Strategic Management Prof. Dr. Majed El-Farra 2012 1 Strategic Implementation Requirements for Strategic Implementation 07/03/1437

Strategic Management Prof. Dr. Majed El-Farra 2012

1

Strategic Implementation

Requirements for Strategic Implementation

/ /١٤٤٤ ١٠ ١

/ /١٤٤٤ ١٠ ١9-2

Strategy implementation- the sum total of all activities and choices required for the execution of a strategic plan

1. Who are the people to carry out the strategic plan?

2. What must be done to align company operations in the intended direction?

3. How is everyone going to work together to do what is needed?


/ /١٤٤٤ ١٠ ١9-3

Common Strategy Implementation Problems1. Took more time than planned2. Unanticipated major problems3. Poor coordination4. Competing activities and crises created distractions5. Employees with insufficient capabilities6. Poor subordinate training7. Uncontrollable external environmental factors8. Poor departmental leadership and direction9. Inadequately defined implementation tasks and

activities10. Inefficient information system to monitor activities



4

Strategy Implementation Effective strategic implementation requires

the follows:1- Organizational structure appropriateness. 2- Sound leadership of the company.3- Effective motivational system4- Annual objectives5- Functional strategies6- Clear budget7- Detailed action plan

/ /١٤٤٤ ١٠ ١

Prentice Hall, Inc. ©2012

6-5

Criticisms of SWOT analysis1. Generates lengthy lists2. Uses no weights to reflect priorities3. Uses ambiguous/vague words and phrases4. Same factor can be in 2 categories5. No obligation to verify opinion with data or

analysis6. Requires only a single level of analysis7. No logical link to strategy implementation


6

Communicating Strategy

Strategy must be clearly understood.It provides employees with general

guidance to make decision.

/ /١٤٤٤ ١٠ ١


7

Strategy & Structure

Definition of Organizational Structure:The structure can either facilitate or

inhibit strategy implementation. Chandler says: Changes in strategy

ultimately lead to changes in the organization’s structure.

/ /١٤٤٤ ١٠ ١


8

Types of organizational structure

1- Functional2- Geographical3- Divisional4- Customer-based5- Matrix

/ /١٤٤٤ ١٠ ١

Copyright © 2005 Prentice Hall, Inc. All rights reserved.

10–9

Departmentalization by Type Functional

Grouping jobs by functions performed

Product Grouping jobs by

product line Geographic

Grouping jobs on the basis of territory or geography

Process Grouping jobs on

the basis of product or customer flow

Customer Grouping jobs by

type of customer and needs


10–10Figure 10.2aFigure 10.2a

Functional Departmentalization

• Advantages

• Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations

• Coordination within functional area

• In-depth specialization

• Disadvantages

• Poor communication across functional areas

• Limited view of organizational goals


10–11Figure 10.2bFigure 10.2b

Geographical Departmentalization

• Advantages

•More effective and efficient handling of specific regional issues that arise

•Serve needs of unique geographic markets better

• Disadvantages

•Duplication of functions

•Can feel isolated from other organizational areas


10–12Figure 10.2cFigure 10.2c

Product Departmentalization

+ Allows specialization in particular products and services

+ Managers can become experts in their industry

+ Closer to customers

– Duplication of functions

– Limited view of organizational goalsSource: Bombardier Annual Report.


10–13Figure 10.2dFigure 10.2d

Process Departmentalization

+More efficient flow of work activities

–Can only be used with certain types of products


10–14Figure 10.2dFigure 10.2d

Customer Departmentalization

+ Customers’ needs and problems can be met by specialists

- Duplication of functions

- Limited view of organizational goals


15

An assessment of Org. Structure

No structure is appropriate for all situations.

Appropriate structure may change as the organization develops.

Examples require structure change:

Introducing new strategy, having problems in achieving its objectives, leadership changes.

/ /١٤٤٤ ١٠ ١


16

Symptoms of an ineffective org. Structure

According to P. Drucker:1- Too many management levels make

cooperation and communication difficult2- Too many meetings attended by too

many.3- Too much attentions are given to resolve

interdepartmental conflict.4- Excessive decision making at top

management. / /١٤٤٤ ١٠ ١


17

Evolution of organizational structure: Alfred D. Chandler

1. Changing strategy.2. Administrative problems leading to

decline performance.3. Revised structure subsequent return

to economic health.

/ /١٤٤٤ ١٠ ١


18

Structural adjustments: Chandler

When does it happen?1. Market expansion.2. Product line diversification.3. Vertical integration.

/ /١٤٤٤ ١٠ ١


19

Relationship between strategy and Org. Structure

The process of matching structure to strategy is complex and should be undertaken with a thorough understanding of:

1. the historical development of the organizational structure.

2.The requirements of the organization’s environment and technology.

3.The political relationships that might be affected inside the organization.

/ /١٤٤٤ ١٠ ١


20

Organizational Culture

. Culture: Refers to the values and patterns of belief and behavior that are accepted and practiced by the members of a particular organizations

Org. culture change as environment changes.

The founder and Top management shape the org. culture.

Change in strategy requires change in culture.

/ /١٤٤٤ ١٠ ١


21

Organizational Leadership

The leader is an individual who is able to influence the attitudes and opinion of others by motivation and guiding.

The leader must have a clear vision.Different strategies need different skills.

/ /١٤٤٤ ١٠ ١


22

Strategy and Motivational systems

Organizational reward system influence the entire organizational climate.

Organizational rewards include all types of rewards, tangible and intangible.

/ /١٤٤٤ ١٠ ١


23

Deployment of Resources through Budgeting

Budgeting: Is the process of allocating resources to be employed to achieve objectives.

Budget should be directly linked to strategy implementation.

/ /١٤٤٤ ١٠ ١


24

Developing functional Strategies

Functional Strategies describe the methods and means at functional level to achieve corporate strategies and business unit strategies.

/ /١٤٤٤ ١٠ ١

Documents

Strategic Management Prof. Dr. Majed El-Farra 2012 1 Strategic Implementation Requirements for Strategic Implementation 07/03/1437