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Chapter Nine

Strategy Implementation :
Organizing for Action

Learning Objectives
Develop programs, budgets, and
procedures to implement strategic change
Understand the importance of achieving
synergy during strategic implementation
List the stages of corporate development
and the structure that characterizes each

Identify the blocks to changing from one stage to

Construct matrix and network structures to
support flexible and nimble organizational
Decide when and if programs such
reengineering, Six SIgma, and job redesign are
appropriate methods of strategy implementation
Understand the centralization vs decentralization
issue in multinational corporation

Strategy implementation
1. Who are the people who will carry out
the strategic plan ?
2. What must be done to align the
companys operations in the new
intended direction ?
3. How is everyone going to work together
to do what is needed ?

The problems exist in strategy

1. Implementation took more time than originally
2. Unanticipated major problems arose
3. Activities were ineffectively coordinated
4. Competing activities and crises took attention
away from implementation
5. The involved employees had insufficient
capabilities to perform their jobs

6. Lower level employees were inadequately

7. Uncontrollable external environmental factors
created problems
8. Departmental managers provided inadequate
leadership and direction
9. Key implementation tasks and activities were
poorly defined
10. The information system inadequately monitored

What must be done ?

1. Developing programs, budgets and
2. Achieving synergy
a. Shared know-how
b. Coordinated strategies
c. Shared tangible resources
d. Economies of scale or scope
e. Pooled negotiated power
f. New business creation

How is Strategy to be Implemented ?

Organizing for Action
Structure follows strategy
Stages of Corporate development
Organizational Life cycle
Reengineering and Strategy
Designing jobs to implement strategy

Stages of Corporate Development

Stage I
: Simple structure
Stage II : Functional structure
Stage III : Divisional structure
Stage IV : Beyond SBUs

Stages of International
Stage I : Domestic company
Stage II : Domestic company with
Export Division
Stage III : Primarily Domestic Company
with International Division
Stage IV : Multinational Corporation with
Multi-domestic Emphasis
Stage V : Multinational Corporation with
Global Emphasis

Advanced Types of Organizational

Matrix Structure
Network Structure The Virtual
Cellular Organization : A New Type of