implementation chap07exp-110905191937-phpapp01.ppt
- 1. Copyright 2005 Prentice Hall Ch 7-1 Chapter 7 Implementing Strategies: Management & Operations Issues
- 2. Copyright 2005 Prentice Hall Ch 7-2 Chapter Outline The Nature of Strategy Implementation Annual Objectives Policies
- 3. Copyright 2005 Prentice Hall Ch 7-3 Chapter Outline (cont’d) Resource Allocation Managing Conflict Matching Structure with Strategy
- 4. Copyright 2005 Prentice Hall Ch 7-4 Chapter Outline (cont’d) Restructuring, Reengineering & E-Engineering Linking Performance & Pay to Strategies Managing Resistance to Change
- 5. Copyright 2005 Prentice Hall Ch 7-5 Chapter Outline (cont’d) Creating a Strategy-Supportive Culture Production/Operations Concerns When Implementing Strategies Human Resource Concerns When Implementing Strategies
- 6. Copyright 2005 Prentice Hall Ch 7-6 Pretend that every single person you meet has a sign around his or her neck that says, “Make me feel important” – Mary Kay Ash, CEO of Mary Kay, Inc. Implementing Strategies
- 7. Copyright 2005 Prentice Hall Ch 7-7 -- Successful strategy formulation does not guarantee successful strategy implementation The Nature of Strategy Implementation
- 8. Copyright 2005 Prentice Hall Ch 7-8 Formulation positions forces before the action Implementation manages forces during the action Nature of Strategy Implementation Formulation vs. Implementation
- 9. Copyright 2005 Prentice Hall Ch 7-9 Formulation focuses on effectiveness Implementation focuses on efficiency Nature of Strategy Implementation Formulation vs. Implementation
- 10. Copyright 2005 Prentice Hall Ch 7-10 Formulation primarily an intellectual process Implementation primarily an operational process Nature of Strategy Implementation Formulation vs. Implementation
- 11. Copyright 2005 Prentice Hall Ch 7-11 Formulation requires good intuitive & analytical skills Implementation requires special motivational & leadership skills Nature of Strategy Implementation Formulation vs. Implementation
- 12. Copyright 2005 Prentice Hall Ch 7-12 Formulation requires coordination among a few individuals Implementation requires coordination among many individuals Nature of Strategy Implementation Formulation vs. Implementation
- 13. Copyright 2005 Prentice Hall Ch 7-13 Varies among different types & sizes of organizations Nature of Strategy Implementation Strategy Implementation
- 14. Copyright 2005 Prentice Hall Ch 7-14 Altering sales territories Adding new departments Closing facilities Hiring new employees Cost-control procedures Modifying advertising strategies Building new facilities Nature of Strategy Implementation Implementation Activities
- 15. Copyright 2005 Prentice Hall Ch 7-15 Shift in responsibility Nature of Strategy Implementation Management Perspectives Division or Functional Managers Strategists
- 16. Copyright 2005 Prentice Hall Ch 7-16 Management Issues Management Issues Resource Allocation Organizational structure Restructuring Rewards/Incentives Annual Objectives Policies
- 17. Copyright 2005 Prentice Hall Ch 7-17 Management Issues (cont’d) Management Issues Supportive Culture Production/Operations Human Resources Resistance to Change Natural Environment
- 18. Copyright 2005 Prentice Hall Ch 7-18 Management Issues Annual Objectives -- -- Decentralized activity -- Directly involve all managers in the organization
- 19. Copyright 2005 Prentice Hall Ch 7-19 Management Issues Purpose of Annual Objectives -- Basis for resource allocation Mechanism for management evaluation Metric for gauging progress on long-term objectives Establish priorities (organizational, division, & departmental)
- 20. Copyright 2005 Prentice Hall Ch 7-20 Management Issues Consistency of Annual Objectives -- Across hierarchical levels Horizontally consistent Vertically consistent
- 21. Copyright 2005 Prentice Hall Ch 7-21 Management Issues Requirements of Annual Objectives Measurable Consistent Reasonable Challenging Clear Understood Timely
- 22. Copyright 2005 Prentice Hall Ch 7-22 Management Issues Annual Objectives Should State Quantity Quality Cost Time Be Verifiable
- 23. Copyright 2005 Prentice Hall Ch 7-23 Management Issues Management Issues Resources Organizational structure Restructuring Rewards/Incentives Annual Objectives Policies
- 24. Copyright 2005 Prentice Hall Ch 7-24 Management Issues Policies -- -- Facilitate solving the recurring problems & guide implementation of strategy
- 25. Copyright 2005 Prentice Hall Ch 7-25 Management Issues Policies Establish -- Boundaries Constraints Limits Policies Effect-- Entire Organization Single Division
- 26. Some Issues That May Require a Management Policy • To offer extensive or limited management development workshops and seminars • To centralize or decentralize employee-training activities • To recruit through employment agencies, college campuses, and/or newspapers • To promote from within or to hire from the outside • To promote on the basis of merit or on the basis of seniority • To tie executive compensation to long-term and/or annual objectives • To offer numerous or few employee benefits • To negotiate directly or indirectly with labor unions • To delegate authority for large expenditures or to centrally retain this authority • To allow much, some, or no overtime work • To use one or more suppliers • To buy, lease, or rent new production equipment • To operate one, two, or three shifts
- 27. Copyright 2005 Prentice Hall Ch 7-27 Management Issues Management Issues Resources Organizational structure Restructuring Rewards/Incentives Annual Objectives Policies
- 28. Copyright 2005 Prentice Hall Ch 7-28 Management Issues Resource Allocation -- Central management activity that allows for the execution of strategy
- 29. Copyright 2005 Prentice Hall Ch 7-29 Management Issues 1. Financial resources 2. Physical resources 3. Human resources 4. Technological resources 4 Types of Resources
- 30. Copyright 2005 Prentice Hall Ch 7-30 Management Issues Managing Conflict -- Disagreement between two more parties on one or more issues
- 31. Copyright 2005 Prentice Hall Ch 7-31 Management Issues Conflict not always “bad” No conflict may signal lack of interest Can energize opposing groups to action May help managers identify problems Managing Conflict
- 32. Copyright 2005 Prentice Hall Ch 7-32 Management Issues Avoidance Diffusion Confrontation Conflict Management & Resolution
- 33. Copyright 2005 Prentice Hall Ch 7-33 Management Issues Management Issues Resources Organizational structure Restructuring Rewards/Incentives Annual Objectives Policies
- 34. Copyright 2005 Prentice Hall Ch 7-34 Management Issues Matching Structure w/ Strategy -- Changes in strategy = Changes in structure
- 35. Copyright 2005 Prentice Hall Ch 7-35 Management Issues Structure dictates how objectives & policies will be established Structure dictates how resources will be allocated Structure & Strategy
- 36. Copyright 2005 Prentice Hall Ch 7-36 New administrative problems emerge New strategy Is formulated Organizational performance declines Organizational performance improves New organizational structure is established Chandler’s Strategy-Structure Relationship
- 37. Symptoms of an Ineffective Organizational Structure 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 4. Too large a span of control 5. Too many unachieved objectives 6. Declining corporate or business performance 7. Losing ground to rival firms 8. Revenue and/or earnings divided by number of employees and/or number of managers is low compared to rival firms
- 38. Copyright 2005 Prentice Hall Ch 7-38 Management Issues Functional Structure Divisional Structure Strategic Business Unit Structure (SBU) Matrix Structure Basic Forms of Structure
- 39. Fred R. David Prentice Hall Basic Forms of Structure 1. Functional Structure Groups tasks and activities by business function 2. Divisional Structure Decentralized and organized by geography, product, customer, or process
- 40. Fred R. David Prentice Hall Basic Forms of Structure 3. Strategic Business Unit Structure (SBU) Groups similar divisions; delegates authority and responsibility to SBU executive 4. Matrix Structure Most complex of all designs. Depends upon both vertical and horizontal flows of authority and communication
- 41. Functional Organizational Structure Advantages 1. Simple and inexpensive 2. Capitalizes on specialization of business activities such as marketing and finance 3. Minimizes need for elaborate control system 4. Allows for rapid decision making Disadvantages 1. Accountability forced to the top 2. Delegation of authority and responsibility not encouraged 3. Minimizes career development 4. Low employee/manager morale 5. Inadequate planning for products and markets 6. Leads to short-term, narrow thinking 7. Leads to communication problems
- 42. Divisional Organizational Structure Advantages 1. Accountability is clear 2. Allows local control of local situations 3. Creates career development chances 4. Promotes delegation of authority 5. Leads to competitive climate internally 6. Allows easy adding of new products or regions 7. Allows strict control and attention to products, customers, and/or regions Disadvantages 1. Can be costly 2. Duplication of functional activities 3. Requires a skilled management force 4. Requires an elaborate control system 5. Competition among divisions can become so intense as to be dysfunctional 6. Can lead to limited sharing of ideas and resources 7. Some regions/products/customers may receive special treatment
- 43. Advantages and Disadvantages of a Matrix Structure Advantages 1. Project objectives are clear 2. Employees can clearly see results of their work 3. Shutting down a project is easily accomplished 4. Facilitates uses of special equipment/personnel/facilities 5. Functional resources are shared instead of duplicated as in a divisional structure Disadvantages 1. Requires excellent vertical and horizontal flows of communication 2. Costly because creates more manager positions 3. Violates unity of command principle 4. Creates dual lines of budget authority 5. Creates dual sources of reward/punishment 6. Creates shared authority and reporting 7. Requires mutual trust and understanding
- 44. Copyright 2005 Prentice Hall Ch 7-44 Management Issues Management Issues Resources Organizational structure Restructuring Rewards/Incentives Annual Objectives Policies
- 45. Copyright 2005 Prentice Hall Ch 7-45 Management Issues Restructuring -- Reducing the size of the firm – # of employees, divisions, and/or units, # of hierarchical levels Downsizing Rightsizing Delayering
- 46. Copyright 2005 Prentice Hall Ch 7-46 Management Issues Restructuring Shareholder well being rather than employee well being Primary benefit cost reduction Results in low motivation
- 47. Copyright 2005 Prentice Hall Ch 7-47 Management Issues Reengineering -- Reconfiguring or redesigning work, jobs, & processes to improve cost, quality, service, & speed. Process management Process innovation Process redesign
- 48. Copyright 2005 Prentice Hall Ch 7-48 Management Issues Reengineering Concerned with employee well being Redesigning work jobs and process Usually doesn’t effect the organizational structure Break down internal and external communication barriers and walls Decentralization
- 49. Copyright 2005 Prentice Hall Ch 7-49 Management Issues Management Issues Resources Organizational structure Restructuring Rewards/Incentives Annual Objectives Policies
- 50. Copyright 2005 Prentice Hall Ch 7-50 Management Issues Linking Pay/Performance to Strategies -- Pay for performance systems
- 51. Copyright 2005 Prentice Hall Ch 7-51 Management Issues Linking Pay/Performance to Strategies Dual bonus systems Profit sharing systems Gain Sharing systems
- 52. Ch 7-52 Tests for Performance-Pay Plans Does the plan capture attention? Do employees understand the plan? Is the plan improving communication? Does the plan pay out when it should? Is the company or unit performing better?
- 53. Copyright 2005 Prentice Hall Ch 7-53 Management Issues (cont’d) Management Issues Supportive Culture Production/Operations Human Resources Resistance to Change Natural Environment
- 54. Copyright 2005 Prentice Hall Ch 7-54 Management Issues Resistance to Change -- Single greatest threat to successful strategy implementation -- Raises anxiety; fear concerning Economic loss Inconvenience Uncertainty Break in status-quo
- 55. Copyright 2005 Prentice Hall Ch 7-55 Management Issues Change Strategies Force Change Strategy Educative Change Strategy Rational or Self-Interest Change Strategy
- 56. Copyright 2005 Prentice Hall Ch 7-56 Management Issues Rational or Self-Interest Change Strategy 1)Employees are invited to participate in the process of change 2)Motivation and incentive to change 3)Effective communication for understanding the purpose of change 4)Feedback
- 57. Copyright 2005 Prentice Hall Ch 7-57 Management Issues (cont’d) Management Issues Supportive Culture Production/Operations Human Resources Resistance to Change Natural Environment
- 58. Copyright 2005 Prentice Hall Ch 7-58 Management Issues Natural Environment -- Wide appreciation for firms that “mend” rather than “harm” the environment Develop/acquire “green” businesses Divesting environmental-damaging business Low-cost producer through waste minimization & energy conservation
- 59. Copyright 2005 Prentice Hall Ch 7-59 Management Issues (cont’d) Management Issues Supportive Culture Production/Operations Human Resources Resistance to Change Natural Environment
- 60. Copyright 2005 Prentice Hall Ch 7-60 Management Issues Strategy-Supportive Culture -- Preserve, emphasize, & build upon aspects of existing culture that support new strategies • Formal statements of philosophy, charters, etc. used for recruitment and selection, and socialization • Designing of physical spaces, facades, buildings • Deliberate role modeling, teaching and coaching • Explicit reward and status system, promotion criteria • Stories, legends, myths about key people and events Elements linking culture to strategy:
- 61. Ch 7-61 • What leaders pay attention to, measure and control • Leader reactions to critical incidents and crises • How the organization is designed and structured • Organizational systems and procedures • Criteria used for recruitment, selection, promotion, retirement Management Issues Elements linking culture to strategy:
- 62. Copyright 2005 Prentice Hall Ch 7-62 Management Issues (cont’d) Management Issues Supportive Culture Production/Operations Human Resources Resistance to Change Natural Environment
- 63. Copyright 2005 Prentice Hall Ch 7-63 Management Issues Production/Operations Concerns -- Production processes typically constitute more than 70% of firm’s total assets Plant size Inventory/Inventory control Quality control Cost control Technological innovation Production/Operations Decisions
- 64. Copyright 2005 Prentice Hall Ch 7-64 Management Issues (cont’d) Management Issues Supportive Culture Production/Operations Human Resources Resistance to Change Natural Environment
- 65. Copyright 2005 Prentice Hall Ch 7-65 Management Issues Human Resource Concerns -- HR manager position has strategic responsibility & has changed dramatically as companies continue to reorganize, outsource, etc.
- 66. Copyright 2005 Prentice Hall Ch 7-66 Management Issues Human Resource Strategic Responsibilities Assessing staffing needs/costs Developing performance incentives ESOP’s Child-care policies Work-life balance issues