Strategy management - Ch. 10

Crafting strategy

- Primarily a market-driven activity
- Success depends on firm's ability to:
* attract and please customers
* outcompete rivals
* effectively leverage resources and capabilities

Building an Organization - Organization building actions

- Staffing the organization's managerial talent
- Building and strengthening capabilities
- Structuring the organization and work effort

Executing Strategy - good strategy requires a team effort

- Primarily an operations-driven activity
- Success depends on management's ability to:
* direct change
* improve operations
* build a strategy-supportive culture
* get things done and deliver good results

Executing Strategy

* Good Strategy execution requires a team effort:
- Ultimately, CEO and TMT responsible for ensuring successful execution
but...
- Middle and lower level mangers actually implement chosen strategy
* All managers should understand their roles and how to ac

Striving for Continuous Improvement

Benchmarking

Benchmarking

is used to compare firm practices to best practices can help firms gauge how well activities are being performed.

striving for cont.. improvement

cont.
- Key tools for improving processes and activities :
* Business process re engineering (for improvement, but NOT for cont.. improvement)
* Total quality management ( for cont... improvement)
* Six Sigma quality control ( for continuous improvement)

Business process re engineering

-radically restructuring organizations often by unifying multiple activities within a single department or cross-functional work group - in order to improve workflow.
*(only done drastically when company needs it) NOT used for continuous improvement.

Total quality management

-philosophy based on the premise that the quality of products and processes is the responsibility of everyone involved with their creation or consumption
* (everyone is responsible)

Six Sigma quality control

-a statistics based quality control system aimed at producing no more than 3.4 defects per million iterations for any business process
* (no such thing as good enough always room for improvements)

Rewards and Incentives

* Reward systems can be used to motivate employees
* Reward systems include both :
- Monetary
- Non monetary
- Extrinsic
- Intrinsic

Monetary - money.

- base pay increases
- bonuses
- Profit sharing plans
- stock options
- Placework Incentives

Non Monetary - motivational recognition

- praise and recognition
- perks and fringe benefits
- autonomy ( control over decision making)
- rapid promotion

Extrinsic - anything rec from another person

- paychecks
- performance bonuses
- praise and other forms of recognition

Intrinsic - a positive emotional experience resulting directly

- enjoyment of learning a new task
- feeling of accomplishment
- sense of responsibility

Organizational culture

* the set of key values, beliefs, understanding, and norms that members of an organization share.
* directs everyone in the organization toward the "right way" of doing things.
* Frames and shapes the decisions that managers and other employees should mak

Characteristics of unhealthy corporate cultures

Part 1
* High politicized internal environment
- issues are resolved on the basis of political clout
* Hostility to change
- Avoid risks, experimentation and efforts to alter status quo are discouraged

Characteristics of unhealthy corporate cultures cont..

Part 2
* Insular, inwardly focused
- "not invented here" mind-set
- company personnel discount the need to look outside for best practices
* Disregard for high ethical standards and overzealous pursuit of wealth by key executives

Building an adaptive culture

- Adaptive cultures are well-suited to fast-changing industries
- An adaptive culture.
* Encourages creativity and risk taking
* Rewards championing of innovation
* Tolerates failure and supports internal entrepreneurship

The Process of organizational change - leadership committed to change

- Unfreezing the organization
- Change Intervention
- Refreezing the organization

Unfreezing the orgainization

Requires:
* shock therapy
* compelling case for change
* compelling vision

Change intervention

Requires:
* decisive action
* committed mgmt team
* new strategy
* asset disposals
* new org. architecture
* cultural change effort
* employee involvement

Refreezing the organization

Requires:
* multi- year perspective
* constant pressure
* ongoing socialization
* consistent application of new organization architecture

Leading the strategy execution process

* Managers at all levels of the firm must:
- stay on top of what is happening and closely monitor progress by engaging in managing by walking around (MBWA)
- Put constructive pressure on the organization to achieve good results and operating excellence
-

Which of the following is an example of a non monetary reward?

Fringe benefits

*Firms that use an unrelated diversification multiproduct strategy are often called conglomerates.

True

*The sharing of corporate-level core competencies among product division is known as operational relatedness.

false

*The related diversification multiproduct strategy focuses almost exclusively on financial economies.

false

* Panda Energy International owns a professional wrestling company. Panda executives no longer think that this wrestling company is a good strategic fit, so they sell the company to the WWE. This is an example of restructuring.

True

The least risky diversification strategy is unrelated diversification.

False

Managers motivations to diversify always align with the interests of their firm.

false

According to the BCG matrix, stars tend to generate the majority of a diversified company's revenue.

false

The market for 3D printers is growing every day. Thus far, however, HP has struggled to gain a foothold in this emerging market. HP's 3D printer division is an example of a question mark.

True

Diversified companies that emphasize operational relatedness usually employ the SBU form of the multidivisional structure.

false

Companies that exercise unrelated diversification usually employ the competitive form of the multidivisional structure.

true

All ethical dilemmas have a clean and obvious solution

false

The Friedman Doctrine is another name for the stakeholder model.

false

The shareholder model rejects the idea that businesses should undertake social expenditures beyond those mandated by law.

true

Microsoft's forcing PC makers to bundle internet explorer with windows and to display it prominently on the desktop is an example of anticompetitive behavior.

true

Someone who believes in ethical universalism would most likely act in accordance with the golden rule.

true

The tragedy of the commons occurs when a resource held in common by all, but owned by no one, is overused by individuals, resulting in its degradation.

true

Information manipulation cannot occur with nonfinancial information.

False

Just because something is ethical does not necessarily mean that it is legal.

True

Just because something is legal does not necessarily mean that it is ethical.

True

Adaptive cultures tolerate failure

True

Bonuses, profit sharing plans, and stock options are all examples of monetary rewards

True

Managers at all levels of a firm must always strive to stay on top of what is happening and closely monitor progress toward organizational goals.

true

Judy is most motivated to perform her best when her boss congratulates her on a job well done. Judy's motivation is fueled most strongly by intrinsic rewards.

False

When attempting to change an organization, the refreezing process typically takes up to a month and a half.

False

Business process reengineering is not typically used to continuously improve an organization.

True

Six Sigma quality control is a statistics-based quality control system aimed at producing no more than 25 defects per million iterations for any business process.

False

Unhealthy corporate cultures are often marked by a tendency to adopt competitors ideas and processes.

false

Executing strategy is primarily an operations-driven activity.

True