The Nature of Strategy Implementation Strategy Formulation Strategy Implementation Strategy formulation is Strategy implementation is positioning forces before the managing forces during the action. action. Strategy formulation Strategy implementation focuses on effectiveness. focuses on efficiency. Strategy formulation is Strategy implementation is primarily an intellectual primarily an operational process. process. Strategy formulation Strategy implementation requires good intuitive and requires special motivation analytical skills. and leadership skills.
Annual Objectives Annual Objectives: 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 5.Are essential for keeping a strategic plan on track
Policies Policy specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work toward stated goals instruments for strategy implementation
Policies 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 Policies (cont.) 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 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 Conflict disagreement between two or more parties on one or more issues Establishing annual objectives can lead to conflict because individuals have different expectations and perceptions, schedules create pressure, personalities are incompatible, and misunderstandings occur between line managers and staff managers
Managing Conflict Avoidance includes such actions as ignoring the problem in hopes that the conflict will resolve itself or physically separating the conflicting individuals Defusion includes playing down differences between conflicting parties while accentuating similarities and common interests
Managing Conflict Confrontation exemplified by exchanging members of conflicting parties so that each can gain an appreciation of the other’s point of view or holding a meeting at which conflicting parties present their views and work through their differences
Matching Structure With Strategy Structure largely dictates how objectives and policies will be established Structure dictates how resources will be allocated
The Functional Structure Functional Structure groups tasks and activities by business function, such as production/operations, marketing, finance/accounting, research and development, and management information systems
Divisional Structure Functional activities are performed both centrally and in each separate division Organized by geographic area, product or service, customer, or process
The Strategic Business Unit (SBU) Structure SBU Structure groups similar divisions into strategic business units and delegates authority and responsibility for each unit to a senior executive who reports directly to the chief executive officer can facilitate strategy implementation by improving coordination between similar divisions and channeling accountability to distinct business units
The Matrix Structure Matrix Structure most complex of all designs because it depends upon both vertical and horizontal flows of authority and communication
The Matrix Structure For a matrix structure to be effective, organizations need participative planning, training, clear mutual understanding of roles and responsibilities, excellent internal communication, and mutual trust and confidence
Restructuring 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 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
Managing Resistance to Change Force Change Strategy involves giving orders and enforcing those orders Educative Change Strategy presents information to convince people of the need for change Self-interest Change Strategy attempts to convince individuals that the change is to their personal advantage
Strategic Human Resource Issues Seven human resource issues: 1. linking performance and pay to strategy 2. balancing work life with home life 3. developing a diverse work force 4. using caution in hiring a rival’s employees 5. creating a strategy-supportive culture 6. using caution in monitoring employees’ social media 7. developing a corporate wellness program
Linking Performance and Pay to Strategies Decisions on salary increases, promotions, merit pay, and bonuses need to support the long-term and annual objectives of the firm Gain sharing and bonus systems can be used
Balance Work and Home Life Work and family strategies now represent a competitive advantage for those firms that offer such benefits as: elder care assistance flexible scheduling job sharing adoption benefits onsite summer camp employee help line pet care lawn service referrals
Creating a Strategy-Supportive Culture 6. What leaders pay attention to, measure, and control 7. Leader reactions to critical incidents and organizational crises 8. How the organization is designed and structured 9. Organizational systems and procedures 10. Criteria used for recruitment, selection, promotion, leveling off, retirement, and “excommunication” of people
Monitoring Social Media Proponents of companies monitoring employees’ social-media activities emphasize that (1) a company’s reputation in the marketplace can easily be damaged by disgruntled employees venting on social media sites (2) social-media records can be subpoenaed, like email, and used as evidence against the company.