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Issues in Implementation. Strategy Implementation and Strategy Formulation are directly related. IMPLEMENTATION ISSUES. Implementation involves adjusting or aligning various internal mechanisms and processes so that they facilitate the execution of a planned strategy.

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issues in implementation
Issues in Implementation

Strategy Implementation and Strategy Formulation are directly related.

implementation issues
IMPLEMENTATION ISSUES
  • Implementation involves adjusting or aligning various internal mechanisms and processes so that they facilitate the execution of a planned strategy
slide3

Basic Elements Involved in Implementation

Technology

Financial

Resources

Human Resources

Organisational

Processes

slide4
Changes in Organisational Structure
  • Changes in Culture
  • Changes in reward systems
  • Changes in skills underpinned by training
  • Changes in physical environment
  • Changes in marketing
organisation structure
Organisation Structure
  • Role and Function of Structure
  • Structure and Strategy
  • Mintzberg’s View on Structure
  • Structural Types
  • Structures Under Change
organisation structure1
Organisation Structure
  • The established pattern of relationships among the component parts of the organisation
  • The features which serve to control or distinguish its parts
formal structure often described in terms of
Formal Structure Often Described In Terms Of:
  • The pattern of formal relationships and duties - charts, job descriptions, etc.
  • The way in which the various activities or tasks are assigned to differentiate departments and/or people - differentiation
  • The way in which separate activities or tasks are co-ordinated -integration
  • The power, status, and hierarchical relationships within the organisation - the authority system
  • The planned and formalised policies and procedures and controls that guide the activities and relationships of people in the organisation - the administrative system
crucial elements of chandlers thesis
Crucial Elements Of Chandlers Thesis

1. Organisation structure follows the growth strategies of the firm.

2. USA firms had followed a stage or stepwise process of development of strategies and structures.

3. Organisations do not change their structures until provoked by inefficiencies to do so.

4. Added later by Drucker and Miles and Snow:"structure constrains strategy".

mintzberg s view on structure
Mintzberg’s view on Structure
  • The Strategic Apex
  • The Middle Line
  • The Technostructure
  • The Support Staff
  • The Operating Core
  • The Ideology
  • See pages 642-646 in Lynch
basic structural types
Basic Structural Types

Functional

M-Forms

Matrix Forms

International Forms

basic functional structure
Basic Functional Structure

Advantages

  • Chief Executive in touch with all operations
  • Reduces/simplifies control mechanisms
  • Clear definition of responsibilities
  • Specialists at senior and middle management level
basic functional structure1
Basic Functional Structure

Disadvantages

  • Senior managers overburdened with routine matters
  • Senior managers neglect strategic issues
  • Difficult to cope with diversity
  • Coordination between functions difficult
product market divisionalisation
Product Market Divisionalisation

Organisations may be divisionalised on different bases, amongst

which are included product part, geography and processes.

DIVISIONS

Lucas CAV

(Diesel)

Lucas

Electrical

Lucas

Batteries

Lucas

Aerospace

SMEC

(Industrial)

RISTS

(Wiring &

Cables)

LUCAS

World Service

Lucas Industries (Joseph Lucas Ltd) 1982

slide17

Outline organisation chart for a decentralised geographically diverse company

slide20

Two cells (or autonomous work groups) alongside a conventional pyramid in computer department

slide21

Advantages

  • Low central overheads
  • Offsetting of individual business losses
  • Availability of cheaper finance for individual businesses
  • Spreading of risk for holding company
  • Ease of divestment for holding company
  • Disadvantages
  • Risk of divestment by holding company for individual business
  • Unavailability of skills at group level to assist individual businesses
  • Lack of synergy
pressure for change 1
Pressure for Change 1
  • Increasing Competition
    • Internal pressures on costs - shake-out
    • Changes in staff functions - delayering
    • Middle management positions - obsolete ?
  • Impact of Information Technology
    • Flexible structures
    • Collegiate structures
    • do you need any ‘deep’ hierarchical structures ?
pressure for change 2
Pressure for Change 2
  • Responsiveness
    • Quick response to market changes and pressures
    • Accelerated NPD
    • Quick to market - first mover advantages
  • Hollowing-out Bureaucracies
    • Sub-contacting and out-sourcing
    • Reconfiguring value chains
    • Emphasis on ‘managing the edges of the company’
changes in strategy 1
Changes in Strategy (1)

Low price strategy

  • Key skills
  • Process design
  • labour supervision
  • easily produced products
  • Low-cost distribution
  • Requiring:
  • Tight cost control
  • Detailed reporting
  • Highly structured operation
  • Quantitative targets
changes in strategy 2
Changes in Strategy (2)

Differentiation Strategy

Key skills:

  • Product design
  • Marketing and Creative Flair
  • Research Capability
  • Corporate image

Requiring:

  • Looser control/simple reporting
  • strong co-ordination
  • Market-based incentives
issues in implementation1
ISSUES IN IMPLEMENTATION

It is invariably easier to think up

clever strategies than it is to make

them work under company, competitive and customer constraints

formulation and implementation compared
Formulation and Implementation Compared

Strategy Formulation

  • An Intellectual Process
  • Requires Conceptual and Analytical Skills
  • Occurs Primarily at the Corporate Level
  • Co-ordination among the Few
  • Strategy Implementation
  • Operational
  • Requires Managerial and Motivational Skills
  • Permeates all Hierarchical Levels
  • Co-ordination among the Many
problems of implementation
PROBLEMS OF IMPLEMENTATION
  • Implementation required more time than planned
  • Major problems were not anticipated
  • Activities were in-adequately co-ordinated
  • Crisis elsewhere in the company directed attention away from implementation
  • Problems arose due to uncontrollable external factors
problems
PROBLEMS
  • Insufficient capabilities of involved employees
  • Inadequate leadership and direction
  • Poor definition of ket implementation tasks
  • Inadequate monitoring of activities by information system

Alexander L.D.(1985)

problems of implementation1
PROBLEMS OF IMPLEMENTATION
  • Employees were not capable enough
  • Managers did not provide adequate leadership and direction
  • Employees received inadequate training
  • Implementation tasks were not properly defined
  • Information system was not adequate
points to remember in implementation
Points to Remember in Implementation
  • Do not overload functional departments
  • Contain shockwaves to a few manageable areas
  • Give personal attention to the relationship between strategy and operational plans
  • Concentrate on communicating the strategy
  • Keep implementation an ongoing process
matching chief executives with strategic options
Matching Chief Executives with Strategic Options

Business Strength/Competitive Position

Strong Average Weak

Turnround

Specialist

Dynamic

Industry

Expert

High

Industry Attractiveness

Moderate

Cautious profit

Planner

Low

Analytical Portfolio

Manager

Liquidator

Source :Wheelen and Hunger

slide34

Implementation of Strategy and the Nature of the Strategy

Inappropriate

Appropriate

Success

Re-build / Ruin

Good

Targets met and

Company Successful

Good Implementation

can allow Management

time to rebuild, but may

hasten failure

Implementation of the Strategy

Trouble

Failure

Poor Implementation

hampers Strategy

Every thing has gone

wrong

Bad

Nature of the Strategy

recent examples
RECENT EXAMPLES

The following are examples of poor implementation:

  • Trafalgar House’s Cunard fiasco in 1996 with the QE2 refit.
  • Disney’s problems with the Euro Disney theme park in Paris.
  • The Channel Tunnel project overruns.
  • BSE Crisis
and finally
And Finally

When a strong vision, culture, strategic intent and functional level concentration are combined, what emerges is that the business has soundness at the top (policies) and at the bottom (functions), rather than flashiness in the middle (programmes).

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