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Implementing Strategies: Management

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The Nature of Strategy Implementation. Ch 7-4. Formulation positions forces before the action ... Nature of Strategy Implementation. Implementation Activities ... – PowerPoint PPT presentation

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Title: Implementing Strategies: Management


1
Chapter 7 Implementing Strategies Management
Operations Issues
2
Implementing Strategies
  • 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.

3
The Nature of Strategy Implementation
  • -- Successful strategy formulation does not
    guarantee successful strategy implementation

4
Nature of Strategy Implementation
Formulation vs. Implementation
  • Formulation positions forces before the action
  • Implementation manages forces during the action

5
Nature of Strategy Implementation
Formulation vs. Implementation
  • Formulation focuses on effectiveness
  • Implementation focuses on efficiency

6
Nature of Strategy Implementation
Formulation vs. Implementation
  • Formulation primarily an intellectual process
  • Implementation primarily an operational process

7
Nature of Strategy Implementation
Formulation vs. Implementation
  • Formulation requires good intuitive analytical
    skills
  • Implementation requires special motivational
    leadership skills

8
Nature of Strategy Implementation
Formulation vs. Implementation
  • Formulation requires coordination among a few
    individuals
  • Implementation requires coordination among many
    individuals

9
Nature of Strategy Implementation
Strategy Implementation
  • Varies among different types sizes of
    organizations

10
Nature of Strategy Implementation
Implementation Activities
  • Altering sales territories
  • Adding new departments
  • Closing facilities
  • Hiring new employees
  • Cost-control procedures
  • Modifying advertising strategies
  • Building new facilities

11
Nature of Strategy Implementation
Management Perspectives
  • Shift in responsibility

Division or Functional Managers
Strategists
12
Management Issues
Annual Objectives
Policies
Management Issues
Resources
Organizational structure
Restructuring
Rewards/Incentives
13
Management Issues (contd)
Resistance to Change
Natural Environment
Management Issues
Supportive Culture
Production/Operations
Human Resources
14
Management Issues
Annual Objectives --
-- Decentralized activity -- Directly involve all
managers in the organization
15
Management Issues
Purpose of Annual Objectives --
Basis for resource allocation Mechanism for manag
ement evaluation Metric for gauging progress on l
ong-term objectives Establish priorities (organiz
ational, division, departmental)
16
Management Issues
Consistency of Annual Objectives --
Across hierarchical levels Horizontally consisten
t
Vertically consistent
17
Management Issues
Requirements of Annual Objectives
Measurable Consistent Reasonable Challenging C
lear
Understood Timely
18
Management Issues
Annual Objectives Should State
Quantity Quality Cost Time Be Verifiable
19
Management Issues
Annual Objectives
Policies
Management Issues
Resources
Organizational structure
Restructuring
Rewards/Incentives
20
Management Issues
Policies --
-- Facilitate the solving or recurring problems
guide implementation of strategy
21
Management Issues
Policies Establish --
Boundaries Constraints Limits
22
Management Issues
Annual Objectives
Policies
Management Issues
Resources
Organizational structure
Restructuring
Rewards/Incentives
23
Management Issues
Resource Allocation
-- Central management activity that allows for
the execution of strategy
24
Management Issues
4 Types of Resources
Financial resources Physical resources Human res
ources
Technological resources
25
Management Issues
Managing Conflict
-- Disagreement between two more parties on one
or more issues
26
Management Issues
Managing Conflict
Conflict not always bad No conflict may signal
apathy Can energize opposing groups to action Ma
y help managers identify problems
27
Management Issues
Conflict Management Resolution
Avoidance Diffusion Confrontation
28
Management Issues
Annual Objectives
Policies
Management Issues
Resources
Organizational structure
Restructuring
Rewards/Incentives
29
Management Issues
Matching Structure w/ Strategy
-- Changes in strategy Changes in structure
30
Management Issues
Structure Strategy
Structure dictates how objectives policies will
be established Structure dictates how resources w
ill be allocated
31
Chandlers Strategy-Structure Relationship
New administrative problems emerge
New strategy Is formulated
Organizational performance declines
Organizational performance improves
New organizational structure is established
32
Management Issues
Basic Forms of Structure
Functional Structure Divisional Structure Strate
gic Business Unit Structure (SBU)
Matrix Structure
33
Functional Structure (1)
  • Groups tasks and activities by business function
  • Coordination and control rests with top
    management

34
A Typical Functional Structure
35
Divisional Structure (2)
  • Probable next stage of development
  • Decentralized and organized by geography,
    product, customer, or process
  • Each unit responsible for a product, customer, or
    process
  • Semi-autonomous and accountable for performance
  • Eases coordination and control problems

36
A Typical Product Division Structure
37
SBU Structure (3)
  • Next type in terms of complexity
  • Groups similar divisions
  • Delegates authority and responsibility to SBU
    executive
  • Semi-autonomous and accountable for profit
    performance

38
A Typical SBU Structure
39
Matrix Structure (4)
  • Most complex of structures
  • Best for large, sophisticated companies
  • Depends upon both vertical and horizontal flows
    of authority and communication
  • Pros Flexible and team-oriented
  • Cons Leads to conflict and power struggles

40
A Matrix Structure
41
Management Issues
Annual Objectives
Policies
Management Issues
Resources
Organizational structure
Restructuring
Rewards/Incentives
42
Management Issues
Restructuring
-- Reducing the size of the firm of
employees, divisions, and/or units, of
hierarchical levels
43
Management Issues
Restructuring
Downsizing Rightsizing Delayering
44
Management Issues
Reengineering
-- Reconfiguring or redesigning work, jobs,
processes to improve cost, quality, service,
speed.
45
Management Issues
Reengineering
Process management Process innovation Process re
design
46
Management Issues
Annual Objectives
Policies
Management Issues
Resources
Organizational structure
Restructuring
Rewards/Incentives
47
Management Issues
Linking Pay/Performance to Strategies
-- Pay for performance systems
48
Management Issues
Linking Pay/Performance to Strategies
Dual bonus systems Profit sharing systems Gain S
haring systems
49
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?
50
Management Issues (contd)
Resistance to Change
Natural Environment
Management Issues
Supportive Culture
Production/Operations
Human Resources
51
Management Issues
Resistance to Change
-- Single greatest threat to successful strategy
implementation
52
Management Issues
Resistance to Change
-- Raises anxiety fear concerning
Economic loss Inconvenience Uncertainty Break i
n status-quo
53
Management Issues
Change Strategies
Force Change Strategy Educative Change Strategy
Rational or Self-Interest Change Strategy
54
Management Issues (contd)
Resistance to Change
Natural Environment
Management Issues
Supportive Culture
Production/Operations
Human Resources
55
Management Issues
Natural Environment
-- Wide appreciation for firms that mend rather
than harm the environment
56
Management Issues
Natural Environment Environmental Strategies
Develop/acquire green businesses
Divesting environmental-damaging business
Low-cost producer through waste minimization
energy conservation
57
Management Issues (contd)
Resistance to Change
Natural Environment
Management Issues
Supportive Culture
Production/Operations
Human Resources
58
Management Issues
Strategy-Supportive Culture
-- Preserve, emphasize, build upon aspects of
existing culture that support new strategies
59
Management Issues
Elements linking culture to strategy
  • 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

60
Management Issues
Elements linking culture to strategy
  • 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

61
Management Issues (contd)
Resistance to Change
Natural Environment
Management Issues
Supportive Culture
Production/Operations
Human Resources
62
Management Issues
Production/Operations Concerns
-- Production processes typically constitute more
than 70 of firms total assets
63
Management Issues
Production/Operations Decisions
Plant size Inventory/Inventory control Quality c
ontrol
Cost control Technological innovation
64
Management Issues (contd)
Resistance to Change
Natural Environment
Management Issues
Supportive Culture
Production/Operations
Human Resources
65
Management Issues
Human Resource Concerns
-- HR manager position has strategic
responsibility has changed dramatically as
companies continue to reorganize, outsource, etc.
66
Management Issues
Human Resource Strategic Responsibilities
Assessing staffing needs/costs
Developing performance incentives
ESOPs Child-care policies Work-life balance iss
ues
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