Module 7
Implementing Strategies: Management &
Operations Issues
Ch 7 -1
Ch 7 -2
Strategy Formulation vs.
Implementation
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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 -3
Nature of Strategy Implementation
Management Perspectives

Shift in responsibility
Strategists
Divisional or
Functional
Managers
Ch 7 -4
Management Issues Central to
Strategy Implementation
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Establish annual
objectives
Devise policies
Allocate resources
Alter existing
organizational structure
Restructure & reengineer
Revise reward & incentive
plans
Minimize resistance to
change
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Match managers to strategy
Develop a strategysupportive culture
Adapt production/operations
processes
Develop an effective human
resources function
Downsize & furlough as
needed
Link performance & pay to
strategies
Ch 7 -5
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 -6
Annual Objectives

Horizontal consistency of objectives

Vertical consistency of objectives
Ch 7 -7
Policies

Policies set boundaries, constraints,
and limits on the kinds of
administrative actions that can be
taken to reward and sanction
behavior
Ch 7 -8
Resource Allocation
Four Types of Resources
1. Financial resources
2. Physical resources
3. Human resources
4. Technological resources
Ch 7 -9
Managing Conflict

Conflict not always “bad”
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Lack of conflict may signal apathy

Can energize opposing groups to action
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May help managers identify problems
Ch 7 -10
Managing Conflict

Approaches for managing and resolving
conflict
 Avoidance
 Defusion
 Confrontation
Ch 7 -11
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 -12
Ch 7 -13
Basic Forms of Structure

Functional Structure

Divisional Structure

Strategic Business Unit Structure
(SBU)
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Matrix Structure
Ch 7 -14
Functional Structure

Group tasks and activities by
business function
Ch 7 -15
Functional Structure
Ch 7 -16
Divisional Structure
 Can
be organized in one of four
ways:
By geographic area
 By product or service
 By customer
 By process

Ch 7 -17
Divisional Structure
Ch 7 -18
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 -19
Matrix Structure
 The
most complex of all designs
because it depends upon both
vertical and horizontal flows of
authority and communication
Ch 7 -20
Matrix Structure
Ch 7 -21
Restructuring, Reengineering, and
E-engineering
Restructuring
is called
Downsizing
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Rightsizing
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Delayering
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Ch 7 -22
Restructuring, Reengineering, and
E-engineering
Cornerstones
of Reengineering
Decentralization
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Reciprocal interdependence
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Information sharing
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Ch 7 -23
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 -24
Managing Resistance to Change
Force change strategy
 Educative change strategy
 Rational or self-interest change
strategy
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Ch 7 -25
Creating a Strategy-Supportive Culture
1.
2.
3.
4.
5.
Formal statements of organizational
philosophy
Design of physical spaces
Deliberate role modeling, teaching,
and coaching
Explicit reward and status system
Stories, legends, myths, and parables
Ch 7 -26
Creating a Strategy-Supportive Culture
6.
7.
8.
9.
10.
What leaders pay attention to
Leader reactions to critical incidents and
crises
Organizational design and structure
Organizational systems and procedures
Criteria for recruitment, selection,
promotion, leveling off, retirement, and
“excommunication” of people
Ch 7 -27
Production/Operations Concerns
Production
processes typically
constitute more than 70% of a
firm’s total assets
Ch 7 -28
Production/Operations Decision
Examples
Plant
size
Inventory
Quality
Cost
/ Inventory control
control
control
Technological
innovation
Ch 7 -29
Human Resource Concerns
Assessing
staffing needs/costs
Furloughs
Developing
performance incentives
ESOPs
Work–life
balance issues
Matching
managers with strategy
Ch 7 -30
Corporate Wellness Programs
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Wellness of employees has
become a strategic issue for many
firms
Ch 7 -31