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Implementing Strategy

IMPLEMENTING STRATEGY THROUGH RESTRUCTURING AND REENGINEERING: THE COMPANYS STRUCTURE, LEADERSHIP, AND CULTURE

McKinsey 7- S Framework

Strategy

Structure

Systems

Shared Values (Culture)

Skills (management)

Style (leadership)

Staff
(management)

STRUCTURING AN EFFECTIVE ORGANIZATION

Structure is the basic way the firms different activities are organized

STRUCTURING AN EFFECTIVE ORGANIZATION


The 5 basic primary structures are:
1. Functional organizational structure 2. Geographic organizational structure 3. Divisional or strategic business unit structure 4. Matrix organizational structure 5. Product-Team structure

STRUCTURING AN EFFECTIVE ORGANIZATION (Continue)


Guidelines to match structure to strategy:
1. Restructure to emphasize and support strategically critical activities 2. Reengineer strategic business processes

3. Downsize, outsource, and self-manage

STRUCTURING AN EFFECTIVE ORGANIZATION (Continue)


4. Recognize that strategy and structure often evolve in a predictable pattern:
a. Volume expansion b. Geographic expansion c. Vertical integration d. Product diversification

ORGANIZATIONAL LEADERSHIP

Leadership includes the need to establish an effective style as well as the necessary staff and skills to execute the strategy.

ORGANIZATIONAL LEADERSHIP

Strategic Leadership: Embracing Change 1. Clarifying strategic intent 2. Building an organization

3. Shaping organization culture

ORGANIZATIONAL LEADERSHIP (Continue)


Assignment of key managers :

1. The right managers be in the right position to facilitate execution of the new strategy.
2. The confidence in the individual occupying crucial managerial positions. 3. Ability and education, previous track record and experience, and personality and temperament.

ORGANIZATIONAL LEADERSHIP (Continue)


4. Whether utilize promotable executives or bring in new personnel.
5. Managers ability to delegate and to handle larger span of control in an environment of restructuring, downsizing, and self management cases.

ORGANIZATIONAL CULTURE

Culture is the shared values that create the norms of individual behavior and the tone of the organization.

ORGANIZATIONAL CULTURE
The most common ways that Leaders typically attempt to manage and create distinct cultures. 1. Emphasize key themes or dominant values (Quality, Differentiation, Cost Advantage) 2. Encourage dissemination of stories and legends about core values. (3M tells innovation stories)

ORGANIZATIONAL CULTURE
3. Institutionalize practices that systematically reinforce desired beliefs and values.( McDonald contest)

4. Adapt some common themes in their own unique ways. (GE: Better than The Best )

ORGANIZATIONAL CULTURE (Continue)


Managing organizational culture in a global organization: 1. Social norms

2. Values and attitude


3. Religion 4. Education

ORGANIZATIONAL CULTURE (Continue)


Managing the strategy-culture relationship
1. Link to mission

2.
3.

Maximize synergy
Manage around the culture

4.

Reformulate the strategy or culture

Managing the strategy-culture relationship

Many
Changes in key organizational factors that are necessary to implement the new strategy

Link changes to basic mission and fundamental organizational norms

Reformulate strategy or prepare carefully for longterm, difficult cultural change

Few
Maximize Synergy - focus on reinforcing culture. Manage around the culture.

High

Low

Potential compatibility of changes with existing culture