Strategy Implementation

PRESENTED BY: GROUP 3

BALLADO, ANJELLINE

CALICA, DANA

VALENZUELA, KYLE

STRATEGY

IMPLEMENTATION

STRATEGY IMPLEMENTATION IS THE PROCESS

THAT PUTS PLANS AND STRATEGIES INTO

ACTION TO REACH GOALS.

A STRATEGIC PLAN IS A WRITTEN DOCUMENT

THAT LAYS OUT THE PLANS OF THE BUSINESS

TO REACH GOALS; BUT WILL SIT FORGOTTEN

WITHOUT STRATEGIC IMPLEMENTATION.

THE IMPLEMENTATION MAKES THE

COMPANY’S PLANS HAPPEN.

WHY

STRATEGIES

FAIL?

COMPANY INITIATIVES DON’T

ALIGN WITH STRATEGY

COMPANY PROCESSES DON’T

ALIGN WITH STRATEGY

EMPLOYEES AND STAKEHOLDER

FAIL TO ENGAGE

5 STEPS TO

SUCCESSFUL STRATEGY

IMPLEMENTATION

1. ALIGN YOUR INITIATIVES

A KEY ROAD TO FAILED IMPLEMENTATION IS WHEN WE CREATE

A NEW STRATEGY BUT THEN CONTINUE TO DO THE SAME

THINGS OF OLD.

A NEW STRATEGY MEANS NEW PRIORITIES AND NEW

ACTIVITIES ACROSS THE ORGANIZATION.

INITIATIVES SHOULD BE ANALYZED AGAINST THEIR STRATEGIC

VALUE AND THE IMPACT TO THE ORGANIZATION.

2. ALIGN BUDGETS & PERFORMANCEIDEALLY YOUR CAPITAL BUDGETS ARE DECENTRALIZED, SO EACH

DIVISION CAN BOTH ALLOCATE AND MANAGE THE BUDGETS TO

DELIVER THE DIVISION’S STRATEGIC INITIATIVES.

3. STRUCTURE FOLLOWS STRATEGY

A TRANSFORMATIONAL STRATEGY MAY REQUIRE A

TRANSFORMATION TO STRUCTURE.

4. ENGAGING STAFF

PREPARE. INCLUDE. COMMUNICATE. CLARIFY.

5. MONITOR AND ADAPT

A STRATEGY MUST BE A LIVING, BREATHING

DOCUMENT. AS WE ALL KNOW: IF THERE’S ONE

CONSTANT IN BUSINESS THESE DAYS IT’S CHANGE.

STRATEGIES MUST BE ADAPTABLE AND FLEXIBLE

SO THEY CAN RESPOND TO CHANGES IN BOTH OUR

INTERNAL AND EXTERNAL ENVIRONMENTS.

COMMUNICATING

STRATEGY

1. Recognize importance of strategic organizational communication.

2. Name the four elements of strategic communication.

3. Understand how values & ethics influence communication activity.

4. Set goals that are appropriate and effective.

5. Use situational knowledge to enhance communication.

6. Understand and demonstrate communication competence.

7. Understand causes & methods of dealing with communication anxiety.

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MODEL OF STRATEGIC

COMMUNICATION

THE ORGANIZATIONAL

FRAMEWORK

Values are often clarified by examining the mission

statement, which may include the following:

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Primacy of Customer

Honesty and Integrity

Respect for Other Workers

Innovative Thinking

Quality Service

Creativity

High Ethical Standards

SUGGESTED GUIDELINES FOR

ENHANCING ETHICAL STANDARDS

1. Maintain openness.

2. Keep messages accurate.

3. Avoid deception.

4. Consistently behave.

5. Keep confidences.

6. Ensure timeliness of communication.

7. Confront unethical behavior.

8. Cultivate empathic listening.

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DISCUSSION QUESTION:

HOW DO PERSONAL VALUES AFFECT

ORGANIZATIONAL BEHAVIOR?

Consider this quote:

A single injustice anywhere, is an injustice everywhere. Stand firm in the face of adversity and remain true to your conviction.

Anonymous

ORGANIZATIONAL STRUCTURE

Virtual Organization

Tall Organization

Flat Organization

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ORGANIZATIONAL LEARNING

• Engage in adaptive learning.

• Understand organizational values.

• Develop specific knowledge of the organization.

• Observe the successes and failures of others.

• Get on-the-job training.

• Understand office politics.

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DIMENSIONS OF

COMMUNICATION CLIMATE

Supportiveness

Participative Decision Making

Trust, Confidence, and Credibility

Openness and Candor

High Performance Goals

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GOAL SETTING PROCESS

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COMPETENT MESSAGES

NEED TO BE…

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Specific

Accurate

Honest

Logical

Complete

Succinct

Deadline-oriented

Relevant

Timely

Feedback-oriented

INTERNAL COMMUNICATION

Downward Communication

Job instructions

Job rationale

Procedures and practices

Feedback

Upward Communication

Employee performance

Attitudes and understanding

Activity reports on accomplishments

Horizontal Communication

Problem solving

Informal networks

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EXTERNAL COMMUNICATION

Messages are exchanged between the organization and its

environment.

Organizations use newsletters, annual reports and events.

Organizations are using the web to inform the public.

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Do you prefer the telephone? E-mail? Instant Messaging? Text Messaging? Face-to Face?

Are there some communication channels that you use more often?

For which situation do you prefer to use one channel over another?

What do you think of personal web pages and blogs? How could organizations benefit from this type of technology?

ANXIETY MANAGEMENT

CAUSES OF ANXIETY

Novelty

Formality

Subordinate status

Conspicuousness

Large groups

Different Cultural Experiences

Evaluation

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ANXIETY MANAGEMENT

Everyone experiences some level of anxiety.

Each fear has its own origin.

Three (E’s) of success:

Encode messages carefully.

Explain each idea concisely.

Express each idea with an appropriate energy level.

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STRATEGY AND

STRUCTURE

LEGAL BUSINESS STRUCTURES

Sole Proprietorship

Partnership

general partnerships

limited partnerships

Corporation


Sole Proprietorship

Easy to form with few regulations

The owner is the business (same legal entity).

No double tax

Owner has unlimited liability

Limited life

Difficult to raise money


PartnershipShared System (funding and liability)

Shared ManagementInexpensive and easy to formNo double taxDifficult to raise money


Corporation Independent legal entity and

independent life

More complicated to form (bylaws, Charters, etc.)

Three sets of distinct stakeholders: shareholders, directors and manager

Ownership can be readily transferable

Limited liability

Unlimited life

Possibility of fund raising

ORGANIZATIONAL STRUCTURE AND CONTROLS

Organizational Structure:

Formal reporting relationships

Authority and decision-making

hierarchy

It is critical to match organizational

structure to the firm’s strategy.


Effective structures provide:

Stability and Flexibility

Structural stability provides:

Capacity to consistently and

predictably manage daily work

routines


Structural flexibility provides:

The opportunity to explore

competitive possibilities

The allocation of resources to

activities that shape needed

competitive advantages

RELATIONSHIPS BETWEEN STRATEGY AND

STRUCTURE

Strategy and structure have a reciprocal relationship:

Structure flows from or follows the selection of the firm’s strategy but …

Once in place, structure can influence current strategic actions as well as choices about future strategies.

SIMPLE STRUCTURE

Owner-manager

Makes all major decisions directly.

Monitors all activities.

Matched with focus strategies and business-level

strategies

Commonly complete by offering a single product line

in a single geographic market.

SIMPLE STRUCTURE

Growth creates complexity and

structural challenges

Owner-managers

Commonly lack organizational skills

and experience.

Become ineffective in managing the

specialized and complex tasks in

multiple organizational functions.

FUNCTIONAL STRUCTURE

Chief Executive Officer (CEO)

Limited corporate staff

Functional line managers in dominant functional

areas:

Production Marketing Engineering

Accounting R&D Human resources

MULTIDIVISIONAL STRUCTURE

Strategic Control

Operating divisions function as separate businesses or profit

centers

Top corporate officer delegates responsibilities to

division managers

For day-to-day operations

For business-unit strategy

Appropriate as firm grows through diversification

MULTIDIVISIONAL STRUCTURE

Three Major Benefits

Corporate officers are able to more accurately

monitor the performance of each business, which

simplifies the problem of control.

Facilitates comparisons between divisions, which

improves the resource allocation process.

Stimulates managers of poorly performing divisions

to look for ways of improving performance.

MATCHING STRATEGY AND FUNCTIONAL

STRUCTURE

Different forms of the functional organizational

structure are matched to:

Cost leadership strategy

Differentiation strategy

Integrated cost

leadership/differentiation

strategy

THE EXTERNAL ENVIRONMENT

GENERAL ENVIRONMENT

Dimensions in the broader society that influence an

industry and the firms:

• Demographic

• Economic

• Political-legal

• Socio-cultural

• Technological

• Global

INDUSTRY ENVIRONMENT

The set of factors influencing a firm and its competitive

actions and competitive responses

Threat of new entrants

Power of suppliers

Power of buyers

Threat of product substitutes

Intensity of rivalry among competitors

FIVE FORCES MODEL

THREAT OF NEW ENTRANTS: BARRIERS TO

ENTRY

Economies of scale

Product differentiation

Capital requirements

Switching costs

Access to distribution channels

Cost disadvantages independent of scale

Government policy

Expected retaliation

BARGAINING POWER OF SUPPLIERS

Supplier power increases when:

Suppliers are large and few in number

Suitable substitute products not available

Individual buyers are not large customer

Suppliers’ goods are critical to the buyers

Suppliers’ products has high switching costs

Suppliers pose a threat to integrate forward

BARGAINING POWER OF BUYERS

Buyer power increases when:

Buyers are large and few in number

Buyers purchase a large portion of an industry’s total output

Buyers’ switching costs are low.

Buyers can pose threat to integrate backward

THREAT OF SUBSTITUTE PRODUCTS

The threat of substitute products increases

Buyers face low switching costs

The substitute product price is low.

Substitute product’s quality and performance are equal to or

greater

Differentiated industry products that are valued by

customers reduce this threat

INTENSITY OF RIVALRY AMONG COMPETITORS

Industry rivalry increases when:

Numerous competitors with equal balance

Industry growth slows or declines

High fixed costs

Lack of differentiation or low switching costs

High strategic stakes

High exit barriers

Low entry barriers

INTERPRETING INDUSTRY ANALYSES

UnattractiveIndustry

Suppliers and buyers have strong positions

Strong threats from substitute products

Intense rivalry among competitors Low profit potential

INTERPRETING INDUSTRY ANALYSES

AttractiveIndustry

High entry barriers

Suppliers and buyers have weak positions

Few threats from substitute products

Moderate rivalry among competitors High profit potential

BUSINESS-LEVEL STRATEGY

An integrated and coordinated set of

commitments and actions the firm

uses to gain a competitive advantage

by exploiting core competencies in

specific product markets.

THE PURPOSE OF A BUSINESS-LEVEL

STRATEGY

Business-Level Strategies

create differences between the firm’s position relative

to those of its rivals

Perform activities differently or

Perform different activities as compared to its rivals

TYPES OF POTENTIAL COMPETITIVE

ADVANTAGE

Lower overall costs than rivals

Differentiate the firm’s product or service and

command a premium price

COMPETITIVE SCOPE

Broad Scope

The firm competes in many customer segments.

Narrow Scope

The firm selects a segment or group of segments in the

industry and tailors its strategy to serving them at the

exclusion of others.

TYPES OF BUSINESS-LEVEL STRATEGIES

Cost Uniqueness

DifferentiationCost Leadership

Focused

Differentiation

Focused Cost

Leadership

Integrated Cost

Leadership/

Differentiation

Broad

Target

Narrow

Target

Competitive Advantage

Competitive

Scope

ORGANIZATIONAL

LEADERSHIP

LEADERSHIP THEORIES: AN OVERVIEW

The Trait Perspective

“Great Man” theories focused on identifying innate

(universal) individual qualities or attributes of

leaders that distinguish them from nonleaders or

noneffective leaders.

The Behavior Perspective

Theories examining the people- and task-oriented

behaviors and organizational roles that make leaders

most effective.

1–60

LEADERSHIP THEORIES

The Contingency Perspective

The idea that effective leadership (as a style) in a

particular case depends on interactions among the

leader, followers, and the situation.

The Power–Influence Perspective

A sociological viewpoint of the leadership process in

terms of social relations involving the interplay of

power, constraints, conflict, and cooperation.

1–61

LEADERSHIP THEORIES

The Gender–Influence Perspective

Analyses that consider how the leadership styles of

female leaders differ for those of male leaders.

The Integrative Perspective

Studies of charismatic leaders that attempt to

combine trait, behavior, and contingency theories to

explain leader–follower relationships.

The Exchange Perspective

Theories that focus on leader–follower interactions—

their nature and effects on leaders, followers, and the

organization.1–62

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LEADERSHIP

Is a dialectical, proactive process wherein an

individual persuades others to do something they

would not otherwise do.

Is socially constructed through the interaction of

leaders and followers within a specific context

and is equated with power.

1–63

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THE NATURE OF LEADERSHIP

Common Assumptions:

Leaders—through their personal qualities, influence,

and actions—profoundly shape societal events (i.e.,

make a difference).

A leader affects and is affected by followers and the

environment within which he or she operates.

Managerial leadership is a process of social

influence whereby an individual exerts influence on

others in an organizational context.

1–64

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THE NATURE OF LEADERSHIP

Effects of Large-scale Industrialization

The bureaucratic need (coordination) for managers

Monitoring and controlling the productivity, quality, and

performance of subordinates.

The organizational need (direction) for leadership

Strategic management in building and deploying a

committed workforce of team members.

1–65

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LEADERSHIP VERSUS MANAGEMENT

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1–66

Management

Maintain the status

quo

Create order and

consistency

“Doing things right”

Transactional

(contractual)

relationships

Leadership

Create vision

Create change or

movement

“Doing the right

thing”

Transformational

relationships

(psychological

contract)

MANAGEMENT AND LEADERSHIP COMPARED

1–67

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Table 1.1Source: Kotter, J. P. (1990). A Force for Change: How Leadership Differs from Management. New

York: Free Press; Kotter, J. P. (1996). Leading Change. Boston: Harvard Business School Press.

LEADING ORGANIZATIONAL CHANGE

Steps in the Change Process:

Step 1: Establish a sense of urgency.

Step 2: Create the guiding coalition.

Step 3: Develop a vision and a strategy.

Step 4: Communicate the change vision.

Step 5: Empower broad-based action.

Step 6: Generate short-term wins.

Step 7: Consolidate gains and produce more change.

Step 8: Anchor new approaches in the culture.

1–68

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REFLECTIVE QUESTION ▼

Think about a position you have held in an

organization.

To what extent were you a leader?

To what extent were you a follower?

Did the managers exhibit managerial or

leadership behaviors?

Do you believe that managers and leaders

reflect fundamentally different personality

types?

1–69

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FACTORS USED TO MEASURE

ORGANIZATIONAL PERFORMANCE

Figure 1.1

METHODOLOGICAL CHALLENGES

Gaining management participation and

disclosure of commercially sensitive information.

Making subjective judgments about which

criteria to study, which measures to use and the

weight to be assigned each measure.

Negatively correlated multiple criteria.

Isolation of external variables to reduce their

influence.

Difficulties in identifying causal links.

1–71

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LEADERSHIP AS A PROCESS

PERSPECTIVES ON LEADERSHIP

MOTIVATION

Willingness to exert high levels of effort to reach

organizational goals.

It is the internal drive to accomplish a particular

objective.

MOTIVATION IS WHAT MAKES PEOPLE

WANT TO WORK!

BASIC ASSUMPTIONS

Everyone is motivated

Key?

Two types of motivation

Intrinsic

Extrinsic

TYPES OF MOTIVATION

Extrinsic Motivation:

"What gets rewarded gets done"

Based on extrinsic/tangible rewards

Intrinsic Motivation:

"What is rewarding gets done"

Based on intrinsic/intangible rewards

MOTIVATION THEORIES

Need (Maslow & ERG)

Equity

Reinforcement

Expectancy Theory

Goal-Setting Theory

NEEDS (STAGE OF DEVELOPMENT)

Maslow Self actualization

Self esteem

Social (love)

Safety

Physiological

Alderfer (ERG) Growth

Relatedness

Existence

EQUITY THEORY

People compare their

outcome/input ratio

to that of others

Conclusions

Ratios are equal

(equity exists)

Ratios are unequal

(inequity exists)

RESPONSES TO

EQUITY/INEQUITY

Equity: Maintenance

Inequity:

Change Inputs

Change Outcomes

Quit

FORMS OF JUSTICE

REINFORCEMENT THEORY

Behavior is a function of consequences

Behavior that is rewarded persists

To increase behavior Positive reinforcement

negative reinforcement

REINFORCEMENT THEORY

To reduce behavior

Extinction

Punishment

EXPECTANCY THEORY

People are motivated to do that which they believe

is possible and valuable

Expectancy: Belief that you can perform

Instrumentality: Belief that performance will

lead to an outcome

Valence: Value of the outcome

GOAL SETTING THEORY

People naturally set goals

Benefits of Goals:

Increase effort

Direct effort

Increase persistence

ESTABLISHING

SHORT TERM

OBJECTIVES

WHAT ARE SHORT-TERM OBJECTIVES

Short-term objectives provide specific guidance

for what is to be done, a clear delineation of

impending actions needed, which help translate

vision into action.

Short-term goals are the stepping stones to

achieve the long-term goal.

usually defined anywhere from now to six months

from now

Short-term objectives help implement strategy by:

they “operationalize” long-term objectives.

discussion about and agreement on short-term

objectives help raise issues and potential conflicts

within the organization.

gives operating personnel a better understanding of

their role in the firm’s mission.

provides the basis for strategic control.

clarifies personnel and group roles.

Many people use the SMART acronym in defining

how to set short-term goals:

S- Specific

M- Measurable

A- Attainable

R- Relevant

T- Timely

SPECIFIC

What is it, exactly, that you want to accomplish

in the short-term?

Goal objectives should address the five Ws…

who, what, when, where, and why.

The goal must specifies what needs to be done

with a timeframe for completion.

MEASURABLE

Goal objectives should include numeric or

descriptive measures that define quantity,

quality, cost, etc.

This way you can have a definite answer if you

have achieved your goals.

Many businesses would say that their

measurable goal is their income after all the

expenses.

ATTAINABLE

Goals must be realistic to be of any use.

You must ask:

Is the goal achievable within the timeframe?

Are the Goal within the staff’s control and

influence?

Is the goal achievable with the available

resources?

RELEVANT

Short-term goals must be designed to lead to

long-term goals.

Why is the goal important? How will the goal

help the department achieve its objectives?

TIMELY

Short-term goals must have a due date set at the

beginning in concrete.

At this point you stop and look at what has been

accomplished. If it’s nowhere near the point you

wanted the company to be at this time, then the

company’s practices, goals, or long-term vision

has to be altered.

FUNCTIONAL

STRATEGY

DEFINED

Selection of decision rules in each

functional area.

Thus, functional strategies in any

organization, some (e.g., marketing

strategy, financial strategy, etc.).

It is desirable that they have been

fixed in writing.

Why is it so hard to

develop a functional

strategy?

CRACKING

THE PROCESS

WHY IS IT SO HARD TO DEVELOP A FUNCTIONAL

STRATEGY?

Production strategy ( "make or buy") - defines what the company produces itself, and that purchases from suppliers or partners, that is, how far worked out the production chain.

Financial Strategy - to select the main source of funding: the development of their own funds (depreciation, profit, the issue of shares, etc.) or through debt financing (bank loans, bonds, commodity suppliers' credits, etc.).

Marketing strategy is a process that can allow an organization to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage. Marketing strategy includes all basic and long-term activities in the field of marketing that deal with the analysis of the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goals of the company and its marketing objectives.

Human resource management (HRM, or

simply HR) is the management process of an

organization's workforce, or human resources. It

is responsible for the attraction, selection,

training, assessment, and rewarding of

employees, while also overseeing organizational

leadership and culture and ensuring compliance

with employment and labor laws. In

circumstances where employees desire and are

legally authorized to hold a collective bargaining

agreement, HR will also serve as the company's

primary liaison with the employees'

representatives (usually a trades union).

ROLE OF ACCOUNTING IN

SETTING AND

IMPLEMENTING STRATEGY

To compete successfully in today’s highly competitive global environment, companies have made customer satisfaction an overriding priority. They have also adopted new management approaches, changed their manufacturing systems and invested in new technologies.

Strategic management accounting examines the decision-making linked with the business operations and strategic work of financial administration as support for the same.

Strategic management accounting is a theory and practice of accounting that looks at an organization's cost position, cost advantages and product differentiation in order to make market decisions.

The value chain is a systematic approach to examining the development of competitive advantage. The chain consists of a series of activities that create and build value.

Value chain analysis refers to a structured method of analyzing the effects of all core activities on cost and/or differentiation of the value chain. With the growing division of labour and the global dispersion of the production of components, systemic competitiveness and so value chain analysis have become increasingly important.

Value chain accounting is the combination of value chain analysis and accounting theory. Value chain accounting is an important part of value chain management and a further development of strategic management accounting. Value chain accounting is a new approach on accounting subject which is combined by the theories of value chain management, supply chain management, accounting management and information technology.

Strategy Implementation

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