CHAPTER 9 Strategy Implementation: Organizing for Action STRATEGIC MANAGEMENT & BUSINESS POLICY 10TH EDITION THOMAS L. WHEELEN J. DAVID HUNGER Prentice Hall, Inc. © 2006 Prentice Hall 2006

--Strategy implementation through programs, budgets, and procedures --Sum total of activities & choices required for strategic plan execution --Strategy implementation through programs, budgets, and procedures Prentice Hall, Inc. © 2006 Prentice Hall 2006

Key Implementation Questions – Strategy Implementation Key Implementation Questions – Who carries out strategic plan? What needs doing for alignment w/ strategy? How is work coordinated? Prentice Hall, Inc. © 2006 Prentice Hall 2006

Programs – Action oriented Matrix of change Feasibility Strategy Implementation Programs – Action oriented Matrix of change Feasibility Sequence of execution Location Pace & nature of change Stakeholder evaluations Prentice Hall, Inc. © 2006 Prentice Hall 2006

The Matrix of Change Prentice Hall, Inc. © 2006 Prentice Hall 2006

Achieving Synergy – Shared know-how Coordinated strategies Strategy Implementation Achieving Synergy – Shared know-how Coordinated strategies Shared tangible resources Prentice Hall, Inc. © 2006 Prentice Hall 2006

Achieving Synergy – Economies of scale or scope Strategy Implementation Achieving Synergy – Economies of scale or scope Pooled negotiating power New business creation Prentice Hall, Inc. © 2006 Prentice Hall 2006

Structure follows strategy – Strategy Implementation Structure follows strategy – New strategy is created New administrative problems emerge Economic performance declines New appropriate structure is invented Profit returns to previous level Prentice Hall, Inc. © 2006 Prentice Hall 2006

Stages of Corporate Development – Strategy Implementation Stages of Corporate Development – Stage I: Simple structure Stage II: Functional structure Stage III: Divisional structure Stage IV: Beyond SBU’s Prentice Hall, Inc. © 2006 Prentice Hall 2006