Strategic Implementation Chapter 10

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Questions and Answers

What is strategy implementation?

The sum total of all activities and choices required for the execution of a strategic plan.

What are the three main questions to ask when starting strategy implementation?

Who are the people to carry out the strategic plan?, What must be done to align company operations in the new intended direction?, How is everyone going to work together to do what is needed?

What are the components of strategy implementation? (Select all that apply)

Structuring the Organization (correct)

Setting Objectives (correct)

Developing Operational Plans (correct)

Establishing a Performance Management System (correct)

Leadership and Direction (correct)

Allocating Resources (correct)

Building a Supportive Culture (correct)

Managing Change (correct)

What is a timing tactic and what are some examples?

A timing tactic deals with when a company implements a strategy. Some examples include first mover, late mover Signup and view all the answers

What are the key characteristics of a first mover?

The first company to manufacture and sell a new product or service. Signup and view all the answers

What is a market location tactic and what are some examples?

A market location tactic deals with where a company implements a strategy. Some examples include offensive tactic, defensive tactic. Signup and view all the answers

What are some examples of offensive tactics? (Select all that apply)

Guerilla Warfare Signup and view all the answers

What is a budget and what is its role in strategy implementation?

A budget is a financial plan that allocates resources to specific activities and projects. Its role in strategy implementation is to ensure that financial resources are aligned with the strategic goals and objectives. Signup and view all the answers

What are procedures and how do they support strategy implementation?

Procedures are detailed instructions that outline the steps involved in completing specific activities or tasks. They contribute to strategy implementation by ensuring consistency, clarity, and efficiency in the execution of those activities or tasks. Signup and view all the answers

Synergy exists for a divisional corporation if the return on investment is less than what the return would be if each division were an independent business.

False Signup and view all the answers

What are the six forms of synergy? (Select all that apply)

Shared tangible resources Signup and view all the answers

What are the stages of corporate development? (Select all that apply)

Simple Structure Signup and view all the answers

What is a simple structure and its key characteristics?

A simple structure is characterized by flexibility and dynamism and is typically found in small businesses. Signup and view all the answers

What is a functional structure and its key characteristics?

A functional structure groups employees based on their expertise or functional area, such as finance, marketing, or operations. This structure is characterized by a team of managers replacing the single entrepreneur. Signup and view all the answers

What are the organizational structures that fall under 'Beyond SBU's' in the stages of corporate development? (Select all that apply)

Network Structure Signup and view all the answers

What is a matrix structure and its key characteristics?

A matrix structure combines functional and product forms simultaneously at the same level of the organization, creating a two-dimensional reporting structure with employees having two bosses. This structure is effective when ideas need to be cross-fertilized across projects or products, resources are scarce, and the company needs to improve its abilities to process information and make decisions. Signup and view all the answers

What is a network structure and its key characteristics?

A network structure is characterized by a virtual elimination of in-house business functions, with tasks being outsourced to specialized external partners. This structure is a complex network of independent organizations that work together to achieve a common goal. Signup and view all the answers

What is a cellular/modular structure and its key characteristics?

A cellular/modular structure comprises self-managing teams, autonomous business units, etc., which can operate independently but can also interact and integrate with other teams to achieve a common goal. This structure is characterized by its flexibility, adaptability, and responsiveness to changing market conditions. This structure is beginning to appear in firms that are focused on rapid product and service innovation. Signup and view all the answers

What is reengineering?

Reengineering involves the radical redesign of business processes to achieve significant gains in cost, service, or time. It is an effective program for implementing a turnaround strategy. Signup and view all the answers

What are the principles of reengineering? (Select all that apply)

Link parallel activities instead of integrating their results. Signup and view all the answers

What is Six Sigma?

Six Sigma is a data-driven quality management methodology that uses statistical analysis to identify and eliminate defects in processes, ultimately aiming for near-perfect results in production. Signup and view all the answers

What are the steps in the Six Sigma process? (Select all that apply)

Define Signup and view all the answers

What are some job design techniques used to implement strategy? (Select all that apply)

Job Rotation Signup and view all the answers

What is job enlargement and its key characteristic?

Job enlargement involves combining tasks to give a worker more of the same type of duties to perform. Signup and view all the answers

What is job rotation and its key characteristic?

Job rotation involves moving workers through several jobs to increase variety and expose them to different aspects of the business. Signup and view all the answers

Which of these structures are considered flexible and adaptable? (Select all that apply)

Network Structure Signup and view all the answers

What is a product group structure and its key characteristics?

A product group structure enables a company to introduce and manage a similar line of products around the world. This structure centralizes decision-making along product lines and reduces costs. This strategy is used by companies to effectively manage and coordinate product development and distribution globally. Signup and view all the answers

What is a geographic area structure and its key characteristics?

A geographic area structure allows a company to tailor products to regional differences and to achieve regional coordination. This structure is especially well-suited for companies operating in diverse markets with distinct customer preferences and regulations. Signup and view all the answers

Study Notes

Chapter 10: Strategy Implementation: Organizing and Structure

Learning Objectives (1 of 2):
- Describe the major issues impacting successful strategy implementation.
- Explain developing programs, budgets, and procedures for implementing strategic change.
- List the stages of corporate development and the associated structures.
Learning Objectives (2 of 2):
- Explain how matrix, network, and modular structures are used to implement strategy.
- Discuss the issues of centralization versus decentralization in structuring organizations.

Strategy Implementation (1 of 2)

Strategy implementation is the sum total of all activities and choices needed to execute a strategic plan.

Strategy Implementation (2 of 2)

Key questions to ask when starting this process include:
- Who will carry out the strategic plan?
- How will company operations be aligned with the new direction?
- How will everyone work together effectively?

Parts of Strategy Implementation (1 of 2)

Setting Objectives: Define clear, specific, and measurable goals aligning with the strategic plan.
Allocating Resources: Distribute financial, human, and technological resources for effective strategy execution.
Structuring the Organization: Design the organizational structure, including roles, responsibilities, and hierarchies, to support strategy execution.
Developing Operational Plans: Translate strategic objectives into detailed short-term plans specifying tasks, personnel, and deadlines.

Parts of Strategy Implementation (2 of 2)

Establishing a Performance Management System: Implement a system to monitor, measure, and evaluate performance against strategic objectives for individuals, teams, and the organization as a whole.
Building a Supportive Culture: Foster a corporate culture that supports the strategic plan through leadership, communication, and alignment of incentives/rewards.
Managing Change: Effectively handle changes in processes, systems, and culture needed to implement the strategy, including overcoming resistance and ensuring stakeholder buy-in.
Leadership and Direction: Provide leadership to guide, motivate, inspire employees to achieve strategic objectives, including clear communication of the vision and strategy.

Ten Common Strategy Implementation Problems (1 of 2)

Problems can include:
- Taking more time than planned
- Unanticipated major problems
- Ineffective coordination
- Competing activities/crises creating distractions
- Employees with insufficient capabilities

Ten Common Strategy Implementation Problems (2 of 2)

Additional problems can include:
- Inadequate training for lower-level employees
- Uncontrollable external environmental factors
- Poor departmental leadership/direction
- Key implementation tasks/activities poorly defined
- Information system inadequately monitoring activities

Developing Programs, Budgets, and Procedures

Program: A collection of tactics, where tactics are individual actions taken to accomplish a plan.
Tactically-oriented programs make strategies more action-oriented.

Timing Tactics: When to Compete (1 of 2)

Timing tactic: Deals with when companies implement a strategy.
First mover: First company to manufacture and sell a new product/service.

Timing Tactics: When to Compete (2 of 2)

Late movers: May imitate competitors to implement their strategies only after a certain standard is set or when a market is established.
Late movers are likely to avoid errors and challenges faced by first movers.

Market Location Tactics: Where to Compete

Market location tactic: Deals with where a company implements a strategy.
Offensive tactic: Usually implemented in an established competitor's market territory.
Defensive tactic: Usually takes place in the firm's current market position as defense against a competitor or rival.

Offensive Tactics

Offensive tactics are strategic maneuvers designed to seize market share or gain an advantage over competitors.
- Frontal assault
- Flanking maneuver
- Bypass attack
- Encirclement
- Guerilla warfare

Defensive Tactics

Defensive Tactics: Designed to protect current market position or minimize the impact of a competitor's actions.
- Raising structural barriers
- Increasing expected retaliation
- Lowering the inducement for attack

Budgets and Procedures

Budgeting: The last real check a corporation has on the practicality of its chosen strategy.
Procedures: Detail the activities needed to complete programs. Standard operating procedures (SOPs) provide uniform processes.

Achieving Synergy

Synergy: For a divisional corporation, the return on investment is greater than what the return would be if each division were an independent business.

Six Forms of Synergy

Shared know-how
Coordinated strategies
Shared tangible resources
Economies of scale or scope
Pooled negotiating power
New business creation

Structure Follows Strategy

Corporate strategy changes cause organizational structures to shift.
The five stages of Corporate development are:
- New strategy is created
- New administrative problems emerge
- Economic performance declines
- New structure to support implementation
- Economic performance rises

Stages of Corporate Development

Simple Structure: This structure is flexible and dynamic
Functional Structure: Entrepreneur is replaced by a team of managers when the company grows
Divisional Structure: Management of diverse product lines/multiple industries, decentralized decision-making is seen in this structure
Beyond SBU’s: The structure may be a matrix or network structure

Blocks to Changing Stages

Internal blocks: Lack of resources, lack of ability, top management unwillingness to delegate.
External blocks: Economic conditions, labor shortages, & lack of market growth

Organizational Life Cycle

A cycle through the stages of birth, growth, maturity, decline, and death of an organization.

Flexible Types of Organizational Structures (1 of 4)

Matrix structure: Combines functional and product forms simultaneously at the same level in an organization.

Flexible Types of Organizational Structures (2 of 4)

Conditions for Matrix Structures:
- Ideas need to be cross-fertilized
- Resources are scarce
- Decision-making and information-processing abilities need improvement

Flexible Types of Organizational Structures (3 of 4)

Three distinct phases of matrix structure development:
- Temporary cross-functional task forces
- Product/brand management
- Mature matrix

Flexible Types of Organizational Structures (4 of 4)

Network Structure: Virtual elimination of in-house business functions.
Virtual organization: Composed of project groups or collaborations linked by electronic networks.

Cellular/Modular Organization

A structure composed of interacting cells which can operate independently but work together to accomplish tasks more effectively.
This structure is seen often in organizations that focus heavily on rapid product/service innovation.

Reengineering and Strategy Implementation

Reengineering: Radical redesign of business processes to improve cost, service, or time. Often used for turnaround strategies.

Principles for Reengineering (1 of 2)

Organize around outcomes, not tasks.
Have those who use the output of a process perform the process.
Integrate information processing into the process.
Treat geographically dispersed resources as centralized.

Principles for Reengineering (2 of 2)

Link parallel activities instead of integrating their outcomes.
Put the control point where the work is performed.
Record information once at the source.

Six Sigma

Six Sigma: Analytical method for achieving perfect results on a production line by focusing on reducing product variance to improve quality and efficiency.
Lean Six Sigma: Includes removing unnecessary steps in any process and fixing those which remain

Process of Six Sigma

Identify processes with sub-optimal results
Measure current process performance
Analyze to identify errors
Improve the process to eliminate errors
Establish controls to prevent future defects

Designing Jobs to Implement Strategy (1 of 2)

Job design: the study of individual tasks to make them relevant to the company and employees.
Job design techniques:
- Job enlargement: Combining tasks to give a worker more similar duties
- Job rotation: Moving workers through several jobs to increase variety

Designing Jobs to Implement Strategy (2 of 2)

Job characteristics: Using task characteristics to improve employee motivation.
Job enrichment: Altering jobs to give the worker more autonomy and control over activities.

Centralization versus Decentralization

Product group structure: Enables managing similar products globally, centralizing decision-making.
Geographic area structure: Allows tailoring products for different regional differences, for enhanced regional coordination.

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Description

This quiz covers key concepts in strategy implementation, focusing on the organizational structures that facilitate effective execution of strategic plans. Learn about the issues influencing successful implementation, development of necessary programs and budgets, and the balance between centralization and decentralization in organizations.