Description
Describing about Strategy Implementation.
Implementing Strategy
Myths of Educated Managers
How do you determine if a manager is competent?
• Numerous degrees • Manager for long time • Thinks Bold strategies
According to reports the current generation of managers lacks basic implementation skills
Purpose of the framework:
1. Define the key implementation tasks
2. Review the variety of approaches managers can apply to these tasks
3. Identify key skills needed to implement strategy
Functional Fits
Identifying Task: Creating Fits
Determining Strategy
Creation of two types of fits: 1. Strategy and functional policies ? Functional Fits 2. Strategy and organizational structure , processes and systems ? Administrative Fits
Functional Fits
Marketing
Manufact uring
Sales
Engineerin g
Finance
Corporate Strategy
• Adoption and execution of functional policies consistent with strategic objectives • Natural functional postures extend deep into each functional area:
• • • • Manufacturing: Standardize Marketing: Customer is king Engineering: Innovation Finance: Cost control
• Solution: • Broad Functional Policies (Communicating and involving functional vice-presidents) + Detailed functional policies reflecting the strategy
Administrative Fits
Administrative Fits
•Management systems and processes consistent with strategy itself •“Source of Influence” to guide their organizations
Systems
Organizational Structure
Information systems Incentive systems
Processes
Organization processes Management Selection and Development Corporate Culture
Control Systems Strategic Planning Systems Leadership Style
•Design of systems and processes needs to reflect strategic intentions •Involvement of General Manager and staff specialists
Designing Systems and Processes
Organizational Structure and Processes
• Product type and Lines of Business • Distribution • Production processes • Number and type of divisions • Reporting Hierarchy • Evaluate viability of operations • Warn when change is necessary
Information and Control Systems
• Track and report key figures of internal and external operations
Management Selection and Development
• Selection of managers • Promotions : “next in line” vs “served the company well”
Incentive Systems
• Motivation towards achieving strategy • Rewarding managers for exhibiting skills in line with strategy • Emphasis of incentive compensation: Short Run rather than Strategic Performance
• Leadership Style
Corporate Culture
Implementation Plan
Implementation Plan
Identifying Functional and Administrative Fits Identifying Objectives and Problem Areas
Prioritizing Critical Issues
Developing Plans for Areas of priority
Address key human and organizational issues Present sequence of actions to be taken over time Suggest alternative actions in case of failure
Implementation and Monitoring by General Manager
Implementation Situation
Implementation Situations
• Stages of organizational development: single product, single business and multi-business • Others strategic situations include • Implementing rapid growth • Consolidations • Strategic change • Turnaround • Integration of new acquisitions All typical transitions and strategic situations require the achievement of fits between the strategy and the functional policies, management systems and processes
Stages of Organizational Development
Company Characteristics Product Line Distribution Stage I Single Product or Single line One channel or set of channels Little or no formal structure- “one man show” Stage II Single product line or business One set of channels Specialization based on function Integrated pattern of transactions Product/ Service NA Stage III Multiple product lines Multiple channels Specialization based on product-market relationships Not integrated
Organization structure
A
Market
B
Markets
C
Strategic Choices
Needs of owners vs. needs of firm
•Degree of integration •Market share objective •Breadth of product line
•Entry and exit from industries •Allocation of resources by industry •Rate of growth
Stages of Organizational Development
Company Characteristics Research and Development Stage I Not institutionalizedoriented by ownermanager By personal contact and subjective criteria Unsystematic and often paternalistic Stage II Increasingly institutionalized search for product or process improvements Increasingly impersonal using cost and/or technical criteria Increasingly systematic with emphasis on stability and service Personal control of strategic decisions, with increasing delegation of operating decisions based on control by decision rules Stage III Institutionalized search for new products as well as for improvements Increasingly impersonal using market criteria (RoI and market share) Increasingly systematic with variability related to performance
Performance measurement
Rewards
Control systems
Personal control of both strategic and operating decisions
Delegation of product market decisions within existing businesses, with indirect control based on analysis of “results”
Implementation Modes
Implementation Modes
Every strategy implementation and/or transition depends on 2 critical factors:
?Degree of involvement
o Personal & Direct involvement o Articulate objectives & Oversee implementation
?Attention to the administrative constraints
o High attention? Modify strategy ?Lagged response o Less attention ? Continue strategy ? Fast response
Concern for Administrative Constraints
Advantages •Mitigate all negative consequences •Little disruption Disadvantages •Time consuming
Advantages •Broad consensus •Least resistance Disadvantages •No radical changes •Time consuming
Administrative Manager
Political Manager
Involvement of Manager
Advantages •Manage situations •Good juniors Disadvantages •Subordination •High Risk Advantages •Speedy response •As-on-need basis
People & Organisation Shaker
Entrepreneurial Manager
Disadvantages •Undermine the success •Cannot eliminate issues
Reasons for Misfits
Strategies change and evolve
Environment and strategy change faster than company’s functional policies and management systems Implementation is more time consuming than strategy formulation
Sometimes misfits are necessary and useful
Implementation Skills
Implementation Skills
Diagnosis of 3 components:
Strategic or Technical Administrative or organization Interpersonal component
When to make a decision alone when in a group
Identifying most affected groups or individuals
To know when it is appropriate to take action
To know what can and cannot be accomplished
To exercise leadership
Implementation Situations
Strategy Implementation at GM
1) Identify the strategy
• Ingris Rubin & Chris Benard planned to increase market share by differentiating through customisation.
2) Spell out the Fits
• Functional fits
• Manufacturing • Sales & Marketing
• Administrative Fits
• Information System • Organisation Structure
• Reason for Misfit
• Manufacturing: Reduction in production time • Sales & Marketing: Offer customisation
3) Implementation Plan
• Improve Control and Coordination Mechanism- GM introduced ‘Semi-autonomous’ and decentralised structure.
Thank You
doc_227567128.pptx
Describing about Strategy Implementation.
Implementing Strategy
Myths of Educated Managers
How do you determine if a manager is competent?
• Numerous degrees • Manager for long time • Thinks Bold strategies
According to reports the current generation of managers lacks basic implementation skills
Purpose of the framework:
1. Define the key implementation tasks
2. Review the variety of approaches managers can apply to these tasks
3. Identify key skills needed to implement strategy
Functional Fits
Identifying Task: Creating Fits
Determining Strategy
Creation of two types of fits: 1. Strategy and functional policies ? Functional Fits 2. Strategy and organizational structure , processes and systems ? Administrative Fits
Functional Fits
Marketing
Manufact uring
Sales
Engineerin g
Finance
Corporate Strategy
• Adoption and execution of functional policies consistent with strategic objectives • Natural functional postures extend deep into each functional area:
• • • • Manufacturing: Standardize Marketing: Customer is king Engineering: Innovation Finance: Cost control
• Solution: • Broad Functional Policies (Communicating and involving functional vice-presidents) + Detailed functional policies reflecting the strategy
Administrative Fits
Administrative Fits
•Management systems and processes consistent with strategy itself •“Source of Influence” to guide their organizations
Systems
Organizational Structure
Information systems Incentive systems
Processes
Organization processes Management Selection and Development Corporate Culture
Control Systems Strategic Planning Systems Leadership Style
•Design of systems and processes needs to reflect strategic intentions •Involvement of General Manager and staff specialists
Designing Systems and Processes
Organizational Structure and Processes
• Product type and Lines of Business • Distribution • Production processes • Number and type of divisions • Reporting Hierarchy • Evaluate viability of operations • Warn when change is necessary
Information and Control Systems
• Track and report key figures of internal and external operations
Management Selection and Development
• Selection of managers • Promotions : “next in line” vs “served the company well”
Incentive Systems
• Motivation towards achieving strategy • Rewarding managers for exhibiting skills in line with strategy • Emphasis of incentive compensation: Short Run rather than Strategic Performance
• Leadership Style
Corporate Culture
Implementation Plan
Implementation Plan
Identifying Functional and Administrative Fits Identifying Objectives and Problem Areas
Prioritizing Critical Issues
Developing Plans for Areas of priority
Address key human and organizational issues Present sequence of actions to be taken over time Suggest alternative actions in case of failure
Implementation and Monitoring by General Manager
Implementation Situation
Implementation Situations
• Stages of organizational development: single product, single business and multi-business • Others strategic situations include • Implementing rapid growth • Consolidations • Strategic change • Turnaround • Integration of new acquisitions All typical transitions and strategic situations require the achievement of fits between the strategy and the functional policies, management systems and processes
Stages of Organizational Development
Company Characteristics Product Line Distribution Stage I Single Product or Single line One channel or set of channels Little or no formal structure- “one man show” Stage II Single product line or business One set of channels Specialization based on function Integrated pattern of transactions Product/ Service NA Stage III Multiple product lines Multiple channels Specialization based on product-market relationships Not integrated
Organization structure
A
Market
B
Markets
C
Strategic Choices
Needs of owners vs. needs of firm
•Degree of integration •Market share objective •Breadth of product line
•Entry and exit from industries •Allocation of resources by industry •Rate of growth
Stages of Organizational Development
Company Characteristics Research and Development Stage I Not institutionalizedoriented by ownermanager By personal contact and subjective criteria Unsystematic and often paternalistic Stage II Increasingly institutionalized search for product or process improvements Increasingly impersonal using cost and/or technical criteria Increasingly systematic with emphasis on stability and service Personal control of strategic decisions, with increasing delegation of operating decisions based on control by decision rules Stage III Institutionalized search for new products as well as for improvements Increasingly impersonal using market criteria (RoI and market share) Increasingly systematic with variability related to performance
Performance measurement
Rewards
Control systems
Personal control of both strategic and operating decisions
Delegation of product market decisions within existing businesses, with indirect control based on analysis of “results”
Implementation Modes
Implementation Modes
Every strategy implementation and/or transition depends on 2 critical factors:
?Degree of involvement
o Personal & Direct involvement o Articulate objectives & Oversee implementation
?Attention to the administrative constraints
o High attention? Modify strategy ?Lagged response o Less attention ? Continue strategy ? Fast response
Concern for Administrative Constraints
Advantages •Mitigate all negative consequences •Little disruption Disadvantages •Time consuming
Advantages •Broad consensus •Least resistance Disadvantages •No radical changes •Time consuming
Administrative Manager
Political Manager
Involvement of Manager
Advantages •Manage situations •Good juniors Disadvantages •Subordination •High Risk Advantages •Speedy response •As-on-need basis
People & Organisation Shaker
Entrepreneurial Manager
Disadvantages •Undermine the success •Cannot eliminate issues
Reasons for Misfits
Strategies change and evolve
Environment and strategy change faster than company’s functional policies and management systems Implementation is more time consuming than strategy formulation
Sometimes misfits are necessary and useful
Implementation Skills
Implementation Skills
Diagnosis of 3 components:
Strategic or Technical Administrative or organization Interpersonal component
When to make a decision alone when in a group
Identifying most affected groups or individuals
To know when it is appropriate to take action
To know what can and cannot be accomplished
To exercise leadership
Implementation Situations
Strategy Implementation at GM
1) Identify the strategy
• Ingris Rubin & Chris Benard planned to increase market share by differentiating through customisation.
2) Spell out the Fits
• Functional fits
• Manufacturing • Sales & Marketing
• Administrative Fits
• Information System • Organisation Structure
• Reason for Misfit
• Manufacturing: Reduction in production time • Sales & Marketing: Offer customisation
3) Implementation Plan
• Improve Control and Coordination Mechanism- GM introduced ‘Semi-autonomous’ and decentralised structure.
Thank You
doc_227567128.pptx