Business Strategy and Policy Lecture 29 1. Recap Nature of Strategy Analysis & Choice...

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Transcript of Business Strategy and Policy Lecture 29 1. Recap Nature of Strategy Analysis & Choice...

Business Strategy and Policy

Business Strategy and PolicyLecture 291RecapNature of Strategy Analysis & Choice

Comprehensive Strategy-Formulation Framework

SWOT Matrix Strategic Position and Action Evaluation (SPACE)BCG MatrixIE MatrixQSPM

2Todays Lecture IMPLEMENTING STRATEGIES: MANAGEMENT AND OPERATIONS ISSUES ManagementPerspectives ANNUALOBJECTIVES POLICIES RESOURCEALLOCATION MANAGINGCONFLICT MATCHINGSTRATEGYWITHSTRUCTURE RESTRUCTURING,REENGINEERING,ANDE-ENGINEERING LINKINGPERFORMANCEANDPAYTOSTRATEGIES MANAGINGRESISTANCETOCHANGE MANAGINGTHENATURALENVIRONMENT CREATINGASTRATEGY-SUPPORTIVECULTURE PRODUCTION/OPERATIONSCONCERNS HUMANRESOURCECONCERNS

34Formulation focuses on effectiveness

Implementation focuses on efficiencyNature of Strategy ImplementationFormulation vs. Implementation45Shift in responsibility

Nature of Strategy ImplementationManagement PerspectivesDivision or FunctionalManagersStrategists56Management IssuesManagementIssuesResourcesOrganizational structureRestructuringRewards/IncentivesAnnual ObjectivesPolicies67Management Issues (contd)ManagementIssuesSupportive CultureProduction/OperationsHuman ResourcesResistance to ChangeNatural Environment78Management IssuesPurpose of Annual Objectives --Basis for resource allocationMechanism for management evaluationMetric for gauging progress on long-term objectivesEstablish priorities (organizational, division, & departmental)89Management IssuesFinancial resourcesPhysical resourcesHuman resourcesTechnological resources4 Types of Resources910Management IssuesConflict not always badNo conflict may signal apathyCan energize opposing groups to actionMay help managers identify problemsManaging Conflict1011Managing ConflictConflict Management and Resolution

AvoidanceDefusionConfrontationAvoidance includes such actions as ignoring the problem in hopes that the conflict will resolve itself or physically separating the conflicting individuals (or groups).

Defusion can include playing down differences between conflicting parties while accentuating similarities and common interests, compromising so that there is neither a clear winner nor loser, resorting to majority rule, appealing to a higher authority, or redesigning present positions.

Confrontation is exemplified by exchanging members of conflicting parties so that each can gain an appreciation of the others point of view, or holding a meeting at which conflicting parties present their views and work through their differences.1112New administrativeproblems emergeNew strategyIs formulatedOrganizationalperformance declinesOrganizational performanceimprovesNew organizationalstructure is establishedChandlers Strategy-Structure Relationship1213Management IssuesFunctional StructureDivisional StructureStrategic Business Unit Structure (SBU)Matrix StructureBasic Forms of Structure1314Management IssuesRestructuringDownsizingRightsizingDelayering1415Management IssuesReengineeringProcess managementProcess innovationProcess redesign1516Tests for Performance-Pay PlansDoes 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?1617Management IssuesProduction/Operations Concerns-- Production processes typically constitute more than 70% of the firms total assets1718Management IssuesProduction/Operations DecisionsPlant sizeInventory/Inventory controlQuality controlCost controlTechnological innovation1819Management IssuesHuman Resource Strategic ResponsibilitiesAssessing staffing needs/costsDeveloping performance incentivesESOPsChild-care policiesWork-life balance issues1920Diversity IssuesCEOCompanyAgeMeg WhitmaneBay49Andrea JungAvon Products47Anne MulcahyXerox52Marjorie MagnerCitigroup56Betsy HoldenKraft Foods49Ann MooreAOL Time Warner57Women CEOs in U.S. 2005 (examples)21Benefits of a Diverse WorkforceImproves corporate cultureImproves employee moraleLeads to a higher retention of employeesLeads to easier recruitment of employeesDecreases complaints and litigationIncreases creativityDecreases interpersonal conflict22Benefits of a Diverse WorkforceEnables the organization to move into emerging marketsImproves client relationsIncreases productivityImproves the bottom lineMaximizes brand identityReduces training costsSummaryIMPLEMENTING STRATEGIES: MANAGEMENT AND OPERATIONS ISSUES ManagementPerspectives ANNUALOBJECTIVES POLICIES RESOURCEALLOCATION MANAGINGCONFLICT MATCHINGSTRATEGYWITHSTRUCTURE RESTRUCTURING,REENGINEERING,ANDE-ENGINEERING LINKINGPERFORMANCEANDPAYTOSTRATEGIES MANAGINGRESISTANCETOCHANGE MANAGINGTHENATURALENVIRONMENT CREATINGASTRATEGY-SUPPORTIVECULTURE PRODUCTION/OPERATIONSCONCERNS HUMANRESOURCECONCERNS

23Next LectureSTRATEGY REVIEW, EVALUATION, AND CONTROL

CHAPTER OUTLINE

The Nature of Strategy EvaluationA Strategy-Evaluation FrameworkThe Balanced ScorecardPublished Sources of Strategy-Evaluation InformationCharacteristics of an Effective Evaluation SystemContingency PlanningAuditing21st Century Challenges in Strategic Management

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