bg strategic management chapter 6 3145

CHAPTER 6 STRATEGY IMPLEMENTATION Bộ môn Quản trị chiến lược 9/16/2022147 http //images google com vn/imgres?imgurl=http //www johnwiley com au/highered/stratmgt2e/0470809299 jpg&imgrefurl=http //www[.]

CHAPTER 6 STRATEGY IMPLEMENTATION

6.1 Definition and factors affecting strategy implementation

6.2 Establishing annual objectives and business policies

6.3 Resource allocation

6.4 Organizational structure

6.5 Organizational culture

6.6 Strategic leadership

6.1.1 Definition and content of Strategy implementation (cont.)

Nature of Strategy implementation:

- Managing forces during the action

- Focusing on efficiency

- Being primarily an intellectual process

- Requiring special motivation and leadership skills

- Requiring coordination among many individuals

6.1.1 Definition (cont.)

Some management issues central to Strategy implementation:

- Establish annual objectives

- Devise policies

- Allocate resources

- Alter an existing organizational structure

- Develop organizational culture and strategic leadership

6.1.2 Factors affecting Strategy implementation

6.1 Definition and factors affecting strategy implementation

6.2 Annual objectives and business policies

6.3 Resource allocation

6.4 Organizational structure

6.5 Organizational culture

6.6 Strategic leadership

6.2.1 Annual objectives

- Annual objectives serve as guidelines for action, directing and channeling effortsand activities of organization members

- Necessity of establishing annual objectives:

- Represent the basis for allocating resources

- Be a primary mechanism for evaluating managers

- Be the major instrument for monitoring progress toward achieving long-termobjectives

- Establish organizational, divisional, and departmental priorities

6.2.1 Annual objectives (cont.)

- Requirements of annual objectives:

- Communicated throughout the organization

- Characterized by an appropriate time dimension

- Accompanied by commensurate rewards and sanctions

6.2.2 Business policies

- Policy refers to “specific guidelines, methods, procedures, rules, forms,

and administrative practices established to support and encourage work

toward stated goals” (David, 2011).

- Are instruments for strategy implementation

- Policies set boundaries, constraints, and limits on the kinds of

administrative actions that can be taken to reward and sanction behavior;

they clarify what can and cannot be done in pursuit of an organization’s

objectives

6.2.2 Business policies (cont.)

Some issues that may require a management policy (David, 2011)

- To offer extensive or limited management development workshops and seminars

- To centralize or decentralize employee-training activities

- To recruit through employment agencies, college campuses, and/or newspapers

- To promote from within or to hire from the outside

- To promote on the basis of merit or on the basis of seniority

- To tie executive compensation to long-term and/or annual objectives

- To offer numerous or few employee benefits

- To negotiate directly or indirectly with labor unions

6.2.2 Business policies (cont.)

Some issues that may require a management policy (cont.)

- To delegate authority for large expenditures or to centrally retain this authority

- To allow much, some, or no overtime work

- To establish a high- or low-safety stock of inventory

- To use one or more suppliers

- To buy, lease, or rent new production equipment

- To greatly or somewhat stress quality control

- To establish many or only a few production standards

- To operate one, two, or three shifts

- To discourage using insider information for personal gain, sexual harassment,

smoking at work, and insider trading

6.1 Definition and factors affecting strategy implementation

6.2 Annual objectives and business policies

6.3 Resource allocation

6.4 Organizational structure

6.5 Organizational culture

6.6 Strategic leadership

6.3 Resource allocation

- Is a central management activity that allows for strategy execution

- There are at least four types of resources that can be used to achieve desired

6.3.2 Negative factors influencing resource allocation

Some factors may influence negative the effectiveness of resource allocation:

- Overprotection of resources

- Too great an emphasis on short-run financial criteria

- Organizational politics

- Vague strategy targets

- A Reluctance to take risks

- A lack of sufficient knowledge

6.1 Definition and factors affecting strategy implementation

6.2 Annual objectives and business policies

6.3 Resource allocation

6.4 Organizational structure

6.5 Organizational culture

6.6 Strategic leadership

6.4.1 Definition and feature

 Definition

“Organizational structure assigns employees to specific value creation tasks and roles and specifies how these tasks and roles are to work together in a way that increases

efficiency, quality, innovation, and responsiveness to customers—the distinctive

competencies that build competitive advantage” (Hill & Jones, 2008).

Basic characteristic

 Specialization

 Coordination

 Integration

6.4.2 Role

6.4.3 Types of organizational structures

 The functional structure

 The divisional structure

 The strategic business unit (SBU) structure

 The matrix structure

6.4.3 Types of organizational structures (cont.)

The functional structure (centralized structure)

The divisional structure (decentralized structure)

 Most widely used structure

 Groups tasks and activities

6.4.3 Types of organizational structures (cont.)

The SBU structure The matrix structure

 Groups similar divisions into SBU and delegate authority and responsibility for each unit to a senior executive

 Improves coordination between similar divisions and channeling accountability to distinct business units.

 The most complex since depending upon both vertical and horizontal flows of authority and communication

 Widely used in many industries: construction, health care, research, and

6.1 Definition and factors affecting strategy implementation

6.2 Annual objectives and business policies

6.3 Resource allocation

6.4 Organizational structure

6.5 Organizational culture

6.6 Strategic leadership

6.5.1 Definition and roles

 Definition: “Organizational culture is the specific collection of values, norms,

beliefs, and attitudes that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization” (Hill and Jones, 2008)

6.5.1 Definition and roles (cont.)

Roles:

 Organizational culture describes the characteristic ways—“this is the way we

do it around here”—in which members of an organization get the job done.

 Organizational culture are the means by which an organization motivates and

coordinates its members to work toward achieving the competitive advantage

6.5.2 Elements using in linking culture to strategy

 Formal statements of organizational philosophy, charters, 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

 What leaders pay attention to, measure, and control

 Leader reactions to critical incidents and organizational crises

 How the organization is designed and structured

 Organizational systems and procedures

 Criteria used for recruitment, selection, promotion, leveling off, retirement, and

6.1 Definition and factors affecting strategy implementation

6.2 Annual objectives and business policies

6.3 Resource allocation

6.4 Organizational structure

6.5 Organizational culture

6.6 Strategic leadership

6.6.1 Definition and roles

Definition:

“Leadership is the process of influencing an organization (or group within an organization) in its efforts towards achieving an aim of goal” (Johnson and Whittington, 2011)

Roles:

 Envisioning future strategy

 Aligning the organization to deliver that strategy

 Embodying change

6.6.2 Styles of strategic leadership

 Theory E and theory O:

 Styles of change leadership:

Strategic Management Department

Do you have any questions?