strategic mgmt & bus policy by thomas l. wheelen (10th edition)
TRANSCRIPT
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STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 1 Basic Concepts of Strategic Management
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Basic Concepts of Strategic Management
GlobalizationInternationalization of markets and corporations
Global (worldwide) markets rather than national markets
Electronic CommerceUse of the Internet to conduct business transactions
Basis for competition on a more strategic level rather than traditional focus on product features and costs
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Basic Concepts of Strategic Management
Electronic Commerce -- Trends
• Forcing company transformation• Market access & branding changing –
disintermediation of traditional distribution channels
• Balance of power shift to consumer• Competition changing
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Basic Concepts of Strategic Management
Electronic Commerce -- Trends
• Pace of business increasing • Internet purchasing beyond traditional
boundaries• Knowledge key asset – source of
competitive advantage
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Strategic Management Defined
Set of managerial decisions and actions that determines the long-run performance of a firm.
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Basic Concepts of Strategic Management
4 Phases of Strategic Management
1. Basic financial planning2. Forecast-based planning3. Externally-oriented planning4. Strategic management
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Basic Concepts of Strategic Management
Highly Rated Benefits
• Clearer sense of strategic vision• Sharper focus on strategic importance• Improved understanding of changing
environment
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Basic Concepts of Strategic Management
Not Always a Formal Process
• Where is the organization now? (not where do we hope it is)
• If no changes are made, where will the organization be in 1,2,5 or 10 years?
• What specific actions should management undertake?
• What are the risks and payoffs?
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Basic Concepts of Strategic Management
Basic Elements of the Strategic Management Process
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Environmental Scanning Defined
Monitoring, evaluation, and disseminating information from external and internal environments –to key people in the firm
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Basic Concepts of Strategic Management
Environmental Variables
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Environmental Scanning
SWOT Analysis
• Strengths – Weaknesses
• Opportunities - Threats
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Strategy Formulation
Development of long-range plans for effective management of opportunities and threats in light of corporate strengths and weaknesses
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Strategy Formulation
Mission Statement
• Purpose/reason for organization• Promotes shared expectations• Communicates public image• Who we are; what we do; what we
aspire to
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Organizational Adaptation
Organization “fit” with environment
• Theory of population ecology• Institution theory• Strategic choice perspective• Organizational learning theory
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Organizational Adaptation
Strategic flexibility
• Demands long-term commitment to development of critical resources
• Demands firm become a learning organization
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Learning Organizations
An organization skilled at creating, acquiring, and transferring knowledge and at modifying its behavior to reflect new knowledge and insights
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Learning Organizations
4 Chief Activities
• Systematic problem solving• New approach experimentation• Learning from experiences• Intra-organization knowledge transfer
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Basic Concepts of Strategic Management
Hierarchy of Strategy
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Goals & Objectives
Corporate Goals/Objectives
–Profitability (net profit)–Growth–Resource utilization (ROE, ROI)–Market leadership
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Basic Concepts of Strategic Management
3 Types of Strategy
–Corporate strategy
–Business strategy
–Functional strategy
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Basic Concepts of Strategic Management
Corporate Strategy
–Stability–Growth–Retrenchment
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Basic Concepts of Strategic Management
Business Strategy
–Competitive strategies
–Cooperative strategies
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Basic Concepts of Strategic Management
Functional Strategy
–Technological leadership
–Technological followership
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Basic Concepts of Strategic Management
Strategic Decision-Making
Process
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Strategic Decision Making
Strategic Decisions
–Rare
–Consequential
–Directive
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Strategic Decision Making
Mintzberg’s Modes
–Entrepreneurial mode–Adaptive mode–Planning mode–Logical incrementalism
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Hambrick and Fredrickson – Good Strategy
5 Elements of Good Strategy
1. Arenas2. Vehicles3. Differentiators4. Staging5. Economic logic
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CHAPTER 2 Corporate Governance
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STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 2 Corporate Governance
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Corporate Governance
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Corporate Governance
The relationship among the board of directors, top management, and shareholders – determining the direction and performance of the corporation
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Corporate Governance
Role of Board
–Monitor
–Evaluate and influence
–Initiate and determine
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Board of Directors Continuum
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Board of Directors
Members --
–Inside directors•“management directors”•Officers or execs employed by the firm
–Outside directors•“non-management directors”•Execs of other firms not employed by the board’s corporation
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Agency Theory
Agency Problem ––Objectives of owners & agents in conflict–Difficult for owners to verify agent performance
Risk Sharing Problem ––Owners & agents risk assessment in conflict
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Stewardship Theory
Executives more motivated to act in best interest of the corporation than their own self-interests. Theory that over time, senior executives tend to view corporation as extension of selves.
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Board of Directors
When Outsiders can be considered Insiders
–Affiliated Directors–Retired Directors–Family Directors
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Board of Directors
Codetermination
–The inclusion of a corporation’s employees on its board of directors
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Board of Directors
Interlocking Directorates
–Direct Interlocking
–Indirect Interlocking
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Board of Directors
Nominations & Elections
–Traditional Approach•CEO invitation to membership•Shareholders approval in annual proxy statement•All nominees usually elected
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Board of Directors
Nominations & Elections
–Staggered Board Approach•Staggered terms of service/election
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Board of Directors
Sarbanes-Oxley
–Code of Ethics
–Audit, Nominating, and Compensation Committees all outside directors
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Board of Directors
Organization of the Board
–Size
•Charter & Bylaws Determination
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Board of Directors
Corporate Governance
–Review & shaping of strategy–Pressure for corporate performance–Demand for executive stock ownership–Outside directors increasing–Impact of Sarbanes-Oxley
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Board of Directors
Transformational leaders
–Change agents through vision for change
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Board of Directors
Successful CEO’s
–Strategic vision–Passion for the company–Strong communication–charisma
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Board of Directors
Executive Leadership
–Strategic vision–Role model
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Board of Directors
Executive Leadership
–Communication of performance standards–Demonstrates confidence in abilities of followers
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Strategic Management Process
Strategic Planning Staff
–Supports top management & business units in the strategic planning process
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Strategic Management Process
Strategic Planning Staff
–Identify & analyze company-wide strategic issues–Generate strategic alternatives
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Strategic Management Process
Strategic Planning Staff
–Facilitate business units in coordinating activities related to strategic planning process
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CHAPTER 3 Ethics & Social Responsibility
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STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 3 Ethics & Social Responsibility
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Ethics & Social Responsibility
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Corporate Governance
Broader responsibility --
Private corporations have responsibility to society that extend beyond making a profit
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Social Responsibility
There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.
Milton Friedman
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Corporate Governance
Carroll’s 4 Responsibilities
–Economic–Legal–Ethical–Discretionary
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Carroll’s 4 Responsibilities
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Corporate Stakeholders
Affect or are affected by the achievement of the corporation’s objectives
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Corporate Stakeholders
Stakeholder Analysis –
–Primary stakeholder•Sufficient bargaining power to affect outcomes
–Secondary stakeholder•Indirect stake but are affected by corporation’s actions
–Stakeholder Input•Determine whether input is necessary
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Ethical Behavior
“business ethics”
–Argument that there is no such thing … it is an oxymoron
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Ethical Decision Making
Corporate practices --
–Massive write-downs and restatements of profit–Misclassification of expenses as capital expenditures–Pirating corporate assets for personal gain
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Ethical Decision Making
Recent Survey Results --
–70% distrust business executives–Enron–WorldCom
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Reasons for Unethical Behavior
Provocative Question --
–Why are businesspeople perceived to be acting unethically?
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Reasons for Unethical Behavior
Perceptions caused by --
–Not aware of impropriety–Cultural norms and values vary–Governance systems based on rule or relationships–Differences in values between businesspeople and key stakeholders
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Reasons for Unethical Behavior
Allport-Vernon-Lindzey Study of Values --
–Aesthetic–Economic–Political–Religious–Social–Theoretical
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Reasons for Unethical Behavior
Most common reasons for bending rules --
–Organizational performance required it–Ambiguous or out of date rules–Pressure from others – everyone else does it
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Moral Relativism
Morality is relative to some personal, social, or cultural standard and there is no method for deciding whether one decision is better than another.
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Kohlberg’s Levels of Moral Development
1. Preconventional level
–Characterized by a concern for self•Personal interest•Avoidance of punishment
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Kohlberg’s Levels of Moral Development
2. Conventional level
–Characterized consideration of society’s values•External code of conduct
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Kohlberg’s Levels of Moral Development
3. Principled level
–Characterized by adherence to internal moral code
•Universal values or principles
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Encouraging Ethical Behavior
Codes of Ethics
–Specifies how an organization expects its employees to behave on the job.
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Encouraging Ethical Behavior
Guidelines for Ethical Behavior
–Ethics
–Morality
–Law
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Encouraging Ethical Behavior
Approaches to Ethical Behavior
–Utilitarian•Judged by consequences
–Individual Rights•Fundamental rights in all decisions
–Justice•Distribution in equitable fashion
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Encouraging Ethical Behavior
Approaches to Ethical Behavior
–Categorical imperative•“golden rule”•Means - Ends
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Strategy Bits
192 U.S. companies surveyed --
–92% monitored employees use of e-mail/Internet
–26% monitored employees electronic activities all the time
–Almost none had checks in place to protect employees privacy
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CHAPTER 4 Environmental Scanning and Industry Analysis
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STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 4 Environmental Scanning and Industry Analysis
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Environmental Scanning
Societal environment --
–Economic forces–Technological forces–Political-legal forces–Sociocultural forces
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Societal Environment
Economic Forces --
–Regulate exchange of materials, money, energy and information
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Societal Environment
Technological Forces --
–Generate problem-solving inventions
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Societal Environment
Political-legal Forces --
–Allocate power; provide laws and regulations
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Societal Environment
Sociocultural Forces --
–Regulate values, mores, and customs of society
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Task Environment
Task environment --
–Elements or groups that directly affect a corporation and are affected by it
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Task Environment
Industry Analysis --
–In-depth examination of key factors within a corporation’s task environment
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Variables in Societal Environment
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Demographic Trends
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Transformational Sociocultural Trends
8 Current Trends –
–Increasing environmental awareness–Growing health consciousness–Expanding seniors market–Impact of the Generation Y boomlet–Declining mass market–Changing pace and location of life–Changing household composition–Increasing diversity of workforce & market
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International Societal Environments
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Scanning the Task Environment
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Ethical Behavior
“business ethics”
–Argument that there is no such thing … it is an oxymoron
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Ethical Decision Making
Corporate practices --
–Massive write-downs and restatements of profit–Misclassification of expenses as capital expenditures–Pirating corporate assets for personal gain
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External Strategic Factors
Strategic myopia --
–Willingness to reject unfamiliar as well as negative information
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Issues Priority Matrix
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Analyzing the Task Environment
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Porter’s Approach to Industry Analysis
Threat of New Entrants –
–Economies of scale–Product differentiation–Capital requirements–Switching costs–Access to distribution channels–Cost disadvantages–Government policy
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Porter’s Approach to Industry Analysis
Rivalry Among Existing Firms –
–Number of competitors–Rate of industry growth–Product or service characteristics–Amount of fixed costs–Capacity–Height of exit barriers–Diversity of rivals
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Porter’s Approach to Industry Analysis
•Threat of Substitute Products or Services
•Bargaining Power of Buyers
•Bargaining Power of Suppliers
•Relative Power of Other Stakeholders
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Industry Evolution
Fragmented Industry –
–No dominant industry
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Industry Evolution
Consolidated Industry –
–Dominated by a few large firms
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International Risk Assessment
Continuum of International Industries
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Strategic Groups
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Strategic Types
•Defenders•Prospectors•Analyzers•Reactors
General Types –
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Competitive Intelligence
Called business intelligence
Gathering information on a company’s competitors
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Forecasting
Forecasting Techniques --
–Extrapolation–Brainstorming–Expert opinion–Delphi technique–Statistical modeling–Scenario writing
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Synthesis of External Factors -- EFAS
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CHAPTER 5Internal Scanning: Organizational Analysis
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STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 5Internal Scanning: Organizational Analysis
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Resource-Based Approach to Organizational Analysis
Internal strategic factors --
–Critical strengths and weaknesses that are likely to determine if the firm will be able to take advantage of opportunities while avoiding threats
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Resource-Based Approach to Organizational Analysis
•Resources
•Capabilities
•Competency
•Core competency
•Distinctive competency
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Core and Distinctive Competencies
VRIO Framework --
–Value
–Rareness
–Imitability
–Organization
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Resource-Based Approach to Organizational Analysis
5-Step Approach Strategy Analysis --
1. Identify and classify resources2. Combine strengths into capabilities3. Appraise profit potential of capabilities4. Select strategy that best exploits 5. Identify resource gaps invest in weaknesses
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Continuum of Sustainability
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Sustainability of Advantage
Durability --
–Rate at which a firm’s underlying resources and capabilities depreciate or become obsolete
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Sustainability of Advantage
Imitability --
–Rate at which a firm’s underlying resources and capabilities can be duplicated by others
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Sustainability of Advantage
Core Competency can be imitated --
–Transparency–Transferability–Replicability
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Business Models
Company’s method for making money in the current business environment.
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Business Models
Types of Models --
–Customer Solutions Model–Profit Pyramid Model–Multi-Component System/Installed Base Model–Advertising Model–Switchboard Model
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Business Models
Types of Models --
–Time Model–Efficiency Model–Blockbuster Model–Profit Multiplier Model–Entrepreneurial Model–De Facto Standard Model
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Value-Chain Analysis
Linked set of value-creating activities beginning with basic raw material and ending with distributors getting final goods into hands of customers
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Value-Chain Analysis
Typical Value Chain for a Manufactured Product
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Corporate Value-Chain Analysis
•Primary activities
•Support activities
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Corporation’s Value Chain
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Scanning Functional Resources & Capabilities
Basic Organizational Structures --
–Simple structure–Functional structure–Divisional structure–Strategic business units (SBU’s)–Conglomerate structure
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Basic Organizational Structures
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Corporate Culture
Collection of beliefs, expectations, and values learned and shared by a corporation’s members and transmitted from one generation of employees to another
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Strategic Marketing Issues
–Market Position & Segmentation–Marketing Mix–Product Life Cycle–Brand & Corporate Reputation
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Product Life Cycle
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Strategic Financial Issues
–Financial leverage
–Capital budgeting
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Strategic Research & Development Issues
–R&D Intensity
–Technological Competence
–Technology Transfer
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Technological Discontinuity
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Strategic Human Resource Management Issues
HRM –
–Increasing use of teams–Union relations –Temporary workers–Quality of work life–Human diversity
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Internal Factor Analysis Summary Table
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CHAPTER 6Strategy Formulation: Situation Analysis & Business Strategy
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STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 6Strategy Formulation: Situation Analysis & Business Strategy
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Situational Analysis
Strategy formulation --
–Strategic planning or long-range planning•Develops mission, objectives, strategies, policies
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Situational Analysis
--process of finding a strategic fit between external opportunities and internal strengths while working around external threats and internal weaknesses
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IFAS – Maytag as Example
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EFAS – Maytag as Example
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SFAS Matrix
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Situational Analysis
Niche --
–Need in the marketplace that is currently unsatisfied
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Situational Analysis
Corporate Goal --
–Find propitious niche–Strategic window
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Situational Analysis
SWOT --
–Internal•Strengths/Weaknesses
–External•Opportunities/Threats
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TOWS Matrix
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Business Strategy
Focuses on improving competitive position of company’s products or services within the specific industry or market segment
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Porter’s Competitive Strategies
Competitive Strategy --
–Low cost–Differentiation–Direct competition–Focus on niche
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Porter’s Competitive Strategies
Generic Competitive Strategies --
–Lower Cost strategy•Greater efficiencies than competitors
–Differentiation strategy•Unique/superior value, quality, features, service
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Porter’s Competitive Strategies
Competitive Advantage --
–Determined by Competitive Scope•Breadth of the target market
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Porter’s Competitive Strategies
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Porter’s Competitive Strategies
Cost Leadership --
–Low-cost competitive strategy–Broad mass market–Efficient-scale facilities–Cost reductions–Cost minimization
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Porter’s Competitive Strategies
Differentiation –
–Broad mass market–Unique product/service–Premiums charged–Less price sensitivity
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Porter’s Competitive Strategies
Cost-Focus –
–Low-cost competitive strategy–Focus on market segment–Niche focused–Cost advantage in market segment
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Porter’s Competitive Strategies
Differentiation Focus –
–Specific group or geographic market focus–Differentiation in target market–Special needs of narrow target market
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Porter’s Competitive Strategies
Stuck in the middle –
–No competitive advantage–Below-average performance
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Risks of Generic Strategies
Risks of Cost LeadershipCost leadership is not sustained:• Competitors imitate.• Technology changes.• Other bases for cost leadership erode.Proximity in differentiation is lost.Cost focusers achieve even lower cost in segments.
Risks of DifferentiationDifferentiation is not sustained:• Competitors imitate.• Bases for differentiation become less important to buyers.Cost proximity is lost.Differentiation focusers achieve even greater differentiation in segments.
Risks of FocusThe focus strategy is imitated:The target segment becomes structurally unattractive:• Structure erodes.• Demand disappears.Broadly targeted competitors overwhelm the segment:• The segment’s differences from other segments narrow.• The advantages of a broad line increase.New focusers subsegment the industry.
Risks of Cost LeadershipCost leadership is not sustained:• Competitors imitate.• Technology changes.• Other bases for cost leadership erode.Proximity in differentiation is lost.Cost focusers achieve even lower cost in segments.
Risks of DifferentiationDifferentiation is not sustained:• Competitors imitate.• Bases for differentiation become less important to buyers.Cost proximity is lost.Differentiation focusers achieve even greater differentiation in segments.
Risks of FocusThe focus strategy is imitated:The target segment becomes structurally unattractive:• Structure erodes.• Demand disappears.Broadly targeted competitors overwhelm the segment:• The segment’s differences from other segments narrow.• The advantages of a broad line increase.New focusers subsegment the industry.
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8 Dimensions of Quality
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Competitive Strategy
Industry Structure --
–Fragmented Industry–Consolidated Industry
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Competitive Tactics
Timing Tactics --
–First mover–Late movers
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Competitive Tactics
Market Location Tactics --
–Frontal Assault–Flanking Maneuver–Bypass Attack–Encirclement–Guerrilla Warfare
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Competitive Tactics
Defensive Tactics --
–Raise structural barriers–Increase expected retaliation–Lower the inducement for attack
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Cooperative Strategies
•Collusion•Strategic Alliances•Mutual service consortia•Joint ventures•Licensing arrangements•Value-chain partnerships
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CHAPTER 7 Strategy Formulation: Corporate Strategy
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STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 7 Strategy Formulation: Corporate Strategy
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Corporate Strategy
3 Key Issues –
–Firm’s directional strategy
–Firm’s portfolio strategy
–Firm’s parenting strategy
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Corporate Directional Strategies
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Corporate Strategy
Directional Strategy –
–Orientation toward growth•Expansion, contraction, status quo•Concentration or diversification•Internal development or acquisitions, mergers, or alliances
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Corporate Strategy
Directional Strategy –
–3 Grand Strategies
•Growth strategies
•Stability strategies
•Retrenchment strategies
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Corporate Strategy
Growth Strategies --
–External mechanisms
•Mergers
•Acquisitions
•Strategic alliances
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Corporate Strategy
Growth Strategies --
–2 Basic forms
•Concentration
•Diversification
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Corporate Strategy
Basic Concentration Strategies --
–Vertical growth
–Horizontal growth
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Corporate Strategy
Vertical Growth --
–Vertical integration•Full integration•Taper integration•Quasi-integration•Long-term contract
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Corporate Strategy
Vertical Growth --
–Backward integration
–Forward integration
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Corporate Strategy
Concentration --
–Horizontal Growth•Horizontal integration
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Corporate Strategy
Basic Diversification Strategies --
–Concentric Diversification
–Conglomerate Diversification
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Corporate Strategy
Concentric Diversification --
–Growth into related industry–Search for synergies
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Corporate Strategy
Conglomerate diversification --
–Growth into unrelated industry–Concern with financial considerations
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Corporate Strategy
International Entry Options --
–Exporting–Licensing–Franchising–Joint Ventures–Acquisitions–Green-Field Development
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Corporate Strategy
International Entry Options --
–Production Sharing–Turnkey Operation–BOT Concept (Build, Operate, Transfer)–Management Contracts
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Corporate Strategy
Stability Strategies --
–Pause/proceed with caution
–No change
–Profit strategies
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Corporate Strategy
Retrenchment Strategies --
–Turnaround–Captive Company Strategy–Selling out–Bankruptcy–Liquidation
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Corporate Strategy
Portfolio Analysis --
–Resource commitment on best products to ensure continued success
–Resource commitment on new costly products high risk
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BCG Matrix (Portfolio Analysis)
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GE Business Screen (Portfolio Analysis)
AWinners Winners
B
C
Question Marks
D
F
Average Businesses
EWinners
Losers
GLosers H
LosersProfit
Producers
Strong Average Weak
Low
Medium
High
Business Strength/Competitive Position
Indu
stry
Att
ract
ive
ness
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Corporate Strategy
Corporate Parenting Strategy --
–Strategic factors–performance improvement–Analyze fit
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CHAPTER 8 Strategy Formulation: Functional Strategy & Strategic Choice
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STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 8 Strategy Formulation: Functional Strategy & Strategic Choice
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Functional Strategy
The approach a functional area takes to achieve corporate and business unit objectives and strategies by maximizing resource productivity
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Functional Strategy
Marketing Strategy –
–Pricing–Selling–Distribution
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Functional Strategy
Marketing Strategy –
–Product development•Line extension
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Functional Strategy
Marketing Strategy –
–Advertising and promotion•Push strategy•Pull strategy
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Functional Strategy
Marketing Strategy –
–Pricing•Skim pricing•Penetration pricing•Dynamic pricing
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Functional Strategy
Financial Strategy –
–Leveraged buyout–Reversed stock split–Tracking stock
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Functional Strategy
R&D Strategy –
–Technological leader–Technological follower–Open innovation
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Functional Strategy
Operations Strategy –
–Job shop–Connected line batch flow–Flexible manufacturing systems–Dedicated transfer lines–Mass production–Continuous improvement system–Modular manufacturing
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Functional Strategy
Purchasing Strategy –
–Multiple sourcing–Sole sourcing–Just-in-time (JIT)–Parallel sourcing
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Functional Strategy
Logistics Strategy –
–Centralization–Outsourcing–Internet
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Functional Strategy
HRM Strategy –
–360 degree appraisal
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Functional Strategy
Outsourcing errors –
–Activities that should not be outsourced–Wrong vendor selection–Writing poor contract–Overlooking personnel issues–Hidden costs of outsourcing–Failing to plan exit strategy
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Proposed Outsourcing Matrix
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Functional Strategy
Strategies to Avoid –
–3 Follow the leader–Hit another home run–Arms race–Do everything–Losing hand
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Corporate Strategy
Growth Strategies --
–External mechanisms
•Mergers
•Acquisitions
•Strategic alliances
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Constructing Corporate Scenarios
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Functional Strategy
Subjective Factors Affecting Decisions --
–Management’s attitude toward risk–Pressures from stakeholders–Pressures from corporate culture–Needs and desires of key managers
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Stakeholder Priority Matrix
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Strategic Choice
Avoiding the Consensus Trap --
–Devil’s Advocate
–Dialectical Inquiry
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Strategic Choice
Evaluation of Strategic Alternatives --
–Mutual exclusivity–Success–Completeness–Internal consistency
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CHAPTER 9 Strategy Implementation: Organizing for Action
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STRATEGIC MANAGEMENT & BUSINESS POLICY10TH EDITION
THOMAS L. WHEELEN J. DAVID HUNGER
CHAPTER 9 Strategy Implementation: Organizing for Action
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Strategy Implementation
--Sum total of activities & choices required for strategic plan execution
--Strategy implementation through programs, budgets, and procedures
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Strategy Implementation
Key Implementation Questions –
–Who carries out strategic plan?–What needs doing for alignment w/ strategy?–How is work coordinated?
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Strategy Implementation
Programs –
–Action oriented
–Matrix of change•Feasibility•Sequence of execution•Location•Pace & nature of change•Stakeholder evaluations
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The Matrix of Change
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Strategy Implementation
Achieving Synergy –
–Shared know-how–Coordinated strategies–Shared tangible resources
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Strategy Implementation
Achieving Synergy –
–Economies of scale or scope–Pooled negotiating power–New business creation
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Strategy Implementation
Structure follows strategy –
–New strategy is created–New administrative problems emerge–Economic performance declines–New appropriate structure is invented–Profit returns to previous level
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Strategy Implementation
Stages of Corporate Development –
–Stage I: Simple structure–Stage II: Functional structure–Stage III: Divisional structure–Stage IV: Beyond SBU’s
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Strategy Implementation
Blocks to Changing Stages –
–Loyalty to comrades–Task oriented–Single-mindedness–Working in isolation
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Organizational Life Cycle
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Changing Structural Characteristics of Modern Organizations
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Strategy Implementation
Advanced Types of Organizational Structures –
–Matrix•Temporary cross-functional task forces•Product/brand management•Mature matrix
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Strategy Implementation
Advanced Types of Organizational Structures –
–Network structure (virtual organization)
–Cellular organization
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Network Structure
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Strategy Implementation
Six Sigma –
–Define–Measure–Analyze–Improve–Establish
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Strategy Implementation
Job design to implement strategy –
–Job enlargement–Job rotation–Job enrichment–Job characteristics model
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Strategy Implementation
International Issues –
–MNC’s–International Strategic Alliances
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International Development Stages–
–Domestic company–Domestic company w/export division–Domestic company w/int’l division–MNC w/multidomestic emphasis–MNC w/global emphasis
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Centralization vs. Decentralization–
–Product-group structure–Geographic-area structure
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Geographic Area Structure
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