This chapter discusses strategy implementation and contrasts it with strategy formulation. Strategy implementation requires operational coordination across many individuals, focusing on efficiency. It involves altering structures, processes, and incentives to support new strategies. Annual objectives are important for allocating resources, evaluating managers, and monitoring progress. Organizational structure must match strategy to enable implementation. Restructuring changes ownership priorities while reengineering changes processes. Performance must be linked to strategies through compensation. Managing resistance to change is key to implementation. Culture influences implementation and must sometimes be modified to support new strategies. Production/operations decisions are important to consider. Employee stock ownership can motivate implementation.

1. CHAPTER 7
Felicia Monika
• 1511011032
Astri Datmalem P.
• 1511011051
ECONOMIC AND BUSINESS FACULTY
UNIVERSITY OF LAMPUNG

2. CHAPTER OBJECTIVES
1. Explain why strategy implementation is more difficult than strategy formulation.
2. Discuss the importance of annual objectives and policies in achieving organizational commitment
for strategies to be implemented.
3. Explain why organizational structure is so important in strategy implementation.
4. Compare and contrast restructuring and reengineering.
5. Describe the relationships between production/operations and strategy implementation.
6. Explain how a firm can effectively link performance and pay to strategies.
7. Discuss employee stock ownership plans (ESOPs) as a strategic management concept.
8. Describe how to modify an organizational culture to support new strategies.
9. Discuss the culture in Mexico and Japan.
10. Describe the glass ceiling in the United States.

4. The Nature of Strategy
Implementation
Strategy formulation and implementation can be contrasted in the following ways:
Strategy
implementation
is primarily an
operational
process.
Strategy
formulation
requires good
intuitive and
analytical skills.
Strategy
implementation
requires special
motivation and
leadership
skills.
Strategy
formulation
requires
coordination
among a few
individuals.
Strategy
implementation
requires
coordination
among many
individuals.
Strategy
formulation is
positioning
forces before
the action.
Strategy
implementation
is managing
forces during
the action.
Strategy
formulation
focuses on
effectiveness.
Strategy
implementation
focuses on
efficiency.
Strategy
formulation is
primarily an
intellectual
process.

5. Implementing strategies requires such actions as
:
altering sales
territories,
adding new
departments,
closing
facilities,
hiring new
employees,
changing an
organization’s
pricing
strategy,
And so on.

6. MANAGEMENT PERSPECTIVES

7. Annual objectives are essential for
strategy implementation
(1) represent the basis for allocating resources;
(2) are a primary mechanism for evaluating
managers;
(3) are the major instrument for monitoring
progress toward achieving long-term objectives;
(4) establish organizational, divisional, and
departmental priorities.

8. As an instruments for strategy implementation

9. Resource
Allocationa central management activity that allows for strategy execution.
financial
resources
physical
resources
human resources
Technological
resources.

10. Managing
Conflicta disagreement between two or more parties on one or more issues
confrontation
defusion
avoidance

11. MATCHING STRUCTURE
WITH STRATEGY
functionaldivisional
process
divisional by
geographic area
matrix
strategic business
unit (SBU)
divisional by
product
divisional by
customer

12. RESTRUCTURING, REENGINEERING, AND E-ENGINEERING
Restructuring
concerned
primarily with
shareholder
well-being
rather than
employee
well-being.
Reengineering
concerned
more with
employee and
customer well-
being than
shareholder
well-being

13. Linking Performance
and Pay to Strategies
Dual Bonus
Systems
Profit Sharing
Systems
Gain Sharing
System

14. Managing Resistance to Change
Resistance to change can be considered the single
greatest threat to successful strategy implementation.
Three
Approaches
Force
change
strategy
Educative
change
strategy
Rational or
self-interest
change
strategy

15. Formal statements of
organizational philosophy,
characters, creeds, materials
used for recruitment and
selection, and socialization
Designing of physical
spaces, facades,
buildings
Deliberate role
modeling, teaching, and
coaching by leaders
Explicit reward and
status system,
promotion criteria
Stories, legends, myths,
and parables about key
people and events

16. What leaders
pay attention
to, measure,
and control
Leader
reactions to
critical
incidents and
organizational
crises
How the
organization is
designed and
structured
Organizational
system and
procedures
Criteria used
for recruitment,
selection,
promotion,
leveling off,
retirement, and
“excommunicat
ion” of people

17. Production/Operations
Concerns When Implementing
Strategies
Production
processes
typically
constitute more
than 70 percent
of a firm’s total
assets.
• Decision on :
1. Plant
size
2. Inventory
control
3. Quality
Control
4. Cost
Control
5. Technological
innovation

18. Employee
Stock
Ownership
Plans (ESOPs)
Balancing
Work Life and
Home Life
Benefits of a
Diverse
Workforce
Corporate
Wellness
Programs

19. ESOP is a tax-qualified, defined-contribution, employee-benefit plan whereby employees
purchase stock of the company through borrowed money or cash contributions

20. Balancing Work Life and Home Life
Work/family strategies have become so popular among companies
today that the strategies now represent a competitive advantage for
those firms.

21. An organization can perhaps be most
effective when its workforce mirrors the
diversity of its customers.

22. Wellness programs provide counseling to
employees and seek lifestyle changes to
achieve healthier living

23. END
OF
PRESENTATION
FELICIA MONIKA ASTRI DATMALEM P

24. Byee…