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Ch 8 -1
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Strategic Management: Concepts and Cases
Arab World Edition
Fred R. David
Abbas J. Ali
Abdulrahman Y. Al-Aali
Chapter 8:
Implementing Strategies:
Management and
Operations Issues
Ch 8 -2
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Source: Adapted from Fred R. David, “How Companies Define Their Mission,” Long Range Planning 22,
no. 3 (June 1988) 40.
Ch 8 -3
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Nature of Strategy Implementation
Formulation vs. Implementation
Strategy implementation is different from strategy formulation
Formulation Skills are..
Implementation Skills are....
Ch 8 -4
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5. Divisional and Functional Managers Copyright © 2011 Pearson Education
Nature of Strategy Implementation
Management Perspectives
Shift in responsibility
Strategists
Divisional and Functional Managers
Ch 8 -5
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6. Organizational Structure Copyright © 2011 Pearson Education
Management Issues
Annual Objectives
Policies
Management
Issues
Resources
Organizational Structure
Restructuring
Rewards/Incentives
Ch 8 -6
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7. Production/Operations Copyright © 2011 Pearson Education
Management Issues (cont’d)
Resistance to Change
Natural Environment
Management
Issues
Supportive Culture
Production/Operations
Human Resources
Ch 8 -7
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Annual Objectives
Purpose of Annual Objectives
Basis for resource allocation
Mechanism for management evaluation
Metric for gauging progress on long-term objectives
Establish priorities (organizational, divisional, and departmental)
Ch 7-8
Ch 8 -8
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Resource Allocation
A central management activity
A process of allocating resources consistent with priorities indicated by approved annual objectives
Ch 7-9
Ch 8 -9
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Resource Allocation
There are four types of resources:
Financial resources
Physical resources
Human resources
Technological resources
Ch 7-10
Ch 8 -10
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Managing Conflict
Conflict not always “bad”
No conflict may signal apathy
Can energize opposing groups to action
May help managers identify problems
Ch 7-11
Ch 8 -11
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Managing Conflict
Approaches for Managing Conflicts
Avoidance – ignoring the problem in hopes that the conflict will resolve itself
Defusion – playing down differences between conflicting parties
Confrontation – exchanging members of conflicting parties
Ch 7-12
Ch 8 -12
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Ch 8 -13
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Matching Structure with Strategy
Changes in strategy lead to changes in organizational Structure
Structure largely dictates how objectives and policies will be established
Structure dictates how resources will be allocated
Ch 7-14
Ch 8 -14
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Matching Structure with Strategy
Basic Forms of Structure
Functional Structure
Divisional Structure
Strategic Business Unit Structure (SBU)
Matrix Structure
Ch 7-15
Ch 8 -15
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Ch 8 -16
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Ch 8 -17
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Ch 8 -18
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Restructuring, Reengineering, and E- Engineering
Restructuring
Downsizing
Rightsizing
Delayering
Ch 7-19
Ch 8 -19
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Restructuring, Reengineering, and E- Engineering
Reengineering
Process management
Process innovation
Process redesign
Ch 7-20
Ch 8 -20
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Linking Performance and Pay to Strategies
Situation in the Arab World
Most companies adopt a compensation system which primarily includes a base salary with annual rises.
Increasingly in large Arab corporations there is a tendency to utilize pay systems similar to those found in western countries.
Ch 7-21
Ch 8 -21
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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?
Ch 8 -22
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Production/Operations Concerns
Production processes typically constitute more than 70% of firm’s total assets.
Ch 7-23
Ch 8 -23
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Production/Operations Concerns (cont’d) Production/Operations Decisions
Plant size
Plant location
Product design
Choice of equipment
Shipping and packaging
Technological innovation
Equipment and resource utilization
Kind of tooling
Inventory / Inventory control
Quality control
Cost control
Use of standards
Job specialization
Employee training
Ch 8 -24
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Human Resource Concerns
Human Resource Strategic Responsibilities
Assessing staffing needs/costs
Developing performance incentives
Employee Stock-Ownership Plans (ESOPs)
Child-care policies
Work–life balance issues
Ch 7-25
Ch 8 -25
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Ch 8 -26
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Ch 8 -27
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