IMPLEMENTING STRATEGIES: SINGLE & MULTI-INDUSTRY/ COUNTRY ISSUES

IMPLEMENTING STRATEGIES: SINGLE & MULTI-INDUSTRY/ COUNTRY ISSUES BUS 189 SPRING 2007 DR. MARK FRUIN

NOKIA’S WOES • SLOW TO RESPOND TO CUSTOMERS AND INNOVATE AS COMPANY GREW • NOKIA HAD ELECTED TO DECENTRALIZE DECISIONS ON NEW PRODUCT DEVELOPMNT • HEADQUARTERS IN ESPOO, FINLAND WAS REMOTE FROM GLOBAL DEVELOPMENTS • NOKIA’S CEO, JORMA OLLILA, ANNOUNCES NEW CORPORATE STRUCTURE: 4 DIVISIONS • MOBILE PHONE • MULTIMEDIA • NETWORKS • ENTERPRISE SOLUTIONS (INTRANET)

ORGANIZATIONAL DESIGN • AND STRATEGY IMPLEMENTATION • ORGANIZATIONAL DESIGN INCLUDES 3 ELEMENTS: • ORGANIZATIONAL STRUCTURE • SPECIALIZATION, COORDINATION & INTEGRATION • CONTROL SYSTEMS • INCENTIVES, MEASURING & MONITORING • ORGANIZATIONAL CULTURE • COLLECTION OF VALUES, NORMS & BELIEFS • CLIFFORD GEERTZ: WORLDVIEW, VALUES & ETHOS

ORG STRUCT BUILDING BLOCKS • GROUPING TASKS, FUNCTIONS & DIVISIONS • GROUPINGS VS BUREAUCRACY/COORD COSTS • ALLOCATING AUTHORITY& RESPONSIBILITY • HIERARCH & SPAN OF CONTROL • TALL OR FLAT • MINIMUM CHAIN OF COMMAND AND CENTRALIZATION VS DECENTRALIZATION • INTEGRATING/INTEGRATION MECHANISMS • FACE-TO-FACE/DIRECT CONTACT/(INTERNET) • LIAISON ROLES • TEAMS

CONTROL SYSTEMS • WHAT IS CONTROL? GETTING DONE WHAT YOU WANT TO GET DONE • MEASURE, MONITOR, MANAGE; PDCA CYCLES • CONTROL & EFFICIENCY: 3M • CONTROL & QUALITY: 3M • CONTROL & INNOVATION: 3M • CONTROL & CUSTOMER RESPONSIVENESS: 3M

LEVELS OF CONTROL • (BOARDS OF DIRECTORS) • TO CONTROL, NEED HIGH QUALITY INFO • CORPORATE-LEVEL MANAGERS • DIVISION-LEVEL MANAGERS • FUNCTIONAL-LEVEL MANAGERS • FIRST-LEVEL/FRONTLINE MANAGERS

TYPES OF CONTROL • PERSONAL CONTROL (FACE-TO-FACE) • OUTPUT CONTROL • DON’T CONTROL PROCESS, JUST OUTPUTS • E.G., WITH SUPPLIERS • BEHAVIORAL CONTROL • RULES & PROCEDURES (PHYSICAL CONTROL TO ACHIEVE MENTAL CONTROL; MBO) • (IDEOLOGICAL/PRINCIPLES CONTROL) • TRUE BELIEVERS CAN BE LEFT ON THEIR OWN • (EMOTIONAL (INTELLIGENCE) CONTROL) • HOOK, LINE & SINKER • WEBER & TYPES OF AUTHORITY (TRADITIONAL, BUREAUCRATIC (LEGAL), & CHARISMATIC

ORGANIZATIONAL CUTURE • VISION, MISSION & GOALS • VALUES, NORMS & BELIEFS FOR THE LONG- , MID- , & SHORT-TERM • ORGANIZATIONAL SOCIALIZATION = HOW LEARN CULTURE • STRATEGIC LEADERSHIP & SYNC WITH ORG CULTURE

ADAPTIVE CULTURE • BECAUSE ENVIRONMENT CHANGES, ORGANIZATION MUST CHANGE (AS MUST CONTROL SYSTEMS & TYPES OF CONTROL) • PETERS & WATERMAN’S IN SEARCH OF EXCELLENCE • BIAS FOR ACTION: BE ENTREPRENEURIAL • NATURE OF MISSION: STICK TO THE KNITTING • HOW TO MOVE A FIRM: MOTIVATE & MOVE

PUTTING IT ALL TOGETHER • PP. 436-48 • GOOD ORG DESIGN, CONTROL SYS& CULTURE SHOULD LEAD TO • ABILITIES/CAPABILITIES TO EXECUTE • EITHER A SUCCESSFUL • COST LEADERSHIP STRATEGY • DIFFERENTIATION STRATEGY

ROLE OF SPACE/GEOGRAPHY • AS FIRM SCOPE AND SPREAD GROW, RELATIVELY FEW ALTERNATIVES (as long as stand-alone firms are the model) • CLASSICAL M-FORM VS. MORE RECENT M-FORM W/GLOBAL FUNCTIONS (P. 439) • REGIONAL HEADQUARTERS MODEL • MATRIX (WWII PROJECTS-->CIVILIANIZE) • PRODUCT LINE FOCUS USE PRODUCT-TEAM/CROSS FUNCTIONAL APPROACH

RESTRUCTURE & REENGINEER • BECAUSE ENVIRONMENT CHANGES, ADAPTIVE CHANGE NOT SUFFICIENT • THUS, RESTRUCTURING & REENGINEERING • RESTRUCTURING • STREAMLINE, DOWNSIZE & RIGHTSIZE • REENGINEERING • PROCESS REDESIGN & IMPROVEMENT • PROCESS MEANS ACTIVITY CHAIN THAT DELIVERS GOODS & SERVICES TO CUSTOMERS

IMPLEMENTING STRATEGIES IN FIRMS THAT COMPETE ACROSS INDUSTRIES & COUNTRIES BUS 189 CHAPTER 13 SPRING 2007

M-FORM STRUCTURE • THE AMERICAN WAY OF BIG BUSINESS • AMERICA’S MOST IMPORTANT ORGANIZATIONAL INNOVATION • CHARACTERISTICS • SEPARATE LONG-TERM & SHORTER-TERM DECISIONS: STRATEGIC & OPERATIONAL MGMT • EVERY DIVISION: OWN MANAGEMENT & COMPLETE SET OF RESOURCES & CAPABILITIES • DIVISIONS COMPETE FOR RESOURCES • HEADQUARTERS REWARDS & PUNISHES PLUS TRIES TO FIND SYNERGIES TO JUSTIFY “WHOLE GREATER THAN”

PROBLEMS W/ M-FIRM • STAND-ALONE MENTALITY • DUPLICATION OF RESOURCES • DIVISIONS COMPETE INSTEAD OF COOPERATE • TRANSFER PRICING • DISTORTION OF INFORMATION • PULL APART INSTEAD OF PULLING TOGETHER

CORP STRATEGY, STRUCTURE & CONTROL • P. 461 TABLE • INTERRELATIONSHIPS OF STRATEGY, STRUCTURE & CONTROL WHEN 3 DIFFERENT TYPES OF STRATEGIES: • UNRELATED DIVERSIFICATION • VERTICAL INTEGRATION • RELATED DIVERSIFICATION

STRATEGIES ACROSS COUNTRIES/BOUNDARIES • REALLY, BOUNDARIES MORE THAN COUNTRIES: WHY? • 4 WAY MODEL • LOCALIZATION (MULTI-LOCAL) • HIGH LOCAL RESPONSIVENESS, LOW GLOBAL COOR • INTERNATIONAL STRATEGY • CENTRAL FUNCTIONS AT HOME, OTHERWISE LOCAL • GLOBAL STRATEGY • CENTRALIZED, LOW COST STRATEGY ACROSS WORLD • TRANSNATIONAL STRATEGY • BALANCE OF LOCAL RESPONSIVENESS & GLOBAL COORD

IMPLEMENTATION ISSUES • MULTI-LOCAL STRATEGY • W/I BUT NOT ACROSS REGIONS COORD • INTERNATIONAL STRATEGY • INTERNATIONAL OR GLOBAL DIVISION TO TAKE CARE OF OVERSEAS/”OVER THERE” • NO PRODUCTS OF OWN, BUT MKT RESPLTY • GLOBAL STRATEGY • CENTRALIZE, STANDARDIZE & OPTIMIZE • TRANSNATIONAL STRATEGY • HILL & JONES-->MATRIX • BARTLETT & GHOSHAL-->NETWORK-LIKE FIRM

INTRAPRENEURING • IMPLEMENTATION ISSUES • DIFFERENT DIVISIONS HAVE DIFFERENT SYSTEMS & CULTURES • UNDERFUND, UNDER-REWARD & -PROMOTE • JOINT VENTURES & STRATEGIC ALLIANCES • ALIGNING VALUES, SYSTEMS & TAKE-AWAYS • MERGERS & ACQUISITIONS • NEW ORG DESIGNS, SYSTEMS & CULTURES • NOT EVERYTHING EQUALLY VALUABLE • STRATEGIC OUTSOURCING & NETWORKS • WHAT TO OUTSOURCE • HOW TO MANAGE OUTSOURCING FOR STRAT ADV?

ROLE OF IT: IMPLEMENTATION • TODAY, EVERYTHING IS INFORMATION & DIGITAL & OPEN (AT LEAST W/I FIRMS) • FOR THIS TO BE, ORGANIZATIONAL LEARNING & KNOWLEDGE MGMT SYSTEMS ARE MANDATORY • KNOWLEDGE BEGINS WITH LEARNING • LEARNING IS SPECIFIC, KNOWLEDGE GENERAL • VIRTUAL ORGANIZATIONS • NOT QUITE THERE • BEING THERE MAY NOT BE ALL THAT IT IS CRACKED UP TO BE (FOR REASONS OF IMPLEMENTATION) • WHAT PROBLEMS ARE LIKELY TO ARISE?

IMPLEMENTING STRATEGIES: SINGLE & MULTI-INDUSTRY/ COUNTRY ISSUES