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Coverage of Chapter 12
Strategy implementation This refers to how a company should create, use, and combine organizational structure, control systems, and culture for competitive advantage
How these elements can build distinctive competencies at the functional level
Their use in implementing a single-business firms generic business strategy The use of restructuring and reengineering in improving the performance of a single-business firm
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Organizational structure
Assigns employees to specific value creation tasks and roles and specifies how those are linked to increase efficiency, quality, innovation, and responsiveness to customers To coordinate and integrate the efforts of all employees
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Organizational culture
The collection of values, norms, beliefs, and attitudes shared within an organization It guides interactions within the organization and with outside stakeholders
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Implementing Strategy
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Centralization or decentralization?
Liaison roles
Gives one manager in each function or division the responsibility for coordinating with the other
Teams
Composed of one manager from each of the various functions, who meet to make decisions jointly about common issues
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efficiency (i.e. measured inputs and outputs) quality (e.g. measured complaints, returned goods) innovation responsiveness to customers (e.g. measured interactions)
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Output control
Behavior control
Challenging performance goals for each division, department, and employee Danger: they can encourage conflict between units Danger: they provide an incentive for dishonesty. Rules and procedures to direct actions or behaviors of divisions, functions, and individuals Operating budgets Standardization (see next slide)
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Standardisation
(1)
Inputs can be standardized by screening so that only high-quality inputs enter the company. (2) Conversion activities are standardized so that tasks are done consistently to improve predictability. (3) Outputs are standardized by specifying performance characteristics of the final product. Only goods and services that meet these criteria are allowed to leave the organization. All must be reviewed and kept up to date.
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Output control
Integrating mechanism
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Functional Structure
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Measurement problems
this happens as more product lines are added to the portfolio
Customer problems
customer needs become more diverse over a greater product range
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Strategic problems
Strategic issues are neglected as managers wrestle with the other problems
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Differentiators tend to have a collegial or professional culture, based on expertise & cooperation.
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Market Structure
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Geographic Structure
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Matrix Structure
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Product-Team Structure
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Reasons
Often reflects prior failure to make incremental changes Change in the business environment Excess capacity Organization grew too tall and inflexible; bureaucratic costs To improve competitive advantage and stay on top
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Reengineering
Fundamental rethinking and radical redesign of business processes to achieve big improvements Focuses not on functions, but on processes (which cut across functions) A blank slate approach, taking a customers point of view, and attempting to maximize value for customers Often used in tandem with TQM, which further refines the processes Advances in information technology have helped firms reengineer
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