IMPLEMENTING STRATEGY: BUILDING RESOURCE CAPABILITIES AND STRUCTURING THE ORGANIZATION

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CHAPTER 11

• IMPLEMENTING STRATEGY BUILDING RESOURCE
  CAPABILITIES AND STRUCTURING THE ORGANIZATION
  

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Why Is Implementing Strategy a Tough
Management Job?
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The Eight Components ofImplementing Strategy
Allocating Resources
Building a Capable Organization
Establishing Strategy- Supportive Policies
Strategy Implementers Action Agenda
Instituting Best Practices for Continuous Improvem
ent
Exercising Strategic Leadership
Installing Support Systems to Carry out Strategic
Roles
Shaping Corporate Culture to Fit Strategy
Tying Rewards to Achievement of Key Strategic
Targets
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What Is the Goal ofStrategy Implementation?

• .

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Building aCapable Organization
Select able people
for key positions
Develop skills, core competencies, managerial
talents, competitive capabilities
Organize business processes, value chain
activities, and decision-making to promote
successful strategy execution
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Power of Unique Competencies and Capabilities
When it is difficult to outstrategize rivals with
a superior strategy . . .
. . . Best avenue to industry leadership is to
out-compete rivals with superior strategy
execution!
Building competencies and capabilities rivals
cant match is one of the best ways to
out-compete them!
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Building Core Competencies The Necessary
Understanding

• Core competencies typically emerge from
  collaborative efforts of different work groups
• Leveraging competencies into competitive
  advantage requires concentrating more effort and
  more talent than rivals
• Sustaining competitive advantage requires
  adapting competencies to new conditions

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Building Competencies and Capabilities The
Keys to Success

• Superior selection
• Training
• Cultural influences
• Cooperative networking
• Motivation

• Empowerment
• Attractive incentives
• Organizational flexibility
• Short deadlines
• Good databases

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Matching Organization Structure to Strategy
The Steps to Take

• 1. Pinpoint critical activities and capabilities
• 2. Decide which activities to outsource
• 3. Decide which activities require partners
• 4. Make primary, internally-performed activities
  the main building blocks
• 5. Determine degree of authority to delegate
• 6. Establish ways to achieve coordination
• 7. Assign responsibility for managing
  relationships with outsiders

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Organizational Structures of the Future
Meeting the New Requirements

• Decentralized structures with fewer managers
• Small-scale business units
• Reengineering to decrease fragmentation
• Development of stronger and newer capabilities
• Collaborative partnerships with outsiders
• Empowerment and self-directed work teams
• Lean staffing of corporate support functions
• Open communications via e-mail
• Electronic information systems
• Accountability for results