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Strategy Implementation - Organizing For Action

The document discusses various aspects of strategy implementation. It describes strategy implementation as the activities required to execute a strategic plan. It also discusses common problems in strategy implementation reported by Fortune 500 companies, such as taking more time than planned and ineffective coordination. The document outlines developing programs, budgets, and procedures to operationalize strategies. It further discusses achieving synergy, organizational structures that support strategies, and reengineering as an approach to strategy implementation.

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Anuska Jayswal
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56 views

Strategy Implementation - Organizing For Action

The document discusses various aspects of strategy implementation. It describes strategy implementation as the activities required to execute a strategic plan. It also discusses common problems in strategy implementation reported by Fortune 500 companies, such as taking more time than planned and ineffective coordination. The document outlines developing programs, budgets, and procedures to operationalize strategies. It further discusses achieving synergy, organizational structures that support strategies, and reengineering as an approach to strategy implementation.

Uploaded by

Anuska Jayswal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Strategy Implementation:

“Organizing for Action”


Strategy Formulation – Implementation
Relationship
Strategy Formulation – Implementation
Relationship
Strategy Formulation – Implementation
Relationship
Strategy Implementation

Strategy implementation
 the sum total of all activities and choices required
for the execution of a strategic plan
 Who are the people to carry out the strategic
plan?
 What must be done to align company operations
in the intended direction?
 How is everyone going to work together to do
what is needed?
Common Strategy
Implementation Problems
A survey of 93 Fortune 500 firms revealed that more than half of the corporations experienced the following 10 problems when they attempted to
implement a strategic change

1. Took more time than planned


2. Unanticipated major problems
3. Ineffective coordination
4. Competing activities and crises created distractions
5. Employees with insufficient capabilities
6. Lower-level employees were inadequately trained
7. Uncontrollable external environmental factors
8. Poor departmental leadership and direction
9. Inadequately defined implementation tasks and activities
10.Inefficient information system to monitor activities
Developing Programs, Budgets
and Procedures
Program
 a collection of tactics where a tactic is the
individual action taken by the organization as an
element of the effort to accomplish a plan
 The purpose of a program or a tactic is to make
a strategy action-oriented.
Timing Tactics: When to Compete

Timing tactic
 First mover
 Late movers
Market tactic
 Offensive tactic
 Defensive tactic
Developing Programs, Budgets
and Procedures

Plan a budget
Fix the Procedures
 Organizational routines
 detail the various activities that must be carried
out to complete a corporation’s programs
 Standard operating procedures
Achieving Synergy

Synergy
 exists for a divisional corporation if the return on
investment is greater than what the return would
be if each division were an independent business
Forms of Synergy

Shared know-how

Coordinated strategies

Shared tangible resources

Economies of scale or scope

Pooled negotiating power

New business creation


Structure Follows Strategy

Structure Follows Strategy


 changes in corporate strategy lead to changes in
organizational structure
1. New strategy is created
2. New administrative problems emerge
3. Economic performance declines
4. New appropriate structure is invented
5. Economic performance rises
Stages of Corporate Development
I. Simple Structure
 Flexible and dynamic handled by entrepreneur herself
II. Functional Structure
 Entrepreneur is replaced by a team of managers (Single
product line in single industry)
III. Divisional Structure
 Management of diverse product lines in numerous industries
 Decentralized decision making
IV. Beyond SBU’s
 Matrix
 Network
Simple Organization Structure
Functional Structure
Divisional Structure

Copyright © 2015 Pearson Education, Inc. 17


Matrix Structure

Copyright © 2015 Pearson Education, Inc. 18


In matrix, you have both vertical and
horizontal flow of work going simultaneously:
Functional and Product/Project
That’s why employees have two bosses –
horizontal (Product/Project) and vertical
(Functional)
Advantages:-
 Overcome problem of subunit orientation
 Allows people to learn about other function
 Quick transfer of employees
 Promotes a concern both cost and quality
Disadvantages:-
 Conflicts between functions and projects
 Hard to design and manage relationships
Blocks to Changing Stages

Internal
 Lack of resources
 Lack of ability
 Refusal of top management to delegate
External
 Economic conditions
 Labor shortages
 Lack of market growth
Blocks to Changing Stages
(Entrepreneurs)

Loyalty to comrades

Task oriented

Single-mindedness

Working in isolation
Organizational Life Cycle

Organizational life cycle


 describes how organizations grow, develop and
decline
Advanced Types of
Organizational Structures
Matrix structures
 functional and product forms are combined
simultaneously at the same level of the
organization
Matrix Structure
Three types of Matrix Organization:-
 Weak Project / Strong Functional Matrix
 Balanced/Functional Matrix
 Strong Project / Weak Functional Matrix
Advanced Types of
Organizational Structures

Network structure
 Virtual elimination of in-house business functions
 Cluster of different organizations whose actions
are coordinated by contracts and agreements
rather than by formal hierarchy of authority.
 Reduces labor cost, avoids bureaucratic costs and
access to low cost resources.
Network Structure
Virtual organization
 composed of a series of project groups or
collaborations linked by constantly changing
nonhierarchical, cobweb-like electronic networks
• It eliminates physical presence for info and
communication – home office
• Interdependent team members
• Geographic dispersion of participants
• Temporary in nature
• Doesn’t have any head office or org chart
• Support from Top Management
Cellular/Modular Organization: A New Type
of Structure?
Cellular/Modular structure
 composed of cells (self-managing teams,
autonomous business units, etc.) which can
operate alone but which can interact with other
cells to produce a more potent and competent
business mechanism
 Beginning to appear in firms that are focused on
rapid product and service innovation
Cellular/Modular structure typically draws
from the dispersed entrepreneurship of
divisional structure, customer responsiveness
of the matrix and self organizing knowledge
and asset sharing from the network structure.
Reengineering and
Strategy Implementation
Reengineering
 the radical redesign of business processes to
achieve major gains in cost, service or time
 effective program to implement a turnaround
strategy

“If this were a new company, how would we run this


place?”
Six Sigma

Six Sigma
 analytical method for achieving near perfect
results on a production line
 emphasis is on reducing product variance in order
to boost quality and efficiency
 Less defect and consistency in quality
Lean Six Sigma
 includes the removal of unnecessary steps in any
process and fixing those that remain
Process of Six Sigma
1. Define a process where results are poorer than
average
2. Measure the process to determine current
performance
3. Analyze the information to pinpoint where things
are going wrong
4. Improve the process and eliminate the error
5. Establish controls to prevent future defects from
occurring
Designing Jobs to
Implement Strategy

Job design
 the study of individual tasks in an attempt to make
them more relevant to the company and to the
employees
 Job enlargement
 combining tasks to give a worker more of the same
type of duties to perform
 Job rotation
 moving workers through several jobs to increase
variety
Designing Jobs to
Implement Strategy

Job enrichment
 altering the jobs by giving the worker more
autonomy and control over activities
Job characteristics
 The worker needs to feel a sense of responsibility,
feel the task to be meaningful and receive useful
feedback on his/her performance.
Thank You!

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