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Lecture 7 Strategy Implementation and Control

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Lecture 7 Strategy Implementation and Control

Uploaded by

mismail10001000
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© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Implementation Strategies

Lecture 7 – MBA
Prepared by: Loaloa Riad
Contrasting
Strategy
Formulation with
Strategy
Implementation
Annual Objectives
The Stamus
Company’s
Hierarchy of
Aims

Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved
Policies (1 of 3)
• Policy
• Specific guidelines, methods, procedures, rules, forms, and administrative
practices established to support and encourage work toward stated goals
• Instruments for strategy implementation
Policies (2 of 3)
• Policies
• Set boundaries, constraints, and limits on the kinds of administrative actions
that can be taken to reward and sanction behavior
• Let both employees and managers know what is expected of them, thereby
increasing the likelihood that strategies will be implemented successfully
• Provide a basis for management control and allow coordination across
organizational units
Policies (3 of 3)
• Policies
• Reduce the amount of time managers spend making decisions. Policies also
clarify what work is to be done and by whom
• Promote delegation of decision making to appropriate managerial levels
where various problems usually arise
• Clarify what can and cannot be done in pursuit of an organization’s objectives
Resource Allocation
Central management activity that allows for strategy execution. Strategic
management enables resources to be allocated according to priorities
established by annual objectives
Managing Conflict
Managing Conflict (1 of 2)
1. To offer extensive or limited management development
workshops and seminars
2. To recruit through employment agencies, college
campuses, or newspapers
Some 3. To promote from within or to hire from the outside
Management
Trade-Off 4. To promote on the basis of merit or on the basis of
Decisions Required seniority
in Strategy
Implementation 5. To tie executive compensation to long-term or annual
objectives
6. To allow heavy, light, or no overtime work
7. To establish a high- or low-safety stock of inventory
Structure largely
dictates how
objectives and
policies will be
established
Matching
Structure With
Strategy
Structure dictates
how resources will
be allocated
1. Too many levels of management
2. Too many meetings attended by too many people
3. Too much attention being directed toward solving
interdepartmental conflicts
Symptoms of 4. Too large a span of control
an Ineffective 5. Too many unachieved objectives
Organizational 6. Declining corporate or business performance
Structure 7. Losing ground to rival firms
8. Revenue or earnings divided by number of
employees or number of managers is low compared
to rival firms
ABC Company’s Existing (Not Good) Organizational Chart
ABC Company’s Improved (Excellent) Organizational Chart
Winnebago’s Actual (Not Good) Organizational Chart
Winnebago’s Improved (Excellent) Organizational Chart
Restructuring
• Involves reducing the size of the firm in terms of
number of employees, number of divisions or units,
and number of hierarchical levels in the firm's
organizational structure
• Primary benefit sought from restructuring is cost
reduction
Reengineering
• Involves reconfiguring or redesigning work, jobs, and
processes for the purpose of improving cost, quality,
service, and speed
• Does not usually affect the organizational structure or
chart, nor does it imply job loss or employee layoffs
Strategy-Evaluation
Assessment Matrix

Have Major Changes Occurred in the Has the Firm Progressed


Firm’s Internal Strategic Have Major Changes Occurred in the Satisfactorily Toward Achieving Its
Position? Firm’s External Strategic Position? Stated Objectives? Result
No No No Take corrective actions
Yes Yes Yes Take corrective actions
Yes Yes No Take corrective actions
Yes No Yes Take corrective actions
Yes No No Take corrective actions
No Yes Yes Take corrective actions
No Yes No Take corrective actions
No No Yes Continue present strategic course
A Strategy-Evaluation Framework

Copyright © 2020, 2017, 2015 Pearson Education, Inc. All Rights Reserved
How have competitors reacted to our strategies?

How have competitors’ strategies changed?

Have major competitors’ strengths and weaknesses


changed?

Why are competitors making certain strategic


changes?
WHY ARE SOME COMPETITORS’ HOW SATISFIED ARE OUR HOW FAR CAN OUR MAJOR HOW COULD WE MORE EFFECTIVELY
STRATEGIES MORE SUCCESSFUL THAN COMPETITORS WITH THEIR PRESENT COMPETITORS BE PUSHED BEFORE COOPERATE WITH OUR
OTHERS? MARKET POSITIONS AND RETALIATING? COMPETITORS?
PROFITABILITY?
1. Alter the firm’s structure.
2. Replace one or more key individuals.
3. Divest a division.
4. Alter the firm’s vision or mission.

Corrective Actions
5. Revise objectives.
6. Alter strategies.
7. Devise new policies.
Corrective Actions Possibly Needed to 8. Install new performance incentives.
Correct Unfavorable Variances 9. Raise capital with stock or debt.
10. Add or terminate salespersons, employees, or
managers.
11. Allocate resources differently.
12. Outsource (or reshore) business functions.
The Balanced Scorecard

• The balanced scorecard is a strategy evaluation and control


technique.
• There is a wide variation in how the balanced scorecard is
used.
• The technique is based on the need to “balance” financial
measures with nonfinancial ones.
Guidelines for
Strategic Planning to
be Effective
1. It should be a people process more than a paper process.
2. It should be a learning process for all managers and employees.
3. It should be words supported by numbers rather than numbers supported by words.
4. It should be simple, non-routine, economical, and provide timely information.
5. It should vary assignments, team memberships, meeting formats, and even the planning calendar.
6. It should challenge the assumptions underlying the current corporate strategy.
7. It should welcome bad news and provide a true picture of what is happening.
8. It should welcome open-mindedness and a spirit of inquiry and learning.
9. It should not be a bureaucratic mechanism.
10. It should not become ritualistic, stilted, or orchestrated.
11. It should not be too formal, predictable, or rigid.
12. It should not contain jargon or arcane planning language.
13. It should not be a formal system for control and should not dominate decisions.
14. It should not disregard qualitative information.
15. It should not be controlled by “technicians.”
16. Do not pursue too many strategies at once.
17. Continually strengthen the “good ethics is good business” policy.

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