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Implementation and

Control
Part 4

Implementing strategies:
Management and Operational Issues
Annual Objectives a decentralized
activity that directly involves all
managers in an organization.
Essential for strategy implementation
because
1) represent the basis for allocating
resources
2) primary mechanism for evaluating
managers

Implementing strategies:
Management and Operational Issues
3)major instrument for monitoring
progress toward achieving long-term
objectives
4) establish organizational, divisional,
and department priorities
Need to ensure that annual
objectives are well conceived,
consistent with long-term objectives,
and supportive of strategies to be
implemented. ( ****)

Implementing strategies:
Management and Operational Issues
Policies are needed to make a strategy
work
Resource Allocation Central management
activity that allows for strategy execution
Managing Conflict interdependency of
objectives and competition and limited
resources
Matching Structure with Strategy
Functional/Divisional/SBU/ Matrix structure
Restructuring & Reengineering

Implementing strategies:
Management and Operational Issues

Linking Performance and pay to Strategies


Managing Resistance to Change
Managing the natural environment
Creating a strategy-supportive culture
Production/operations concerns when
implementing strategies
Human Resources concern when
implementing strategies (e.g. work life
balance)

Implementing strategies: Marketing,


Finance/Accounting & MIS Issues
Marketing issues STP
Finance/Accounting Issues Capital
acquisition/Projected Financial
Statements/Financial
budget/Valuation issues
Research & Development issues
Management Information System
Issues

Strategy Evaluation
Strategy evaluation is vital to an organizations
well-being; timely evaluations can alert
management to problems or potential problems
before a situation becomes critical.
Three basic activities:
1) examining the underlying bases of a firms
strategy
2) comparing expected results with actual
results
3) taking corrective actions to ensure that
performance conforms to plan

Reviewing Bases of Strategy

Reviewing Bases of Strategy


Corrective actions are almost always
needed except when
1) external and internal factors have
not significantly changed and
2) the firm is progressing
satisfactorily towards achieving
stated objectives

Reviewing Bases of Strategy


Questions to ask:
How have competitors reacted to our
strategies?
How have competitors strategies
changed?
Have major competitors strenghts
and weaknesses changed?
Why are competitors making certain
strategic changes/

Reviewing Bases of Strategy


Why are some competitors
strategies more successful than
others?
How satisfied are our competitors
with their present market positions
and profitability?
How far can our major competitors
be pushed before retaliating?
How could we more effectively
cooperate with our competitors?

Reviewing Bases of Strategy


Important to that external
opportunities and threats and
internal strengths and weakness that
represent the bases of current
strategies should continually be
monitored for change.
It is not if but when they will
change.

Measuring Organizational
Performance
Compare actual results with
expected results
Some financial ratios that are useful
as criteria for strategy evaluation:
ROI /ROE/Profit margin
Market Share / Sales growth/ assets
growth.
Note: most quantitative criteria are
geared to annual objectives rather
than long-term objectives

Taking corrective actions


Taking corrective action does not
necessarily mean that existing
strategies will be abandoned or even
that new strategies must be
formulated.
E.g. of corrective actions altering
an organizations structure, replacing
one or more key individual and etc.

Reference
F.R. David, Strategic Management
concepts and cases, 11th Edition,
Pearson International edition.

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