1. Chapter 7 Implementing Strategies: Management & Operations Issues
Strategic Management: Concepts & Cases
13th Edition
Fred David
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3. Strategy Formulation vs. Implementation
Positioning forces before the action
Focus on effectiveness
Primarily intellectual
Requires good intuitive and analytical skills
Requires coordination among a few people
Strategy Implementation
Managing forces during the action
Focus on efficiency
Primarily operational
Requires special motivation and leadership skills
Requires coordination among many people
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4. Divisional or Functional Managers
Nature of Strategy Implementation
Management Perspectives
Shift in responsibility
Strategists
Divisional or Functional Managers
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5. Management Issues Central to Strategy Implementation
Establish annual objectives
Devise policies
Allocate resources
Alter existing organizational structure
Restructure & reengineer
Revise reward & incentive plans
Minimize resistance to change
Match managers to strategy
Develop a strategy-supportive culture
Adapt production/operations processes
Develop an effective human resources function
Downsize & furlough as needed
Link performance & pay to strategies
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6. Purpose of Annual Objectives
Basis for resource allocation
Mechanism for management evaluation
Major instrument for monitoring progress toward achieving long-term objectives
Establish priorities (organizational, divisional, and departmental)
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7. Annual Objectives Horizontal consistency of objectives
Vertical consistency of objectives
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8. Policies
Policies set boundaries, constraints, and limits on the kinds of administrative actions that can be taken to reward and sanction behavior
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9. Resource Allocation Four Types of Resources Financial resources
Physical resources
Human resources
Technological resources
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10. Managing Conflict Conflict not always “bad”
Lack of conflict may signal apathy
Can energize opposing groups to action
May help managers identify problems
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11. Managing Conflict Approaches for managing and resolving conflict
Avoidance
Defusion
Confrontation
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12. Matching Structure with Strategy
Structure dictates how objectives and policies will be established
Structure dictates how resources will be allocated
Changes in strategy often lead to changes in organizational structure
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14. Basic Forms of Structure
Functional Structure
Divisional Structure
Strategic Business Unit Structure (SBU)
Matrix Structure
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15. Functional Structure Group tasks and activities by business function
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16. Functional Structure Copyright © 2011 Pearson Education, Inc.
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17. Can be organized in one of four ways:
Divisional Structure
Can be organized in one of four ways:
By geographic area
By product or service
By customer
By process
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18. Divisional Structure Copyright © 2011 Pearson Education, Inc.
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19. Strategic Business Unit Structure (SBU)
Group similar divisions into strategic business units and delegate authority and responsibility for each unit to a senior executive who reports directly to the chief executive officer
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20. Matrix Structure
The most complex of all designs because it depends upon both vertical and horizontal flows of authority and communication
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21. Matrix Structure Copyright © 2011 Pearson Education, Inc.
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22. Restructuring is called Downsizing Rightsizing Delayering
Restructuring, Reengineering, and E-engineering
Restructuring is called
Downsizing
Rightsizing
Delayering
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23. Cornerstones of Reengineering Decentralization
Restructuring, Reengineering, and E-engineering
Cornerstones of Reengineering
Decentralization
Reciprocal interdependence
Information sharing
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24. Tests for Performance-Pay Plans
Does the plan capture attention?
Do employees understand the plan?
Is the plan improving communication?
Does the plan pay out when it should?
Is the company or unit performing better?
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25. Managing Resistance to Change
Force change strategy
Educative change strategy
Rational or self-interest change strategy
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26. Creating a Strategy-Supportive Culture
Formal statements of organizational philosophy
Design of physical spaces
Deliberate role modeling, teaching, and coaching
Explicit reward and status system
Stories, legends, myths, and parables
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27. Creating a Strategy-Supportive Culture
What leaders pay attention to
Leader reactions to critical incidents and crises
Organizational design and structure
Organizational systems and procedures
Criteria for recruitment, selection, promotion, leveling off, retirement, and “excommunication” of people
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28. Production/Operations Concerns
Production processes typically constitute more than 70% of a firm’s total assets
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29. Production/Operations Decision Examples
Plant size
Inventory / Inventory control
Quality control
Cost control
Technological innovation
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30. Human Resource Concerns
Assessing staffing needs/costs
Furloughs
Developing performance incentives
ESOPs
Work–life balance issues
Matching managers with strategy
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31. Corporate Wellness Programs
Wellness of employees has become a strategic issue for many firms
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32. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
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