The Strategic Management Process

1
Strategy Implementation

• What must we do to put the strategy in place,
  execute it proficiently, and produce good
  results?
• Creating FITS between strategy and external
  environment and creating FITS inside the
  organization
• Control, coordination, and motivation issues

2
Figure 11.1 The Eight Componentsof the
Strategy Execution Process
3
Figure 11.2 The Three Components of Building a
Capable Organization
Staffing the Organization
Building Core Competencies and Competitive
Capabilities
Matching the Organization Structure to Strategy
4
ALLOCATING RESOURCES TO SUPPORT STRATEGY
IMPLEMENTATION
5
Allocating Resources toSupport Strategy
Execution

• Resource allocation should fit strategy
• Changing strategy requires changes to resource
  allocation process
• Shifting resources downsizing some
  areas,upsizing others, getting rid of activities
  no longer needed, and funding new strategically
  critical activities
• Financial and other resources (physical and human
  assets)

6
CREATING STRATEGY-SUPPORTIVE POLICIES AND
PROCEDURES
7
Fig. 12.1 How Prescribed Policies
andProcedures Facilitate Strategy Execution
8
INSTITUTING BEST PRACTICES AND CONTINUOUS
IMPROVEMENT
9
Instituting Best Practicesand Continuous
Improvement

• Searching out and adopting best practicesis
  integral to effective implementation
• Benchmarking is the backbone of theprocess of
  identifying, studying, andimplementing best
  practices
• Key tools to promote continuous improvement
• Business process reengineering
• TQM
• Six Sigma quality control

10
INSTALLING STRATEGY-SUPPORTIVE INFORMATION AND
OPERATING SYSTEMS
11
Installing Strategy-SupportiveInformation and
Operating Systems

• Good information and operating systems
  areessential for first-rate strategy execution
• Support systems can relate to all value-chain
  activities
• Includes all type of Computer Based Information
  Systems (CBISs)
• MIS, DBMS, TPS, DSS, E-commerce and e-business
  systems, CRM, SCM, etc
• Mobilizing information and creating systemsto
  use knowledge effectively can yield
• Competitive advantage

12
TYING REWARDS AND INCENTIVES TO GOOD STRATEGY
IMPLEMENTATION
13
Exercising Adequate ControlOver Empowered
Employees

• Challenge Behavioral Control
• How to ensure actions of employeesstay within
  acceptable bounds
• Control approaches
• Managerial control
• Establish boundaries on what not todo, allowing
  freedom to act with limits
• Track and review daily operating performance
• Peer-based control

14
Gaining Commitment Componentsof an
Effective Reward System

• Monetary Incentives
• Base pay increases
• Performance bonuses
• Profit sharing plans
• Stock options
• Retirement packages
• Piecework incentives

• Non-monetary Incentives
• Praise
• Constructive criticism
• Special recognition
• More, or less, job security
• Stimulating assignments
• More, or less, autonomy
• Rapid promotion

15
Linking the Reward Systemto Performance
Outcomes

• Rewards are the single most powerful tool to win
  the commitment of company personnel to effective
  strategy implementation
• Objectives in designing the reward system
• Generously reward those achieving objectives
• Deny rewards to those who dont
• Tie incentive compensation to relevant outcomes -
  both strategic and financial

16
BUILDING A STRATEGY-SUPPORTIVE CORPORATE
CULTURE
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Defining Characteristics of Corporate Culture

• Core values, beliefs, and business principles
• Ethical standards
• Operating practices and behaviors defininghow
  we do things around here
• Approach to people management
• Chemistry and personality permeatingwork
  environment
• Often told stories illustrating
• Companys values
• Business practices
• Traditions

18
Identifying the Key Featuresof Corporate
Culture

• A companys culture is manifested in . . .
• Values, business principles, and ethical
  standards preached and practiced by management
• Approaches to people management and problem
  solving
• Official policies and procedures
• Spirit and character permeating work environment
• Interactions and relationships among managers and
  employees
• Peer pressures that exist to display core values
• Its revered traditions and often repeated stories
• Its relationships with external stakeholders

19
Why is Culture Important?

• Matching culture to strategy will improve
  performance
• A culture that promotes attitudes and behaviors
  that are well-suited to strategy is a valuable
  ally in the strategy implementation process
• Can hinder strategy implementation and
  performance if not compatible with strategy
• A culture where attitudes and behaviors impede
  good strategy implementation is a huge obstacle
  to overcome
• Provides another means to control, coordinate,
  and motivate employees

20
Grounding the Culture inCore Values and
Ethics

• A culture based on ethical principles is vital to
  long-term strategic success
• Ethics programs help make ethical conduct a way
  of life
• Executives must provide genuine support of
  personnel displaying ethical standards in
  conducting the companys business
• Value statements serve as a cornerstone for
  culture-building
• Can be used to control employees to behave in
  the right way