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Implementing Strategies:Management Issues

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Implementing Strategies:Management Issues

  1. 1. © 2001 Prentice Hall Ch.7-1 Strategic Management Concepts & Cases 8th edition Fred R. David Chapter 7: Implementing Strategies: Management Issues PowerPoint Slides By: Anthony F. Chelte Western New England College
  2. 2. Comprehensive Strategic MMaannaaggeemmeenntt MMooddeell © 2001 Prentice Hall Ch.7-2 Vision & Mission Statements Chapter 2 External Audit Chapter 3 Strategies In Action Chapter 5 Internal Audit Chapter 4 Strategy Analysis & Choice Chapter 6 Implement Strategies: Marketing, Fin/Acct, R&D, CIS Chapter 8 Measure & Evaluate Performance Chapter 9 Strategy Implementation: Management Issues Chapter 7
  3. 3. MMaannaaggeemmeenntt IIssssuueess “You want your people to run the business as if it were their own.” © 2001 Prentice Hall Ch.7-3 —William Fulmer —
  4. 4. MMaannaaggeemmeenntt IIssssuueess “A management truism says structure follows strategy. However, this truism is often ignored. Too many organizations attempt to carry out a new strategy with an old structure.” © 2001 Prentice Hall Ch.7-4 —Dale McConkey—
  5. 5. MMaannaaggeemmeenntt IIssssuueess “In most organizations, the top performers are paid too little and the worst performers too much.” © 2001 Prentice Hall Ch.7-5 —Cass Bettinger—
  6. 6. MMaannaaggeemmeenntt IIssssuueess Successful strategy formulation © 2001 Prentice Hall Ch.7-6 does NOT guarantee successful strategy implementation!
  7. 7. MMaannaaggeemmeenntt IIssssuueess © 2001 Prentice Hall Ch.7-7 Strategy Implementation —more difficult to “do” something Strategy Formulation —easier to say “going to do it”
  8. 8. MMaannaaggeemmeenntt IIssssuueess Strategy Formulation Strategy Implementation Focuses on effectiveness Focuses on efficiency Requires coordination among many persons © 2001 Prentice Hall Ch.7-8 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 Managing forces during the action Positioning forces before the action
  9. 9. MMaannaaggeemmeenntt IIssssuueess Transition to Strategy Implementation  Shift in responsibility from strategists to divisional and functional managers Implementation problems may arise © 2001 Prentice Hall Ch.7-9
  10. 10. MMaannaaggeemmeenntt IIssssuueess Important Implementation Concerns • Managers & employees motivated more by self-interests than organizational interests © 2001 Prentice Hall Ch.7-10 • Need to involve divisional and functional managers in strategy formulation
  11. 11. Management Issues & Strategy Implementation © 2001 Prentice Hall Ch.7-11 Establishing Annual Objectives Devising Policies Allocating Resources Altering Existing Organizational Structure Restructuring & Reengineering
  12. 12. Management Issues & Strategy Implementation © 2001 Prentice Hall Ch.7-12 Revising Reward & Incentive Programs Minimizing Resistance to Change Managing the Natural Environment Developing a Strategy Supportive Culture Adapting Production/ Operations Processes Developing HR Function If Necessary Downsizing
  13. 13. Management Issues & Strategy © 2001 Prentice Hall Ch.7-13 Implementation • Basis for allocating resources • Mechanism for evaluating managers • Monitor progress toward long-term objectives • Establish organizational, divisional, and departmental priorities Establishing Annual Objectives
  14. 14. Management Issues & Strategy © 2001 Prentice Hall Ch.7-14 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 Devising Policies
  15. 15. Management Issues & Strategy © 2001 Prentice Hall Ch.7-15 Implementation • Allows for strategy execution • Sets allocation plan based on annual objectives • Allocation based on four types of resources: financial, physical, human, and technological Allocating Resources
  16. 16. Management Issues & Strategy © 2001 Prentice Hall Ch.7-16 Implementation • Function • Divisional • SBU Structure • Matrix Structure Altering Existing Organizational Structure
  17. 17. Management Issues & Strategy © 2001 Prentice Hall Ch.7-17 Implementation • Reducing size of firm  Employees  Divisions or units  Hierarchical levels • Benchmarking against competitors  Ratios out of line • Primary benefit = cost reduction Restructuring
  18. 18. Management Issues & Strategy © 2001 Prentice Hall Ch.7-18 Implementation • Employee/customer well-being  Redesign work  Redesign jobs  Redesign processes • Improvement in:  Costs  Quality  Service  Speed Reengineering
  19. 19. Management Issues & Strategy © 2001 Prentice Hall Ch.7-19 Implementation • Pay-for-performance plans • Flexibility in compensation systems is necessary • Dual bonus system  Annual objectives  Long-term objectives • Profit Sharing Revising Reward & Incentive Programs
  20. 20. Management Issues & Strategy © 2001 Prentice Hall Ch.7-20 Implementation • Raises anxiety/fear • Force change strategy • Educative change strategy • Rational or self-interest change strategy  Most desirable Managing Resistance To Change
  21. 21. Management Issues & Strategy © 2001 Prentice Hall Ch.7-21 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 Managing the Natural Environment
  22. 22. Management Issues & Strategy © 2001 Prentice Hall Ch.7-22 Implementation • Triangulation as method to determine changes in a firm’s culture that could benefit strategy • Weak linkages between strategic management and organizational culture can jeopardize performance and success Creating a Strategy- Supportive Culture
  23. 23. Management Issues & Strategy © 2001 Prentice Hall Ch.7-23 Implementation • Production processes typically constitute more than 70% of firm’s total assets • Decisions on:  Plant size  Inventory/inventory control  Quality control  Cost control  Technological innovation Production/ Operations Concerns
  24. 24. Management Issues & Strategy © 2001 Prentice Hall Ch.7-24 Implementation • Assessing staffing needs and costs • Develop performance incentives • ESOPs • Child-care policies • Work-life balance Human Resources Concerns
  25. 25. MMaannaaggeemmeenntt IIssssuueess Important Implementation Concerns © 2001 Prentice Hall Ch.7-25 • Strategy implementation means change • Successful implementation requires: Support Discipline Motivation Hard work
  26. 26. KKeeyy TTeerrmmss && CCoonncceeppttss © 2001 Prentice Hall Ch.7-26 • Annual objectives • Avoidance • Benchmarking • Bonus system • Conflict • Confrontation • Culture • Defusion • Delayering • Decentralized structure • Divisional structure • Downsizing • Educative change strategy • Employee Stock Ownership Plan (ESOP)
  27. 27. KKeeyy TTeerrmmss && CCoonncceeppttss © 2001 Prentice Hall Ch.7-27 • Establishing annual objectives • Force change strategy • Functional structure • Gain sharing • Horizontal consistency of objectives • Just in time • Matrix structure • Policy • Profit sharing • Rational change strategy • Reengineering • Resistance to change • Resource allocation • Restructuring • Rightsizing • Self-interest change • Triangulation • Vertical consistency of objectives

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