1. Foundations of Strategy Chapter 9: Realising Strategy
Ashlyn Hargraves
Kyle Gooch
Martin Gutierrez
Sofia Maese
Hunter Bernays

2. Introduction “Great strategy, lousy implementation”
Formulation and implementation of strategy must not be separated into two distinct processes
Intended strategy is not always realized strategy

3. The organizational challenge: reconciling specialization with coordination and cooperation
Specialization and division of labor
A fundamental source of efficiency
Increases productivity
Specialization took 100 hours off the assembly time of the Model T
Specialization brings two problems wit h it
Cooperation Problem
Coordination Problem

4. Cooperation Problem Three mechanisms to induce cooperation
Bureaucratic controls
Focuses on the hierarchy within the organization
Performance incentives
Links rewards to outputs
Powerful tool to promote behavior
Shared Values
Most effective way to ensure cooperation
Everyone in the organization shares the same core values

5. Coordination Problem Three mechanisms for coordination
Rules and Instructions
Basic feature of all firms
General rules and also specific instructions to guide employees
Routines
Consistent routines are established to ensure coordination between departments
Mutual adjustment
Individuals working together adjust to each other and coordinate their actions

6. Specialization at EY Different departments perform different functions
External auditing
Tax accounting
Financial Accounting Advisory

7. Organizational design
Bureaucracy and Hierarchy
Who reports to who
Two main issues:
The advantages of using hierarchies to achieve coordination and control
The different ways in which organizations can be structured along hierarchical lines

8. Hierarchy and coordination
Reduce costs
Hierarchy lowers cost of coordination
Self-organized teams
Many interactions
Mutual adjustment
Hierarchy
Appointed leader
Fewer interactions
Lower cost of communication

9. Defining organisational units
Many ways to structure hierarchy
By product divisions, country subsidiaries or functional departments
Some principal bases for grouping employees are:
Common tasks, products, geography, and process
Group by intensity of coordination needs

10. Alternative structural forms
The functional structure
By similarities
Conducive to high centralised control
Problems occur with company expansion and integration
The multidivisional structure
Decentralised decision making
More operating decisions at the division level
Matrix structures
Multiple products, functions, and locations
Very complex, confusing, and cause conflict

11. Beyond hierarchical structures
Many changes have been made to the original forms of hierarchy
Mechanistic formality has been replaced by organic informality
Depending on the level of company morale and culture, they require more or less need for strict hierarchy
Adhocracies
Team-based and project-based organisations
Networks

12. Organizational forms A focus on coordination rather than control
Reliance on coordination by mutual adjustment
Individuals in multiple organisational roles

13. management systems
Management systems provide the tools for communication, decision making, and allow industries to coordinate and implement activities.
4 types
Information Systems
Strategic Planning Systems
Financial Systems
H/R management systems

14. Information Systems Fundamental to every management system
This system is the key component of how information is relayed and interpreted throughout the company
Accounting systems are the information systems that are associated within firms such as EY
EY as well as other firms have been updating their accounting systems due to the increased demand for transparency and reliability due to the financial crisis and to reach the qualifications set to meet IPSAS

15. Strategic Planning Systems
Includes the following components
A statement of goals
A set of assumptions or forecasts
A qualitative statement
Specific Action Steps
A set of financial projections
As stated previously, businesses in the industry have moved to acquiring consulting firms in order to follow their strategic plan in expanding business and increasing revenues.

16. Financial Systems
Primary mechanism that top management seeks to control
Two types of budgets are set in order to achieve this control
Capital Expenditure budget- Example of this would be the amount that would be allowed for each project
Operating Budget- Profit and loss statement
EY Global revenues: US$28.7 billion (Financial Year '15, ending 30 June 2015). Has seen growth in each service provided.
Cut down costs as well by outsourcing

17. H/R management systems
The strategic and financial plans mean nothing unless this system is utilized to the greatest extent.
EY has a great system in set in regards to Human Resources
This includes:
Rank Harmonism- would entail having the most qualified employee for the job as well as having job clarification
Incentives for performance
Providing great benefits to employees

18. Corporate Culture
Organizational Culture - “the way things get done around here”
Corporate Culture - “the values and ways of thinking that senior managers wish to encourage within their organizations.”
Strong vs. Weak Culture -
Strong: key values and attributes are widely shared and intensely held.
Weak: people hold different views and values and respond in different ways

19. Layers of Culture
Organizational attributes that an outsider visiting the company for the first time might see, feel or hear. Ex: Artefacts (i.e. company logo, how people dress, where they are located, etc.)
Values and attributes that organizational members express.
Unspoken Rules or Tacit Beliefs
Can they be changed?

20. EY Culture - Building a better working world.
Inclusiveness
Development
Engagement
EY Values:
People who demonstrate integrity, respect, and teaming.
People with energy, enthusiasm, and the courage to lead.
People who build relationships based on doing the right thing.
EY ranked 14th among the 25 ‘Best Big Companies to Work For’ in 2015 – ahead of Deloitte, which came 22nd.

21. EY Culture - cntd. Global Awards Program - “Better Begins with You”
Diversity and Inclusiveness -
“The only way to be our best is to include our best. That means we need to include the whole world, not just pieces of it. That all starts with diversity and inclusiveness. It’s the smart thing. It’s the right thing. And it’s the only way to succeed in today’s global economy.” - Mark Weinberger, Global Chairman and CEO, EY

22. Summary Discrepancy between planned strategy & realized strategy
Key issues that underpin the design and structure of an organization’s structures.
Influences on developing strong corporate culture
BP case
Managers Designing appropriate Organization Structures

23. Summary Table

24. References http://www.ey.com/US/en/About-us/Our-people-and-culture
/EYDI/EYDI.html?Shortcut=EYDI#3