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Strategy Implementation:

Organizing for Action

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Strategy Implementation

--Sum total of activities & choices


required for the execution of a
strategic plan

--Process by which strategies and


policies are put into action through
programs, budgets, and procedures

--Everyone in the organization is


involved in the process

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WHAT DOES STRATEGY
IMPLEMENTATION INCLUDE?

•Building a firm capable of carrying out strategy


successfully
•Allocating ample resources to strategy-critical
activities
•Establishing strategy-supportive policies
•Instituting best practices & programs for continuous
improvement
•Installing support systems
•Tying reward structure to achievement of results
•Creating a strategy-supportive corporate culture
•Exerting strategic leadership

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Strategy Implementation

Key Questions in the


Implementation Process –

–Who carries out strategic plan?


–What needs doing to align operations
with new direction/strategy?
–How is work going to be coordinated?

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Common Implementation
Problems

More time than planned


Unanticipated problems
Activities ineffectively coordinated
Crises deferred attention away
Problems in
Employees w/o capabilities
Implementing
Inadequate employee training
Strategic plans
Uncontrollable external factors
Inadequate leadership
Poorly defined tasks
Inadequate information systems

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Strategy Implementation

Programs – Defining Activities


– Purpose is to define activities and to
make the strategy action oriented
– The Matrix of change – It is a tool to check
for:
 Feasibility, sequence of execution, location of activities,
pace & nature of change, and stakeholder’s evaluation.

– It compare proposed and existing


programs and activities and can be used
to address the following types of
questions:
1. How quick change should proceed?
2. In what order change should take place?
3. Is the proposed system stable and coherent?

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The Matrix of Change

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Strategy Implementation
Budgets – Allocate funds to the new
activities
–Define how much implementation
will cost.
–The budget is the last real check a
firm has on the feasibility of the
selected strategy.

Procedures – Handle the day-to-day


details
–Standard Operating Procedures
(SOP’s) detail the various activities
that must be carried out to complete
a corporation’s programs
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Strategy Implementation
Achieving Synergy – between and
among functions and business
units.
– It occurs if ROI is greater than what it
would be if division was an independent
business.

It takes place in one of the six


forms:
1. Shared know-how
2. Coordinated strategies
3. Shared tangible resources
4. Economies of scale or scope
5. Pooled negotiating power
6. New business creation

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Strategy Implementation

Structure follows strategy view–


Changes in corporate strategy lead
to changes in org. structure as
follows:

–New strategy is created


–New administrative problems emerge
–Economic performance declines
–New appropriate structure is invented
–Profit returns to previous level

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STRUCTURE: Stages of Corporate Development

Stage I: Simple Structure (Entrepreneur)


Flexible and dynamic
Decision making tightly controlled
Little formal structure
Planning short range/reactive

Stage II: Functional Structure


Functional specialization
Delegation of decision making
Concentration/specialization in industry

Stage III: Divisional Structure (SBU)


Diverse product lines
Decentralized decision making

Stage IV: Beyond SBU’s: Matrix, Network, and Cellular


Increasing environmental uncertainty & Tech
advances
More empahsis on Teams
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Advanced Types of OrganizationalStrategy Implementation
Structures –
1) Matrix Structure – Combine division with function
form.
–Cross-functional task forces / teams
–Employees with two superiors
2) Network Structure or “non structure” (virtual
organization)
–Elimination of in-house business functions -
OUTSOURCING
–Useful in unstable environments when there is need
for innovation and quick responses
3) Cellular Organization: New type composed of
“cells”
–Includes dispersed entrepreneurship from
DIVISIONAL, customer responsiveness of the MATRIX,
and self-organizing knowledge and asset-sharing of
the NETWORK
–Self-managing / autonomous teams and business
units
–Modular 12
Network Structure

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Organizational Life Cycle
Organization Life Cycle Approach
(Instead of Stage of Development
approach)
Describes how organization grows,
develop and eventually declines

Impact of each stage on strategy and


structure

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TRENDS: Changing Structural Characteristics of Modern Organizations

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Reengineering & Strategy
Implementation

 Radical redesign of business


processes to achieve major gains in
cost, service, or time

 Effective way to implement a


turnaround strategy

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Designing Jobs to Implement Strategies
 Making jobs more relevant to the
company and employees serves as
a source of competitive advantage

 New Job Design Techniques:


1. Job enlargement: Combining tasks
2. Job rotation: Increase variety of tasks
3. Job enrichment: More autonomy and control to
workers

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International Issues

International Development Stages–


–Domestic company
–Domestic company w/export division
–Domestic company w/int’l division
–MNC w/ multidomestic emphasis
–MNC w/global emphasis

Decision Issues for MNC’s:


Strategic alliances to enter new markets
Product-group vs. Geographic-area structure
Centralization vs. Decentralization of
Authority
–Decentralization - pressure for local responsiveness
–Centralization - pressure for efficiency / low cost

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