STRATEGIC MANAGEMENT IN TIMES OF CHANGE Strategy implementation

STRATEGIC MANAGEMENT IN TIMES OF CHANGE

Strategy implementation

Purpose

To understand what is involved in translating strategy into action.

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.

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).

Explain the model of the implementation process.

THE SEVEN ‘S’ FRAMEWORK

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.

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.

Understand how structure features in implementation (continued).

FUNCTIONAL ORGANISATION STRUCTURE

Understand how structure features in implementation (continued).

GEOGRAPHIC ORGANISATIONAL STRUCTURE

Understand how structure features in implementation (continued).

DECENTRALISED LINE-OF-BUSINESS ORGANISATION STRUCTURE

Understand how structure features in implementation (continued).

A STRATEGIC BUSINESS UNIT ORGANISATION STRUCTURE

Understand how structure features in implementation (continued).

A MATRIX ORGANISATIONAL STRUCTURE

Understand how structure features in implementation (continued).

A PROCESS-ORIENTED FUNCTIONAL STRUCTURE

Understand how structure features in implementation (continued).

ONE COMPANY - THREE PROCESSES

• Customer relationship process.

• Product innovation process.

• Infrastructure management process.

Understand how structure features in implementation (continued).

STRUCTURES SUITABLE FOR ALLIANCES

• Spiders web.

• Matrix structure.

• Cloverleaf structure.

Understand how structure features in implementation (continued).

SPIDERS WEB STRUCTURE

Understand how structure features in implementation (continued).

CLOVERLEAF STRUCTURE

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

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

Understand how systems feature in the implementation process (continued).

• Management information and decision support systems.

• Policy and standard operating procedures.

• Reward systems.

• TQM systems.

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.

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.

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.