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Strategic Management Prof. Dr. Majed El-Farra 2012 1 Strategic Implementation Requirements for Strategic Implementation 07/03/1437.

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Presentation on theme: "Strategic Management Prof. Dr. Majed El-Farra 2012 1 Strategic Implementation Requirements for Strategic Implementation 07/03/1437."— Presentation transcript:

1 Strategic Management Prof. Dr. Majed El-Farra 2012 1 Strategic Implementation Requirements for Strategic Implementation 07/03/1437

2 9-2 Strategy implementation- the sum total of all activities and choices required for the execution of a strategic plan 1.Who are the people to carry out the strategic plan? 2.What must be done to align company operations in the intended direction? 3.How is everyone going to work together to do what is needed? Strategic Management Prof. Dr. Majed El-Farra 2012

3 07/03/1437 9-3 Common Strategy Implementation Problems 1.Took more time than planned 2.Unanticipated major problems 3.Poor coordination 4.Competing activities and crises created distractions 5.Employees with insufficient capabilities 6.Poor subordinate training 7.Uncontrollable external environmental factors 8.Poor departmental leadership and direction 9.Inadequately defined implementation tasks and activities 10.Inefficient information system to monitor activities Strategic Management Prof. Dr. Majed El-Farra 2012

4 4 Strategy Implementation  Effective strategic implementation requires the follows: 1- Organizational structure appropriateness. 2- Sound leadership of the company. 3- Effective motivational system 4- Annual objectives 5- Functional strategies 6- Clear budget 7- Detailed action plan 07/03/1437

5 Prentice Hall, Inc. ©2012 6-5 Criticisms of SWOT analysis 1.Generates lengthy lists 2.Uses no weights to reflect priorities 3.Uses ambiguous/vague words and phrases 4.Same factor can be in 2 categories 5.No obligation to verify opinion with data or analysis 6.Requires only a single level of analysis 7.No logical link to strategy implementation

6 Strategic Management Prof. Dr. Majed El-Farra 2012 6 Communicating Strategy Strategy must be clearly understood. It provides employees with general guidance to make decision. 07/03/1437

7 Strategic Management Prof. Dr. Majed El-Farra 2012 7 Strategy & Structure Definition of Organizational Structure: The structure can either facilitate or inhibit strategy implementation. Chandler says: Changes in strategy ultimately lead to changes in the organization ’ s structure. 07/03/1437

8 Strategic Management Prof. Dr. Majed El-Farra 2012 8 Types of organizational structure 1- Functional 2- Geographical 3- Divisional 4- Customer-based 5- Matrix 07/03/1437

9 Copyright © 2005 Prentice Hall, Inc. All rights reserved. 10–9 Departmentalization by Type  Functional Grouping jobs by functions performed  Product Grouping jobs by product line  Geographic Grouping jobs on the basis of territory or geography  Process Grouping jobs on the basis of product or customer flow  Customer Grouping jobs by type of customer and needs

10 Copyright © 2005 Prentice Hall, Inc. All rights reserved. 10–10 Figure 10.2a Functional Departmentalization Advantages Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations Coordination within functional area In-depth specialization Disadvantages Poor communication across functional areas Limited view of organizational goals

11 Copyright © 2005 Prentice Hall, Inc. All rights reserved. 10–11 Figure 10.2b G eographical Departmentalization Advantages More effective and efficient handling of specific regional issues that arise Serve needs of unique geographic markets better Disadvantages Duplication of functions Can feel isolated from other organizational areas

12 Copyright © 2005 Prentice Hall, Inc. All rights reserved. 10–12 Figure 10.2c Product Departmentalization +Allows specialization in particular products and services +Managers can become experts in their industry +Closer to customers –Duplication of functions –Limited view of organizational goals Source: Bombardier Annual Report.

13 Copyright © 2005 Prentice Hall, Inc. All rights reserved. 10–13 Figure 10.2d Process Departmentalization +More efficient flow of work activities –Can only be used with certain types of products

14 Copyright © 2005 Prentice Hall, Inc. All rights reserved. 10–14 Figure 10.2d Customer Departmentalization + Customers’ needs and problems can be met by specialists - Duplication of functions - Limited view of organizational goals

15 Strategic Management Prof. Dr. Majed El-Farra 2012 15 An assessment of Org. Structure  No structure is appropriate for all situations.  Appropriate structure may change as the organization develops.  Examples require structure change: Introducing new strategy, having problems in achieving its objectives, leadership changes. 07/03/1437

16 Strategic Management Prof. Dr. Majed El-Farra 2012 16 Symptoms of an ineffective org. Structure According to P. Drucker: 1- Too many management levels make cooperation and communication difficult 2- Too many meetings attended by too many. 3- Too much attentions are given to resolve interdepartmental conflict. 4- Excessive decision making at top management. 07/03/1437

17 Strategic Management Prof. Dr. Majed El-Farra 2012 17 Evolution of organizational structure: Alfred D. Chandler 1.Changing strategy. 2.Administrative problems leading to decline performance. 3.Revised structure subsequent return to economic health. 07/03/1437

18 Strategic Management Prof. Dr. Majed El-Farra 2012 18 Structural adjustments: Chandler  When does it happen? 1.Market expansion. 2.Product line diversification. 3.Vertical integration. 07/03/1437

19 Strategic Management Prof. Dr. Majed El-Farra 2012 19 Relationship between strategy and Org. Structure The process of matching structure to strategy is complex and should be undertaken with a thorough understanding of: 1. the historical development of the organizational structure. 2.The requirements of the organization ’ s environment and technology. 3.The political relationships that might be affected inside the organization. 07/03/1437

20 Strategic Management Prof. Dr. Majed El-Farra 2012 20 Organizational Culture . Culture : Refers to the values and patterns of belief and behavior that are accepted and practiced by the members of a particular organizations  Org. culture change as environment changes.  The founder and Top management shape the org. culture.  Change in strategy requires change in culture. 07/03/1437

21 Strategic Management Prof. Dr. Majed El-Farra 2012 21 Organizational Leadership The leader is an individual who is able to influence the attitudes and opinion of others by motivation and guiding. The leader must have a clear vision. Different strategies need different skills. 07/03/1437

22 Strategic Management Prof. Dr. Majed El-Farra 2012 22 Strategy and Motivational systems  Organizational reward system influence the entire organizational climate. Organizational rewards include all types of rewards, tangible and intangible. 07/03/1437

23 Strategic Management Prof. Dr. Majed El-Farra 2012 23 Deployment of Resources through Budgeting  Budgeting: Is the process of allocating resources to be employed to achieve objectives.  Budget should be directly linked to strategy implementation. 07/03/1437

24 Strategic Management Prof. Dr. Majed El-Farra 2012 24 Developing functional Strategies  Functional Strategies describe the methods and means at functional level to achieve corporate strategies and business unit strategies. 07/03/1437


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