1 Strategy Implementation Chapter 11 Chapter 11 Organizational Structure and Structure and Controls Chapter 10 Chapter 10 Corporate Governance Chapter 12 Chapter 12 Strategic Leadership Strategy Formulation Strategic Competitiveness Above-Average Returns Strategic Intent Strategic Intent Strategic Mission Strategic Mission Chapter 2 Chapter 2 The External The External Environment Chapter 3 Chapter 3 The Internal The Internal Environment The Strategic Management Process Feedback Strategic Inputs Strategic Actions Strategic Outcomes Chapter 6 Chapter 6 Corporate- Level Strategy Level Strategy Chapter 9 Chapter 9 Cooperative Strategy Chapter 5 Chapter 5 Competitive Rivalry Competitive Rivalry and Competitive and Competitive Dynamics Chapter 8 Chapter 8 International Strategy Chapter 4 Chapter 4 Business-Level Strategy Chapter 7 Chapter 7 Acquisition and Acquisition and Restructuring Strategies

2 Strategic Leadership Strategic leadership involves: Strategic leadership involves: –the ability to anticipate, envision, maintain flexibility and empower others to create strategic change –multi-functional work that involves working through others –consideration of the entire enterprise rather than just a sub-unit –a managerial frame of reference

3 Successful Strategic Actions Strategic Leadership and the Strategic Management Process Effective Strategic Leadership Strategic Intent Strategic Mission shapes the formulation of and influence

4 Strategic Leadership and the Strategic Management Process StrategicCompetitiveness Above-Average Returns Formulation of Strategies Implementation Successful Strategic Actions yields

5 Factors Affecting Managerial Discretion External Environment Industry structureIndustry structure Rate of market growthRate of market growth Number and type of competitorsNumber and type of competitors Nature and degree of political/legal constraintsNature and degree of political/legal constraints Degree to which products can be differentiatedDegree to which products can be differentiated External Environment

6 Factors Affecting Managerial Discretion Characteristics of the Organization Characteristics of the Organization SizeSize AgeAge CultureCulture Availability of resourcesAvailability of resources Patterns of interaction among employeesPatterns of interaction among employees External Environment

7 Factors Affecting Managerial Discretion External Environment Characteristics of the Organization Manager ManagerialDiscretion Characteristics of the Manager Tolerance for ambiguityTolerance for ambiguity Commitment to the firm and its desired strategic outcomesCommitment to the firm and its desired strategic outcomes Interpersonal skillsInterpersonal skills Aspiration levelAspiration level Degree of self-confidenceDegree of self-confidence

8 Top Management Teams The top management team is composed of key managers who are responsible for The top management team is composed of key managers who are responsible for –formulating and –implementing –the organization’s strategies A heterogeneous top management team with varied expertise and knowledge can draw on multiple perspectives when evaluating alternative strategies and building consensus A heterogeneous top management team with varied expertise and knowledge can draw on multiple perspectives when evaluating alternative strategies and building consensus

9 Top Management Teams A top management team must also be able to function effectively as a team in order to implement strategies A top management team must also be able to function effectively as a team in order to implement strategies –a heterogeneous team makes this more difficult –a heterogeneous team, however, is associated positively with innovation and strategic change

10 Strategic Leadership Chief executive officers can gain so much power that they are virtually independent of oversight by the board of directors Chief executive officers can gain so much power that they are virtually independent of oversight by the board of directors This is especially true when the CEO is also chairman of the board of directors This is especially true when the CEO is also chairman of the board of directors CEOs of long tenure can also wield substantial power CEOs of long tenure can also wield substantial power The most effective forms of governance share power and influence among the CEO and board of directors The most effective forms of governance share power and influence among the CEO and board of directors

11 Exercise of Effective Strategic Leadership Establishingbalancedorganizationalcontrols EmphasizingethicalpracticeDevelopinghumancapital Exploiting and maintainingcorecompetencies Sustaining an effective organizationalculture Determiningstrategicdirection Effective Strategic Leadership

12 Exploiting and Maintaining Core Competencies Core competencies are resources and capabilities that serve as a source of competitive advantage for a firm over its rivals Core competencies are resources and capabilities that serve as a source of competitive advantage for a firm over its rivals Strategic leaders must verify that the firm’s competencies are emphasized in strategy implementation efforts Strategic leaders must verify that the firm’s competencies are emphasized in strategy implementation efforts

13 Developing Human Capital Human capital refers to the knowledge and skills of the firm’s entire workforce Human capital refers to the knowledge and skills of the firm’s entire workforce Employees are viewed as a capital resource that requires investment Employees are viewed as a capital resource that requires investment No strategy can be effective unless the firm is able to develop and retain good people to carry it out No strategy can be effective unless the firm is able to develop and retain good people to carry it out The effective development and management of the firm’s human capital may be the primary determinant of a firm’s ability to formulate and implement strategies successfully The effective development and management of the firm’s human capital may be the primary determinant of a firm’s ability to formulate and implement strategies successfully

14 Emphasizing Ethical Practices To properly influence employee judgment and behavior, ethical practices must shape the firm’s decision-making process and be an integral part of an organization’s culture To properly influence employee judgment and behavior, ethical practices must shape the firm’s decision-making process and be an integral part of an organization’s culture Leaders set the tone for creating an environment of mutual respect, honesty and ethical practices among employees Leaders set the tone for creating an environment of mutual respect, honesty and ethical practices among employees

15 The Eight Components of Implementing Strategy Strategy Implementer’s Action Agenda Building a Capable Organization Allocating Resources Establishing Strategy- Supportive Policies Instituting Best Practices for Continuous Improvement Installing Support Systems to Carry out Strategic Roles Tying Rewards to Achievement of Key Strategic Targets Exercising Strategic Leadership Shaping Corporate Culture to Fit Strategy