SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing
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SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing

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SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing Presentation Transcript

  • Strategic Management BUSM 3200 These Lecture Slides summarize the key points covered in the respective chapters in your recommended text; these slides do NOT substitute, at all, the required reading of the assigned chapter from the text. These slides also may contain additional supplementary material extracted from other texts and sources outside your text book.BUSM 3200- Strategic Management (Jan 2013) GDS 10-1
  • Learning outcomes Identify key challenges in organizing for success, including ensuring control, managing knowledge, coping with change and responding to internationalization. Analyze main organization structural types in terms of strengths and weaknesses. Recognise key issues in designing organisational control systems (such as planning and performance targeting systems). Recognise how the three strands of strategy, structure and systems should reinforce each other in organisational configurations and the managerial dilemmas involved.BUSM 3200- Strategic Management (Jan 2013) GDS 10-2
  • Structures and systems Structures give people formally defined roles, responsibilities and lines of reporting with regard to strategy. Systems support and control people as they carry out structurally defined roles and responsibilities. Configurations are the mutually supporting elements that make up an organisation’s design.BUSM 3200- Strategic Management (Jan 2013) GDS 10-3
  • Organisational configurations Figure 13.1 Organizational configurations: strategy, structure and systemsBUSM 3200- Strategic Management (Jan 2013) GDS 10-4
  • Structural types Functional Multidivisional Multinational/ Matrix Transnational Project-basedBUSM 3200- Strategic Management (Jan 2013) GDS 10-5
  • The functional structure The functional structure divides responsibilities according to the organisation’s primary specialist roles such as production, research and sales.BUSM 3200- Strategic Management (Jan 2013) GDS 10-6
  • A functional structureBUSM 3200- Strategic Management (Jan 2013) GDS 10-7
  • Functional structuresAdvantages DisadvantagesChief executive in Senior managers touch with all overburdened with operations. routine matters. Senior managersReduces/simplifies neglect strategic issues. control mechanisms. Difficult to cope withClear definition of diversity. responsibilities. Coordination betweenSpecialists at senior functions is difficult. and middle Failure to adapt. management levels. 10-8
  • The multidivisional structure The multidivisional structure is built up of separate divisions on the basis of products, services or geographical areas.BUSM 3200- Strategic Management (Jan 2013) GDS 10-9
  • A multidivisional structureBUSM 3200- Strategic Management (Jan 2013) GDS 10-10
  • Multidivisional structuresAdvantages DisadvantagesFlexible (add or Duplication of central divest divisions). and divisionalControl by functions. performance. Fragmentation andOwnership of non-cooperation. strategy. Danger of loss ofSpecialization of central control. competences.Training in strategic view. 10-11
  • The matrix structure The matrix structure combines different structural dimensions simultaneously, for example product divisions and geographical territories or product divisions and functional specialisms.BUSM 3200- Strategic Management (Jan 2013) GDS 10-12
  • Matrix structures (1) Figure 13.4 Two examples of matrix structuresBUSM 3200- Strategic Management (Jan 2013) GDS 10-13
  • Matrix structures (2) Figure 13.4 Two examples of matrix structures (Continued)BUSM 3200- Strategic Management (Jan 2013) GDS 10-14
  • Matrix structuresAdvantages DisadvantagesIntegrated knowledge. Length of time to takeFlexible. decisions.Allows for dual Unclear job and task dimensions. responsibilities. Unclear cost and profit responsibilities. High degrees of conflict. 10-15
  • Multinational structures Figure 13.5 Multinational structures Source: Reprinted by permission of Harvard Business School Press. From Managing Across Borders: The Transnational Corporation, 2nd edition by C.A. Bartlett and S. Ghoshal, Boston, MA, 1998. Copyright © 1998 by the Harvard Business School Publishing Corporation. All rights reservedBUSM 3200- Strategic Management (Jan 2013) GDS 10-16
  • Transnational structures The transnational structure combines local responsiveness with high global coordination. Key Advantages include:  Knowledge-sharing.  Specialisation.  Network management.BUSM 3200- Strategic Management (Jan 2013) GDS 10-17
  • Project-based structures A project-based structure is one where teams are created, undertake the work (e.g. internal or external contracts) and are then dissolved.BUSM 3200- Strategic Management (Jan 2013) GDS 10-18
  • Comparison of structures Table 13.1 Comparison of structuresBUSM 3200- Strategic Management (Jan 2013) GDS 10-19
  • Design tests for checking structural solutionsMarket- Difficult Links. Advantage. RedundantParenting Hierarchy. Advantage. Accountability.People. Flexibility.Feasibility.Specialized Cultures. 5-20
  • Types of control systems Table 13.2 Types of control systemsBUSM 3200- Strategic Management (Jan 2013) GDS 10-21
  • Types of control systems Direct supervision – direct control of strategic decisions by one or a few individuals, typically focused on the effort of employees. Cultural systems aim to standardise norms of behaviour within an organisation in line with particular objectives. Performance targets focus on the outputs of an organisation (or its parts) such as product quality, revenues or profits. Internal market systems – a formal system of a) ‘contracting’ for resources or inputs and b) for supplying outputs to other parts of an organisation.BUSM 3200- Strategic Management (Jan 2013) GDS 10-22
  • Balanced scorecards Balanced scorecards set performance targets according to a range of perspectives, not only financial. Typically combine four specific perspectives:  financial,  customer,  internal and  innovation and learning.BUSM 3200- Strategic Management (Jan 2013) GDS 10-23
  • Strategy maps Strategy maps link different performance targets into a mutually supportive causal chain supporting strategic objectives.BUSM 3200- Strategic Management (Jan 2013) GDS 10-24
  • A strategy map Figure 13.6 A strategy map Source: Exhibit 1, R. Lawson, W. Stratton and T. Hatch (2005), ‘Achieving strategy with Scorecarding’, Journal of Corporate Accounting and Finance, March–April, 62–8: p. 64BUSM 3200- Strategic Management (Jan 2013) GDS 10-25
  • Planning systems Planning systems plan and control the allocation of resources and monitor their utilisation.BUSM 3200- Strategic Management (Jan 2013) GDS 10-26
  • Strategy styles Figure 13.7 Strategy styles Source: Adapted from M. Goold and A. Campbell, Strategies and Styles, Blackwell, 1989, Figure 3.1, p. 39BUSM 3200- Strategic Management (Jan 2013) GDS 10-27
  • Configurations Configurations are the set of organisational design elements that interlink together in order to support the intended strategy.BUSM 3200- Strategic Management (Jan 2013) GDS 10-28
  • McKinsey 7-S framework Figure 13.8 The McKinsey 7 Ss Source: R. Waterman, T. Peters and J. Phillips, ‘Structure is not organization’, Business Horizons, June 1980, pp. 14–26: p. 18BUSM 3200- Strategic Management (Jan 2013) GDS 10-29
  • Configuration dilemmas Figure 13.9 Some dilemmas in organizing for successBUSM 3200- Strategic Management (Jan 2013) GDS 10-30
  • Summary  Successful organising means responding to the key challenges facing the organisation. This chapter has stressed control, change, knowledge and internationalisation.  There are many structural types (e.g. functional, divisional, matrix, transnational and project). Each type has its own strengths and weaknesses and responds differently to the challenges of control, change, knowledge and internationalisation.  There is a range of different organisational systems to facilitate and control strategy. These focus on either inputs or outputs and can be direct or indirect.  The separate organisational elements, summarised in the McKinsey 7-S framework, should come together to form a coherent reinforcing configuration. But these reinforcing cycles also raise dilemmas that can be managed by subdividing, combining and reorganising.BUSM 3200- Strategic Management (Jan 2013) GDS 10-31
  • Sample essay question  "Corporate structure and financial control mechanisms contributed more to XYZ Company gaining sustainable competitive advantage than its corporate communications or organizational culture". Using examples from XYZ Company and one other firm to justify your point of view, discuss this statement in relation to the XYZ company case studied in this course.BUSM 3200- Strategic Management (Jan 2013) GDS 10-32
  • Sample Essay Question Compare and contrast the advantages and disadvantages of using Porters Five Forces, Balanced Scorecard, Value Chain, and SWOT analyses for a firm to formulate strategy. Illustrate your answer with examples from two of the cases studied in this course.BUSM 3200- Strategic Management (Jan 2013) GDS 10-33
  • Sample Essay Question Strategic control, financial control, and strategic planning are three ways of dividing responsibilities between corporate centre and its business units. Discuss these three ways of control and their links with three corporate rationales. Give examples to support your argument.BUSM 3200- Strategic Management (Jan 2013) GDS 10-34
  • Sample Essay Question The balanced scorecard is widely used as a useful set of performance targets for controlling organisations’ performance. Discuss the contents of balanced scorecards and potential benefits of implementing it in organisations.BUSM 3200- Strategic Management (Jan 2013) GDS 10-35