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Bus 411
Day 11
Copyright 2005 Prentice Hall 1
Copyright 2005 Prentice Hall Ch 1 -2
Agenda Question? Assignment 3 partially Corrected
Poor results on ratios
Assignment 4 posted Due March 8 @ 12:30 PM SWOT, Space, BCG and QSPM matrixes for McDonald’s
Mid-term exam March 19th or 22th
Chapters 1 – 9 and 10, 11? MCD’s ratios – class excercise
Discussion on Implementing Strategies: Management and Operations Issues
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -3
Chapter 7Implementing Strategies: Management & Operations Issues
Strategic Management: Concepts & Cases
13th Edition
Fred David
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -4
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 2 -5
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -6
Strategy Formulation vs. Implementation
Strategy Formulation Positioning forces
before the action Focus on effectiveness Primarily intellectual Requires good intuitive
and analytical skills
Requires coordination among a few people
Strategy Implementation Managing forces during
the action Focus on efficiency Primarily operational Requires special
motivation and leadership skills
Requires coordination among many people
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 2 -7
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -8
Shift in responsibility
Nature of Strategy Implementation
Management Perspectives
Divisional or FunctionalManagers
Strategists
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -9
Management Issues Central to Strategy Implementation
Establish annual objectives
Devise policies Allocate resources Alter existing
organizational structure Restructure & reengineer Revise reward & incentive
plans Minimize resistance to
change
Match managers to strategy Develop a strategy-
supportive culture Adapt production/operations
processes Develop an effective human
resources function Downsize & furlough as
needed Link performance & pay to
strategies
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -10
Purpose of Annual Objectives
Basis for resource allocation
Mechanism for management evaluation
Major instrument for monitoring progress toward achieving long-term objectives
Establish priorities (organizational, divisional, and departmental)
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -11
Annual Objectives
Horizontal consistency of objectives
Vertical consistency of objectives
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 2 -12
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 2 -13
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -14
Policies
Policies set boundaries, constraints, and limits on the kinds of administrative actions that can be taken to reward and sanction behavior
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -15
Resource Allocation
1. Financial resources
2. Physical resources
3. Human resources
4. Technological resources
Four Types of Resources
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -16
Managing Conflict
Conflict not always “bad”
Lack of conflict may signal apathy
Can energize opposing groups to action
May help managers identify problems
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -17
Managing Conflict
Approaches for managing and resolving conflict Avoidance Defusion Confrontation
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -18
Matching Structure with Strategy
Structure dictates how objectives and policies will be established
Structure dictates how resources will be allocated
Changes in strategy often lead to changes in organizational structure
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -19
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -20
Basic Forms of Structure
Functional Structure
Divisional Structure
Strategic Business Unit Structure (SBU)
Matrix Structure
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -21
Functional Structure
Group tasks and activities by business function
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -22
Functional Structure
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -23
Divisional Structure
Can be organized in one of four ways: By geographic area By product or service By customer By process
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -24
Divisional Structure
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -25
Strategic Business Unit Structure (SBU) Group similar divisions into
strategic business units and delegate authority and responsibility for each unit to a senior executive who reports directly to the chief executive officer
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 2 -26
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -27
Matrix Structure
The most complex of all designs because it depends upon both vertical and horizontal flows of authority and communication
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 2 -28
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -29
Matrix Structure
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 2 -30
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 2 -31
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -32
Restructuring, Reengineering, and E-engineering
Restructuring is called
Downsizing
Rightsizing
Delayering
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -33
Restructuring, Reengineering, and E-engineering
Cornerstones of Reengineering
Decentralization
Reciprocal interdependence
Information sharing
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 2 -34
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 2 -35
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -36
Tests for Performance-Pay Plans
Does the plan capture attention?
Do employees understand the plan?
Is the plan improving communication?
Does the plan pay out when it should?
Is the company or unit performing better?
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 2 -37
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 2 -38
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -39
Managing Resistance to Change
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -40
Creating a Strategy-Supportive Culture
1. Formal statements of organizational philosophy
2. Design of physical spaces
3. Deliberate role modeling, teaching, and coaching
4. Explicit reward and status system
5. Stories, legends, myths, and parables
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -41
Creating a Strategy-Supportive Culture
6. What leaders pay attention to
7. Leader reactions to critical incidents and crises
8. Organizational design and structure
9. Organizational systems and procedures
10. Criteria for recruitment, selection, promotion, leveling off, retirement, and “excommunication” of people
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -42
Production/Operations Concerns
Production processes typically constitute more than 70% of a firm’s total assets
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -43
Production/Operations Decision ExamplesPlant size
Inventory / Inventory control
Quality control
Cost control
Technological innovation
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 2 -44
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 2 -45
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -46
Human Resource Concerns
Assessing staffing needs/costs
Furloughs
Developing performance incentives
ESOPs
Work–life balance issues
Matching managers with strategy
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -47
Corporate Wellness Programs
Wellness of employees has become a strategic issue for many firms
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall
Ch 7 -48
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