Strategic Management PEARCE & ROBINSON

1. CHAPTER 10 Implementing Strategy: Structure, Leadership, and Culture

3. Ex. 10-2: What a Difference a Century Can Make (Contrasting Views of the Corporation)) The Web or Network External Flexible Change Interdependencies Bits – information Virtual integration Mass customization Global Real-time The Pyramid Internal Structured Stability Self-sufficiency Atoms – physical assets Vertical integration Mass production Domestic Quarterly Organization Focus Style Source of Strength Structure Resources Operations Products Reach Financials 21 st Century 20 th Century Characteristic

4. Ex. 10-2 (contd.) Hours Bottom-up Inspirational Employees/ free agents Personal growth To build Revolutionary No compromise Months Top-down Dogmatic Employees Security To compete Incremental Affordable best Inventories Strategy Leadership Workers Job Expectations Motivation Improvements Quality 21 st Century 20 th Century Characteristic

5. Trends Driving Organizational Structure Speed of Decision Making Globalization Internet

11. Product-Teams The product-team structure assigns functional managers and specialists (e.g., engineering, marketing, financial, R&D, operations) to a new product, project, or process team that is empowered to make major decisions about their product

12. Ex. 10-5: Product-Team Structure Chief Executive Officer Research and Development Engineering Operations Finance Sales and Marketing Product or process teams

13. Virtual Organization A temporary network of independent companies – suppliers, customers, subcontractors, even competitors – linked primarily by information technology to share skills, access to markets, and costs

14. Key Considerations of Organizational Leadership Organizational leadership involves action on two fronts Guiding the organization to deal with constant change Providing the management skill to cope with the ramifications of constant change

15. Strategic Leadership: Embracing Change Activities involved in galvanizing commitment to change Clarifying strategic intent Building an organization Shaping organizational culture

16. Strategic Intent An articulation of a simple criterion or characterization of what the company must become to establish and sustain global leadership

18. Ex. 10-13: Management Processes and Levels of Management RENEWAL PROCESS Attracting resources and capabilities and developing the business Developing operating managers and supporting their activities. Maintaining organizational trust Providing institutional leadership through shaping and embedding corporate purpose and challenging embedded assumptions INTEGRATION PROCESS Managing operational interdependencies and personal networks Linking skills, knowledge, and resources across units. Reconciling short-term performance and long-term ambition Creating corporate direction. Developing and nurturing organizational values Creating and pursuing opportunities. Managing continuous performance improvement Renewing, developing, and supporting initiatives Establishing performance standards ENTREPRENEURIAL PROCESS Front-Line Management Middle Management Top Management

19. What is Organizational Culture? The set of important assumptions (often unstated) that members of an organization share in common.

20. Ex. 10-14: Managing the Strategy-Culture Relationship Link changes to basic mission and fundamental organizational norms Reformulate strategy or prepare carefully for long-term, difficult cultural change Synergistic – focus on reinforcing culture Manage around the culture 1 4 2 3 High Low Many Few Potential compatibility of changes with existing culture Changes in key organizational factors that are necessary to implement the new strategy

21. Ex. 10-A: Functional Organizational Structure

23. Ex. 10-A (contd.) Process-Oriented Functional Structure

24. Ex. 10-B: Geographic Organizational Structure

26. Ex. 10-C: Divisional or Strategic Business Unit Structure Manager Prod/Operation Manager Marketing/Sales Manager, HR Manager, Acctg/Finance Manager, R&D Personnel Acctg/Control Division Planning Marketing Prod/Operation Marketing Prod/Operation Personnel Acctg/Control Division Planning Chief Executive Officer GM Division/SBU A GM Division/SBU B GM Division/SBU C VP-Admn Services VP-Operating Support

28. Ex. 10-D: Matrix Organizational Structure Engineering Staff Engineering Staff Engineering Staff Production Staff Production Staff Production Staff Purchasing Agent Purchasing Agent Purchasing Agent Administration Coordinator Administration Coordinator Administration Coordinator Chief Executive Officer Vice President, Engineering Vice President, Production Vice President, Purchasing Vice President, Administration Project Manager A Project Manager B Project Manager C