Unit 5 Syllabus
• Strategy Implementation Strategy and tactics, gap analysis and
garnering required resources, implementation plan, timeline,
people, organization structure, incentives and disincentives,
skills, culture, Re-Positioning the Organization, Strategic
Change. Strategic Control – Strategy Audit - Leadership and
Governance
6 concepts are
covered under
strategy
implementatio
n and
Evaluation
Fred R David Model
• SM process is dynamic and --------------
• SM process is dynamic and -------------- continuous
Challenges in SM
• Any disruptive change in the external environment –
question the appropriateness of the strategy and
direction.
Problems with the strategy? Or
implementation
• Whenever the company feels the downturn in the
market, the company has to find out the causes relate
to poor strategy, poor execution or both
Strategy formulation vs Strategy
implementation
Which one to change?
Change the
organization
Forward
structure
Linkage
based on the
strategy
Backward Can you
Linkage Guess?
Strategy is implemented through the organisational
architecture of the enterprise
Write a short note on organizational
architecture
Organizational architecture
The totality of a firm’s organizational arrangements,
including its formal organizational structure, control
systems, incentive systems, organizational culture,
organizational processes, and human capital
Organizational structure
• Changes in the corporate strategy often require
changes in the way an organization is structured.
No one optimal organisational design
• Small firms – centralised
• Medium sized – decentralised
• Large firms use SBU or matrix structure
Simple structure – suitable for companies that follow
single business strategy and offer a line of products in a
single geographic market
• Simple structure – communication is frequent and
direct, new products tend to be introduced to the
market quickly
Organizational structure
3 Dimensions
1 vertical differentiation( centralised vs decentralised)
2. Horizontal differentiation( formal division of the
organisation into subunits)
3. Integrating mechanisms ( Mechanism for
coordinating subunits)
Centralization
Structure in which decision-making authority is
concentrated at a high level in the management
hierarchy
Decentralization
Structure in which decision-making authority is
distributed to lower-level managers or other
employees.
Centralization can help ensure that decisions are consistent with
organizational objectives.
Organizations can centralise only a few functions.
Example
R& D functions
Example
Walmart has centralized all purchasing decisions at its
headquarters in Arkansas
• Decentralisation
In a decentralized structure, decisions are made closer to the
spot by individuals who have better information than
managers several levels up a hierarchy.
Example
It make little sense for the CEO of P&G to make marketing
decisions for the detergent business in Germany because he
is unlikely to have the relevant expertise and information
• Decentralization is favored in environments characterized
by high uncertainty and rapid change.
• Due to this many high-tech firms operate with a greater
degree of decentralization
• Example
At Google lower level employees are given the ability to
develop new business ideas and the right to lobby top
managers for the funds to develop those ideas
Other aspects
• Tall vs Flat hierarchies
• Span of control ( the number of direct reports a
manager can handle)
• Problem in Tall Hierarchies
• Accidental distortion
• Deliberate distortion
2. Horizontal differentiation
Functional structure
Multidivisional structure
Matric structure in High-Tech Firm
[Link] Mechanism
Higher the need for coordination ,the integration
mechanisms becomes complex
Integrating
Mechanism
- image
Formal integrating Mechanism
Informal integrating Mechanism
Example knowledge network
• “You get what you measure””
Organisational Controls & incentives
• Control
The process through which managers regulate the activities
of individuals and units so that they are consistent with the
goals and standards of the organization.
Goal
A desired future state that an organization attempts to
realize.
Standard
A performance requirement that the organization is
meant to attain on an ongoing basis.
Subgoal
An objective, is the achievement of which helps the
organization attain or exceed its major goals.
Image of control system
A key element in the control process is generating the
right goals, subgoals, and standards.
• The right culture is
the key
Process
Process is the manner in which decisions are made and
work is performed within the organisation.
There are processes for formulating strategy, allocating
resources, evaluating new product ideas, handling
customer inquiries and complaints for improving
product quality, evaluating employee performance and
so on.
Often, a firm’s core competencies or valuable,
knowledge-based resources are embedded in its
processes.
Efficient, effective processes can lower the costs of
value creation and add additional value to a product.
An organisation’s processes can be summarized by
means of a floe chart, which illustrate the various teps
and decision points involved in performing work.
Case – organizational culture at
Lincoln Electric
Strategic change
• The changes in environmental forces often require
businesses to make modifications to their existing
strategies and bring out new strategies.
• It is a complex process that involves a corporate
strategy focused on new markets, products,
services and new ways of doing business.
Steps to initiate strategic change
RECOGNIZE THE NEED CREATE A SHARED INSTITUTIONALIZE THE
FOR CHANGE VISION TO MANAGE THE CHANGE
CHANGE
5 best practices for managing change
• [Link]
leadership styles
• Transformational
• Transactional
leadership
More Suitable for start ups &
turnarounds
Types of strategic performance measures
• Financial measures
• Customer satisfaction
• Market measures
• Employee measures
• Innovation measures
• Environmental measures
Corporate governance
• While pursuing strategies that maximize profitability a
company has obligations to do so within the limits set
by law and in a manner consistent with societal
expectations.
• HCLTech
Annual Report 2023-24: Founder and Board of Directo
rs |
HCLTech
Strategy Audit
• Towards Tripple bottom line framework
• Profit, People, Planet
• Now one more P
• What is that ?