Business Strategy Chapter 11 Building an Organization Capable of Good Strategy Execution

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S 1:Building  an  Organization  Capable  of  Good  Strategy  Execution
S 2:Executing  the  Strategy:

—An action-oriented, make-things happen task involving management’s ability to

—Direct organizational change

—Achieve continuous improvement in
operations and business processes

—Move toward operating excellence

—Create and nurture a
strategy-supportive culture

—Consistently meet or beat performance targets

—Tougher and more time-consuming than crafting strategy

S 3:Goals  of  the  Strategy Implementing-Executing  Process

—Unite total organization behind strategy

—See that activities are done in a manner that is conducive to first-rate strategy execution

—Generate commitment so an enthusiastic
crusade emerges to carry out strategy

—Fit how organization conducts its
operations to strategy requirements

S 4:Fig. 11.1:  The Eight Components of the Strategy Execution Process

S 5:What Top Executives Have to Do in Leading the Implementation Process

—Communicate the case for change

—Build consensus on how to proceed

—Arouse enthusiasm for the strategy to turn implementation process into a company wide crusade

—Empower subordinates to keep process moving

—Establish measures of progress and deadlines

—Reward those who achieve
implementation milestones

—Direct resources to the right places

—Personally lead strategic change process
and the drive for operating excellence

S 6:Fig. 11.2:  The Three Components of Building an Organization Capable of Proficient Strategy Execution

S 7:Three-Stage  Process  of  Developing  Competencies  and  Capabilities:

1.  Develop ability to do something

2.  As experience builds,
ability can translate into a
competence or capability

3.  If ability continues to be polished and refined, it can become a distinctive competence, providing a path to
competitive advantage!

S 8:Fig. 11.3:  Structuring the Work Effort to Promote Successful Strategy Execution

S 9: Step 1:Decide Which Value Chain Activities to Perform Internally and Which to Outsource:

—Involves deciding which activities are
essential to strategic success

—Most strategies entail certain crucial business processes or activities that must be performed exceedingly well or in closely coordinated fashion if the strategy is
to be executed with real proficiency

—These processes/activities usually
 need to be performed internally

—Other activities, such as routine
administrative housekeeping and
some support functions, may be
candidates for outsourcing

S 10: Step 2:Make Strategy-Critical Activities the Main Building Blocks

—Assign managers of strategy-critical activities a visible, influential position

—Avoid fragmenting responsibility for strategy-critical activities across many departments

—Provide coordinating linkages
between related work groups

—Meld into a valuable
competitive capability

Assign managers key roles

Primary  activities | Support functions

Strategic relation-ships | Coordi-nation | Valuable capability

S 11:Step 3:Determine How Much Authority to Delegate to Whom

—In a centralized structure

—Top managers retain authority
for most decisions

—In a decentralized structure

—Managers and employees are
empowered to make decisions

—Trend in most companies

—Shift from authoritarian to decentralized
structures stressing empowerment

S 12:Advantages and Disadvantages of Centralized versus Decentralized Decision Making

S 13:Step 4:Provide for Internal Cross-Unit Coordination

—Classic method of coordinating activities – Have related units report to single manager

—Upper-level managers have clout to
coordinate efforts of their units

—Support activities should be
woven into structure to

—Maximize performance of primary activities

—Contain costs of support activities

—Formal reporting relationships often need to be supplemented to facilitate coordination

S 14:Step 5:Provide for Collaboration With Outsiders  

—Need multiple ties at multiple levels to ensure

—Communication

—Coordination and control

—Find ways to produce collaborative
efforts to enhance firm’s capabilities
and resource strengths

—While collaborative relationships present opportunities, nothing valuable is realized until the relationship develops into an engine for better organizational performance

S 15:Current  Organizational  Trends

—Numerous companies have completed the task of remodeling traditional, hierarchical structures built on

—Functional specialization and

—Centralized authority

—Corporate downsizing movement in the
late 1980s and early 1990s was aimed at

—Recasting authoritarian, pyramidal
organizational structures

—Into flatter, decentralized structures 

S 16:Organizational Structures of the Future: Overall Themes

—Revolutionary changes in how work is organized have been triggered by

—New strategic priorities

—Rapidly shifting competitive conditions

—Tools of organizational design include

—Empowered managers and workers

—Reengineered work processes

—Self-directed work teams

—Rapid incorporation of Internet
technology

—Networking with outsiders