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    Strategic Implementation

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    Dr Rushen Singh
    The document discusses strategic implementation and the factors important for successful implementation. It covers understanding where implementation fits in the strategic process, the importance of resource planning and ensuring corporate culture and structure fit the strategy. It also discusses managing the change process through Lewin's three steps of change or using managerialist and change agent approaches. Key aspects of strategic implementation include resource audits and planning, assessing cultural and structural fit, and overcoming organizational inertia to change.

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    Strategic Implementation

    Uploaded by

    Dr Rushen Singh
    270 views28 pages
    The document discusses strategic implementation and the factors important for successful implementation. It covers understanding where implementation fits in the strategic process, the importance of resource planning and ensuring corporate culture and structure fit the strategy. It also discusses managing the change process through Lewin's three steps of change or using managerialist and change agent approaches. Key aspects of strategic implementation include resource audits and planning, assessing cultural and structural fit, and overcoming organizational inertia to change.

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    The document discusses strategic implementation and the factors important for successful implementation. It covers understanding where implementation fits in the strategic process, the importance of resource planning and ensuring corporate culture and structure fit the strategy. It also discusses managing the change process through Lewin's three steps of change or using managerialist and change agent approaches. Key aspects of strategic implementation include resource audits and planning, assessing cultural and structural fit, and overcoming organizational inertia to change.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    270 views28 pages

    Strategic Implementation

    Uploaded by

    Dr Rushen Singh
    The document discusses strategic implementation and the factors important for successful implementation. It covers understanding where implementation fits in the strategic process, the importance of resource planning and ensuring corporate culture and structure fit the strategy. It also discusses managing the change process through Lewin's three steps of change or using managerialist and change agent approaches. Key aspects of strategic implementation include resource audits and planning, assessing cultural and structural fit, and overcoming organizational inertia to change.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 28

    Strategic Implementation

    Prof. Rushen Chahal

    Learning Outcomes
    y y y y y

    Understand where strategy implementation fits into strategic process Understand the role of resource planning in strategic implementation Understand how corporate culture is important to strategy implementation Understand the link between structure and strategy Understand change management

    The Process
    Strategic Analysis

    Strategic Selection

    Strategic Implementation

    Introduction
    U.S. managers spend more than $10 billion each year on strategic analysis and making strategy y Managers report that less than half the strategic plans made are implemented y Outside observers estimate that only 10% of strategic plans are implemented
    y

    Implementation: Doing the Strategy


    y

    3 questions:
    How well is the strategy resourced? How well do the culture, structure and internal systems fit the strategy? How will the process of change be managed?

    Strategy Implementation

    Structure Decision Processes and Controls

    TaskTask-Focus (Value) Firm Strategy

    Firm Performance

    People

    Reward Systems

    How well is the strategy resourced?


    Do the resources need to be increased or decreased? y Resources include:
    y

    Physical Financial Human Intellectual/intangible

    Resource Audit
    y

    Used to assess resources for:


    Sufficiency Adequacy Availability

    Resource Planning
    y y

    Hand in hand with resource audits are plans to make sure the needs of the strategy are met Includes:
    Financial planning (budgeting) Human resource planning Physical resource planning Intellectual resource planning

    Does the culture fit the strategy?


    y y

    Assessment of the culture determines if the organization is ready to take on the strategy Use Miles and Snows culture types
    Defender Prospector Analyser Reactor

    Does the structure fit the strategy?


    y y y

    Height layers of the organization Width the extent to which power is decentralized Complexity the extent to which there is a formal hierarchy
    Formal/informal matrix

    Methods of division
    Simple Structure Functional Product Network

    Strategy Implementation
    
    Organization Structures Simple Structure

    President

    OwnerOwner-manager makes decisions. Little specialization of tasks. Few rules, little formalization. Advantages: - Provides high flexibility - Rapid product introduction - Few coordination problems

    Employees

    Organization structure
    Functional structure

    President Accounting Legal Affairs

    HRM

    Finance

    Marketing

    R&D

    Production

    Strategy Implementation

    Organization structure
    Functional structure Advantages - Centralized control of operations - Promotes in-depth functional expertise in- Enhances operating efficiency where tasks are routine Disadvantages - Functional coordination problems - Inter-functional rivalry Inter- Overspecialization and narrow viewpoints - Hinders development of cross-functional experience cross- Slower to respond in turbulent environments

    Organization structure
    ProductProduct-divisional structure

    President Government Affairs Legal Affairs

    Corporate R&D Lab

    Strategic Planning

    Corporate Human Resources

    Corporate Marketing

    Corporate Finance

    Product Division

    Product Division

    Product Division

    Product Division

    Product Division

    Strategy Implementation

    Organization structure
    ProductProduct-divisional structure Organization based on products versus functions Each division is a separate business in which day-to-day day-todecisions are delegated to divisional managers. Divisions are managed using strategic controls detailed knowledge of firm operations allows managers to remain actively involved. Overdiversification leads to inability to process detailed information and a reliance on financial controls to evaluate managers.

    Strategy Implementation

    Organization structure
    ProductProduct-divisional structure Advantages - Decentralized decision making - Each business is organized around products - Puts profit/loss accountability on managers - Facilitates rapid response to environmental changes - Allows efficient management of a large number of units Disadvantages - May lead to costly duplication of functions - Inter-divisional rivalry Inter- Corporate managers may lose in-depth understanding in-

    Matrix Structure

    President

    R&D

    Production

    Marketing

    Finance

    Business Project Business Project Business Project

    Specialists

    Specialists

    Specialists

    Specialists

    Specialists

    Specialists

    Specialists

    Specialists

    Specialists

    Specialists

    Specialists

    Specialists

    Strategy Implementation

    Organization structure
    Matrix structure Contains aspects of both functional and product-divisional productstructures. Advantages: - Creates checks and balances between competing viewpoints - Promotes holistic view of the firm - Encourages cooperation and consensus building Disadvantages: - Very complex and costly - Shared authority increases communication time - Difficult to respond rapidly - May promote bureaucracy and reduce innovation (in large firms).

    Strategy Implementation
    Network structure Group of firms combine resources to achieve together what they can t achieve alone. Advantages: - Firm s emphasize their own core competencies - Rapid response time

    Partner

    Partner

    Focal Firm

    - Very flexible - Reduces capital intensity Disadvantages - Asymmetric information - Technology expropriation - Trustworthiness of partners - Asset hold-up hold-

    Partner

    Partner

    How to manage change in implementation


    y y y y y

    Often, new strategy brings change Willingness to change depends on culture, size, structure, age, product, and positioning Challenge: how to overcome inertia From physics: a body at rest tends to stay at rest Inertia may result from:
    Lack of understanding Lack of trust Fear Uncertainty about the future

    Lewins 3 Steps of Change


    Unfreezing y Moving to a new level y Refreezing
    y

    Step Change vs. Incremental Change


    Step change = rapid change y Incremental change = small changes over time
    y

    Models for Managing Change


    Managerialist approach y Change agent approach
    y

    Managerialist Approach
    Using a variety of managerial approaches to effect change y Should include:
    y

    Education Communication Negotiation and participation Coercion (maybe)

    Change agent approach


    One individual manages the entire change process y May be a key manager, or an outside consultant
    y

    Strategy Implementation
    Sears example In 1983 Sears implements one-stop shopping banking-financial onebankingservices power. Sears retail unit fell to #3 behind low-cost providers (Walmart lowand K-Mart). KSpecialty retailers (focused differentiators) such as The Gap, The Limited, Toys-R-Us, and Kids-R-Us took market share. ToysKidsSears was outperformed by both low-cost and focused differentiators. lowSears initiated restructuring in 1992 after losing $3.8 billion.

    Strategy Implementation
    Sears example What happened? Why did Sears fail so dramatically? - Lost ability to control core business (too diversified). - Resources were taken from retail and given to new ventures. - Managers spent too much time on diversified businesses. - Managed retail segment using financial controls. - Lost operational understanding of the competitive dynamics in the retail industry.

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