1. COURSE TITLE : COMPETITIVE STRATEGY
Ashesi University
COURSE TITLE : COMPETITIVE STRATEGY
SEMESTER : 1ST 2011/2012
MODULE 9: Strategic Implementation: Organization, Leadership and Culture
Lecturer : Ebow Spio

2. Learning Objectives
Appreciate what managers must do to promote successful strategy execution
Understand why good strategy execution requires astute managerial actions to build core competencies and competitive capabilities
Learn what issues to consider in organizing the work effort and why strategy-critical activities should be the main building blocks of the organizational culture
Become aware of pros and cons of centralized and decentralized decision making implementing and executing chosen strategy
Be able to identify key features of a company’s corporate culture
Understand how and why a company’s culture can aid the drive for proficient strategy execution and operating excellence
Understand What constitutes effective managerial leadership in achieving superior strategy execution and operating

3. Crafting vs. Executing Strategy
Crafting the Strategy
Primarily a market-driven activity
Successful strategy making depends on
Business vision
Solid Industry and competitive analysis and company capabilities
Attracting and pleasing customers
Outcompeting rivals
Using company capabilities to forge a competitive advantage
Executing the Strategy
Primarily an operations-driven activity
Successful strategy execution depends on
Doing a good job of working through others
Good organization-building
Building and strengthening competitive capabilities
Motivating and Rewarding people in a strategy-supportive culture
Getting things done and delivering good results
Executing strategy is an operations-driven activity that revolves around the management of people and business processes.

4. Executing the Strategy
An action-oriented, make-things happen task involving management’s ability to
Direct organizational change
Achieve continuous improvement in operations and business processes
Move toward operating excellence
Create and nurture a strategy-supportive culture
Consistently meet or beat performance targets
Tougher and more time-consuming than crafting strategy
Implementation involves . . .
It denotes that successfully executing a strategy depends on doing a good job of working with and through others, building and strengthening competitive capabilities, motivating and rewarding people in a strategy-supportive manner, and instilling a discipline of getting things done.

5. Implementing a New Strategy Requires Adept Leadership
Implementing a new strategy takes adept leadership to
Convincingly communicate reasons for the new strategy
Overcome pockets of doubt
Secure commitment of concerned parties
Build consensus and enthusiasm
Get all implementation pieces in place and coordinated

6. Why Executing Strategy Is a Tough Management Job
Overcoming resistance to change
Wide array of demanding managerial activities to be performed
Numerous ways to tackle each activity
Number of bedeviling issues to be worked out
Demands good people management skills
Requires launching and managing a variety of initiatives simultaneously
Hard to integrate efforts of many different work groups into a smoothly-functioning whole

7. Who Are the Strategy Implementers?
Implementing and executing strategy involves a company’s whole management team and all employees
Just as every part of a watch plays a role in making the watch function properly, it takes all pieces of an organization working cohesively for a strategy to be well-executed
Top-level managers must lead the process and orchestrate major initiatives
But they must rely on cooperation of
Middle and lower-level managers to see things go well in various parts of an organization and
Employees to perform their roles competently

8. Goals of the Strategy Implementing-Executing Process
Unite total organization behind strategy
See that activities are done in a manner that is conducive to first-rate strategy execution
Generate commitment so an enthusiastic crusade emerges to carry out strategy
Fit how organization conducts its operations to strategy requirements

9. Fig. 11.1: The Eight Components of the Strategy Execution Process

10. The Eight Components of the Strategy Execution Process
Building an organization with the competences, capabilities, and resource strengths to execute strategy successfully
Marshaling sufficient money and people
Instituting policies and procedures that facilitate strategy execution
Adopting best practices and striving for continuous improvement
Installing information and operating systems that enable company personnel to carry out their strategic roles proficiently
Tying rewards and incentives directly to the achievement of strategic and financial targets and to good strategy execution
Instilling a corporate culture that promotes good strategy execution
Exerting the internal leadership needed to drive implementation forward and keep improving on how the strategy is being executed

11. What Top Executives Have to Do in Leading the Implementation Process
Communicate the case for change
Build consensus on how to proceed
Arouse enthusiasm for the strategy to turn implementation process into a companywide crusade
Empower subordinates to keep process moving
Establish measures of progress and deadlines
Reward those who achieve implementation milestones
Direct resources to the right places
Personally lead strategic change process and the drive for operating excellence

12. Fig. 11.2: The Three Components of Building an Organization Capable of Proficient Strategy Execution
1. Staffing the Organization
No company can hope to perform the activities required for successful strategy execution without attracting and retaining talented managers and employees with suitable skills and intellectual capital.
In many industries adding to a company’s talent base and building intellectual capital is more important to strategy execution than additional investments in plants, equipment, and capital projects.
2. Building Core Competences and Competitive Capabilities
1. A top organization-building priority in the strategy implementing/executing process is the need to build and strengthen competitively valuable core competences and organizational capabilities.
Building competences and capabilities that are very difficulty or costly for rivals to emulate has a huge payoff – improved strategy execution and a potential for competitive advantage.

13. Three-Stage Process of Developing Competencies and Capabilities
1. Develop ability to do something
2. As experience builds, ability can translate into a competence or capability
3. If ability continues to be polished and refined, it can become a distinctive competence, providing a path to competitive advantage!
Managing the Process of Building Competences: Four Key Traits
1. Competencies are bundles of skills and know-how growing from combined efforts of cross-functional departments
2. Normally, competencies emerge incrementally from various company efforts to respond to market conditions
3. Leveraging competencies into competitive advantage requires concentrating more effort and talent than rivals on strengthening competencies to create valuable capabilities
4. Sustaining competitive advantage requires adjusting competencies to new conditions

14. Example: Toyota’s Core Competence
Legendary “production system” giving it the capability to produce high-quality vehicles at relatively low costs

15. Instituting the Organizational Structure to deliver Strategy
Few hard and fast rules for organizing
One Big Rule: Role and purpose of organization structure is to support and facilitate good strategy execution!
Each firm’s structure is idiosyncratic, reflecting
Prior arrangements and internal politics
Executive judgments and preferences about how to arrange reporting relationships
How best to integrate and coordinate work effort of different work groups and departments
Vice President
CEO

16. Fig. 11.3: Structuring the Work Effort to Promote Successful Strategy Execution

17. What Types of Organizational Structures Fit Which Strategies?
A company operating in one business
Functional department structure
A company with operations in various parts of the world
Geographic organizational units
A vertically integrated company
Divisional organizational structure
A diversified company
Individual businesses, with each business unit operating as independent profit center

18. Determine How Much Authority to Delegate to Whom
In a centralized structure
Top managers retain authority for most decisions
In a decentralized structure
Managers and employees are empowered to make decisions
Trend in most companies
Shift from authoritarian to decentralized structures stressing empowerment

20. Characteristics of Centralized Decision Making
Top executives retain authority
For most strategic and operating decisions and
Keep a tight rein on lower-level managers
Minimal discretionary authority is granted to
Frontline supervisors
Rank-and-file employees
Key advantage – Tight control by top managers fixes accountability
Disadvantages
Lengthens response time to changing conditions
Does not encourage responsibility among lower-level managers and employees
Discourages lower-level managers and employees from exercising initiative

21. Advantages of a Decentralized Structure
Creates a more horizontal structure with fewer management layers
Managers and employees develop their own answers and action plans
Make decisions in their areas of responsibility
Held accountable for results
Shortens organizational response times and spurs
New ideas
Creative thinking and innovation
Greater involvement of managers and employees
Jobs can be defined more broadly
Fewer managers are needed
Electronic communication systems provide quick, direct access to data
Genuine gains in morale and productivity

22. Strategy-Critical Activities that cut across functions
Filling customer orders
Speeding new products to market
Improving product quality
Supply chain management
Building capability to conduct business via the Internet
Obtaining feedback from customers, making product modifications to meet their needs

23. Coordinating Mechanisms to Supplement the Basic Organization Structure
Cross-functional task forces
Dual reporting relationships
Informal networking
Voluntary cooperation
Incentive compensation tied to group performance
Teamwork and cross- departmental cooperation

24. Organizational Structures of the Future: Overall Themes
Revolutionary changes in how work is organized have been triggered by
New strategic priorities
Rapidly shifting competitive conditions
Tools of organizational design include
Empowered managers and workers
Reengineered work processes
Self-directed work teams
Rapid incorporation of Internet technology
Networking with outsiders
The future structure will be . . .

25. Characteristics of Organizations of the Future
Extensive use of Internet technology and e-commerce business practices
Fewer barriers between
Different vertical ranks
Functions and disciplines
Units in different geographic locations
Company and its suppliers, distributors, strategic allies, and customers
Capacity for change and rapid learning
Collaborative efforts among people in different functions and geographic locations
Change &
Learning

26. Defining Characteristics of Corporate Culture
Core values, beliefs, and business principles
Ethical standards
Operating practices and behaviors defining “how we do things around here”
Approach to people management
“Chemistry” and “personality” permeating work environment
Oft-told stories illustrating
Company’s values
Business practices
Traditions
Organizational culture is a system of shared values and beliefs that shape a company’s people, organizational structures, and control systems to produce behavioral norms

27. Features of the Corporate Culture at Wal-Mart
Dedication to customer satisfaction
Zealous pursuit of low costs
Frugal operating practices
Strong work ethic
Ritualistic Saturday morning meetings
Executive commitment to
Visit stores
Listen to customers
Solicit employees’ suggestions

28. Identifying the Key Features of Corporate Culture
A company’s culture is manifested in . . .
Values, business principles, and ethical standards preached and practiced by management
Approaches to people management and problem solving
Official policies and procedures
Spirit and character permeating work environment
Interactions and relationships among managers and employees
Peer pressures that exist to display core values
Its revered traditions and oft-repeated stories
Its relationships with external stakeholders

29. Where Does Corporate Culture Come From?
Founder or early leader
Influential individual or work group
Policies, vision, or strategies
Operating approaches
Company’s approach to people management
Traditions, supervisory practices, employee attitudes
Organizational politics
Relationships with stakeholders

30. Types of Corporate Cultures
Strong vs. Weak Cultures
Unhealthy Cultures
High-Performance Cultures
Adaptive Cultures

31. Characteristics of Strong Culture Companies
Conduct business according to a clear, widely-understood philosophy
Considerable time spent by management communicating and reinforcing values
Values are widely shared and deeply rooted
Have a well-defined corporate character, reinforced by a creed or values statement
Careful screening/selection of new employees to be sure they will “fit in”

32. Characteristics of Weak Culture Companies
Lack of a widely-shared core set of values
Few behavioral norms evident in operating practices
Few strong traditions
No strong sense of company identity
Little cohesion among departments
Weak employee allegiance to company’s vision and strategy

33. Characteristics of Unhealthy Cultures
Highly politicized internal environment
Issues resolved on basis of political clout
Hostility to change
Avoid risks and don’t screw up
Experimentation and efforts to alter status quo discouraged
“Not-invented-here” mindset – company personnel discount need to look outside for
Best practices
New or better managerial approaches
Innovative ideas
Disregard for high ethical standards and overzealous pursuit of wealth by key executives

34. Characteristics of High-Performance Cultures
Standout cultural traits include
A can-do spirit
Pride in doing things right
No-excuses accountability
A results-oriented work climate in which people go the extra mile to achieve performance targets
Strong sense of involvement by all employees
Emphasis on individual initiative and creativity
Performance expectations are clearly identified for all organizational members
Strong bias for being proactive, not reactive
Respect for the contributions of all employees

35. Dominant Traits of Adaptive Cultures
Any changes in operating practices and behaviors
Must not compromise core values and long-standing business principles
Must be “legitimate” in the sense of not having an inappropriate or unfair impact on the best interests of key stakeholders
Customers
Employees
Shareholders
Suppliers
Communities

36. Why Culture Matters: Benefits of a Tight Culture-Strategy Fit
A culture that encourages actions and behaviors supportive of good strategy execution
Provides employees with clear guidance regarding what behaviors and results constitute good job performance
Creates significant peer pressure among co-workers to conform to culturally acceptable norms
A culture imbedded with values and behaviors that facilitate strategy execution promotes strong employee commitment to the company’s
Vision
Performance targets
Strategy

37. Numerous Roles of Strategic Leaders
Visionary
Chief Entrepreneur & Strategist
Capabilities Builder
Resource Acquirer & Allocator
Culture Builder
Chief Administrator & Strategy Implementer
Process Integrator
Coach
Crisis Solver
Taskmaster
Spokesperson
Negotiator
Motivator
Arbitrator
Consensus Builder
Policymaker
Policy Enforcer
Mentor
Head Cheerleader

38. Leadership Activities of Chief Strategy Implementer
1. Stay on top of what’s happening
2. Put constructive pressure on company to achieve good results
3. Lead development of stronger core competencies and competitive capabilities
4. Exercise ethics leadership and lead social responsibility initiatives
5. Take corrective actions to improve overall strategic performance