This chapter discusses strategy implementation and contrasts it with strategy formulation. Strategy implementation requires operational coordination across many individuals, focusing on efficiency. It involves altering structures, processes, and incentives to support new strategies. Annual objectives are important for allocating resources, evaluating managers, and monitoring progress. Organizational structure must match strategy to enable implementation. Restructuring changes ownership priorities while reengineering changes processes to benefit employees and customers. Performance pay can be linked to strategies through bonus and profit-sharing systems. Managing resistance to change is key through education, self-interest appeals, or forcing change. Culture shapes implementation and must be modified to support new strategies. Production concerns include decisions around assets, processes, quality, and innovation.
1. CHAPTER 7
Felicia Monika
• 1511011032
Astri Datmalem P.
• 1511011051
ECONOMIC AND BUSINESS FACULTY
UNIVERSITY OF LAMPUNG
2. CHAPTER OBJECTIVES
1. Explain why strategy implementation is more difficult than strategy formulation.
2. Discuss the importance of annual objectives and policies in achieving organizational commitment
for strategies to be implemented.
3. Explain why organizational structure is so important in strategy implementation.
4. Compare and contrast restructuring and reengineering.
5. Describe the relationships between production/operations and strategy implementation.
6. Explain how a firm can effectively link performance and pay to strategies.
7. Discuss employee stock ownership plans (ESOPs) as a strategic management concept.
8. Describe how to modify an organizational culture to support new strategies.
9. Discuss the culture in Mexico and Japan.
10. Describe the glass ceiling in the United States.
3.
4. The Nature of Strategy
Implementation
Strategy formulation and implementation can be contrasted in the following ways:
Strategy
implementation
is primarily an
operational
process.
Strategy
formulation
requires good
intuitive and
analytical skills.
Strategy
implementation
requires special
motivation and
leadership
skills.
Strategy
formulation
requires
coordination
among a few
individuals.
Strategy
implementation
requires
coordination
among many
individuals.
Strategy
formulation is
positioning
forces before
the action.
Strategy
implementation
is managing
forces during
the action.
Strategy
formulation
focuses on
effectiveness.
Strategy
implementation
focuses on
efficiency.
Strategy
formulation is
primarily an
intellectual
process.
5. Implementing strategies requires such actions as
:
altering sales
territories,
adding new
departments,
closing
facilities,
hiring new
employees,
changing an
organization’s
pricing
strategy,
And so on.
7. Annual objectives are essential for
strategy implementation
(1) represent the basis for allocating resources;
(2) are a primary mechanism for evaluating
managers;
(3) are the major instrument for monitoring
progress toward achieving long-term objectives;
(4) establish organizational, divisional, and
departmental priorities.
9. Resource
Allocationa central management activity that allows for strategy execution.
financial
resources
physical
resources
human resources
Technological
resources.
12. RESTRUCTURING, REENGINEERING, AND E-ENGINEERING
Restructuring
concerned
primarily with
shareholder
well-being
rather than
employee
well-being.
Reengineering
concerned
more with
employee and
customer well-
being than
shareholder
well-being
14. Managing Resistance to Change
Resistance to change can be considered the single
greatest threat to successful strategy implementation.
Three
Approaches
Force
change
strategy
Educative
change
strategy
Rational or
self-interest
change
strategy
15. Formal statements of
organizational philosophy,
characters, creeds, materials
used for recruitment and
selection, and socialization
Designing of physical
spaces, facades,
buildings
Deliberate role
modeling, teaching, and
coaching by leaders
Explicit reward and
status system,
promotion criteria
Stories, legends, myths,
and parables about key
people and events
16. What leaders
pay attention
to, measure,
and control
Leader
reactions to
critical
incidents and
organizational
crises
How the
organization is
designed and
structured
Organizational
system and
procedures
Criteria used
for recruitment,
selection,
promotion,
leveling off,
retirement, and
“excommunicat
ion” of people
19. ESOP is a tax-qualified, defined-contribution, employee-benefit plan whereby employees
purchase stock of the company through borrowed money or cash contributions
20. Balancing Work Life and Home Life
Work/family strategies have become so popular among companies
today that the strategies now represent a competitive advantage for
those firms.
21. An organization can perhaps be most
effective when its workforce mirrors the
diversity of its customers.
22. Wellness programs provide counseling to
employees and seek lifestyle changes to
achieve healthier living