presentaion

1. STRATEGY
IMPLEMENTATION:
ORGANIZING FOR ACTION

3. Strategy Implementation
Strategy implementation is the sum total of the
activities and choices required for the execution of a
strategic plan.
It is the process by which objectives, strategies, and
policies are put into action through the
development of programs, budgets, and
procedures.

4. Who Implements Strategy?
Depending on how a corporation is organized,
those who implement strategy will probably be a
much more diverse set of people than those who
formulate it.
 In most large, multi-industry corporations, the
implementers are everyone in the organization.

5. What Must Be Done?
The managers of divisions and functional areas
work with their fellow managers to develop
programs, budgets, and procedures for the
implementation of strategy.
 They also work to achieve synergy among the divisions
and functional areas in order to establish and maintain
a company’s distinctive competence.

6. DEVELOPING PROGRAMS, BUDGETS,
AND PROCEDURES
Programs
• The purpose of a program is to
make a strategy action oriented.
• A matrix of change to help
managers decide how quickly
change should proceed, in what
order changes should take place,
whether to start at a new site, and
whether the proposed systems are
stable and coherent.

7. DEVELOPING PROGRAMS, BUDGETS,
AND PROCEDURES

8. The Matrix of Change (explained)

9. DEVELOPING PROGRAMS, BUDGETS,
AND PROCEDURES
The matrix of change can be used to address the
following types of questions:
Feasibility
Sequence
of
execution
Location
Pace and
nature of
change
Stakeholder
evaluations

10. DEVELOPING PROGRAMS, BUDGETS,
AND PROCEDURES
The matrix of change can be used to address the
following types of questions:

11. DEVELOPING PROGRAMS, BUDGETS,
AND PROCEDURES
Budgets
• After programs have been
developed, the budget process
begins.
• Planning a budget is the last real
check a corporation has on the
feasibility of its selected strategy.
• Return on investment

12. DEVELOPING PROGRAMS, BUDGETS,
AND PROCEDURES
Procedures
• After the program, divisional, and corporate budgets
are approved, procedures must be developed.
• Often called Standard Operating Procedures (SOPs),
they typically detail the various activities that must
be carried out to complete a corporation’s programs.
• Also known as organizational routines, procedures are
the primary means by which organizations
accomplish much of what they do.
• In a retail store, procedures ensure that the day-to-
day store operations will be consistent over time and
consistent among stores.

13. ACHIEVING SYNERGY
Synergy is said to exist for a divisional corporation if the return
on investment (ROI) of each division is greater than what the
return would be if each division were an independent.
 Shared know-how: Combined units often benefit from sharing
knowledge or skills.This is a leveraging of core competencies.
Example: One reason that Procter & Gamble purchased
Gillette was to combine P&G’s knowledge of the female
consumer with Gillette’s knowledge of the male consumer.
 Coordinated strategies: Aligning the business strategies of two or
more business units may provide a corporation significant
advantage by reducing inter-unit competition and developing a
coordinated response to common competitors (horizontal strategy).
Example: The merger between Arcelor and Mittal Steel, for example,
gave the combined company enhanced R&D capabilities and wider global
coverage while presenting a common face to the market.

14. ACHIEVING SYNERGY
 Shared tangible resources: Combined units can sometimes save
money by sharing resources, such as a common manufacturing
facility or R&D lab.The alliance between Renault and Nissan allowed
it to build new factories that would build both Nissan and Renault
vehicles.
 Economies of scale or scope: Coordinating the flow of products or
services of one unit with that of another unit can reduce inventory,
increase capacity utilization, and improve market access. This was a
reason Delta Airlines bought Northwest Airlines.
 Pooled negotiating power: Combined units can combine their
purchasing to gain bargaining power over common suppliers to
reduce costs and improve quality.The same can be done with
common distributors.

15. ACHIEVING SYNERGY
 New business creation: Exchanging knowledge
and skills can facilitate new products or services
by extracting discrete activities from various
units and combining them in a new unit or by
establishing joint ventures among internal
business units.

16. How Is Strategy to Be
Implemented? Organizing for
Action
Organizing for Action Before plans can lead to
actual performance, a corporation should be
appropriately organized, programs should be
adequately staffed, and activities should be
directed toward achieving desired objectives.

17. STRUCTURE FOLLOWS STRATEGY
Structure follows strategy is changes in corporate
strategy lead to changes in organizational structure.
Chandler also concluded that organizations follow a pattern of
development from one kind of structural arrangement to
another as they expand.
Chandler, therefore, proposed the following as the
sequence of what occurs:
1. New strategy is created.
2. New administrative problems emerge.
3. Economic performance declines.

18. STRUCTURE FOLLOWS STRATEGY
4. New appropriate structure is invented.
5. Profit returns to its previous level.

19. STAGES OF CORPORATE DEVELOPMENT
The differences among these three structural
stages of corporate development in terms of
typical problems, objectives, strategies, reward
systems, and other characteristics are specified in
detail in Table 9–1.

21. ORGANIZATIONAL LIFE CYCLE
The organizational life cycle describes how
organizations grow, develop, and eventually
decline. It is the organizational equivalent of the
product life cycle in marketing.These stages are
 Birth (Stage I)
 Growth (Stage II)
 Maturity(Stage III)
 Decline (Stage IV)
 Death (StageV).

22. ORGANIZATIONAL LIFE CYCLE

23. ADVANCED TYPES OF
ORGANIZATIONAL STRUCTURES
Many variations and hybrid structures contain these
characteristics, two forms stand out:
 The matrix structure
 The network structure

24. ADVANCED TYPES OF
ORGANIZATIONAL STRUCTURES
 Matrix Structure
In matrix structures, functional and product forms
are combined simultaneously at the same level of
the organization. Employees have two superiors, a
product or project manager, and a functional
manager

25. ADVANCED TYPES OF
ORGANIZATIONAL STRUCTURES