...Implementing Strategy in Companies That Compete Across Industries and Countries 13 - 1 Managing Corporate Strategy Through the Multidivisional Structure • Functional or product structures are not sufficient when a company enters new industries • Multidivisional structure innovations – Divisions (operating responsibility) – Corporate headquarters staff to monitor divisions (strategic responsibility) – Each division may be organized 13 - 2 Multidivisional Structure 13 - 3 Advantages of a Multidivisional Structure • • • • Enhanced corporate financial control Enhanced strategic control Growth Stronger pursuit of internal efficiency 13 - 4 Problems in Implementing a Multidivisional Structure • Establishing the divisional-corporate authority relationship • Distortion of information • Competition for resources • Transfer pricing • Short-term R&D focus • Duplication of functional resources 13 - 5 Structure, Control, Culture, and Corporate-Level Strategy • Unrelated diversification – Easiest and cheapest strategy to manage – Allows corporate managers to evaluate divisional performance easily and accurately – Divisions have considerable autonomy – No integration among divisions is necessary 13 - 6 Structure, Control, Culture, and Corporate-Level Strategy (cont’d) • Vertical integration – More expensive than unrelated diversification – Multidivisional structure provides necessary controls to achieve benefits from the control of resource transfers...
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...Synergetic Solutions, Inc. faces a crossroad in implementing change to its organization as a result of market changes. Two years ago, the company made a leap in to the network solutions business of designing and implementing complex computing networks. This change is resulting in new orders and now accounts for 20% of the total revenues of the company. The company’s Chief Executive Officer has made the decision to focus the company’s energy and resources on making the network solutions business account for 80% of the revenues. The Chief Operating Officer has been assigned the task of this major transformation. There are three major areas that will need to be addressed when considering these action plans: 1. Redesign the work environment and organization structure to move from the present departmental structure to the new team-based structure. 2. Develop new HR policies and programs to help employees make the transition. 3. Upgrade current employee skill sets and/or hire new employees with relevant skills. Internal and External Forces of Change Synergetic Solutions, Inc. is facing external changes that are forcing it to make internal changes in the company structure and way of doing business. Changes in technology are the most significant external factor facing Synergetic. Technology is Synergetic’s business – keeping up with market changes is what is needed to survive. Market-share is another factor that Synergetic will face. Not only will there be others entering...
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...BlackBerry has been struggling to generate profits over the past years and its market share has been dwindling. New CEO, John Chen, is taking the focus of the overall company toward enterprise, government customers and software services. Part of the strategy is to control the cost associated with the devices business and figure out how to get that section of the business as profitable as possible. To do this Chen has decided to implement a new overall business strategy. This new strategy is to change the operating structure to focus on enterprise, messaging, QNX, and the hardware business. In order for Chen to be successful in implementing and carrying out this new strategy he must use Kotter’s 8 step model of implementing change. A global leader in mobile communications, BlackBerry revolutionized the mobile industry when it was introduced in 1999. Today, BlackBerry aims to inspire the success of our millions of customers around the world by continuously pushing the boundaries of mobile experiences. Founded in 1984 and based in Waterloo, Ontario, BlackBerry operates offices in North America, Europe, Asia Pacific and Latin America. Over the past several years BlackBerry has been struggling to make a profit and lacks behind all other competitors. BlackBerry's decline has been a case of mismanagement, faltering innovation and killer competition from the likes of Apple, Google and Samsung. For most consumers, the brand these days is an afterthought, with even the commercially...
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...product divisions are plastic additives, fire protection products and medical plastics. In order to become one of the leading chemical companies in the world, Luis Morales, the president of Kent Chemical, is struggling, after two unsuccessful tries to integrate the regional and the global business, with his decision what the best way to coordinate the company in terms of the organizational change, structure and strategy is. In theory, organizational change occurs if a company changes from a current non-wanted state into a future desired one. According to Wischnevsky, J. and Damanpour, D. (2006) the company has pass through three different stages during this process; first they have to accept that their present situation is not sufficient anymore, secondly the need to develop a future view for the company and thirdly implementing the necessary measures to succeed. To be able to implement those measure correctly an organizational structure is needed. As Jones, G. R. (2012) states, organizational structure is defined as rules and policies to provide a structure on company level where roles and responsibilities are delegated, controlled and coordinated. The three dimensions of organizational structure according to Hill, C. (2005) are vertical differentiation, horizontal differentiation and the establishment of integrating mechanisms. To Hill, C. (2005) vertical differentiation defines whether the companies should make their decisions on a centralized or decentralized level. Pluses for...
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...CHAPTER 12 Implementing Strategy in Companies That Compete in a Single Industry Synopsis of Chapter Chapter 12 examines how managers can best implement their strategies in single-industry firms in order to achieve a competitive advantage and superior performance. First, the main elements of strategy implementation—structure, control systems, and culture—are analyzed in detail, focusing on the way they work together to create an organizing framework. Then the chapter turns to the topic of using structure, control, and culture at the functional level to build distinctive competencies. After that, the chapter addresses the challenges of implementing the generic business strategies of cost leadership or differentiation in a single industry. The final section covers restructuring and reengineering, two strategies that single-business firms can use to improve corporate performance. The next chapter takes up where this one leaves off and examines strategy implementation across industries and across countries—that is, implementing corporate and global strategy in firms that compete in more than one industry. Teaching Objectives 1. Introduce the main elements of strategy implementation—structure, control systems, and culture—and their relationships to each other. 2. Demonstrate how structure, control, and culture can build distinctive competencies at the functional level. 3. Describe the use of structure, control, and culture in implementing a single-business firm’s...
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...distinct conceptions of the term. Some authors view it as a sequence of carefully planned consecutive steps, a perspective which can be labeled a process perspective. The second approach treats strategy implementation as a series of concerted (but often parallel) actions and examines these actions from a behavior perspective. Some authors combine the process perspective and behavior or action perspective and form a third approach, which we label as a hybrid perspective. Under the process perspective, implementation is the process that turns plans into action assignments and ensures that such assignments are executed in a manner that accomplishes the plan’s stated objectives (Kotler, 1984). Strategy implementation is an iterative process of implementing strategies, policies, programs and action plans that allows a firm to utilize its resources to take advantage of opportunities in the competitive environment (Harrington, 2006). Under the behaviour perspective, implementation is the actions initiated within the organization and its relationships with external constituencies to realize the strategy (Varadarajan, 1999). Implementation is operationally defined as those senior-level leadership behaviors and activities that will transform a working plan into a concrete reality (Schaap, 2006). In the hybrid perspective, implementation is defined as ‘the sum total of the activities and choices required for the execution of a strategic plan…the process by which strategies and policies are...
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...Strategy Implementation Meaning and Steps in Implementing a Strategy Search MSG Home (index.html) / Library (allsubjects.htm) / Marketing (allsubjects.htm#marketing) / Strategic Management (strategicmanagementarticles.htm) / Strategy Implementation Meaning and Steps in Implementing a Strategy Strategy Implementation Meaning and Steps in Implementing a Strategy Strategy implementation is the translation of chosen strategy into organizational action so as to achieve strategic goals and objectives. Strategy implementation is also defined as the manner in which an organization should develop, utilize, and amalgamate organizational structure, control systems, and culture to follow strategies that lead to competitive advantage and a better performance. Organizational structure allocates special value developing tasks and roles to the employees and states how these tasks and roles can be correlated so as maximize efficiency, quality, and customer satisfactionthe pillars of competitive advantage. But, organizational structure is not sufficient in itself to motivate the employees. An organizational control system is also required. This control system equips managers with motivational incentives for employees as well as feedback on employees and organizational performance. Organizational culture refers to the specialized collection of values, attitudes, norms and beliefs shared by organizational members and groups. Follwoing are the main steps in implementing a strategy: ...
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...communication of knowledge in an organization. Explicit-explicit communication is one transformation phase that is best supported by technology. Explicit knowledge can be easily captured and transmitted to a worldwide audience. * Financial reports * Reports which are used for analysis . * websites 2. How does knowledge creation and transfer in organizational teams take place? Knowledge transfer has always been a challenge for organizations. Its importance has grown in recent decades for three related reasons. First, knowledge appears to be an increasing proportion of many organizations total assets. Second, organizations have moved away from hierarchical methods of control toward more decentralized organizational structures and increased employee involvement This has resulted in more creativity by frontline employees and subunits, but fewer obvious organizational paths through which the transfer can occur. The Components of Knowledge Transfer In principle, knowledge transfer can be broken down into distinct stages. The five steps to describe the process: idea creation, sharing, evaluation, dissemination, and adoption. 1) Idea creation: A massive literature exists on how to promote creativity. Robert Sutton has studied creativity in groups and offers the following list of questions to ask when assessing a group's potential for creativity. 2) Idea sharing: For information sharing to occur, two conditions must be satisfied. First, ideas must be in...
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...NER School of Business, Southern Illinois University, Campus Box 1106, Edwardsville, IL 62026, USA The purpose of this study was to identify the risk factors in implementing traditional management information systems projects, describe the risk factors associated with enterprise-wide/ERP (enterprise resource planning) projects and identify the risk factors in ERP projects which are unique to these projects. Some of the unique challenges in managing enterprise-wide projects which were highlighted through the ndings included the challenge of re-engineering business processes to ‘ t’ the process which the ERP software supports, investment in recruiting and reskilling technology professionals, the challenge of using external consultants and integrating their application-speci c knowledge and technical expertise with existing teams, the risk of technological bottlenecks through client-server implementation and the challenge of recruiting and retaining business analysts who combine technology and business skills. Introduction In the past few years many organizations have initiated enterprise-wide/ERP (enterprise resource planning) projects using such packages as SAP, Peoplesoft and Oracle. These projects often represent the single largest investment in an information systems (IS) project in the histories of these companies and, in many cases, the largest single investment in any corporatewide project. These enterprise-wide/ERP projects bring about a host of new questions because...
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...disruptions (Industry discontinuities , Product life cycle shifts, and Internal company dynamics) • Change is aimed at competitive advantage (Uniqueness, Value, Difficult to imitate) • Change is sytemic and revolutionary - Reshaping organization's design elements • Change demands a new organizing paradigm (gamma change) • Change is driven by senior executives and line management (envisioning, energizing, and enabling) • Change involves significant learning - Must learn how to enact the new behaviors Intergrated Strategic Change - Extends traditional OD process into content oriented discipline of strategic management • Key Features: - Strategic Orientation - Stratic change capability - Individual and organizations are integrated into the process • Applications Stages (Strategic analysis, strategic choice, and design and implement the strategic change plan) Organization Design - Configures the organizations structure, work design, HR practice, and management to guide members' behavior • Conceptual Framework ( Strategy, Structure, Work Design, HR Practices, and Management / Information Systems) • Application Stages (Clarify design focus, designing the organization, and implementing the design Culture Change • Concept of Organization Culture (artifacts, norms, values, basic assumptions) • Organization culture and organization effectiveness - Culture affects performance through its influence on the organization's ability to implement change • Diagnosing...
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... In completing the organizational Structure Simulation, One could observe how changes are bought as a result of strategic initiatives within Synergetic Solution affect work design and organizational culture. The Simulation challenges of implementing structural changes, and deals with the resistance to change as an individual as well as organization level. It also allows me to employ different tactics to deal with resistance and lead Synergetic Solution through the stages of transition. After reading they will know at least three of internal and external forces of change for Synergetic S Solution. Also what the leaders at Synergetic Solution need to consider implementing change strategy and models the leaders may employ. Synergetic Solutions Report To give a little history about Synergetic Solutions, it is a six billion dollar company in business of system integration, assembling, and reselling leading computers brands. The company employees over 300 employees, mostly sales, and service department, and they have five locations across the East Coast. The majority of the employees at Synergetic Solutions have only basic computer assembling and trouble shooting skills. Individuals with a higher skilled operate as the specialists. Synergetic Solutions Chief Executive Officer Harold Reed made forays into the networking solution business of designing and implanting complex computing...
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...preferences and technology. The professional team of MGHM Enterprises took on the challenge of resurrecting Montgomery Wards into the new and improved company, Arron's (the first name of Ward). By using IT, foreign and virtual investors, and by flattening the organizations structure, the team was able to put together a plan to make Arron's productive once again. The newest innovation to Arron's is the incorporation of an e-business where the consumer is able to conduct business online. This added to the new look, business principles, and innovative mind-set has made Arron's into a competitive marketing enterprise. Using Organization Methodologies and IT To Resurrect Montgomery Ward’s Montgomery Ward, an American retail merchandising company, founded in Chicago in August 1872 by Aaron Montgomery Ward was a pioneer company selling merchandise directly to the people, it invented the “mail-order catalog” business. Montgomery Ward was famous for coining the phrase, “Satisfaction guaranteed or your money back.” It also was the creator of “Rudolph the Red-nosed Reindeer”. (Montgomery Ward’s Last Chapter). Montgomery Ward’s management lacked foresight and lost major market share to Sears, who has been their rival competitor since shortly after the inception of the company. In the year 2000 Montgomery Wards faced serious business problems and was forced to close its doors. We will analyze...
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...CHAPTER 12 Implementing Strategy in Companies That Compete in a Single Industry SYNOPSIS OF CHAPTER Chapter 12 examines how managers can best implement their strategies in single-industry firms in order to achieve a competitive advantage and superior performance. First, the main elements of strategy implementation—structure, control systems, and culture—are analyzed in detail, focusing on the way they work together to create an organizing framework. Then the chapter turns to the topic of using structure, control, and culture at the functional level to build distinctive competencies. After that, the chapter addresses the challenges of implementing the generic business strategies of cost leadership or differentiation in a single industry. The final section covers restructuring and reengineering, two strategies that single-business firms can use to improve corporate performance. The next chapter takes up where this one leaves off and examines strategy implementation across industries and across countries—that is, implementing corporate and global strategy in firms that compete in more than one industry. TEACHING OBJECTIVES 1. Introduce the main elements of strategy implementation—structure, control systems, and culture—and their relationships to each other. 2. Demonstrate how structure, control, and culture can build distinctive competencies at the functional level. 3. Describe the use of structure, control, and culture in implementing a single-business firm’s generic business...
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...Introduction Case 4: Integrating Strategy and Human Resource Management is about how a business or organization can deal with situations as deregulation and ceilings on interest such as “People’s Bank”, a financial services company headquartered in Bridgeport, Connecticut where major changes took place to develop a market place orientation to its products and services. The internal and external structures of the financial service implemented strategic changes to their banking services and stock trading position. Added criteria included their employees who have participated in decision making participation for the purchase new technology. This summary considers some of the decisions that were contained to choose the right type of technology that worked for their environment and business in general (Greer, 2001, p. 156-157). Based on these descriptions of the experiences of People’s Bank, Ingersoll-Rand, Maid Bess, what is the unifying theme of the role played by human resource management? Human Resource Management (HRM) develops the company or organization’s integrated strategic planning processes by implementing the changes and technologies needed for a company’s growth and continued success and competition. HRM implements planning in the business unit and value chain unit. How this is done is setting goals for the organization and having alternative strategies for the business units in the marketing department for example, where the marketing department will further...
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...customers. Employees are not always open for change and sometime will rebuttal against any such transformation that is set in place to improve the organization’s structure or operation. Employees normally view change from a negative or positive perspective, because of such internal and external forces that cause the changes to take place. Synergetic Solutions Inc. internal forces of change entail employee structure, technological capacity, and to inspire employee’s to step up and work diligently to fulfill the plans of the organization. The organization was in a stagnating stage, which cause for the work environment and organizational structure to be redesigned from the present departmental structure to the new team base structure (UOP Simulation, 2012). Employees were custom to running things according to what works for them rather than what will enhance the company. Harold Redd, who is the CEO of the company, decided that implementing complex computing networks would allow for increase in revenue. Redd’s plans were to raise revenue to 80%, and reduce absenteeism to 2% in nine months. Quarterly targets for revenue and measure of employee involvement were set in place such as productivity and absenteeism. Redd put the Chief Operating Officer (COO) in charge of this transformation and mandated him to turn the business on its head and make Synergetic into a...
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