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Week 9
March 17, 2020 11:54 AM
Week 8: Realizing Strategy
• A good looking strategy is not enough, it has to be implemented well.
• Consultants will help make/create strategy for an organization, but they will not be there during
the realization phase (and they don't wanna spend a lot of money)
• When thinking about the future/vision of the organization, what strategy/plan of action is
required, it is a very creative process.
• You have to imagine in advance what kind of problems may incurr or problems, what expertise
should we have access to, who should we go to
• Since there will be mistakes and implementing strategies is a longer process than what is
emphasized.
• The company has to revise its targets, creates some confusions about timelines, resource
availability, how to assign responsibility for missteps (fire) or acknowledge they weren't given the
right resources.
• Required for implementing strategy: You have to be able to inform people in organization and
communicate well.
• Culture
○ Glue that hold an organization together
○ Helps in implementation --> Cooperative culture helps the organization bond
○ Accepts mistakes are part of the game, maybe have a system to fix mistake
• Structure and Systems help make and develop strategy since it informs the organization and gives
it the confidence when it's trying to do something new or different.
• E.g., open culture: encourages discussion, sense of how easy implementation would be based on
what employees are used to
Organizational Challenge: Reconciling Specialization with Coordination and Co-operation
• Fundamental source of efficiency in production is specialization via division of labour into
separate tasks.
• But then raises issues of co-operation problem --> aligning stakeholders interests with divergent
goals and
• Coordination problem --> harmonization of different activities within a process... And hence
increase in costs when there is more complexity.
• We have to ensure there is efficiency: When you divide labour in such a way that people based on
their knowledge and skill, do a certain job
• Work in a manor which the employees have the knowledge for
• If other parts cannot keep up, it's not efficient
• We have to think how to manage specialization and ensure it works well.
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• No point of doing one thing so well but it has no alignment with customers
Aligning goals for co-operation via
• Bureaucratic controls - go hand in hand with hierarchy (to an ordered grouping of people with an
established pecking order)
○ Almost of a requirement of your being in the organization
• Performance incentives - link rewards to outputs: these kinds of incentives include piece rates for
production workers and profit bonuses for executives.
○ Financial incentive could be given to all those people who helped achieve a particular goal
• Shared values - achieve high levels of co-operation and low levels of goal conflict without
extensive explicit
○ Each one in that organization believes in a particular vision, they want it, shared values
Mechanisms for coordination
• Rules and instructions - general employment contracts under which individuals agree to perform a
range of duties as required by their employer. Managers exercise authority by means referring to
these general rules and specific instructions.
• Routines - where activities are performed recurrently, coordination based on mutual adjustment
and rules becomes institutionalized within organizational routines.
○ Learning of organization
○ Organization memory
○ Changes as people develop themselves to become more efficient
• Mutual adjustment - the simplest form of coordination involves the mutual adjustment of
individuals engaged in related tasks.
○ Since there is uncertainty so folks help each other
Organizational Design
• Self-organizing team works well when it's a turbulent environment or a small set-up (everyone
knows everyone and what they're doing) and works together to co-ordinate to ensure strategy is
implemented
• Hierarchy: top tells middle, middle tells bottom how a work should be done, how strategy should
be implemented.
Defining Organizational Units
• Tasks: Organization units can be created around common tasks. This usually means grouping
together employees who do the same job; thus, a firm might create a machine shop, a
maintenance department, a secretarial pool, and a sales office.
• Products: Where a company offers multiple products, these can provide a basis for structure. In a
department store, departments are defined by products: kitchen goods, bedding, lingerie, and so
on. GreatWest Life comprises five main product groups: life insurance, health insurance,
retirement and investment services, asset management, and reinsurance.
• Geography: Where a company serves multiple local markets, organizational units can be defined
around these localities.
• Process: A process is a sequence of interlinked activities. An organization may be viewed as a set
of processes: the product development process, the manufacturing process, the sales and
distribution process, and so on. A process may correspond closely with an individual product, or a
process may be dominated by a single task. Functional organizations tend to combine task-based
and process-based grouping.
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Management Systems
• Information systems --> communications systems how people provide info to one another
○ How things are communicated
○ How it's decided who will talk to whom
○ Whether a record would be kept
○ If they have a intranet system and who will have access
• Strategic planning systems bring together knowledge from different parts of the organization.
○ A statement of goals
○ A set of forecasts and assumptions
○ Qualitative analysis
○ Specific actions statement
○ Financial projection
• Knowledge that stays inside the organization
• Thinking about various analysis
• Need information for the future
• Financial planning and control systems
○ Capital expenditure budget
• Long-term assets
○ Operating expenditure budget
• More daily basis what expenditure would be required
• Human resource management systems.
○ Useful when formulating culture
○ Skills and knowledge of people that exists in an organization to see if the strategy is feasible
in terms of their HR
Culture
• Corporate culture refers to values and ways of thinking that senior managers wish to encourage
within their organization, and organizational culture refers to diverse culture patterns that exist in
the informal organization.
• A strong culture is one in which key values and attitudes are widely shared, intensely held, and
endeavour to create a strong sense of identity among their employees (Starbucks, Agrium,
WestJet, and Google). A weak culture is one where people tend to hold different views, have
different values, and may interpret and respond to signals in very ways.
• Mistakes are fine and required when doing innovations for strong culture
Classifying Corporate Culture
• The first level comprises organization attributes that a visitor to the company might see, hear, or
feel. E.g., Artefacts such as corporate logos, the way people dress, the premises in which the firm's
activities are located, the stories people tell about the organization.
• The second level refers to the values and attitudes that organizational members express.
• The third and deepest level is that of "unspoken rules" and tacit beliefs.
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