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Strategy Implementation

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Strategy Implementation ... Corporate Strategy Business Strategies Functional Tactics Corporate strategy Achieve 15-20 % annual growth through existing businesses ... – PowerPoint PPT presentation

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Title: Strategy Implementation


1
Session 21
  • Strategy Implementation

2
Strategic Management Model
3
Strategy Implementation
Identify short-term objectives
Initiate specific functional tactics
Communicate policies to empower people
Design effective reward systems
4
What are Short-Term Objectives?
Provide specific guidance for what is to be done,
translating vision into action
5
Role of Short-Term Objectives in Implementing
Strategy
1. Operationalize long-term objectives
2. Raise issues and potential conflicts requiring
coordination to avoid dysfunctional consequences
3. Identify measurable outcomes of functional
activities to be used to make feedback,
correction, and evaluation more relevant
6
Potential Conflicting Objectives and Priorities
7
Relationship of Action Plans to Short-Term
Objectives
Specificity - Identify functional activities to
be undertaken to build competitive advantage
Provide a clear time frame for completion
Identify who is responsible for each action in
the plan
8
Qualities of Effective Short-term Objectives
9
Creating Measurable Objectives
10
Value-Added Benefits of Short-Term Objectives
Give operating personnel a better understanding
of their role in a firms mission
Provide basis for accomplishing conflicting
concerns
Provide basis for strategic control
Motivation - Clarify personal and group roles in
a firms strategies
11
Functional Tactics (aka Short Term Strategies)
  • key, routine activities that must be undertaken
    in each functional area to provide the businesss
    products and services
  • In a sense, functional tactics translate thought
    into action 
  • Every value chain activity in a company executes
  • functional tactics that support the businesss
    strategy and help accomplish strategic objectives

12
Functional Tactics at General Cinema Corporation
13
Functional Tactics
  • Functional tactics are different from business or
    corporate strategies in three fundamental ways
  • Time horizon
  • Specificity
  • Participants who develop
  • them

14
Characteristics of Functional Tactics in
Production/Operations
  • Viewed as core function of an organization
  • Involves converting inputs into value-enhanced
    output
  • Focuses on decisions regarding
  • Basic nature of firms POM system,
  • Seeks optimum balance between investment input
    and production/operations output
  • Location
  • Facilities design
  • Process planning on a short-term basis

15
Key Functional Tactics in POM
16
Characteristics of Functional Tactics in Marketing
  • Lead to strategic success of the firm through the
    profitable sale of products/services in target
    markets
  • Clearly identify customer needs that
    products/services aim to meet
  • Identify where, when, and by whom
    products/services are to be sold
  • Define how firm will communicate with target
    markets
  • Directly influence supply, demand, profitability,
    consumer perception, and regulatory response
    through pricing

17
Key Functional Tactics in Marketing
18
Characteristics of Functional Tactics in
Accounting and Finance
  • Time frame of finance tactics varies because they
    direct use of financial resources supporting the
    business strategy, long-term goals, and annual
    objectives
  • Long-term tactics guide decisions in
  • Long-term capital investment
  • Debt financing
  • Dividend allocation
  • Leveraging
  • Short-term tactics guide decisions in
  • Managing working capital and short-term assets
  • Accounting-focused tactics have taken on
    increased strategic significance in last decade

19
Key Functional Tactics in Finance and Accounting
20
Characteristics of Functional Tactics in RD
  • Assumed a key strategic role in many firms due to
    increasing rate of technological change
  • May be more critical instruments of business
    strategy in some industries than in others

21
Key Functional Tactics in RD
22
Characteristics of Functional Tactics in HRM
  • Assumed increasing strategic importance in the
    1990s
  • Aid long-term success in
  • Development of managerial talent and competent
    employees
  • Creating systems to manage compensation or
    regulatory concerns
  • Guiding effective utilization of human resources
    to achieve both the
  • Firms short-term objectives
  • Employees satisfaction and development

23
Key Functional Tactics in HRM
24
Empowering Operating Personnel Policies
  • Empowerment is the act of allowing an individual
    or team the right and flexibility to make
    decisions and initiate action
  • Policies are directives designed to guide the
    thinking, decisions, and actions of managers and
    their subordinates in implementing a firms
    strategy

25
Creating Policies That Empower
  1. Policies establish indirect control over
    independent action
  2. Policies promote uniform handling of similar
    activities
  3. Policies ensure quicker decisions by
    standardizing answers to recurring questions
  4. Policies institutionalize basic aspects of
    organization behavior
  5. Policies reduce uncertainty in repetitive and
    day-to-day decision making
  6. Policies counteract resistance
  7. Policies afford managers a mechanism for avoiding
    hasty decisions

26
Advantages of Formal, Written Policies
  1. They require managers to think through the
    policys meaning, content, and intended use
  2. They reduce misunderstanding
  3. They make equitable and consistent treatment of
    problems more likely
  4. They ensure unalterable transmission of policies
  5. They communicate the authorization or sanction of
    policies more clearly
  6. They supply a convenient and authoritative
    reference
  7. They systematically enhance indirect control and
    organization wide coordination of the key
    purposes of policies

27
Executive Compensation Plans
  • Stock options provide the executive with the
    right to purchase company stock at a fixed price
    in the future
  • Restricted stock is designed to provide benefits
    of direct executive stock ownership
  • Golden handcuffs occur where the stock
    compensation is deferred until vesting time
    provisions are met or a bonus is deferred
  • Golden parachutes are a form of bonus
    compensation that is designed to retain talented
    executives
  • Cash bonuses based on accounting measures
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