Issues in Implementation

1. Issues in Implementation Strategy Implementation and Strategy Formulation are directly related.

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

3. Basic Elements Involved in Implementation Technology Financial Resources Human Resources Organisational Processes

4. Changes in Organisational Structure • Changes in Culture • Changes in reward systems • Changes in skills underpinned by training • Changes in physical environment • Changes in marketing

5. Organisation Structure • Role and Function of Structure • Structure and Strategy • Mintzberg’s View on Structure • Structural Types • Structures Under Change

6. Organisation Structure • The established pattern of relationships among the component parts of the organisation • The features which serve to control or distinguish its parts

7. 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

8. Basic View Of "Strategy-Structure" Relationship strategy structure “fit”

9. 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".

10. 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

11. Basic Structural Types Functional M-Forms Matrix Forms International Forms

13. 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

14. Basic Functional Structure Disadvantages • Senior managers overburdened with routine matters • Senior managers neglect strategic issues • Difficult to cope with diversity • Coordination between functions difficult

15. 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

16. A conventional pyramid with a management services department ladder

17. Outline organisation chart for a decentralised geographically diverse company

18. Outline organisational chart for a heavily centralised geographically diverse company

19. A Matrix organisation structure Chief Executive

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

21. 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

22. Future Directions in Organisational Structures due to Change

23. 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 ?

24. 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’

25. 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

26. 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

27. 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

28. 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

29. 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

30. 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)

31. 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

32. 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

33. 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

34. 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

35. 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

36. Just Do It

37. 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).