strategic management concepts &cases 11th edition by Fred R. David Chap 7
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Transcript of strategic management concepts &cases 11th edition by Fred R. David Chap 7
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Implementing Strategies
Management Issues
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Comprehensive Strategic Management Model
Vision &
MissionStatements
Chapter 2
ExternalAudit
Chapter 3
InternalAudit
Chapter 4
Strategies In
Action
Chapter 5
Strategy Analysis
&Choice
Chapter 6
ImplementStrategies:Marketing,Fin/Acct,R&D, CISChapter 8
Measure &Evaluate
Performance
Chapter 9
Strategy Implementation:
Management Issues
Chapter 7
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Management Issues
“You want your people to run the business as if it were their own.”
—William Fulmer —
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Management Issues
“In most organizations, the top performers are paid too little and the worst performers too much.”
—Cass Bettinger—
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Management Issues
Strategy Implementation—more difficult to “do” something
Strategy Formulation—easier to say “going to do it”
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Management Issues
Strategy ImplementationStrategy Formulation
Requires coordination among many persons
Requires coordination among a few individuals
Requires motivation and leadership skills
Requires good intuitive and analytical skills
Primarily an operational process
Primarily an intellectual process
Focuses on efficiencyFocuses on effectiveness
Managing forces during the action
Positioning forces before the action
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Management Issues
Transition to Strategy Implementation
Shift in responsibility from strategists to divisional and functional managers
Implementation problems may arise
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Management Issues
Important Implementation Concerns
• Managers & employees motivated more by self-interests than organizational interests
• Need to involve divisional and functional managers in strategy formulation
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Management Issues & Strategy Implementation
EstablishingAnnual
Objectives
DevisingPolicies Allocating
Resources
AlteringExisting
OrganizationalStructure
Restructuring&
Reengineering
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Management Issues & Strategy Implementation
RevisingReward &IncentivePrograms
MinimizingResistance
toChange
Managing the
NaturalEnvironment
Developing aStrategy
SupportiveCulture
Adapting Production/OperationsProcesses
DevelopingHR
Function
If NecessaryDownsizing
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Management Issues & Strategy Implementation
• Basis for allocating resources
• Mechanism for evaluating managers
• Monitor progress toward long-term objectives
• Establish organizational, divisional, and departmental priorities
EstablishingAnnual
Objectives
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Management Issues & Strategy Implementation
• Basis for solving recurring problems
• Sets boundaries, constraints, and limits on administrative actions
• Sets expectations for managers and employees
• Basis for management control and coordination
DevisingPolicies
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Management Issues & Strategy Implementation
AllocatingResources
• Allows for strategy execution• Sets allocation plan based on
annual objectives• Allocation based on four types
of resources: financial, physical, human, and technological
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Management Issues & Strategy Implementation
• Functional• Divisional• SBU Structure• Matrix Structure
AlteringExisting
OrganizationalStructure
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Management Issues & Strategy Implementation
• Reducing size of firmEmployeesDivisions or unitsHierarchical levels
• Benchmarking against competitors
Ratios out of line
• Primary benefit = cost reduction
Restructuring
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Management Issues & Strategy Implementation
• Employee/customer well-being
Redesign workRedesign jobsRedesign processes
• Improvement in:CostsQualityServiceSpeed
Reengineering
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Management Issues & Strategy Implementation
• Pay-for-performance plans• Flexibility in compensation
systems is necessary• Dual bonus system
Annual objectivesLong-term objectives
• Profit Sharing
RevisingReward &IncentivePrograms
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Management Issues & Strategy Implementation
• Raises anxiety/fear• Force change strategy• Educative change strategy• Rational or self-interest
change strategyMost desirable
ManagingResistance
ToChange
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Management Issues & Strategy Implementation
• Customer & employee sensitivity to environment
• Legal requirements• Earth has become a
stakeholder for all firms• Preserve and conserve
natural resources• Emphasis on developing
environmental perspective
Managingthe
NaturalEnvironment
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Management Issues & Strategy Implementation
Weak linkages between strategic management and organizational culture can jeopardize performance and success
Creating aStrategy-
SupportiveCulture
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Management Issues & Strategy Implementation
• Production processes typically constitute more than 70% of firm’s total assets
• Decisions on:Plant sizeInventory/inventory controlQuality controlCost controlTechnological innovation
Production/OperationsConcerns
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Management Issues & Strategy Implementation
• Assessing staffing needs and costs
• Develop performance incentives
• ESOPs (Employee Stock Ownership Plans)
• Child-care policies• Work-life balance
Human ResourcesConcerns
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Management Issues
Important Implementation Concerns
• Strategy implementation means change
• Successful implementation requires:SupportDisciplineMotivationHard work