1. Chapter 7 Implementing Strategies: Management Issues

2. Strategy Formulation vs Strategy Implementation
Positioning forces
Effectiveness
Intellectual process
Requires intuitive and analytical skills
Coordination among a few individuals
Implementation
Managing forces
Efficiency
Operational process
Requires motivation and leadership skills
Coordination among many people

3. Strategy Implementation Requirements
Annual objectives
Policies (set boundaries, constrains, limits)
Resource allocation
Financial
Human
Physical
Technological

4. Conflict Management Strategies
How to Prevent Conflict
Emphasize Organizational Goals
Structure Tasks
Promote Organizational Communication
Avoid Win-Lose situations
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5. Strategy and Structure
A change in strategy often requires a change in structure because:
Structure largely dictates how objectives and policies will be established;
Structure dictates how resources will be allocated.

6. Figure 7-3: Chandler’s Strategy-Structure Relationship
New strategy is formulated
New administrative problems emerge
Organizational performance declines
Organizational performance improves
A new organizational structure is established
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7. Types of Organizational Structure
Functional (Centralized)
Divisional (Decentralized)
Geographic
Product
Customer
Process
Strategic Business Unit (SBU)
Matrix
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8. A Functional Organizational Structure Chief Executive Officer
VP of Production
VP of Marketing
VP of Finance
Plant Manager
Sales Manager
AccountingManager
Engineering Manager
AdvertisingManager
Budgeting Manager
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9. A Divisional Organizational Structure
Chief Executive Officer
Vice-President of Personnel
Vice-President of Operations
Vice-President of Finance
U.S. Manager
European Manager
Asian Manager
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10. The Strategic Business Unit (SBU) Structure
Chief Executive Officer
Vice-President of Administration
Vice-President of Operations
Group V.P.
SBU
Group V.P.
SBU
Group V.P.
SBU
Division 1
Division 3
Division 5
Division 2
Division 4
Division 6
©1999 Prentice Hall

11. Restructuring & Reengineering
Restructuring (downsizing, rightsizing, delayering) – involves reducing the number of employees, number of divisions or units, and number of hierarchical levels in the firm’s organizational structure.
Reengineering –reconfiguring or redesigning work, jobs, and processes for the purpose of improving cost, quality, service, and speed.

12. Ways to Link Compensation With Company Performance
Profit Sharing
Stock Options
Bonuses
Gain Sharing
Commissions
©1999 Prentice Hall

13. Factors Influencing Employee Compensation
Individual Performance
Group Performance
Plant-Wide Productivity
Company Performance
Profit-Sharing
Pay Systems
Job Description
Job Analysis
Labor/Market Conditions
Seniority
©1999 Prentice Hall

14. 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?

15. Managing Resistance to Change
Force change strategy
Educative change strategy
Rational or self-interest change strategy

16. Strategy Implementation: Production/operations & HR Concerns
Production related decisions have a dramatic impact on the success or failure of strategy implementation efforts.
Staffing, compensation and benefits must all be addressed.

17. Implementation Through Leadership
Leadership is any behavior that develops or uses power to influence other peoples’ behavior. It is used by management to achieve enthusiastic, willing, zealous participation of followers to accomplish the organization’s objectives.
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