sm lecture ten - strategy implementation, strategy control and organizing
DESCRIPTION
TRANSCRIPT
![Page 1: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/1.jpg)
Strategic Management BUSM 3200
These Lecture Slides summarize the key points covered in the respective chapters in your
recommended text; these slides do NOT substitute, at all, the required reading of the assigned
chapter from the text. These slides also may contain additional supplementary material extracted
from other texts and sources outside your text book.
10-1 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 2: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/2.jpg)
Learning outcomes
Identify key challenges in organizing for success, including ensuring control, managing knowledge, coping with change and responding to internationalization.
Analyze main organization structural types in terms of strengths and weaknesses.
Recognise key issues in designing organisational control systems (such as planning and performance targeting systems).
Recognise how the three strands of strategy, structure and systems should reinforce each other in organisational configurations and the managerial dilemmas involved.
10-2 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 3: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/3.jpg)
Structures and systems
Structures give people formally defined roles, responsibilities and lines of reporting with regard to strategy.
Systems support and control people as they carry out structurally defined roles and responsibilities.
Configurations are the mutually supporting elements that make up an organisation’s design.
10-3 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 4: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/4.jpg)
Organisational configurations
Figure 13.1 Organizational configurations: strategy, structure and systems
10-4 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 5: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/5.jpg)
Structural types
Functional Multidivisional
Matrix Multinational/
Transnational
Project-based
10-5 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 6: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/6.jpg)
The functional structure
The functional structure divides responsibilities according to the organisation’s primary specialist roles such as production, research and sales.
10-6 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 7: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/7.jpg)
A functional structure
10-7 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 8: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/8.jpg)
Functional structures
Advantages
Chief executive in touch with all operations.
Reduces/simplifies control mechanisms.
Clear definition of responsibilities.
Specialists at senior and middle management levels.
Disadvantages
Senior managers overburdened with routine matters.
Senior managers neglect strategic issues.
Difficult to cope with diversity.
Coordination between functions is difficult.
Failure to adapt.
10-8
![Page 9: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/9.jpg)
The multidivisional structure
The multidivisional structure is built up of separate divisions on the basis of products, services or geographical areas.
10-9 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 10: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/10.jpg)
A multidivisional structure
10-10 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 11: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/11.jpg)
Multidivisional structures
Advantages
Flexible (add or divest divisions).
Control by performance.
Ownership of strategy.
Specialization of competences.
Training in strategic view.
Disadvantages
Duplication of central and divisional functions.
Fragmentation and non-cooperation.
Danger of loss of central control.
10-11
![Page 12: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/12.jpg)
The matrix structure
The matrix structure combines different structural dimensions simultaneously, for example product divisions and geographical territories or product divisions and functional specialisms.
10-12 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 13: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/13.jpg)
Matrix structures (1)
Figure 13.4 Two examples of matrix structures
10-13 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 14: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/14.jpg)
Matrix structures (2)
Figure 13.4 Two examples of matrix structures (Continued)
10-14 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 15: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/15.jpg)
Matrix structures
Advantages
Integrated knowledge.
Flexible.
Allows for dual dimensions.
Disadvantages
Length of time to take decisions.
Unclear job and task responsibilities.
Unclear cost and profit responsibilities.
High degrees of conflict.
10-15
![Page 16: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/16.jpg)
Multinational structures
Figure 13.5 Multinational structures Source: Reprinted by permission of Harvard Business School Press. From Managing Across Borders: The Transnational Corporation, 2nd edition by C.A. Bartlett and S. Ghoshal, Boston,
MA, 1998. Copyright © 1998 by the Harvard Business School Publishing Corporation. All rights reserved
10-16 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 17: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/17.jpg)
Transnational structures
The transnational structure combines local responsiveness with high global coordination.
Key Advantages include:
Knowledge-sharing.
Specialisation.
Network management.
10-17 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 18: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/18.jpg)
Project-based structures
A project-based structure is one where teams are created, undertake the work (e.g. internal or external contracts) and are then dissolved.
10-18 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 19: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/19.jpg)
Comparison of structures
Table 13.1 Comparison of structures
10-19 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 20: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/20.jpg)
Design tests for checking structural solutions
Market-Advantage.
Parenting Advantage.
People.
Feasibility.
Specialized Cultures.
Difficult Links.
Redundant Hierarchy.
Accountability.
Flexibility.
5-20
![Page 21: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/21.jpg)
Types of control systems
Table 13.2 Types of control systems
10-21 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 22: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/22.jpg)
Types of control systems
Direct supervision – direct control of strategic decisions by one or a few individuals, typically focused on the effort of employees.
Cultural systems aim to standardise norms of behaviour within an organisation in line with particular objectives.
Performance targets focus on the outputs of an organisation (or its parts) such as product quality, revenues or profits.
Internal market systems – a formal system of
a) ‘contracting’ for resources or inputs and b) for supplying outputs to other parts of an organisation.
10-22 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 23: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/23.jpg)
Balanced scorecards
Balanced scorecards set performance targets according to a range of perspectives, not only financial.
Typically combine four specific perspectives:
financial,
customer,
internal and
innovation and learning.
10-23 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 24: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/24.jpg)
Strategy maps
Strategy maps link different performance targets into a mutually supportive causal chain supporting strategic objectives.
10-24 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 25: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/25.jpg)
A strategy map
Figure 13.6 A strategy map Source: Exhibit 1, R. Lawson, W. Stratton and T. Hatch (2005), ‘Achieving strategy with Scorecarding’, Journal of Corporate Accounting and Finance, March–April, 62–8: p. 64
10-25 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 26: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/26.jpg)
Planning systems
Planning systems plan and control the allocation of resources and monitor their utilisation.
10-26 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 27: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/27.jpg)
Strategy styles
Figure 13.7 Strategy styles Source: Adapted from M. Goold and A. Campbell, Strategies and Styles, Blackwell, 1989, Figure 3.1, p. 39
10-27 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 28: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/28.jpg)
Configurations
Configurations are the set of organisational design elements that interlink together in order to support the intended strategy.
10-28 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 29: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/29.jpg)
McKinsey 7-S framework
Figure 13.8 The McKinsey 7 Ss Source: R. Waterman, T. Peters and J. Phillips, ‘Structure is not organization’, Business Horizons, June 1980, pp. 14–26: p. 18
10-29 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 30: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/30.jpg)
Configuration dilemmas
Figure 13.9 Some dilemmas in organizing for success
10-30 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 31: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/31.jpg)
Summary
Successful organising means responding to the key challenges facing the organisation. This chapter has stressed control, change, knowledge and internationalisation.
There are many structural types (e.g. functional, divisional, matrix, transnational and project). Each type has its own strengths and weaknesses and responds differently to the challenges of control, change, knowledge and internationalisation.
There is a range of different organisational systems to facilitate and control strategy. These focus on either inputs or outputs and can be direct or indirect.
The separate organisational elements, summarised in the McKinsey 7-S framework, should come together to form a coherent reinforcing configuration. But these reinforcing cycles also raise dilemmas that can be managed by subdividing, combining and reorganising.
10-31 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 32: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/32.jpg)
Sample essay question
"Corporate structure and financial control
mechanisms contributed more to XYZ Company gaining sustainable competitive advantage than its corporate communications or organizational culture".
Using examples from XYZ Company and one other firm to justify your point of view, discuss this statement in relation to the XYZ company case studied in this course.
10-32 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 33: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/33.jpg)
Sample Essay Question
Compare and contrast the advantages and disadvantages of using Porter's Five Forces, Balanced Scorecard, Value Chain, and SWOT analyses for a firm to formulate strategy.
Illustrate your answer with examples from two of the cases studied in this course.
10-33 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 34: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/34.jpg)
Sample Essay Question
Strategic control, financial control, and strategic planning are three ways of dividing responsibilities between corporate centre and its business units. Discuss these three ways of control and their links with three corporate rationales. Give examples to support your argument.
10-34 BUSM 3200- Strategic Management (Jan 2013) GDS
![Page 35: SM Lecture Ten - Strategy Implementation, Strategy Control and Organizing](https://reader033.vdocument.in/reader033/viewer/2022050904/5463bbf8b4af9f5d3f8b466b/html5/thumbnails/35.jpg)
Sample Essay Question
The balanced scorecard is widely used as a useful set of performance targets for controlling organisations’ performance. Discuss the contents of balanced scorecards and potential benefits of implementing it in organisations.
10-35 BUSM 3200- Strategic Management (Jan 2013) GDS