David sm13 ppt_07

Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 7 -1
Chapter 7
Implementing Strategies: Management &
Operations Issues
Strategic Management:
Concepts & Cases
13th
Edition
Fred David

Ch 7 -2

Ch 7 -3
Strategy Formulation vs.
Implementation
Strategy Formulation
 Positioning forces
before the action
 Focus on effectiveness
 Primarily intellectual
 Requires good intuitive
and analytical skills
 Requires coordination
among a few people
Strategy Implementation
 Managing forces during
the action
 Focus on efficiency
 Primarily operational
 Requires special
motivation and
leadership skills
 Requires coordination
among many people

Ch 7 -4
 Shift in responsibility
Nature of Strategy Implementation
Management Perspectives
Divisional or
Functional
Managers
Strategists

Ch 7 -5
Management Issues Central to
Strategy Implementation
 Establish annual
objectives
 Devise policies
 Allocate resources
 Alter existing
organizational structure
 Restructure & reengineer
 Revise reward & incentive
plans
 Minimize resistance to
change
 Match managers to strategy
 Develop a strategy-
supportive culture
 Adapt production/operations
processes
 Develop an effective human
resources function
 Downsize & furlough as
needed
 Link performance & pay to
strategies

Ch 7 -6
Purpose of Annual Objectives
Basis for resource allocation
Mechanism for management evaluation
Major instrument for monitoring progress
toward achieving long-term objectives
Establish priorities (organizational, divisional,
and departmental)

Ch 7 -7
Annual Objectives
 Horizontal consistency of objectives
 Vertical consistency of objectives

Ch 7 -8
Policies
 Policies set boundaries, constraints,
and limits on the kinds of
administrative actions that can be
taken to reward and sanction
behavior

Ch 7 -9
Resource Allocation
1. Financial resources
2. Physical resources
3. Human resources
4. Technological resources
Four Types of Resources

Ch 7 -10
Managing Conflict
 Conflict not always “bad”
 Lack of conflict may signal apathy
 Can energize opposing groups to action
 May help managers identify problems

Ch 7 -11
Managing Conflict
 Approaches for managing and resolving
conflict
 Avoidance
 Defusion
 Confrontation

Ch 7 -12
Matching Structure with Strategy
 Structure dictates how objectives
and policies will be established
 Structure dictates how resources
will be allocated
 Changes in strategy often lead to
changes in organizational structure

Ch 7 -13

Ch 7 -14
Basic Forms of Structure
 Functional Structure
 Divisional Structure
 Strategic Business Unit Structure
(SBU)
 Matrix Structure

Ch 7 -15
Functional Structure
 Group tasks and activities by
business function

Ch 7 -16
Functional Structure

Ch 7 -17
Divisional Structure
 Can be organized in one of four
ways:
 By geographic area
 By product or service
 By customer
 By process

Ch 7 -18
Divisional Structure

Ch 7 -19
Strategic Business Unit Structure
(SBU)
 Group similar divisions into
strategic business units and
delegate authority and
responsibility for each unit to a
senior executive who reports
directly to the chief executive
officer

Ch 7 -20
Matrix Structure
 The most complex of all designs
because it depends upon both
vertical and horizontal flows of
authority and communication

Ch 7 -21
Matrix Structure

Ch 7 -22
Restructuring, Reengineering, and
E-engineering
Restructuring is called
Downsizing
Rightsizing
Delayering

Ch 7 -23
Restructuring, Reengineering, and
E-engineering
Cornerstones of Reengineering
Decentralization
Reciprocal interdependence
Information sharing

Ch 7 -24
Tests for Performance-Pay Plans
Does the plan capture attention?
Do employees understand the plan?
Is the plan improving communication?
Does the plan pay out when it should?
Is the company or unit performing better?

Ch 7 -25
Managing Resistance to Change
 Force change strategy
 Educative change strategy
 Rational or self-interest change
strategy

Ch 7 -26
Creating a Strategy-Supportive Culture
1. Formal statements of organizational
philosophy
2. Design of physical spaces
3. Deliberate role modeling, teaching,
and coaching
4. Explicit reward and status system
5. Stories, legends, myths, and parables

Ch 7 -27
Creating a Strategy-Supportive Culture
6. What leaders pay attention to
7. Leader reactions to critical incidents and
crises
8. Organizational design and structure
9. Organizational systems and procedures
10. Criteria for recruitment, selection,
promotion, leveling off, retirement, and
“excommunication” of people

Ch 7 -28
Production/Operations Concerns
Production processes typically
constitute more than 70% of a
firm’s total assets

Ch 7 -29
Production/Operations Decision
Examples
Plant size
Inventory / Inventory control
Quality control
Cost control
Technological innovation

Ch 7 -30
Human Resource Concerns
Assessing staffing needs/costs
Furloughs
Developing performance incentives
ESOPs
Work–life balance issues
Matching managers with strategy

Ch 7 -31
Corporate Wellness Programs
 Wellness of employees has
become a strategic issue for many
firms

Ch 7 -32
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.

David sm13 ppt_07

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