Lecture 16 Implementing Strategies: Management Issues

Lecture 16Implementing Strategies:

Management Issues

Lecture Outline

• The nature of Strategy Implementation

• Annual Objectives

• Policies

• Resource Allocation

Lecture Outline

• Managing Conflict

• Matching Structure with Strategy

• Restructuring, Reengineering, and E-Engineering

• Linking Performance and Pay to Strategies

Lecture Outline

• Managing Resistance to Change

• Managing the Natural Environment

• Creating a Strategy-Supportive Culture

Lecture Outline

• Production/Operations Concerns When Implementing Strategies

• Human Resource Concerns When Implementing Strategies

Implementing Strategies: Management Issues

Pretend that every single person you meet has a sign around his or her neck that says, “Make me feel important.”

-- Mary Kay Ash, CEO of Mary Kay, Inc.

Contrasting strategy formulation and strategy implementation

– Formulation is positioning forces before the action

– Implementation is managing forces during the action

Implementing Strategies: Management Issues

Contrasting strategy formulation and strategy implementation

– Formulation focuses on effectiveness

– Implementation focuses on efficiency

Implementing Strategies: Management Issues

Contrasting strategy formulation and strategy implementation

– Formulation is primarily an intellectual process

– Implementation is primarily an operational process

Implementing Strategies: Management Issues

Contrasting strategy formulation and strategy implementation

– Formulation requires good intuitive and analytical skills

– Implementation requires special motivation and leadership skills

Implementing Strategies: Management Issues

Strategy Analysis & Choice

Contrasting strategy formulation and strategy implementation

– Formulation requires coordination among a few individuals

– Implementation requires coordination among many persons

Implementing Strategies: Management Issues

Strategy Analysis & Choice

Strategy implementation –

– Varies among different types and sizes of organizations

Implementing Strategies: Management Issues

Strategy Analysis & Choice

Strategy implementation Actions –

– Altering sales territories– Adding new departments– Closing facilities– Hiring new employees– Cost-control procedures– Changing advertising strategies– Building new facilities

Implementing Strategies: Management Issues

Formulation to Implementation transition –

– Shift in responsibility• From strategists to division and functional

managers

Management Perspectives

Management Issues

ManagementIssues

ResourcesResources

Organizational structureOrganizational structure

RestructuringRestructuring

Rewards/IncentivesRewards/Incentives

Annual ObjectivesAnnual Objectives

PoliciesPolicies

Management Issues (continued)

ManagementIssues

Supportive cultureSupportive culture

Production/operationsProduction/operations

Human resourcesHuman resources

DownsizingDownsizing

Resistance to ChangeResistance to Change

Managers & strategyManagers & strategy

Annual ObjectivesAnnual Objectives

• Decentralized activityDecentralized activity• Involves all managers in the firmInvolves all managers in the firm

Annual Objectives

1. Basis for allocating resources2. Primary mechanism for evaluating

managers3. Major instrument for monitoring progress

toward long-term objectives4. Establish organizational, divisional, and

departmental priorities

Annual Objectives

• Horizontal consistency of objectives

• Vertical consistency of objectives

Annual Objectives

Objectives should state –

– Quantity– Quality– Cost– Time

PoliciesPolicies

Policies facilitate solving recurring problems Policies facilitate solving recurring problems and guide the implementation of strategyand guide the implementation of strategy

Policies

Policies set –

– Boundaries– Constraints– limits

Policies

Example Issues requiring management policy --

– 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 hire from the outside– To establish a high- or low-safety stock of inventory– To buy lease, or rent new production equipment

Resource Allocation

Resource Allocation –

A central management activity that allows for strategy execution

Thank You