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STRATEGY IMPLEMENTATION IS THE PROCESS
THAT PUTS PLANS AND STRATEGIES INTO
ACTION TO REACH GOALS.
A STRATEGIC PLAN IS A WRITTEN DOCUMENT
THAT LAYS OUT THE PLANS OF THE BUSINESS
TO REACH GOALS; BUT WILL SIT FORGOTTEN
WITHOUT STRATEGIC IMPLEMENTATION.
THE IMPLEMENTATION MAKES THE
COMPANY’S PLANS HAPPEN.
COMPANY INITIATIVES DON’T
ALIGN WITH STRATEGY
COMPANY PROCESSES DON’T
ALIGN WITH STRATEGY
EMPLOYEES AND STAKEHOLDER
FAIL TO ENGAGE
1. ALIGN YOUR INITIATIVES
A KEY ROAD TO FAILED IMPLEMENTATION IS WHEN WE CREATE
A NEW STRATEGY BUT THEN CONTINUE TO DO THE SAME
THINGS OF OLD.
A NEW STRATEGY MEANS NEW PRIORITIES AND NEW
ACTIVITIES ACROSS THE ORGANIZATION.
INITIATIVES SHOULD BE ANALYZED AGAINST THEIR STRATEGIC
VALUE AND THE IMPACT TO THE ORGANIZATION.
2. ALIGN BUDGETS & PERFORMANCEIDEALLY YOUR CAPITAL BUDGETS ARE DECENTRALIZED, SO EACH
DIVISION CAN BOTH ALLOCATE AND MANAGE THE BUDGETS TO
DELIVER THE DIVISION’S STRATEGIC INITIATIVES.
3. STRUCTURE FOLLOWS STRATEGY
A TRANSFORMATIONAL STRATEGY MAY REQUIRE A
TRANSFORMATION TO STRUCTURE.
4. ENGAGING STAFF
PREPARE. INCLUDE. COMMUNICATE. CLARIFY.
5. MONITOR AND ADAPT
A STRATEGY MUST BE A LIVING, BREATHING
DOCUMENT. AS WE ALL KNOW: IF THERE’S ONE
CONSTANT IN BUSINESS THESE DAYS IT’S CHANGE.
STRATEGIES MUST BE ADAPTABLE AND FLEXIBLE
SO THEY CAN RESPOND TO CHANGES IN BOTH OUR
INTERNAL AND EXTERNAL ENVIRONMENTS.
COMMUNICATING
STRATEGY
1. Recognize importance of strategic organizational communication.
2. Name the four elements of strategic communication.
3. Understand how values & ethics influence communication activity.
4. Set goals that are appropriate and effective.
5. Use situational knowledge to enhance communication.
6. Understand and demonstrate communication competence.
7. Understand causes & methods of dealing with communication anxiety.
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THE ORGANIZATIONAL
FRAMEWORK
Values are often clarified by examining the mission
statement, which may include the following:
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Primacy of Customer
Honesty and Integrity
Respect for Other Workers
Innovative Thinking
Quality Service
Creativity
High Ethical Standards
SUGGESTED GUIDELINES FOR
ENHANCING ETHICAL STANDARDS
1. Maintain openness.
2. Keep messages accurate.
3. Avoid deception.
4. Consistently behave.
5. Keep confidences.
6. Ensure timeliness of communication.
7. Confront unethical behavior.
8. Cultivate empathic listening.
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DISCUSSION QUESTION:
HOW DO PERSONAL VALUES AFFECT
ORGANIZATIONAL BEHAVIOR?
Consider this quote:
A single injustice anywhere, is an injustice everywhere. Stand firm in the face of adversity and remain true to your conviction.
Anonymous
ORGANIZATIONAL LEARNING
• Engage in adaptive learning.
• Understand organizational values.
• Develop specific knowledge of the organization.
• Observe the successes and failures of others.
• Get on-the-job training.
• Understand office politics.
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DIMENSIONS OF
COMMUNICATION CLIMATE
Supportiveness
Participative Decision Making
Trust, Confidence, and Credibility
Openness and Candor
High Performance Goals
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COMPETENT MESSAGES
NEED TO BE…
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Specific
Accurate
Honest
Logical
Complete
Succinct
Deadline-oriented
Relevant
Timely
Feedback-oriented
INTERNAL COMMUNICATION
Downward Communication
Job instructions
Job rationale
Procedures and practices
Feedback
Upward Communication
Employee performance
Attitudes and understanding
Activity reports on accomplishments
Horizontal Communication
Problem solving
Informal networks
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EXTERNAL COMMUNICATION
Messages are exchanged between the organization and its
environment.
Organizations use newsletters, annual reports and events.
Organizations are using the web to inform the public.
Do you prefer the telephone? E-mail? Instant Messaging? Text Messaging? Face-to Face?
Are there some communication channels that you use more often?
For which situation do you prefer to use one channel over another?
What do you think of personal web pages and blogs? How could organizations benefit from this type of technology?
ANXIETY MANAGEMENT
CAUSES OF ANXIETY
Novelty
Formality
Subordinate status
Conspicuousness
Large groups
Different Cultural Experiences
Evaluation
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ANXIETY MANAGEMENT
Everyone experiences some level of anxiety.
Each fear has its own origin.
Three (E’s) of success:
Encode messages carefully.
Explain each idea concisely.
Express each idea with an appropriate energy level.
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LEGAL BUSINESS STRUCTURES
Sole Proprietorship
Partnership
general partnerships
limited partnerships
Corporation
LEGAL BUSINESS STRUCTURES
Sole Proprietorship
Easy to form with few regulations
The owner is the business (same legal entity).
No double tax
Owner has unlimited liability
Limited life
Difficult to raise money
LEGAL BUSINESS STRUCTURES
PartnershipShared System (funding and liability)
Shared ManagementInexpensive and easy to formNo double taxDifficult to raise money
LEGAL BUSINESS STRUCTURES
Corporation Independent legal entity and
independent life
More complicated to form (bylaws, Charters, etc.)
Three sets of distinct stakeholders: shareholders, directors and manager
Ownership can be readily transferable
Limited liability
Unlimited life
Possibility of fund raising
ORGANIZATIONAL STRUCTURE AND CONTROLS
Organizational Structure:
Formal reporting relationships
Authority and decision-making
hierarchy
It is critical to match organizational
structure to the firm’s strategy.
ORGANIZATIONAL STRUCTURE
Effective structures provide:
Stability and Flexibility
Structural stability provides:
Capacity to consistently and
predictably manage daily work
routines
ORGANIZATIONAL STRUCTURE
Structural flexibility provides:
The opportunity to explore
competitive possibilities
The allocation of resources to
activities that shape needed
competitive advantages
RELATIONSHIPS BETWEEN STRATEGY AND
STRUCTURE
Strategy and structure have a reciprocal relationship:
Structure flows from or follows the selection of the firm’s strategy but …
Once in place, structure can influence current strategic actions as well as choices about future strategies.
SIMPLE STRUCTURE
Owner-manager
Makes all major decisions directly.
Monitors all activities.
Matched with focus strategies and business-level
strategies
Commonly complete by offering a single product line
in a single geographic market.
SIMPLE STRUCTURE
Growth creates complexity and
structural challenges
Owner-managers
Commonly lack organizational skills
and experience.
Become ineffective in managing the
specialized and complex tasks in
multiple organizational functions.
FUNCTIONAL STRUCTURE
Chief Executive Officer (CEO)
Limited corporate staff
Functional line managers in dominant functional
areas:
Production Marketing Engineering
Accounting R&D Human resources
MULTIDIVISIONAL STRUCTURE
Strategic Control
Operating divisions function as separate businesses or profit
centers
Top corporate officer delegates responsibilities to
division managers
For day-to-day operations
For business-unit strategy
Appropriate as firm grows through diversification
MULTIDIVISIONAL STRUCTURE
Three Major Benefits
Corporate officers are able to more accurately
monitor the performance of each business, which
simplifies the problem of control.
Facilitates comparisons between divisions, which
improves the resource allocation process.
Stimulates managers of poorly performing divisions
to look for ways of improving performance.
MATCHING STRATEGY AND FUNCTIONAL
STRUCTURE
Different forms of the functional organizational
structure are matched to:
Cost leadership strategy
Differentiation strategy
Integrated cost
leadership/differentiation
strategy
GENERAL ENVIRONMENT
Dimensions in the broader society that influence an
industry and the firms:
• Demographic
• Economic
• Political-legal
• Socio-cultural
• Technological
• Global
INDUSTRY ENVIRONMENT
The set of factors influencing a firm and its competitive
actions and competitive responses
Threat of new entrants
Power of suppliers
Power of buyers
Threat of product substitutes
Intensity of rivalry among competitors
THREAT OF NEW ENTRANTS: BARRIERS TO
ENTRY
Economies of scale
Product differentiation
Capital requirements
Switching costs
Access to distribution channels
Cost disadvantages independent of scale
Government policy
Expected retaliation
BARGAINING POWER OF SUPPLIERS
Supplier power increases when:
Suppliers are large and few in number
Suitable substitute products not available
Individual buyers are not large customer
Suppliers’ goods are critical to the buyers
Suppliers’ products has high switching costs
Suppliers pose a threat to integrate forward
BARGAINING POWER OF BUYERS
Buyer power increases when:
Buyers are large and few in number
Buyers purchase a large portion of an industry’s total output
Buyers’ switching costs are low.
Buyers can pose threat to integrate backward
THREAT OF SUBSTITUTE PRODUCTS
The threat of substitute products increases
Buyers face low switching costs
The substitute product price is low.
Substitute product’s quality and performance are equal to or
greater
Differentiated industry products that are valued by
customers reduce this threat
INTENSITY OF RIVALRY AMONG COMPETITORS
Industry rivalry increases when:
Numerous competitors with equal balance
Industry growth slows or declines
High fixed costs
Lack of differentiation or low switching costs
High strategic stakes
High exit barriers
Low entry barriers
INTERPRETING INDUSTRY ANALYSES
UnattractiveIndustry
Suppliers and buyers have strong positions
Strong threats from substitute products
Intense rivalry among competitors Low profit potential
INTERPRETING INDUSTRY ANALYSES
AttractiveIndustry
High entry barriers
Suppliers and buyers have weak positions
Few threats from substitute products
Moderate rivalry among competitors High profit potential
BUSINESS-LEVEL STRATEGY
An integrated and coordinated set of
commitments and actions the firm
uses to gain a competitive advantage
by exploiting core competencies in
specific product markets.
THE PURPOSE OF A BUSINESS-LEVEL
STRATEGY
Business-Level Strategies
create differences between the firm’s position relative
to those of its rivals
Perform activities differently or
Perform different activities as compared to its rivals
TYPES OF POTENTIAL COMPETITIVE
ADVANTAGE
Lower overall costs than rivals
Differentiate the firm’s product or service and
command a premium price
COMPETITIVE SCOPE
Broad Scope
The firm competes in many customer segments.
Narrow Scope
The firm selects a segment or group of segments in the
industry and tailors its strategy to serving them at the
exclusion of others.
TYPES OF BUSINESS-LEVEL STRATEGIES
Cost Uniqueness
DifferentiationCost Leadership
Focused
Differentiation
Focused Cost
Leadership
Integrated Cost
Leadership/
Differentiation
Broad
Target
Narrow
Target
Competitive Advantage
Competitive
Scope
LEADERSHIP THEORIES: AN OVERVIEW
The Trait Perspective
“Great Man” theories focused on identifying innate
(universal) individual qualities or attributes of
leaders that distinguish them from nonleaders or
noneffective leaders.
The Behavior Perspective
Theories examining the people- and task-oriented
behaviors and organizational roles that make leaders
most effective.
1–60
LEADERSHIP THEORIES
The Contingency Perspective
The idea that effective leadership (as a style) in a
particular case depends on interactions among the
leader, followers, and the situation.
The Power–Influence Perspective
A sociological viewpoint of the leadership process in
terms of social relations involving the interplay of
power, constraints, conflict, and cooperation.
1–61
LEADERSHIP THEORIES
The Gender–Influence Perspective
Analyses that consider how the leadership styles of
female leaders differ for those of male leaders.
The Integrative Perspective
Studies of charismatic leaders that attempt to
combine trait, behavior, and contingency theories to
explain leader–follower relationships.
The Exchange Perspective
Theories that focus on leader–follower interactions—
their nature and effects on leaders, followers, and the
organization.1–62
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LEADERSHIP
Is a dialectical, proactive process wherein an
individual persuades others to do something they
would not otherwise do.
Is socially constructed through the interaction of
leaders and followers within a specific context
and is equated with power.
1–63
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THE NATURE OF LEADERSHIP
Common Assumptions:
Leaders—through their personal qualities, influence,
and actions—profoundly shape societal events (i.e.,
make a difference).
A leader affects and is affected by followers and the
environment within which he or she operates.
Managerial leadership is a process of social
influence whereby an individual exerts influence on
others in an organizational context.
1–64
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THE NATURE OF LEADERSHIP
Effects of Large-scale Industrialization
The bureaucratic need (coordination) for managers
Monitoring and controlling the productivity, quality, and
performance of subordinates.
The organizational need (direction) for leadership
Strategic management in building and deploying a
committed workforce of team members.
1–65
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LEADERSHIP VERSUS MANAGEMENT
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Management
Maintain the status
quo
Create order and
consistency
“Doing things right”
Transactional
(contractual)
relationships
Leadership
Create vision
Create change or
movement
“Doing the right
thing”
Transformational
relationships
(psychological
contract)
MANAGEMENT AND LEADERSHIP COMPARED
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Table 1.1Source: Kotter, J. P. (1990). A Force for Change: How Leadership Differs from Management. New
York: Free Press; Kotter, J. P. (1996). Leading Change. Boston: Harvard Business School Press.
LEADING ORGANIZATIONAL CHANGE
Steps in the Change Process:
Step 1: Establish a sense of urgency.
Step 2: Create the guiding coalition.
Step 3: Develop a vision and a strategy.
Step 4: Communicate the change vision.
Step 5: Empower broad-based action.
Step 6: Generate short-term wins.
Step 7: Consolidate gains and produce more change.
Step 8: Anchor new approaches in the culture.
1–68
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REFLECTIVE QUESTION ▼
Think about a position you have held in an
organization.
To what extent were you a leader?
To what extent were you a follower?
Did the managers exhibit managerial or
leadership behaviors?
Do you believe that managers and leaders
reflect fundamentally different personality
types?
1–69
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METHODOLOGICAL CHALLENGES
Gaining management participation and
disclosure of commercially sensitive information.
Making subjective judgments about which
criteria to study, which measures to use and the
weight to be assigned each measure.
Negatively correlated multiple criteria.
Isolation of external variables to reduce their
influence.
Difficulties in identifying causal links.
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Willingness to exert high levels of effort to reach
organizational goals.
It is the internal drive to accomplish a particular
objective.
TYPES OF MOTIVATION
Extrinsic Motivation:
"What gets rewarded gets done"
Based on extrinsic/tangible rewards
Intrinsic Motivation:
"What is rewarding gets done"
Based on intrinsic/intangible rewards
NEEDS (STAGE OF DEVELOPMENT)
Maslow Self actualization
Self esteem
Social (love)
Safety
Physiological
Alderfer (ERG) Growth
Relatedness
Existence
EQUITY THEORY
People compare their
outcome/input ratio
to that of others
Conclusions
Ratios are equal
(equity exists)
Ratios are unequal
(inequity exists)
REINFORCEMENT THEORY
Behavior is a function of consequences
Behavior that is rewarded persists
To increase behavior Positive reinforcement
negative reinforcement
EXPECTANCY THEORY
People are motivated to do that which they believe
is possible and valuable
Expectancy: Belief that you can perform
Instrumentality: Belief that performance will
lead to an outcome
Valence: Value of the outcome
GOAL SETTING THEORY
People naturally set goals
Benefits of Goals:
Increase effort
Direct effort
Increase persistence
WHAT ARE SHORT-TERM OBJECTIVES
Short-term objectives provide specific guidance
for what is to be done, a clear delineation of
impending actions needed, which help translate
vision into action.
Short-term goals are the stepping stones to
achieve the long-term goal.
usually defined anywhere from now to six months
from now
Short-term objectives help implement strategy by:
they “operationalize” long-term objectives.
discussion about and agreement on short-term
objectives help raise issues and potential conflicts
within the organization.
gives operating personnel a better understanding of
their role in the firm’s mission.
provides the basis for strategic control.
clarifies personnel and group roles.
Many people use the SMART acronym in defining
how to set short-term goals:
S- Specific
M- Measurable
A- Attainable
R- Relevant
T- Timely
SPECIFIC
What is it, exactly, that you want to accomplish
in the short-term?
Goal objectives should address the five Ws…
who, what, when, where, and why.
The goal must specifies what needs to be done
with a timeframe for completion.
MEASURABLE
Goal objectives should include numeric or
descriptive measures that define quantity,
quality, cost, etc.
This way you can have a definite answer if you
have achieved your goals.
Many businesses would say that their
measurable goal is their income after all the
expenses.
ATTAINABLE
Goals must be realistic to be of any use.
You must ask:
Is the goal achievable within the timeframe?
Are the Goal within the staff’s control and
influence?
Is the goal achievable with the available
resources?
RELEVANT
Short-term goals must be designed to lead to
long-term goals.
Why is the goal important? How will the goal
help the department achieve its objectives?
TIMELY
Short-term goals must have a due date set at the
beginning in concrete.
At this point you stop and look at what has been
accomplished. If it’s nowhere near the point you
wanted the company to be at this time, then the
company’s practices, goals, or long-term vision
has to be altered.
DEFINED
Selection of decision rules in each
functional area.
Thus, functional strategies in any
organization, some (e.g., marketing
strategy, financial strategy, etc.).
It is desirable that they have been
fixed in writing.
Production strategy ( "make or buy") - defines what the company produces itself, and that purchases from suppliers or partners, that is, how far worked out the production chain.
Financial Strategy - to select the main source of funding: the development of their own funds (depreciation, profit, the issue of shares, etc.) or through debt financing (bank loans, bonds, commodity suppliers' credits, etc.).
Marketing strategy is a process that can allow an organization to concentrate its resources on the optimal opportunities with the goals of increasing sales and achieving a sustainable competitive advantage. Marketing strategy includes all basic and long-term activities in the field of marketing that deal with the analysis of the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goals of the company and its marketing objectives.
Human resource management (HRM, or
simply HR) is the management process of an
organization's workforce, or human resources. It
is responsible for the attraction, selection,
training, assessment, and rewarding of
employees, while also overseeing organizational
leadership and culture and ensuring compliance
with employment and labor laws. In
circumstances where employees desire and are
legally authorized to hold a collective bargaining
agreement, HR will also serve as the company's
primary liaison with the employees'
representatives (usually a trades union).
To compete successfully in today’s highly competitive global environment, companies have made customer satisfaction an overriding priority. They have also adopted new management approaches, changed their manufacturing systems and invested in new technologies.
Strategic management accounting examines the decision-making linked with the business operations and strategic work of financial administration as support for the same.
Strategic management accounting is a theory and practice of accounting that looks at an organization's cost position, cost advantages and product differentiation in order to make market decisions.
The value chain is a systematic approach to examining the development of competitive advantage. The chain consists of a series of activities that create and build value.
Value chain analysis refers to a structured method of analyzing the effects of all core activities on cost and/or differentiation of the value chain. With the growing division of labour and the global dispersion of the production of components, systemic competitiveness and so value chain analysis have become increasingly important.
Value chain accounting is the combination of value chain analysis and accounting theory. Value chain accounting is an important part of value chain management and a further development of strategic management accounting. Value chain accounting is a new approach on accounting subject which is combined by the theories of value chain management, supply chain management, accounting management and information technology.