IMPLEMENTATION n Business Strategies n Operations and Production Issues n Management Issues n Research and Development Issues n Information Systems Issues n Marketing Issues n Finance and Accounting Issues

IMPLEMENTATION n Putting Strategies Into Action n Shift in responsibility to divisional and functional managers

CORPORATE STRATEGY Decisions about what markets to compete in Competing in these markets via existing operations, mergers, acquisitions, joint ventures, divestitures Business Strategy IMPLEMENTATION FORMULATION Decisions about how to compete in each market Competing by least cost, focus, differentiation Functional Strategy Decisions about the actions needed within each functional area Carry out strategy chosen for each function

Why Implementation is so difficult n Strategy is often implicit in the head of the CEO and/or top management team n Strategy is developed in isolation n Strategic thinking is not encouraged n Outside consultants set direction and strategies

Management Issues in Implementation Corporate Business Functional

I. ANNUAL OBJECTIVES

II. POLICIES

III. RESOURCE ALLOCATION

IV. CONFLICT MANAGEMENT

Causes Consequences of Conflictof Conflict n Interdependency n Competition n Different Goals and Activities n Personalities n Scarce Resources Negative Consequences n Hostility n Withdrawal Positive Consequences n Increased Motivation n Increased Performance n More creative thinking

Conflict LowHigh Low High PerformancePerformance Optimal Level of Conflict

How to Prevent/Reduce Conflict n Emphasize Organizational Goals n Structure Tasks n Promote Organizational Communication n Separate dysfunctionally conflicting groups n Apply rules and regulations n Encourage confrontation and negotiation n Use 3rd party consultants n Rotate members among groups

How to Stimulate Conflict n Increase competition n Increase uncertainty among groups n Change reward systems

V. MATCHING STRUCTURE WITH STRATEGY

Types of Organizational Structure n Functional (Centralized) n Divisional (Decentralized) ä “M” form for multidivisional ä Geographic ä Product ä Customer ä Process n Strategic Business Unit (SBU) n Matrix n Others

VI. RESTRUCTURING

n Downsizing, rightsizing, delayering n Primary benefit sought is cost reduction n Reducing employees, costs, levels, assets

VII. MANAGING RESISTANCE TO CHANGE

Implementation Issues -Other Functional Areas

Research and Development Issues n Emphasize product and/or process improvements n Stress basic or applied research n Be leaders or followers in R&D n Develop robotics or manual type processes n Spend a high, average, or low amount of money on R&D n Perform R&D within firm or contract out n Use university or private sectors researchers

Information Systems Issues n Computer hardware and software facilitate global information consistency n All divisions self-sufficient, but compatible n Support cross-functional integration n Data and information should be available to any department that has a demonstratable need. n Security n Upgrading hardware and software

Marketing Issues n Marketing Mix n Product n Place n Promotion n Price n Market Segmentation n Product Posititioning

Finance and Accounting Issues n Acquiring Capital to Implement Strategies ä EPS/EBIT n Pro Forma Financial Statements ä Income Statement n Financial Budgets n Evaluating the Worth of a Business

VIII. Creating a Supportive Culture