1. The eight components of implementing strategy
Allocation Resources
Establishing Strategy-Supportive Policies
Building a Capable Organization
Strategy Implementer’s Action Agenda
Exercising strategic Leadership
Instituting Best Practices for Continuous Improvement
Shaping Corporate Culture to Fit Strategy
Installing Support Systems to Carry out Strategic Roles
Tying rewards to achievement of key strategic targets

2. Building a capable organization
Select able people for key positions
Develop skills, core competencies, managerial talents, competitive capabilities
Organize business processes, value chain activities, and decision-making to promote successful strategy execution

3. Strategy and organization structure
Few hard and fast rules for organizing
Main Rule: Structure must support and facilitate good strategy execution
Each firm’s organization structure is idiosyncratic, reflecting
Prior arrangements, internal politics
Executive judgments and preferences about how to arrange reporting relationships

4. Matching organization structure to strategy: the steps to take
Pinpoint critical activities and capabilities
Decide which activities to outsource
Decide which activities require “Partners”
Make primary, internally-performed activities the main building blocks
Determine degree of authority to delegate
Establish ways to achieve coordination
Assign responsibility for managing relationships with outsiders

5. Uniting efforts of interrelated organizational units: the options
Coordinating teams
Cross-functional task forces
Dual reporting relationships
Informal networking
Incentive compensation tied to group performance
Teamwork and interdepartmental cooperation

6. Why structure follows strategy
Changes in strategy typically require a new structure for implementation to be successful
Research indicates
Structure affects performance
Structure merits reassessment whenever strategy changes
New strategy involves different skills and key activities
How work is structure is a means to an end-not an end in itself!

7. Strategy and Structure: Evolutionary Pattern
Organization form in which the owner-manager take all decisions and monitors all activities, while staff aids in monitoring & supervising
Less Specialization
No Communication Barriers
Quick Decisions
(e.g. Restaurants, Retail Shops)
Simple Structure
Efficient Implementation of Strategy
Sales Growth Integration & Control Problem
Functional Structure
CEO and functional line managers in dominant areas like production, marketing, HR, finance etc.

8. Strategy and Structure: Evolutionary Pattern
CEO and functional line managers in dominant areas like production, marketing, HR, Finance etc.
Sales Growth Integration Problems
* Efficient Implementation of formulated strategy
Excessive diversification and complexity calls for this design
Operation Divisions each a separate SBU and top officer delegates unit strategy to divisional managers.
Multi Divisional Structure
Organization structures are modified when they no longer “ENABLE COORDINATION & CONTROL” Managers require for implementing newly designed strategy
Impose STRATEGIC and FINANCIAL controls and evaluate performance

9. When do traditional hierarchical structures make strategic sense?
When activities can be divided into simple, repeatable tasks and are efficiently performed in mass quantity
There are important benefits to deep functional expertise
Customer needs are standardized

10. When are multi-layered authoritarian structures liability?
Market conditions are fluid
Customer preferences shift from standardized to customized products and features
Personalized customer service is essential
Product life-cycles grow shorter
Flexible manufacturing replaces mass production
Customers want to be treated as individuals
Pace of technological change accelerates

11. Organizational structures of the future: success depends on …
Quick response to shifting customer preferences
short design – to – market cycles
First-time quality
Custom order and multi-version production
Expedited delivery and accurate order filling
Personalized customer service
Rapid assimilation of new technologies Creativity and innovativeness
Speedy reaction to competitive developments

12. Organizational structures of the future: meeting the new requirements
Decentralized structures with fewer managers
Small-scale business units
Reengineering to decrease fragmentation
Development of stronger and newer capabilities
Collaborative partnerships with outsiders
Empowerment and self-directed work teams
Lean staffing of corporate support functions
Open communications ( , IS, etc)
Accountability for results

13. Characteristics of organizations of the future
Fewer boundaries between
Different vertical ranks
Functions and disciplines
Units in different geographic locations
Firm and its suppliers, distributors, strategic allies, and customers
Capacity for change and learning
Collaborative efforts among people in different functions and geographic locations

14. MINTZBERG Strategic apex Ideology Middle line Operating core
Techno-structure
Support staff
Ideology

15. Functional Structure: Implementing Business Level Strategy
1. COST LEADERSHIP
PRESIDENT
CORPORATE STAFF
ENGINEERING
MARKETING
OPERATIONS
PERSONNEL

16. Specialization, centralization play a pivotal role in implementation of cost leadership strategy
SPECIALIZATION  Divide work into homogenous groups.
Cost reduction through efficiency achieved
By employee specialization in few activities
CENTRALIZATION  Decision making authority at managerial level.
However, managers strive to push down some decision making authority lover
FORMALIZATION  Rules and procedures govern activities foster
efficient operations, R & D improvements and
mass scale production of standardized goods

17. PRESIDENT & CORPORATE STAFF
2. DIFFERENTIATED STRATEGY
PRESIDENT & CORPORATE STAFF
R & D
MARKETING
NEW PRODUCT R & D
OPERATIONS
MARKETING HR
FINANCE

18. Constantly seeking improvement in product design, image, quality
Decision making authority is decentralized
Coordinate and integrate activities
Concensus style of decision making
Marketing and R & D functions  More Focus
Product innovations (L’OREAL)
Flat structure, more flexible, and jobs less structures
Constantly seeking improvement in product design, image, quality
Creative Advertising

19. THE INTEGRATED APPROACH:
Provide value which differs from that offered by rival firms
Low Cost
Valuable Differentiated features
For cost leadership focus in on process recast and operational excellence (Standardised product)
For differentiation in features emphasis is on marketing, innovation & new product development
Therefore, functional form has to be supplemented by cross function a teams and strong culture.
(e.g. TOYATA MOTORS – Differentiated production & Design process)

20. Corporate level strategy business level strategy for each SBU
SHIFT TO MULTIDIVISIONAL DESIGN:
The above average profits through successful implementation of business level strategy results in diversification of the firm’s operations
Product portfolio diversification
Market diversification
Corporate level strategy business level strategy for each SBU

21. Multi Divisional Structure (M-Form)
ORGANISATION STRUCTURE: Corporate Level Strategy
THREE VARIETIES OF MULIDIVISIONAL STRUCTURE
Multi Divisional Structure (M-Form)
CO OPERATIVE FORM
COMPETITIVE FORM
SBU FORM

22. COOPERATIVE  Related constrained strategy
HR practices to foster cooperation
Integration of firms divisions
SBU FORM  Related linked strategy
Each SBU has corporate leader, SBU groups and divisions grouped by relatedness
SBU Individual decision makers seek guidance from SBU heads
COMPETITIVE FORM  Unrelated Diversification Strategy
Competition between business units
Allocation of capital based on performance

23. Tight links across all divisions and strong relationship
COOPERATIVE DESIGN
CORP. HQ.
GOVT.
LEGAL AFFAIRS
CORPORATE R & D
STRATEGIC PLANNING
CORPORATE HR
CORPORATE MARKETING
CORPORATE
FINANCE
PRODUCT DIVION
PRODUCT DIVISION
PRODUCT DIVISION
PRODUCT DIVIONS
Tight links across all divisions and strong relationship
Centralization at corporate office to foster co-operation between divisions
Cooperative sharing
Rewards are governed by divisional and corporate performance

24. Integration among divisions within SBUs, but independence across SBUs
SBU DESIGN
CORP. HQ.
PRESIDENT
CORPORATE R & D
CORPORATE
FINANCE
STRATEGIC PLANNING
CORPORATE MARKETING
CORPORATE HR
SBU 1
SBU 2
SBU 3
Division
Div 2
Div 3
Div 1
Div 2
Div 3
Div 1
Div 2
Div 3
Integration among divisions within SBUs, but independence across SBUs
Each SBU-own budget & staff to foster integration
Corporate planning most prominent for managing approval process
Corporate HQ staff advise SBUs and Divisions

25. Corporate HQ  Lean and competent
COMPETING DESIGN
CORP. HQ.
PRESIDENT
LEGAL AFFAIRS
FINANCE
AUDITING
DIVISION
DIVISION
DIVISION
DIVISION
DIVISION
Corporate HQ  Lean and competent
Finance and Auditing  Prominent Functions to Manage cash flows and disclose performance information
Divisions are independent  Retain corporate control
The legal affairs function most prominent - Acquisition or Divestiture
Compete for corporate resources

26. ORGANIZATIO STRUCTURE: Implementing International Strategies
MULIDOMESTIC STRATEGY
Strategic and operating decisions are decentralized t business units in each country
No need for integration or coordination
A structure concentrating on national interests to satisfy local & cultural mismatches
GLOBAL STRATEGY
Decision making authority is centralized
Need to coordinate and integrate operations
Superior communication systems and quick decisions
TRANSNATIONAL STRATEGY
Combination of global efficiency and local responsiveness
Geographic and product structure
Incredibly difficult to accomplish
Cultural change must be effective to foster leadership and a shared vision

27. PRODUCT DIVISIONAL STRUCTURE: GLOBAL STRATEGY
Worldwide Products Division
Worldwide Products Division
GLOBAL CORP HQ
Worldwide Products Division
Worldwide Products Division
Centralize to coordinate information flow among worldwide products
Facilitate global economies of scale & Scope
Allocate financial resources in a cooperative manner
Centralized federation
COST LEADERSHIP ADVANTAGE

28. WORLDWIDE GEOGRAPHICAL AREA STRUCTURE: MULTIDOMESTIC STRATEGY
USA
WORLDWIDE GEOGRAPHICAL AREA STRUCTURE: MULTIDOMESTIC STRATEGY
ASIA
MULTINATIONAL HQ
EUROPE
MIDDLE EAST/ GULF
LATIN AMERICA
Decentralization of operations
Emphasis and attention on local needs to match country culture
Decentralized federation
Corporate HQ Coordinates resources among independent subsidiaries

29. Structural Types for Multinationals (1)
International Divisions
Usually dominant home base
With its own structure
And additional international division
Drawing on products or services of home division

30. Structural Types for Multinationals (2)
International Subsidiaries
Independent operations by country
Allowing for high local responsiveness
Perhaps with central planning or reporting
But now ultimate central control

31. Structural Types for Multinationals (3)
Global Businesses
Product/ service divisions managed globally
Aim is to produce scale efficiencies
And transfer of resources/ skills
Requires sophisticated co-ordination
May reduce sensitivity to local markets

32. Increasing Devolution
- Some common problems
Concept not understood
Centre cannot let go
Centre lets go too much
Self-sufficiency vs. bargaining
Enabling framework vs. regulations
Fear of accountability