIPS OF STRATEGY, STRUCTURE & CONTROL WHEN 3 DIFFERENT TYPES OF STRATEGIES: –UNRELATED DIVERSIFICATION –VERTICAL INTEGRATION –RELATED DIVERSIFICATION

STRATEGIES ACROSS COUNTRIES/BOUNDARIES REALLY, BOUNDARIES MORE THAN COUNTRIES: WHY? 4 WAY MODEL –LOCALIZATION (MULTI-LOCAL) HIGH LOCAL RESPONSIVENESS, LOW GLOBAL COOR –INTERNATIONAL STRATEGY CENTRAL FUNCTIONS AT HOME, OTHERWISE LOCAL –GLOBAL STRATEGY CENTRALIZED, LOW COST STRATEGY ACROSS WORLD –TRANSNATIONAL STRATEGY BALANCE OF LOCAL RESPONSIVENESS & GLOBAL COORD

IMPLEMENTATION ISSUES MULTI-LOCAL STRATEGY –W/I BUT NOT ACROSS REGIONS COORD INTERNATIONAL STRATEGY –INTERNATIONAL OR GLOBAL DIVISION TO TAKE CARE OF OVERSEAS/”OVER THERE” –NO PRODUCTS OF OWN, BUT MKT RESPLTY GLOBAL STRATEGY –CENTRALIZE, STANDARDIZE & OPTIMIZE TRANSNATIONAL STRATEGY –HILL & JONES-->MATRIX –BARTLETT & GHOSHAL-->NETWORK-LIKE FIRM

INTRAPRENEURING IMPLEMENTATION ISSUES –DIFFERENT DIVISIONS HAVE DIFFERENT SYSTEMS & CULTURES –UNDERFUND, UNDER-REWARD & -PROMOTE JOINT VENTURES & STRATEGIC ALLIANCES –ALIGNING VALUES, SYSTEMS & TAKE-AWAYS MERGERS & ACQUISITIONS –NEW ORG DESIGNS, SYSTEMS & CULTURES –NOT EVERYTHING EQUALLY VALUABLE STRATEGIC OUTSOURCING & NETWORKS –WHAT TO OUTSOURCE –HOW TO MANAGE OUTSOURCING FOR STRAT ADV?

ROLE OF IT: IMPLEMENTATION TODAY, EVERYTHING IS INFORMATION & DIGITAL & OPEN (AT LEAST W/I FIRMS) FOR THIS TO BE, ORGANIZATIONAL LEARNING & KNOWLEDGE MGMT SYSTEMS ARE MANDATORY –KNOWLEDGE BEGINS WITH LEARNING –LEARNING IS SPECIFIC, KNOWLEDGE GENERAL VIRTUAL ORGANIZATIONS –NOT QUITE THERE –BEING THERE MAY NOT BE ALL THAT IT IS CRACKED UP TO BE (FOR REASONS OF IMPLEMENTATION) –WHAT PROBLEMS ARE LIKELY TO ARISE?