STRATEGY IMPLEMENTATION

PRESENTED BY: GROUP 3

BALLADO, ANJELLINE CALICA, DANA VALENZUELA, KYLE

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 COMPANYS PLANS HAPPEN.

WHY STRATEGIES FAIL?

COMPANY INITIATIVES DONT

ALIGN WITH STRATEGY

COMPANY PROCESSES DONT

ALIGN WITH STRATEGY

EMPLOYEES AND STAKEHOLDER

FAIL TO ENGAGE

5 STEPS TO
SUCCESSFUL STRATEGY IMPLEMENTATION

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 & PERFORMANCE

IDEALLY YOUR CAPITAL BUDGETS ARE DECENTRALIZED, SO EACH
DIVISION CAN BOTH ALLOCATE AND MANAGE THE BUDGETS TO DELIVER THE DIVISIONS 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 THERES ONE CONSTANT IN BUSINESS THESE DAYS ITS CHANGE.
STRATEGIES MUST BE ADAPTABLE AND FLEXIBLE
SO THEY CAN RESPOND TO CHANGES IN BOTH OUR INTERNAL AND EXTERNAL ENVIRONMENTS.

COMMUNICATING STRATEGY
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1. 2. 3. 4. 5. 6. 7.

Recognize importance of strategic organizational communication. Name the four elements of strategic communication. Understand how values & ethics influence communication activity. Set goals that are appropriate and effective. Use situational knowledge to enhance communication. Understand and demonstrate communication competence. Understand causes & methods of dealing with communication anxiety.

MODEL OF STRATEGIC COMMUNICATION

THE ORGANIZATIONAL FRAMEWORK

Values are often clarified by examining the mission statement, which may include the following: Primacy of Customer Honesty and Integrity Respect for Other Workers Innovative Thinking Quality Service Creativity High Ethical Standards
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SUGGESTED GUIDELINES FOR ENHANCING ETHICAL STANDARDS

1. 2. 3. 4. 5. 6. 7. 8. Maintain openness. Keep messages accurate. Avoid deception. Consistently behave. Keep confidences. Ensure timeliness of communication. Confront unethical behavior. Cultivate empathic listening.
Copyright 2008 Allyn & Bacon

DISCUSSION QUESTION:
HOW DO PERSONAL
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
VALUES AFFECT

ORGANIZATIONAL BEHAVIOR?

ORGANIZATIONAL STRUCTURE
Virtual Organization Tall Organization Flat Organization

Copyright 2008 Allyn & Bacon

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

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Supportiveness Participative Trust,

Decision Making

Confidence, and Credibility and Candor

Openness

High

Performance Goals

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GOAL SETTING PROCESS

COMPETENT MESSAGES NEED TO BE

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Specific Accurate Honest

Succinct Deadline-oriented Relevant

Logical
Complete

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

Copyright 2008 Allyn & Bacon

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.

Copyright 2008 Allyn & Bacon

Copyright 2008 Allyn & Bacon

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
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Novelty Formality Subordinate status Conspicuousness Large groups Different Cultural Experiences Evaluation

ANXIETY MANAGEMENT Everyone experiences some level of anxiety. Each fear has its own origin.
Three (Es) of success: Encode messages carefully. Explain each idea concisely. Express each idea with an appropriate energy level.

Copyright 2008 Allyn & Bacon

STRATEGY AND STRUCTURE

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

Partnership Shared System (funding and liability) Shared Management Inexpensive and easy to form No double tax Difficult 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
and decision-making

Authority

hierarchy
It

is critical to match organizational structure to the firms 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 The

opportunity to explore competitive possibilities 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 firms strategy but in place, structure can influence current strategic actions as well as choices about future strategies.

Once

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 Accounting R&D Engineering 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

THE EXTERNAL ENVIRONMENT

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

FIVE FORCES MODEL

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 industrys 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 products 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

INTERPRETING INDUSTRY ANALYSES

Low entry barriers
Suppliers and buyers have strong positions

Strong threats from substitute products

Unattractive Industry
Low profit potential

Intense rivalry among competitors

INTERPRETING INDUSTRY ANALYSES

High entry barriers Suppliers and buyers have weak positions

Few threats from substitute products Moderate rivalry among competitors

Attractive Industry
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 firms 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 firms 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

Competitive Advantage Cost Uniqueness

Broad Target Competitive Scope Narrow Target

Cost Leadership

Differentiation

Integrated Cost Leadership/ Differentiation Focused Cost Leadership Focused Differentiation

ORGANIZATIONAL LEADERSHIP

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.

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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 PowerInfluence Perspective

A sociological viewpoint of the leadership process in terms of social relations involving the interplay of power, constraints, conflict, and cooperation.

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LEADERSHIP THEORIES

The GenderInfluence Perspective

Analyses that consider how the leadership styles of female leaders differ for those of male leaders. Studies of charismatic leaders that attempt to combine trait, behavior, and contingency theories to explain leaderfollower relationships. Theories that focus on leaderfollower interactions their nature and effects on leaders, followers, and the organization.

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The Integrative Perspective

The Exchange Perspective

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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.

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163

THE NATURE OF LEADERSHIP

Common Assumptions:

Leadersthrough their personal qualities, influence, and actionsprofoundly 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.

Copyright 2005 South-Western. All rights reserved.

164

THE NATURE OF LEADERSHIP

Effects of Large-scale Industrialization

The bureaucratic need (coordination) for managers

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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.

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LEADERSHIP VERSUS MANAGEMENT

Management

Leadership

Maintain the status quo Create order and consistency Doing things right Transactional (contractual) relationships

Create vision

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Create change or movement

Doing the right thing Transformational relationships (psychological contract)

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MANAGEMENT AND LEADERSHIP COMPARED

167
Source: 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.

Table 1.1

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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.

Copyright 2005 South-Western. All rights reserved.

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.

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REFLECTIVE QUESTION

Think about a position you have held in an organization.

Copyright 2005 South-Western. All rights reserved.

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?

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FACTORS USED TO MEASURE ORGANIZATIONAL PERFORMANCE

Figure 1.1

METHODOLOGICAL CHALLENGES

Gaining management participation and disclosure of commercially sensitive information.

Copyright 2005 South-Western. All rights reserved.

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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LEADERSHIP AS A PROCESS

PERSPECTIVES ON LEADERSHIP

MOTIVATION

Willingness to exert high levels of effort to reach organizational goals. It is the internal drive to accomplish a particular objective.

MOTIVATION IS WHAT MAKES PEOPLE WANT TO WORK!

BASIC ASSUMPTIONS

Everyone is motivated

Key?

Two types of motivation

Intrinsic Extrinsic

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

MOTIVATION THEORIES
Need (Maslow & ERG) Equity Reinforcement Expectancy Theory Goal-Setting Theory

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)

RESPONSES TO EQUITY/INEQUITY
Equity: Maintenance Inequity:

Change Inputs Change Outcomes Quit

FORMS OF JUSTICE

REINFORCEMENT THEORY
Behavior

is a function of consequences Behavior that is rewarded persists To increase behavior

Positive reinforcement negative reinforcement

REINFORCEMENT THEORY
To

reduce behavior

Extinction Punishment

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

ESTABLISHING SHORT TERM

OBJECTIVES

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 firms 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 staffs 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 its nowhere near the point you wanted the company to be at this time, then the companys practices, goals, or long-term vision has to be altered.

FUNCTIONAL STRATEGY

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.

Why is it so hard to develop a functional strategy?

CRACKING
THE PROCESS

WHY IS IT SO HARD TO DEVELOP A FUNCTIONAL STRATEGY?

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).

ROLE OF ACCOUNTING IN
SETTING AND IMPLEMENTING STRATEGY

To compete successfully in todays 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.

END