UDESH REGULAR

FOR GROUP-2, MAY 2024

§ Subject- Strategic Management

§ Chapter- Strategic Implementation and Evaluation

§ Lecture No.- 4
Recap of Previous Lecture

Topic Doubts Solving

Topics to be Covered

Topic Concept & Questions

F. Matrix Structure
- It is used when neither functional nor divisional forms are appropriate for org.

- It is a combination of functional and divisional structure.

- employees have two superiors i.e., a product/ project manager and functional manager.

- It is the most complex structure since there is both vertical & horizontal flow of
authority.

- It has dual sources of reward and punishment, shared authority, dual reporting channel
and need for extensive communication, visible results of work etc.

- It results in higher overhead because it has more management positions.

- It is very useful when the external environment is very complex and changeable.

- However there can be produce conflicts revolving around duties, authority, and
resource allocation.

- It is widely used in many industries, including construction, healthcare, research and

defence.

It is often found in an organization or within an SBU when the following three conditions
exist:

i) ideas need to be cross fertilized across projects or products,

ii) resources are scarce, and

iii) abilities to process information and to make decision needs to be improved.

For development of matrix structure Davis and Lawrence, have proposed three distinct
phases:

1. Cross-functional task forces:

Temporary cross-functional task forces are initially used when a new product line is being
introduced. A project manager is in charge as the key horizontal link.

2. Product/brand management:

If the cross-functional task forces become more permanent, the project manager
becomes a product or brand manager and a second phase begins. In this arrangement,
function is still the primary organizational structure, but product or brand managers act
as the integrators of semi-permanent products or brands.
For development of matrix structure Davis and Lawrence, have proposed three distinct
phases:

3. Mature matrix:

The third and final phase of matrix development involves a true dual-authority structure.
Both the functional and product structures are permanent. All employees are connected
to both a vertical functional superior and a horizontal product manager. Functional and
product managers have equal authority and must work well together to resolve
disagreements over resources and priorities.
G. Network Structure
►A corporation organized in this manner is often called a virtual organization as many
activities are outsourced.

► It is virtual elimination of inhouse business functions (non-structure).

►The network structure becomes most useful when the environment of a firm is unstable
and is expected to remain so.

► In this there are less salaried employees, and majority are contract workers for
specific project or time.

► The organization is, in effect, only a shell, with a small headquarters acting as a
“broker”, electronically connected to some completely owned divisions, partially owned
subsidiaries, and other independent organisation.
 Advantages Disadvantages
►Allows a company to concentrate on its own ►Availability of numerous partners can be
competencies & outsourcing of other functions a source of trouble.
to experts in their field. ►Outsourcing of functions may keep the
►It provides more flexibility and adaptability Firm away from discovering any synergies.
to meet/face rapid change in technology, taste ►If a Firm overspecializes in only few
and preferences. functions, there is a risk of choosing the
►Most useful when environment of a Firm is wrong function and thus becoming non-
unstable. competitive.

►Low employee morale.

Hourglass Structure
►The role played by middle management is diminishing as the tasks performed by them
are increasingly being replaced by the technological tools.

►It consists of three layers with constricted middle layer. The structure has a short and
narrow middle-management level.

►In this manager are handling cross functional issues like production, finance, marketing
etc.
 Advantages Disadvantages
►Reduced cost due to reduction of middle a) Since size of middle management is reduced,
level management posts. promotion opportunity for lower-level managers

►Enhanced responsiveness by simplifying is also reduced.

decision making. b) Lower employee morale at lower level due to

►Decision making authority is close to monotony.

source of information, so it’s faster.
Organization Culture
Corporate culture refers to a company’s values, beliefs, business principles, traditions,
ways of operating, and internal work environment.
Where Does Corporate Culture Come From?
It is reflected or manifested comes from:

• Official policies and practices

• Ethical standards

• Management practices

• Dealing with stakeholders i.e, relationship with employees, shareholders, vendors, trade
union, Government etc.

• Employee’s attitude and behaviour

• Legends people repeat about in organization

• Peer pressure that exists in organization.

Culture: ally or obstacle to strategy execution?
An organization's culture is either an important contributor or an obstacle to successful
strategy execution. The beliefs, vision, objectives, and business approaches and practices
underpinning a company's strategy may or may not be compatible with its culture.

If compatible than it becomes valuable support and it in conflict than it becomes a

blockage.
Role of culture in strategy execution
►Culture dictates not only the way managers behave within the organization but also
decisions they take.

►A strong strategy-supportive culture nurtures and motivates people to do their jobs in

ways conducive to effective strategy execution; it provides structure, standards, and a
value system in which to operate; and it promotes strong employee identification with the
company's vision, performance targets, and strategy.

►Employees are motivated to take challenging work to realize company’s vision & do their
work competently.
Changing a problem culture:
- Changing a problem culture is very difficult because of the heavy anchor of deeply held
values and habits-people cling emotionally to the old and familiar.

- It takes combined management efforts over a point of time to replace unhealthy culture
with healthy culture or remove unwanted aspects of problem culture and in still those
which are more supportive.

- first step - Diagnose which facets of the present culture are strategy supportive and
which are not.

- Second step - Managers have to talk openly and forthrightly to all concerned about
those aspects of the culture that have to be changed.

- Third step - The talk has to be followed swiftly by visible aggressive action to identify
and modify the culture to create right strategy-culture fit.
Strategic Leadership
Strategic leadership sets the firms direction by

ü developing and communicating vision of future,

ü formulate strategies in the light of internal and external environment,
ü brings about changes required to implement strategies and
ü inspire the staff to contribute to strategy execution.

A leader has to play various roles like entrepreneur, strategist, culture builder, visionary,
spokesperson, negotiator, motivator, arbitrator, policy maker, policy enforcer, listener
and decision maker.
Five leadership roles to play in pushing for good strategy execution:
• Staying on top of what is happening, closely monitoring progress, solving out issues, and
learning what obstacles lie in the path of good execution.

• Promoting a culture of esprit de corps (feeling of pride) that mobilizes and energizes
organizational members to execute strategy in a competent fashion and perform at a
high level.

• Keeping the Organization responsive to changing situation.

• Exercising ethical leadership and insisting that the company conduct its affairs like a
model corporate citizen.

• Pushing corrective actions to improve strategy execution and performance.

Leadership role in implementation:
- The strategic leaders must be able to use the strategic management process effectively
by guiding the company in ways that result in the formation of strategic intent and
strategic mission, facilitating the development and implementation of appropriate
strategic plans and providing guidance to the employees for achieving strategic goals.

- Effective strategic leaders must be able to deal with the diverse and cognitively
complex competitive situations that are characteristic of today’s competitive landscape.
A Strategic leader has several responsibilities, including the following:
• Making strategic decisions.

• Ensuring effective communication in the organisation.

• Managing change in the organisation.

• Sustaining high performance over time.

• Formulating policies and action plans to implement strategic decision.

• Managing human capital (perhaps the most critical of the strategic leader's skills).

• Creating and sustaining strong corporate culture

 Transformational leadership style Transactional leadership style
- It uses charisma and enthusiasm to inspire people - It focuses on design system and controlling
to work for good of Organization. organisation activity.

It is appropriate It is more appropriate

►in turbulent/ unsafe environment or ►in static environment, or

►in industries at start or end of PLC or ►in mature industry; or

►In poorly performing organization. ►in organizations that are performing well.
 Transformational leadership style Transactional leadership style
- These leaders inspire employees by offering - It uses the authority of its office to exchange
excitement, vision, intellectual stimulation and reward and punishment.
personal satisfaction.

- They prefer a more formalized approach to

- They motivate followers to do more than motivation, setting clear goals with explicit rewards
expectation by increasing their self confidence. or penalties for achievement or non-achievement.
Strategic Control
- It involves monitoring the activity, measuring results against predefined standards,
analysing & correcting deviation as necessary & adapting the system.

- It is a function intended to regulate & check and ensure that performance of planned
activities achieve pre-determined goals.

Primarily there are three types of organizational control, viz., operational control,
management control and strategic control.
Operational Control
- It is concerned with individual task or transaction as against total management
functions.

- One of the ways to identify operational control area is there should be clear cut &
measurable relationship between input & output.

- It ensures that processes are regulated within certain ‘tolerances’ limit.

- Examples: Stock control (maintaining stocks between set limits), Production control
(manufacturing to set programmes), Quality control (keeping product quality between
agreed limits), Cost control (maintaining expenditure as per standards), Budgetary control
(keeping performance to budget)
Management Control
- It is concerned with integrated activities of a complete department, division or even
organization.

- It is more aggregative & inclusive than operational control.

- It is a process by which management ensure that resources obtained are used

effectively and efficiently to achieve objectives.
- Example: Inventory management
Strategic Control
- According to Schendel and Hofer "Strategic control focuses on the dual questions of
whether:

(1) the strategy is being implemented as planned; and

(2) the results produced by the strategy are those intended."

- It is directed towards identifying problems and changes in premises and making

necessary adjustments.
Thank You