1. Strategic Implementation, Administration and Organization
In Search of Efficiency and Superior Execution

2. Implementation Is Strategy
Distinctive performance is almost entirely a function of deeply engrained repertoires
not one thing a 1000% better but a 1000 things 1% better
organizations consist of many things -- the most critical are its inherent skills or distinctive competencies
distinctive skills -- “thousand thousand little things” are the real source of “unassailable” barriers to imitation

3. THE CRITICAL COMPONENTS OF STRATEGY IMPLEMENTATION
Innovative, dedicated, motivated people
Creative empowering leadership
Organizational structures the match competitive strategies, efficiently
Organizational controls and incentives that efficiently focus people on strategic goals and objectives
appropriate administrative procedures and policies
Organizational arrangements that efficiently “govern” the critical activities.
efficient organizational boundaries
internalized vs out-sourced (in some non-hierarchial organizational arrangement)

4. ORGANIZATIONAL STRUCTURE
Structure follows strategy; but then strategy must follow structure
Objective of organizational structure is to balance:
the economic advantages of specialization, with
the problems and costs of coordination and motivation, i.e. bureaucratic costs
Bureaucratic costs arise from:
supervisory monitoring
motivation problems
coordination activities
opportunism and information distortions

5. GENERIC ORGANIZATIONAL STRUCTURAL FORMS
Three Generic Organizational Structures
U-Forms (Unitary or Functional Structures)
M-Forms (Multidivisional Structures)
H-Forms (Holding or Conglomerate Structures)
Hybrid Organizational Structures
Matrix Structures
Team-based Structures

6. U-FORMS
Functional (or U-Form) Structures group or “chunk” on the basis of their common expertise/experience or because they use the same resources or focus on the same activities
Advantages:
increased specialization
economies of scale in monitoring
critical decision-making is centralized in one “peak” person
Disadvantages:
cannot handle the complexity of multiple activities well
subgoal pursuit problems can become acute
absence of objective measures of performance
operational concerns can divert attention from strategic/competitive/entrepreneurial issues

7. M-FORMS
A Multi-divisional structure is designed to manage diversification while controlling bureaucratic costs and control-loss problems
M-Forms decentralizes operating decision-making to the business unit/division level where all necessary competitive and operational decisions are made.
Strategic decision-making responsibility is retained at the headquarters level. The HQ also monitors division’s performance by using both objective market/output measures and subjective performance measures .

8. M-FORMS Advantages: Disadvantages:
uses objective market/output performance measures, bureaucratic controls, and clan/cultural controls
encourages the exploiting of economies of scope across divisions
frees corporate to focus on strategic concerns
Facilitates diversification and growth
Disadvantages:
Introduces additional levels of hierarchy
Opportunism and information distortion problems
Myopic focus
Divisions may compete at the expense of cooperating
Transfer pricing battles

9. Three Types of M-form and Their Optimal Use
Cooperative Form -- Related-Constrained
SBU Form -- Related-Linked
Competitive Form -- Unrelated

10. H-FORMS
Holding or Conglomerate structures seek to exploit the advantages of internal capital markets

11. ORGANIZATIONAL GOVERNANCE
How do you get people to achieve organizational goals in the most efficient way possible?
Problems in managing/motivating people:
Opportunism
Unrestrained self-interest
Error and mistakes
Ambiguity in measuring performance
Complexity/Inability in giving unambiguous direction

12. Generic Forms of Organizational Governance
Three Generic Forms of Organizational Governance
Market/Output-based Incentive Schemes
profit goals
output quotas
Bureaucratic Monitoring and Control Schemes
Rules and procedures
Standardization and monitoring
Clan or Culture-based Control Schemes
Norms, values, socialization
Internalization of organizational goals

13. Corporate Governance
A relationship among stakeholders that is used to determine and control the strategic direction and performance of organizations.
Internal Governance Mechanisms
External Governance Mechanisms

14. Why Is Corporate Governance Needed
Separation of Ownership and Managerial Control
Agency Relationship
Agency Costs (incentive, monitoring, enforcement costs, and financial losses due to insufficient governance)
Product diversification as an example

15. Internal Governance Mechanisms
Ownership Concentration (blockholders, institutional investors)
Board of Directors (insiders vs. outsiders, diversity; strategic control vs. financial control)
Executive Compensation (salary, bonuses, long-term incentive compensation)
M-form

16. External Governance Mechanisms
Market for Corporate Control
Managerial Defense Tactics (golden parachute, poison pill, etc.)