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Learning Objectives
To understand:
 the role of leadership in successful execution of
strategies
 how culture and organizational energy influence
the success of strategy implementation
 functional strategies and their importance to
strategy implementation
 the stages firms encounter as they execute global
strategies
 basic organizational structures, and their strengths
and weaknesses
 the various roles played by foreign subsidiaries
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Internal and External
Analysis
Strategic
Direction
Strategy Formulation
(corporate and
business level)
Strategy Implementation
and Control
Strategic Restructuring
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Four Primary Responsibilities of
Leaders
• Design organizational purpose, vision
and core values
• Develop policies, strategies and
structure
• Create an environment for
organizational learning
• Serve as a steward for the organization
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Situational Leadership
• Leadership style should fit the situation
• Effective leaders can employ a range of styles, from
coercive to coaching to consensus-building
• Most successful leaders exhibit a high degree of
emotional intelligence
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Emotional Intelligence
•Self Awareness: Ability to understand own moods and
emotions as well as their impact on others
•Self Regulation: Ability to regulate impulses, to think before
acting
•Motivation: Drive to achieve, optimism, passion
•Empathy: Ability to understand the emotional make-up of
other people
•Social Skill: Ability to manage relationships for particular
purposes
Sources: Daniel Goleman, “What makes a leader?” HBR on What Makes a Leader, (2001), 1-25; and Daniel
Goleman, “Leadership that gets results,” HBR on What Makes a Leader, (2001), 53-85.
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Leadership Styles
•Authoritative: Inspire with a vision, set direction. Appropriate when
new direction needed.
•Affiliative: Build teams, create harmony. Appropriate in stressful
situations.
•Democratic: Build consensus, create participation. Appropriate
when need input from key employees and buy-in.
•Pace-setting: Set high standards. Appropriate when need quick
results from a highly motivated team.
•Coaching: Develop people for the future.
•Coercive: Demand immediate compliance. Appropriate in a crisis.
Sources: Daniel Goleman, “What makes a leader?” HBR on What Makes a Leader, (2001), 1-25; and Daniel
Goleman, “Leadership that gets results,” HBR on What Makes a Leader, (2001), 53-85.
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Organizational Culture
An organization’s culture, the system of shared
values that guides employee beliefs and behavior,
influences the success of strategy implementation.
• Often reflects the values and leadership styles of
top executives
• Human resource management practices can
influence culture – recruitment, training,
performance evaluation
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Organizational Energy
An organization’s energy can be described in terms
of its intensity and its quality.
• Passion – High energy that is positive
• Comfort or Complacency – Low energy that is
positive
• Aggression – High energy that is negative
• Resignation – Low energy that is negative
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Links Between Business and
Marketing Strategies
• For growth strategies - identify new customers, suggest
product opportunities, create advertising and promotional
programs, arrange distribution channels, and creates
pricing and customer service policies
• For stability or retrenchment strategies - focus on most
profitable segments by reducing number of customer
groups, distribution channels, and products in the product
line
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Links Between Business and
Marketing Strategies
• For low-cost competitive strategies - develop low cost
channels of distribution and low-risk product and market
development activities.
• For differentiation strategies - identify the attributes of
products that customers will value, price and distribute in
ways that capitalize on the differentiation, and advertise
and promote the image of difference.
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Links Between Business and
Operations Strategies
• Growth strategies - expand capacity, improve procedures
for scheduling customer orders, hire/train new employees,
increase quantities of inputs, cultivate new supplier
arrangements, invest in larger volume equipment.
• Retrenchment strategies - scale back numbers of line
employees, idle equipment, close plants.
• Differentiation strategies - develop higher quality standards,
make investments in technology, develop high skilled
workforce, cultivate special arrangements with suppliers.
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Links Between Business and R&D
Strategies
• Growth Strategies -- develop new products
• Low Cost/Retrenchment Strategies - develop low
cost processes
• Differentiation Strategies - develop unique
products and proprietary processes
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Information Systems Strategies
• At a minimum - provide the organization with the
technology and systems that are necessary for
operating, planning, and controlling the business.
• To support a competitive advantage - allow more
superior cost management and customer knowledge, by
providing more effective use of timely market
information, or by allowing integrated transactions
within the supply chain of customers and suppliers.
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Human Resources Strategies
• Establish the performance evaluation,
training, rewards, and benefits programs
that support chosen strategies
• Recruit management and employees that
fulfill the strategic needs of the
organization.
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Financial Strategies
• Decide the appropriate levels of debt,
equity, and internal financing needed to
support strategies. Trade-offs carry
significant implications.
• Determine hurdle rates for new
investments.
• Determine dividend policies and, through
preparation of financial reports,
communicate financial performance to
stockholders.
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Well-Integrated Functional
Strategies
• Decisions made in each functional area are
consistent with each other
• Decisions made within one function are
consistent with those made in other
functions
• Decisions within functions are consistent
with the strategies of the business
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Creating an
International Mind-Set
CEOs can create a sense of urgency about global
matters by
• expanding organizational visions to include overseas
operations
• assigning specific individuals to monitor global trends and
incorporate information into strategic planning processes
• frequently discussing global issues with employees, the board
of directors, and the media
• making frequent visits to global operations
• recruiting and promoting foreign nationals for key managerial
roles
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Stages of International
Development
• Domestic Stage - Possible exporting
• International Stage - Significant exporting
• Multinational Stage - Marketing and production
facilities throughout world
• Global Stage - Organization not associated with any one
country
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Functional Structure
General Manager
Marketing
Finance
Productio
n
HR
Organizing Framework
• - Inputs such as marketing and production
Degree of Centralization
• High
Competitive Environment
• Stable
Growth Strategy
• Market Penetration (efficiency or quality, etc.)
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Product/Market Structure
General Manager
Administrative Departments
Flight Simulators
Design
Manufac.
Design Graphics
Design
Manufac.
Organizing Framework
• Outputs such as product groups
Degree of Centralization
• Low
Competitive Environment
• Dynamic with External Market Pressures
Growth Strategy
• Market and/or Product Development (serving particular
markets well)
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Project Matrix Structure
General Manager
Administrative Depts.
Marketing
Production
Project A
Project B
Organizing Framework
• Inputs and Outputs
Degree of Centralization
• Decentralization with Sharing
Competitive Environment
• Dynamic with Dual Pressures
Growth Strategy
• Frequent New Product/Market Development
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Network Structure
Info.
Center
Organizing Framework
• Outputs
Degree of Centralization
• Very Low (High Decentralization)
Competitive Environment
• Conditions vary from region to region
Growth Strategy
• Market Penetration and Market Development
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Foreign Subsidiaries
• Local implementation – focus on one country,
making only minor adjustments to business
strategy to meet local needs
• Specialized contribution – play a unique role as a
member of an interdependent network of
subsidiaries, often as the production arm or as a
distributor to a particular region
• Global mandate – responsible for an entire global
business
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