Strategy Implementation

1. Strategy Implementation CON 547 - Strategic Planning

2. 1.8 Basic Elements of the Strategic Management Process (Fig. 1.1) p. 9 Evaluation Environmental Strategy Strategy and Scanning Formulation Implementation Control Basic Elements of the Strategic Planning Process CON 547 - Strategic Planning

3. 1.9 Strategic Management Model (Fig. 1.2) p. 9 Strategic Planning Model Environmental Strategy Strategy Evaluation Scanning Formulation Implementation and Control Mission External Reason for Societal existence Objectives Environment General Forces What results to Strategies Task accomplish Environment by when Plan to Industry Analysis achieve the Policies mission & Internal objectives Broad guidelines for Programs Structure Process decision to monitor Chain of Command making Activities performance needed to Budgets Culture and take accomplish corrective Beliefs, Expectations, a plan Cost of the action Values programs Procedures Resources Sequence Assets, Skills of steps Competencies, needed to Knowledge Performance do the job Feedback/Learning CON 547 - Strategic Planning

4. Strategy Implementation • Sum total of the activities and choices required to execute the Strategic Plan • Process by which strategies and policies are put into action through the development of programs, budgets, and procedures CON 547 - Strategic Planning

5. 8.1 Implementation Questions p. 183 Implementation Questions • WHO will carry out the strategic plan? • WHAT must be done? • HOW is everyone going to do what is needed? CON 547 - Strategic Planning

6. Who Implements Strategy? • Planners - small, select group • Implementers - everyone • Important to communicate plan clearly • Important to involve people from all organizational levels in plan formulation CON 547 - Strategic Planning

7. What Must Be Done? • Subordinate plans to be developed at all levels • Developing programs, budgets, and procedures • Programs to make strategy action-oriented • Budgets to provide and manage resources • Procedures detail activities to be carried out CON 547 - Strategic Planning

8. How Is Strategy Implemented? • Organizing Activities - Chap 8 • Staffing Activities - Chap 9 • Directing Activities - Chap 9 CON 547 - Strategic Planning

9. 8.2 Structure Follows Strategy p. 187 Structure Follows Strategy 1. New strategy is created. 2. New administrative problems emerge. 3. Economic performance declines. 4. New appropriate structure is invented. 5. Profit returns to its previous level. CON 547 - Strategic Planning

10. 8.4 Organizational Life Cycle (Table 8.2) p. 193 Organizational Life Cycle Stage I Stage II Stage III1 Stage IV Stage V Dominant Issue Birth Growth Maturity Decline Death Popular Concentration Horizontal Concentric and Profit strategy Liquidation orStrategies in a niche and vertical conglomerate followed by bankruptcy growth diversification retrenchment Likely Entrepreneur- Functional Decentralization Structural DismembermentStructure dominated management into profit or surgery of structure emphasized investment centers Note: 1. An organization may enter a Revival Phase either during the Maturity or Decline Stages and thus extend the organiza-tion’s life. CON 547 - Strategic Planning

11. Types of Organizational Structures • Simple Structure • small, entrepreneur-dominated company • Functional Structure • medium-sized company, multiple products • Divisional Structure • large corporations, multiple products or multiple locations • Matrix Structure • Network Structure CON 547 - Strategic Planning

12. 8.6a Matrix and Network Structure (Fig. 8.1) p. 196 Top Management Manufacturing Sales Finance Personnel Manager: Manufacturing Sales Finance Personnel Project Unit Unit Unit Unit A Manager: Manufacturing Sales Finance Personnel Project Unit Unit Unit Unit B Manager: Manufacturing Sales Finance Personnel Project Unit Unit Unit Unit C Manager: Manufacturing Sales Finance Personnel Project Unit Unit Unit Unit D Matrix Structure CON 547 - Strategic Planning

13. 8.6b Network Structure (Fig. 8.1) p. 196 Packagers Designers Suppliers Corporate Headquarters (Broker) Manufacturers Distributors Promotion/ Advertising Agencies Network Structure CON 547 - Strategic Planning

14. 8.7 Principles for Re-engineering p. 197 Principles for Re-engineering • Organize around outcomes, not tasks • Have those who use the output perform the process • Subsume information-processing work into the real work that produces the information • Treat geographically dispersed resources as though they were centralized • Link parallel activities instead of integrating their results • Put decision point where work is performed and build control into the process • Capture information once at the source CON 547 - Strategic Planning

15. 8.8 Job Characteristics Model p. 199 Job Characteristics Model • Combine tasks • Form natural work units • Vertically load the job • Establish client relationships • Vertically load the job • Open feedback channels CON 547 - Strategic Planning

16. Staffing Issues • Hiring new people with new skills • Firing people with inappropriate or substandard skills • Training existing employees to learn new skills CON 547 - Strategic Planning

17. Staffing Follows Strategy 1. Hiring and training requirements change 2. Matching the manager to the strategy 3. Executive succession: insiders vs. outsiders 4. Identifying abilities and potential CON 547 - Strategic Planning

18. 9.2 Downsizing Guidelines p. 212 Downsizing Guidelines • Eliminate unnecessary work. • Contract out work that others can do cheaper. • Plan for long-run efficiencies. • Communicate the reasons for actions. • Invest in the remaining employees. • Develop value-added jobs to balance out job elimination. CON 547 - Strategic Planning

19. Issues in Leading • Directing people to use their abilities and skills most effectively and efficiently • Achieve organizational objectives • Management leadership • Communicating norms of behavior • Agreements among workers in teams CON 547 - Strategic Planning

20. 9.3 Assessing Strategy-Structure Compatibility (Fig. 9.1) p. 216 Assessing Strategy—Culture Compatibility Is the planned strategy compatible with the current culture? No Yes Can the culture be modified to Tie changes into the culture. make it more compatible with the new strategy? Yes Is management willing and able to make major organizational No changes and accept probable delays and a likely increase in No Yes Manage around the culture by Is management still committed establishing a new structural unit to implementing the strategy? to implement the new strategy. No Yes Find a joint-venture partner or Formulate a different stategy. contract with another company to carry out the strategy. CON 547 - Strategic Planning

21. 9.5 Action Planning p. 218–219 Action Planning 1. List specific actions. 2. List dates to begin and end each action. 3. Name person responsible for each action. 4. Name person responsible for monitoring timelines and effectiveness of each action. 5. Estimate expected financial and physical consequences of each action. 6. Develop contingency plans. CON 547 - Strategic Planning

22. 9.6 Process of Management by Objectives p. 220–221 3 2 Superior plans objectives for subordinates Revise structure 3 Subordinate proposes objectives 1 4 Formulate corporate, divisional, and functional objectives Joint agrement on subordinate’s objectives and action plan Feedback and Change 7 5 Evaluate corporate, divisional, and functional performance Review and discuss interim results 5(A) Consider new information 6 Review and discuss overall results 5(b) Drop inappropriate objectives Process of Managment by Objectives CON 547 - Strategic Planning

23. 9.7 Objectives of Total Quality Management (TQM) p. 221 Objectives of Total Quality Management (TQM) 1. Better, less variable quality of product / service. 2. Quicker, less variable response to customers’ needs. 3. Greater flexibility in adjusting to customers’ shifting requirements. 4. Lower cost through quality improvements and elimination of nonvalue-adding work. CON 547 - Strategic Planning

24. 9.8 Essential Ingredients of Total Quality Management (TQM) p. 221-222 Essential Ingredients of TQM • Intense focus on customer satisfaction • Internal as well as external customers • Accurate measurement of every critical variable in a company’s operations • Continuous improvement of products / services • New work relationships based on trust and teamwork CON 547 - Strategic Planning

25. Implementation Problems 1. Implementation took more time than planned 2. Unanticipated major problems arose 3. Activities were ineffectively coordinated 4. Competing activities and crises took attention away from implementation 5. The involved employees had insufficient capabilities to perform their jobs CON 547 - Strategic Planning

26. Implementation Problems, con. 6. Lower-level employees were inadequately trained 7. Uncontrollable external environmental factors created problems 8. Departmental managers provided inadequate leadership and direction 9. Key implementation tasks and activities were poorly defined 10. The information system inadequately monitored activities CON 547 - Strategic Planning

27. Implementation Summary • Who? • What? • How? • Organizing • Staffing • Leading CON 547 - Strategic Planning