strategic management in times of change strategy implementation
TRANSCRIPT
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STRATEGIC MANAGEMENT IN TIMES OF CHANGE
Strategy implementation
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Purpose
To understand what is involved in translating strategy into action.
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Objectives
At the end of this unit you should be able to:• Define implementation.
• Explain the model of the implementation process.
• Understand how structure features in implementation.
• Understand how systems feature in the implementation process.
• Understand the significance of leadership in implementing strategy.
• Understand how culture impacts on the implementation of strategy.
• Explain how strategy impacts on skills and staffing.
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Define implementation.
• Implementation involves actually executing the strategic plan. This includes setting policies, designing the organisational structure, and developing a corporate culture to enable the attainment of organisational objectives (Harvey 1982).
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Explain the model of the implementation process.
THE SEVEN ‘S’ FRAMEWORK
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Understand how structure features in implementation.
• Structure: The organisational chart and accompanying details that define who reports to whom and how tasks are divided up and integrated.
• The determinants of structure:– impact on strategy on structure
– organisational size and complexity
– technology
– environmental turbulence
– personnel attitudes
– geographic considerations.
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Understand how structure features in implementation (continued).
• Two structural dichotomies:– the structure is a mechanism through which
organisations arrange for actions to take place as well as a conduit for passing information
– the structure demands simultaneous integration and differentiation.
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Understand how structure features in implementation (continued).
FUNCTIONAL ORGANISATION STRUCTURE
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Understand how structure features in implementation (continued).
GEOGRAPHIC ORGANISATIONAL STRUCTURE
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Understand how structure features in implementation (continued).
DECENTRALISED LINE-OF-BUSINESS ORGANISATION STRUCTURE
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Understand how structure features in implementation (continued).
A STRATEGIC BUSINESS UNIT ORGANISATION STRUCTURE
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Understand how structure features in implementation (continued).
A MATRIX ORGANISATIONAL STRUCTURE
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Understand how structure features in implementation (continued).
A PROCESS-ORIENTED FUNCTIONAL STRUCTURE
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Understand how structure features in implementation (continued).
ONE COMPANY - THREE PROCESSES
• Customer relationship process.
• Product innovation process.
• Infrastructure management process.
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Understand how structure features in implementation (continued).
STRUCTURES SUITABLE FOR ALLIANCES
• Spiders web.
• Matrix structure.
• Cloverleaf structure.
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Understand how structure features in implementation (continued).
SPIDERS WEB STRUCTURE
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Understand how structure features in implementation (continued).
CLOVERLEAF STRUCTURE
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Understand how structure features in implementation (continued).
• Integration refers to the way firms co-ordinate their activities and make them interdependent.
• Six coordinating mechanisms are:
– mutual adjustment
– direct supervision
– standardisation of work processes
– standardisation of output
– standardisation of skills
– standardisation of norms
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Understand how systems feature in the implementation process.
• A new strategy dictates that a company revises some or all of its systems.
• Resource allocation at corporate level:
– task approach
– historical approach
– competitive parity approach.
• Resource allocation at SBU level:
– resource requirements
– activities of greatest importance
– pre-existing resources.
• Resource allocation through budgeting
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Understand how systems feature in the implementation process (continued).
• Management information and decision support systems.
• Policy and standard operating procedures.
• Reward systems.
• TQM systems.
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Understand the significance of leadership in implementing strategy.
• Leadership is a significant determinant in implementing managerial strategy.
• Strategic leadership task includes:– building capable organisation to carry out strategy
– channel resources to activities critical to strategic success
– establish strategic systems
– institute best practice
– install support systems
– tie rewards to performance
– create suitable corporate culture
– lead and monitor the process of implementation and improve how strategy is being implemented.
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Understand how culture impacts on the implementation of strategy.
• Culture refers to the system of shared values and beliefs about how the organisation should be managed. It includes values, assumptions, customs and behavioural norms that guide organisational action.
• Cultural manifestation in organisations:
– bureaucratic cultures
– entrepreneurial cultures
– anticipatory structures.
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Explain how strategy impacts on skills and staffing.
• Skills refers to strategic architecture, the development of the stepping stones towards strategic intent.
• Strategic architecture is the road-map that shows what competencies. need to be built and cultivated to ensure long-term competitiveness.
• Implementation impacts on staff needs.
• Strategic outsourcing.