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1
Strategy Implementation
 What must we do to put the strategy in
place, execute it proficiently, and
produce good result...
2
Building a
Capable
Organization
Allocating
Resources
Establishing Strategy-
Supportive Policies
Instituting Best
Practic...
3
Figure 11.2: The Three Components of
Building a Capable Organization
Staffing the Organization
A Company with
the
Compet...
4
ALLOCATINGALLOCATING
RESOURCES TORESOURCES TO
SUPPORT STRATEGYSUPPORT STRATEGY
IMPLEMENTATIONIMPLEMENTATION
5
Allocating Resources to
Support Strategy Execution
 Resource allocation should fit strategy
 Changing strategy require...
6
CREATING STRATEGY-CREATING STRATEGY-
SUPPORTIVE POLICIES ANDSUPPORTIVE POLICIES AND
PROCEDURESPROCEDURES
7
Fig. 12.1: How Prescribed Policies and
Procedures Facilitate Strategy Execution
8
INSTITUTING BEST PRACTICESINSTITUTING BEST PRACTICES
AND CONTINUOUS IMPROVEMENTAND CONTINUOUS IMPROVEMENT
9
Instituting Best Practices
and Continuous Improvement
 Searching out and adopting best practices
is integral to effecti...
10
INSTALLING STRATEGY-INSTALLING STRATEGY-
SUPPORTIVESUPPORTIVE
INFORMATION ANDINFORMATION AND
OPERATING SYSTEMSOPERATING...
11
Installing Strategy-Supportive
Information and Operating Systems
 Good information and operating systems are
essential...
12
TYING REWARDS ANDTYING REWARDS AND
INCENTIVES TO GOODINCENTIVES TO GOOD
STRATEGY IMPLEMENTATIONSTRATEGY IMPLEMENTATION
13
 Challenge – Behavioral Control
 How to ensure actions of employees
stay within acceptable bounds
 Control approache...
14
Monetary IncentivesMonetary Incentives
 Base pay increases
 Performance bonuses
 Profit sharing plans
 Stock option...
15
 Rewards are the single most powerful tool to
win the commitment of company personnel to
effective strategy implementa...
16
BUILDING A STRATEGY-BUILDING A STRATEGY-
SUPPORTIVE CORPORATESUPPORTIVE CORPORATE
CULTURECULTURE
17
Defining Characteristics
of Corporate Culture
 Core values, beliefs, and business principles
 Ethical standards
 Ope...
18
A company’s culture is manifested in . . .
 Values, business principles, and ethical standards
preached and practiced ...
19
Why is Culture Important?
 Matching culture to strategy will improve
performance
 A culture that promotes attitudes a...
20
 A culture based on ethical principles is vital to
long-term strategic success
 Ethics programs help make ethical con...
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Ch13 mba

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Ch13 mba

  1. 1. 1 Strategy Implementation  What must we do to put the strategy in place, execute it proficiently, and produce good results?  Creating FITS between strategy and external environment and creating FITS inside the organization  Control, coordination, and motivation issues
  2. 2. 2 Building a Capable Organization Allocating Resources Establishing Strategy- Supportive Policies Instituting Best Practices for Continuous Improvement Installing Support SystemsTying Rewards to Achievement of Key Strategic Targets Exercising Strategic Leadership Shaping Corporate Culture to Fit Strategy Strategy Implementer’s Action Agenda Figure 11.1: The Eight Components of the Strategy Execution Process
  3. 3. 3 Figure 11.2: The Three Components of Building a Capable Organization Staffing the Organization A Company with the Competencies and Capabilities Needed for Proficient Strategy Execution Building Core Competencies and Competitive Capabilities Matching the Organization Structure to Strategy
  4. 4. 4 ALLOCATINGALLOCATING RESOURCES TORESOURCES TO SUPPORT STRATEGYSUPPORT STRATEGY IMPLEMENTATIONIMPLEMENTATION
  5. 5. 5 Allocating Resources to Support Strategy Execution  Resource allocation should fit strategy  Changing strategy requires changes to resource allocation process  Shifting resources — downsizing some areas, upsizing others, getting rid of activities no longer needed, and funding new strategically critical activities  Financial and other resources (physical and human assets)
  6. 6. 6 CREATING STRATEGY-CREATING STRATEGY- SUPPORTIVE POLICIES ANDSUPPORTIVE POLICIES AND PROCEDURESPROCEDURES
  7. 7. 7 Fig. 12.1: How Prescribed Policies and Procedures Facilitate Strategy Execution
  8. 8. 8 INSTITUTING BEST PRACTICESINSTITUTING BEST PRACTICES AND CONTINUOUS IMPROVEMENTAND CONTINUOUS IMPROVEMENT
  9. 9. 9 Instituting Best Practices and Continuous Improvement  Searching out and adopting best practices is integral to effective implementation  Benchmarking is the backbone of the process of identifying, studying, and implementing best practices  Key tools to promote continuous improvement  Business process reengineering  TQM  Six Sigma quality control
  10. 10. 10 INSTALLING STRATEGY-INSTALLING STRATEGY- SUPPORTIVESUPPORTIVE INFORMATION ANDINFORMATION AND OPERATING SYSTEMSOPERATING SYSTEMS
  11. 11. 11 Installing Strategy-Supportive Information and Operating Systems  Good information and operating systems are essential for first-rate strategy execution  Support systems can relate to all value-chain activities  Includes all type of Computer Based Information Systems (CBISs):  MIS, DBMS, TPS, DSS, E-commerce and e- business systems, CRM, SCM, etc…  Mobilizing information and creating systems to use knowledge effectively can yield  Competitive advantage
  12. 12. 12 TYING REWARDS ANDTYING REWARDS AND INCENTIVES TO GOODINCENTIVES TO GOOD STRATEGY IMPLEMENTATIONSTRATEGY IMPLEMENTATION
  13. 13. 13  Challenge – Behavioral Control  How to ensure actions of employees stay within acceptable bounds  Control approaches  Managerial control Establish boundaries on what not to do, allowing freedom to act with limits Track and review daily operating performance  Peer-based control Exercising Adequate Control Over Empowered Employees
  14. 14. 14 Monetary IncentivesMonetary Incentives  Base pay increases  Performance bonuses  Profit sharing plans  Stock options  Retirement packages  Piecework incentives Non-monetary IncentivesNon-monetary Incentives  Praise  Constructive criticism  Special recognition  More, or less, job security  Stimulating assignments  More, or less, autonomy  Rapid promotion Gaining Commitment: Components of an Effective Reward System
  15. 15. 15  Rewards are the single most powerful tool to win the commitment of company personnel to effective strategy implementation  Objectives in designing the reward system  Generously reward those achieving objectives  Deny rewards to those who don’t  Tie incentive compensation to relevant outcomes - both strategic and financial Linking the Reward System to Performance Outcomes
  16. 16. 16 BUILDING A STRATEGY-BUILDING A STRATEGY- SUPPORTIVE CORPORATESUPPORTIVE CORPORATE CULTURECULTURE
  17. 17. 17 Defining Characteristics of Corporate Culture  Core values, beliefs, and business principles  Ethical standards  Operating practices and behaviors defining “how we do things around here”  Approach to people management  “Chemistry” and “personality” permeating work environment  Often told stories illustrating  Company’s values  Business practices  Traditions
  18. 18. 18 A company’s culture is manifested in . . .  Values, business principles, and ethical standards preached and practiced by management  Approaches to people management and problem solving  Official policies and procedures  Spirit and character permeating work environment  Interactions and relationships among managers and employees  Peer pressures that exist to display core values  Its revered traditions and often repeated stories  Its relationships with external stakeholders Identifying the Key Features of Corporate Culture
  19. 19. 19 Why is Culture Important?  Matching culture to strategy will improve performance  A culture that promotes attitudes and behaviors that are well-suited to strategy is a valuable ally in the strategy implementation process  Can hinder strategy implementation and performance if not compatible with strategy  A culture where attitudes and behaviors impede good strategy implementation is a huge obstacle to overcome  Provides another means to control, coordinate, and motivate employees
  20. 20. 20  A culture based on ethical principles is vital to long-term strategic success  Ethics programs help make ethical conduct a way of life  Executives must provide genuine support of personnel displaying ethical standards in conducting the company’s business  Value statements serve as a cornerstone for culture-building  Can be used to control employees – to behave in the “right” way Grounding the Culture in Core Values and Ethics

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