Strategic Management week 7 Discussion

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chapter 10 Building an Organization Capable of Good Strategy Execution

Arthur A. Thompson The University of Alabama

An e-book published and distributed by McGraw Hill Education

Sixth Edition of Strategy: Core Concepts and Analytical Approaches (2020-2021). Arthur A. Thompson, The University of Alabama. Published and distributed by McGraw Hill Education. Image of globe comprised of puzzle pieces with several pieces dislodged and scattered below the globe. Chapter 5 The Five Generic Competitive Strategy Options: Which One to Employ

“Strategies most often fail because they aren’t executed well.”

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Larry Bossidy, former CEO Honeywell International, and Ram Charan, author and consultant

“A second-rate strategy perfectly executed will beat a first-rate strategy poorly executed every time.”

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Richard M. Kovacevich, former Chairman and CEO, Wells Fargo

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Costas Markides, professor

“Any strategy, however brilliant, needs to be implemented properly if it is to deliver the desired results.”

“People are not your most important asset. The right people are.”

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Jim Collins, professor and author

“Organizing is what you do before you do something, so that when you do it, it is not all mixed up.”

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A. A. Milne, author of Winnie the Pooh

Learn the eight managerial tasks that underpin successful strategy execution.

Gain command of the three types of organization-building efforts critical to good strategy execution.

Understand the hows and whys of acquiring, developing, and upgrading the resources, competencies, and capabilities needed to execute strategy successfully.

Recognize what issues to consider in organizing the work effort and why strategy-critical activities should be the main building blocks of the organizational structure.

Become aware of the pros and cons of centralized and decentralized decision making in implementing and executing the chosen strategy.

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Chapter Learning Objectives

A Framework for Executing Strategy

Building an Organization Capable of Good Strategy Execution: Three Key Actions

Staffing the Organization

Developing and Strengthening Execution-Critical Resources and Capabilities

Structuring the Organization and Work Effort

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Chapter 10 Roadmap

Crafting the Strategy

Is a market-driven activity

Successful strategy making depends on:

Business vision

Perceptive analysis of market conditions and the firm’s capabilities

Shrewd market positioning

Outcompeting rivals

Creating and deploying resources and capabilities to forge a competitive advantage

Executing the Strategy

Is an operations-driven activity

Successful strategy execution depends on doing a good job of:

Organization-building and people management

Continuously improving how activities are performed

Motivating/rewarding people in ways that support good execution

Creating and nurturing a strategy-supportive culture

Instilling a discipline of getting things done

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Crafting versus Executing Strategy

It is much easier to develop than to execute a sound strategic plan and achieve its desired outcomes because:

A wide array of managerial activities must be attended to

There are many ways to put new strategic initiatives in place and keep things moving—which approach(es) to employ and when/how to make needed adjustments is not managerially simple

Bedeviling issues crop up and have to be resolved

Executing strategy tests the ability of managers to:

Direct organizational change to achieve continuous improvement in operations and business processes and thus build/strengthen competitive capabilities

Marshal organization-wide support and enthusiasm for executing the strategy as proficiently as possible

Consistently meet or beat performance targets

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Strategy Execution Is Tougher Than Strategy-Making

Implementing and executing strategy requires that a firm’s whole management team and all employees be actively involved in the strategy execution process

Top-level managers must lead the process and orchestrate the big initiatives

Middle and lower-level managers must see that all goes well in their areas of the organization

Employees must perform their individual roles competently

The strategy execution process involves every part of the enterprise—all value chain activities, all organizational units, and all company personnel.

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Executing Strategy Is a Team Effort

Strategic Insight

Ideally, senior managers need to create a companywide crusade to implement and execute the chosen strategy as fast and effectively as possible.

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Core Concept

Good strategy execution requires a team effort:

All managers have strategy-executing responsibility in their areas of authority

All employees are active participants in the strategy execution process

All company personnel in one way or another are actively involved in the strategy execution process.

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It takes adept managerial leadership to:

Convincingly communicate reasons for the new strategy

Overcome pockets of doubt

Secure commitment of concerned parties

Build consensus and enthusiasm

Get all implementation pieces in place and coordinated

It takes first-rate “managerial smarts” to zero in on what exactly needs to be done and how to get good results in a timely manner.

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Implementing a New Strategy Requires Adept Leadership

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A Framework for Executing Strategy

The managerial approach to implementing and executing a strategy always has to be customized to fit the particulars of a firm’s situation.

Making minor changes in an existing strategy differs greatly from implementing radical strategy changes

Some managers are more adept at using this or that approach to achieving desired organizational changes.

There is no one managerial recipe for strategy execution for all situations or for all types of strategies or for all managers.

Rather, the “to-do list” that constitutes management’s agenda for implementing and executing a given strategy always represents management’s judgment about how best to proceed in light of the prevailing circumstances.

Staffing the organization and developing the resources, capabilities, competencies, and organizational structure to execute strategy successfully

Steering the needed financial and organizational resources to execution-critical value chain activities

Ensuring that policies and procedures facilitate rather than impede strategy execution

Adopting best practices and employing process management tools to drive continuous improvement in how value chain activities are performed

Installing information and operating systems that enable company personnel to carry out their strategic roles proficiently

Tying rewards and incentives directly to the achievement of strategic and financial targets

Instilling a corporate culture that promotes good strategy execution

Exercising strong leadership to drive the execution process forward

The Principal Managerial Components of the Strategy Execution Process

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FIGURE 10.1 The Eight Components of the Strategy Execution Process

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Strategic Insight

When strategies fail, it is often because of poor execution—needed actions are overlooked, lax oversight allows important details to slip through the cracks, key implementation approaches turn out to be ill chosen or mismanaged, or there is deficient motivation or slack effort on the part of company personnel to achieve the desired results.

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First assess what the organization must do differently and better to execute the strategy with a high degree of proficiency and meet or beat the targeted levels of financial and strategic performance

Each manager needs to ask the question:

“What needs to be done in my area of responsibility to implement our part of the company’s chosen strategy and what should I do to get these things accomplished in a manner that enables good strategy execution and produces the desired results?”

It is then incumbent on every manager to determine precisely how to make the necessary internal changes

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Devising an Action Agenda to Implement and Execute a Strategy

CORE CONCEPT

The two best signs of good strategy execution are:

Whether a firm is meeting or beating its performance targets

Whether it is progressing well along the path to attaining real proficiency in performing strategy-critical value chain activities.

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Staffing the organization

Putting together a strong management team, and recruiting and retaining employees with the needed experience, technical skills, and intellectual capital.

Acquiring, developing, and strengthening the resources and capabilities important to good strategy execution

Accumulating the required resources, developing competitively strong proficiencies in performing strategy-critical value chain activities, and updating the company’s resources and capabilities to match changing market and competitive conditions.

Structuring the organization and work effort

Organizing value chain activities and business processes and deciding how much decision-making authority to push down to lower-level managers and frontline employees

Building an Organization Capable of Good Strategy Execution: Three Key Actions

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FIGURE 10.2 Building an Organization Capable of Successful Strategy Execution: Three Key Actions

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Core Concept

Putting together a talented management team with the right mix of experiences, skills, and abilities to get things done is one of the first steps to take in launching the strategy execution process.

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One of the key organization-building tasks is filling managerial slots with smart people who are:

Clear thinkers

Good at figuring out what needs to be done

Skilled in “making it happen” and delivering good results

A capable management team ensures that the implementation-execution process is not hampered by wasted time and effort or managerial ineptness.

Staffing: Putting Together a Strong Management Team

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A company’s management team can be strengthened by:

Promoting qualified people from within and/or

Bringing in outsiders whose experiences, talents, and leadership styles better suit the situation

Overriding aim:

To assemble a critical mass of talented managers who will function as agents of change to further the cause of first-rate strategy execution

A firm needs to get the right executives on the bus— and the wrong executives off the bus—before trying to drive the bus in the desired direction.

Staffing: Putting Together a Strong Management Team (continued)

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The quality of an organization’s people is an essential ingredient of successful strategy execution

Knowledgeable, engaged employees are a firm’s best source of creative ideas for the nuts-and-bolts operating improvements that lead to operating excellence

The firm’s entire workforce (managers and rank-and-file employees) needs to be a genuine resource strength

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Recruiting and Retaining Capable Employees

Core Concept

It is difficult for a firm to competently execute its strategy and achieve operating excellence without recruiting and retaining a large band of very capable, actively engaged, high-achieving employees.

The best firms strive hard to make their entire workforce (both managers and rank-and-file employees) a genuine resource strength.

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Spend considerable effort in screening and evaluating job applicants, selecting only those with:

Suitable skill sets

Energy, initiative, and judgment

Aptitudes for learning and adaptability to the firm’s work environment and culture

Put employees through training programs that continue throughout their careers

Provide promising employees with challenging, interesting, and skill-stretching assignments

Rotate people through jobs that have great content and span functional and geographic boundaries

Best Practices to Attract and Retain Talented Employees

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Encourage employees to:

Challenge existing ways of doing things and propose better ways

Be creative and innovative

Push their ideas for new products or businesses

Make the work environment stimulating and engaging

Strive to retain talented, high-performing employees with attractive compensation and benefits

Coach average performers to improve their skills and weed out underperformers

Best Practices to Attract and Retain Talented Employees (continued)

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Good strategy execution requires:

Acquiring and developing the desired competencies and capabilities and integrating them into the appropriate value chain activities

Working diligently to improve how all execution-critical value chain activities are being performed

Modifying the resource/capability portfolio as needed to keep it well-matched to evolving market and competitive conditions

Creating dynamic and competitively valuable competencies and capabilities is an important organization-building priority

Developing and Strengthening Execution-Critical Resources and Capabilities

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Stage 1: The company must develop the ability to do something—however imperfectly or inefficiently—by selecting people with the requisite skills and experience, upgrading or expanding individual abilities as needed, and molding the efforts and work products of individuals into a collaborative effort to create organizational ability.

Stage 2: As experience grows and company personnel learn how to perform the activity consistently well and at an acceptable cost, the ability evolves into a tried-and-true capability or proven competence. If the competence is a key part of executing the firm’s strategy, then it qualifies as a core competence.

Stage 3: The third stage involves an ongoing effort to polish, refine, and otherwise sharpen the performance of a capability or competence, aiming not just for incremental improvements but, ultimately, for best-in-industry or best-in-world proficiency, the core competence evolves into a competitively superior distinctive competence, thus providing a path to competitive advantage.

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Developing and Strengthening Capabilities Internally: Three Stages

Many firms get through stages 1 and 2, but few achieve enough proficiency in performing strategy-critical activities to reach the third stage of dominating competitive advantage.

The key to building a distinctive competence (or competitively superior capability) is concentrating more talent/effort than rivals on strengthening the competence/capability needed for competitive advantage.

This does not require outspending rivals on building a competence or capability. It does mean consciously focusing more talent on strengthening the competence or capability and striving for best-in-industry, if not best-in-world, status.

Important Traits of the Process of Building Competencies and Capabilities

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Core Concept

Building competencies and capabilities is a three-stage process that occurs over a period of months and years. It is not accomplished overnight.

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Acquisitions and mergers are often used to upgrade and/or build a stronger present portfolio of competencies and capabilities when speed is of critical importance because:

A market opportunity can often slip by faster than a needed capability can be created or developed internally

When industry conditions, technology, or competitors are moving at a rapid clip then time is of the essence in developing the capability to capture the opportunity

Developing and Strengthening Capabilities via Acquisition or Merger

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There are three basic ways to obtain needed capabilities via collaboration with outsiders:

Outsource a capability-deficient function to a key supplier or another provider having attractively strong capabilities.

Work collaboratively with key suppliers to achieve such valuable and mutually beneficial capabilities as just-in-time inventory management, speedy design and delivery of parts and components for new products, and defect-free or more durable parts and components.

Establish alliances or collaborative working relationships with one or more firms having valuable expertise and know-how for the purpose of sharing information, learning how each other does things, sharing certain resources and capabilities, or contributing resources to a joint venture of mutual interest.

Accessing Needed Capabilities via Collaborative Partnerships

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Core Concept

A company’s competencies and competitive capabilities must be continually refreshed and recalibrated to remain aligned with changing customer expectations, ever-evolving competitive conditions, and a company’s own strategic initiatives to outcompete rivals.

This refreshment and recalibration is what is meant by the term dynamic capabilities. Ongoing managerial efforts to build a dynamic set of competencies and capabilities is why it is appropriate to view a firm as a “bundle of evolving competencies and capabilities.”

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It takes freshly honed, cutting-edge competencies and competitive capabilities to:

Stay abreast of changes in customer needs and expectations

Combat competitors’ offensives to win bigger sales and market shares and their efforts to strengthen their competencies and capabilities

Keep the firm’s resource portfolio in step with strategy changes

Build a more durable resource-based competitive edge over rivals

A firm’s competencies and competitive capabilities must be dynamic and constantly recalibrated to remain in step with evolving competitive circumstances.

Maximizing the Competitive Power of Competencies and Capabilities: The Challenge of Dynamically Managing a Company’s Resource/Capability Pool

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Building a dynamically evolving set of competencies and capabilities with maximum competitive power entails:

Making capability-building a companywide priority

Senior executives must insist on ongoing efforts to strengthen the company’s resource/capability portfolio in performing value chain activities

Deciding when and how to recalibrate existing competencies and capabilities, and either having the foresight or spotting opportunities to develop new or innovatively-enhanced competencies and capabilities.

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Building Dynamic Capabilities: The Managerial Challenges

The organizational momentum that comes from astute and timely managerial efforts to develop a competitively formidable portfolio of dynamic capabilities often results in

Greater ability to attract new customers

Increases in sales revenues

Higher profitability

The Benefits of Dynamic Capabilities

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Training and retraining are important when:

A firm shifts to a strategy requiring different skills, competitive capabilities, and operating methods

A firm is striving to build skills-based competencies

Technical know-how is changing so rapidly that a firm loses its ability to compete unless its skilled people have cutting-edge knowledge and expertise

Better execution of the chosen strategy calls for new skills, deeper technological capability, or building and using new capabilities

In all such instances, training must be placed near the top of management’s action agenda.

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The Strategic Role of Employee Training

The Importance of Out-Executing Close Competitors

Strong core competencies and competitive capabilities are key factors in securing a sustainable competitive edge over rivals when it is relatively easy for rivals to copy smart strategies.

When rivals can duplicate the successful features of a firm’s product or quickly imitate its maneuvers in the marketplace to attract customers, the only dependable path to durable competitive advantage is to out-execute them by performing certain value chain activities in superior fashion.

Because a first-mover’s competitively powerful resources and capabilities are time-consuming and expensive to match or overpower, the competitive edge they produce in the form of superior strategy execution capabilities tends to be sustainable

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Translating Resources and Capabilities into Competitive Advantage

Strategic Insight

A superior capability to execute strategy better than rivals is the only path to sustainable competitive advantage when a firm’s product features and strategy are easy for rivals to copy.

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Strategic Insight

When company managers deliberately strive to develop a portfolio of resources and capabilities that enable superior strategy execution, the door to creating a sustainable competitive advantage over rivals opens up.

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Each firm’s organizational structure is partly a product of its own situation, reflecting:

Prior organizational patterns and internal circumstances

Executive judgments about reporting relationships

The politics of who gets which assignments

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Structuring the Organization and Work Effort

FIGURE 10.3 Structuring the Work Effort to Promote Successful Strategy Execution

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Outsourcing the performance of assorted administrative support functions and perhaps even selected core or primary value chain activities to outside vendors offer the potential to improve strategy execution by enabling a company to

Heighten its strategic focus

Concentrate its full energies and resources on even more competently performing those value chain activities at the core of its strategy and for which it can create unique value

Deciding Which Value Chain Activities to Perform Internally and Which to Outsource

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Heightened focus on performing strategy-critical activities can yield three important execution-related benefits:

Improved chances for outclassing rivals in performing strategy-critical activities and turning a core competence into a distinctive competence

A streamlining of internal operations that acts to

Decrease internal bureaucracies

Flatten the organization structure

Speed internal decision making

Shorten the response time to changing market conditions

Added ability to draw on partnerships with outsiders to add to a firm’s arsenal of capabilities

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Execution-Related Benefits of Astute Outsourcing

Core Concept

Wisely choosing which activities to perform internally and which to outsource can lead to several strategy-executing advantages:

Lower costs

A heightened strategic focus

Less internal bureaucracy

Speedier decision making

A better arsenal of competencies and capabilities

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Outsourcing is best for strategically less important activities:

Handling customer inquiries and providing technical support

Doing the payroll and administering employee benefit programs

Providing corporate security

Managing stockholder relations

Maintaining fleet vehicles

Operating the firm’s web site

Conducting employee training

Handling certain information and data processing functions

A firm is not the master of its own destiny unless it maintains expertise and resource depth in performing those value chain activities that underpin its long-term competitive success.

Guarding Against Outsourcing the Wrong Things

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Making organizational units that perform execution-critical value chain activities centerpieces of the enterprise’s organizational structure has the advantages of:

Helping ensure these organizational units have adequate decision-making influence

Increasing the likelihood they will be allocated ample resources to execute their piece of the strategy capably

Making Strategy-Critical Value Chain Activities the Main Building Blocks of the Organization Structure

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A single business is usually organized around one of two types of organizational building blocks:

Traditional functional departments

Process departments (a work unit with full responsibility for a performing all aspects of a particular process)

In firms with global operations (or with geographically scattered organizational units within a country), the basic building blocks often include geographic organizational units in addition to functional and/or process departments

In vertically integrated firms, the major building blocks are divisional units performing the major processing steps along the value chain

A diversified firm’s typical building blocks are its individual businesses

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What Types of Organization Structures Fit Which Strategies?

Firms must decide:

How much authority to delegate to the managers of each organization unit

How much decision-making latitude to give individual employees in performing their jobs

Options for organizing decision-making authority are to:

Centralize decision making at the top (the CEO and a few other top managers)

Decentralize decision making by giving mid- and lower-level managers and employees considerable decision-making latitude in their areas of responsibility

Determining How Much Authority to Delegate

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TABLE 10.1 Advantages and Disadvantages of Centralized vs. Decentralized Decision Making

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In a highly centralized organization structure, top executives retain authority for most strategic and operating decisions by:

Keeping a tight rein on business-unit heads, department heads, and the managers of key operating units

Granting little discretionary authority to frontline supervisors and rank-and-file employees.

The thesis underlying command-and-control authoritarian structures is that strict enforcement of detailed procedures backed by rigorous managerial oversight is the most reliable way to keep the daily execution of strategy on track

Tight control by the manager in charge makes it easy to know who is accountable when things do not go well.

Centralizing decision-making at the top reduces the potential for conflicting actions and decisions on the part of lower-level managers

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Centralized Decision Making: The Advantages

Centralized decision-making has important weaknesses:

Command-and-control structures make an organization sluggish in responding to changing conditions because of the time it takes for the review/approval process to run up all the layers of the management bureaucracy—long response times can be problematic

It is difficult for high-level executives far from the scene of the action to have full understanding of the situation and make wise decisions

Top managers have too much room to micromanage activities that are best delegated to personnel close to the scene of the action

Lower-level managers and rank-and-file employees are discouraged from exercising any initiative. They are expected to wait to be told what to do.

Command-and-control from above does not encourage lower-level managers and rank-and-file employees to be responsible or accountable for their actions or to exercise any initiative for improving things.

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Centralized Decision-Making: The Disadvantages

Decision-making authority is pushed down to the lowest organizational level capable of making timely, informed, competent decisions.

Puts decision-making authority in the hands of the people closest to and most familiar with the situation and trains them to weigh all the factors and exercise good judgment

Top management maintains adequate control by:

Placing limits on the authority that empowered personnel can exercise

Holding people accountable for their decisions

Instituting compensation incentives that reward people for doing their jobs in a manner that contributes to good company performance

Creating a corporate culture where there is strong peer pressure on individuals to act responsibly

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Decentralized Decision Making: The Advantages

Delegating greater authority to managers and employees creates a horizontal organization structure with fewer management layers and less management bureaucracy:

Employees have latitude to develop their own answers and action plans because deciding how to do things is part of each person’s or team’s job, rather than having to go up the ladder of authority for an answer

Pushing decision-making authority down to the heads of business units, departments, and operating units and then further on to work teams and individual employees:

Shortens organizational response times

Spurs new ideas, creative thinking, innovation, and greater involvement on the part of subordinate managers and employees

Promotes higher employee morale and productivity

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Decentralized Decision Making: The Advantages (continued)

Higher-level managers lack “full control” to the extent they may be unaware of actions taken by empowered personnel under their supervision

Such lack of control can put a firm at risk in the event that empowered employees happen to make unwise decisions

Cross-unit collaboration is impaired if decentralization gives organizational units too much authority to act independently, with no obligation to coordinate or cooperate with other organizational units

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Decentralized Decision-Making: The Disadvantages

Diversified firms striving to capture cross-business strategic fits must not give business heads total authority to operate independently when cross-business collaboration is essential to capturing strategic-fit benefits

Cross-business strategic fits typically must be captured by:

Enforcing and rewarding close cross-business collaboration

Centralizing performance of business-level functions and activities with strategic fits at the corporate level

For example, centralizing the related activities of separate businesses makes sense when there are opportunities to share a common sales force, use common distribution centers, rely on a common field service organization to provide maintenance and repair services, use common e-commerce systems and approaches, and economize on administrative costs by utilizing a common administrative infrastructure to perform support activities for each business unit

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Capturing Strategic Fits in a Decentralized Structure

Close cross-unit collaboration

Builds core competencies and competitive capabilities into activities that involve employees scattered across several internal organization units and, in some instances, employees of outside strategic partners or specialty vendors.

Requires reengineering the organizational structure to pull the pieces together into process departments (like customer service)

Other coordinating mechanisms include

Strong executive-level insistence on teamwork and cross-department cooperation (including removal of managers who resist collaborative efforts)

The use of cross-functional task forces

Incentive compensation tied to performance of cross-unit tasks

Providing for Internal Cross-Unit Coordination

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Strategic Insight

Getting managers of execution-critical activities to voluntarily but conscientiously live up to their promises and commitments to coordinate closely with sister organizational unit turns out to be the key factor in achieving good internal cross-unit coordination.

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Filling customer orders accurately and promptly.

Fast, ongoing introduction of new products.

Improving product quality.

Supply chain management.

Building the capability to conduct business via the Internet.

Obtaining feedback from customers and making product modifications to meet their needs.

These types of activities require close cross-department coordination and collaboration

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Strategy-Critical Activities that Cut Across Different Functions

Building organizational bridges with strategic partners and external allies is best accomplished by appointing “relationship managers” who have responsibility and authority for:

Getting the right people together

Promoting good rapport and information-sharing

Nurturing interpersonal cooperation and communication

Ensuring effective coordination

Unless top management sees that constructive organizational bridge-building with external partners occurs and that productive working relationships emerge, the value of partnerships and alliances is lost and the firm’s power to execute its strategy is weakened.

Providing for Collaboration with External Partners and Strategic Allies

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If close collaboration with key suppliers is crucial, then designated people in the firm’s supply chain organization must be tasked with responsibility for:

Establishing routine communications with these key suppliers (via telephone, e-mail, instant messaging, online teleconferencing, and face-to-face meetings)

Making sure that information flows freely both ways and in a timely manner

Facilitating or personally coordinating all of the company’s cooperative actions with these suppliers.

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Collaboration with External Partners

Strategic Insight

Organizational capabilities emerge from a process of consciously knitting together the efforts of different work groups, departments, and external

allies.

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FIGURE 10.1 The Eight Components of the Strategy Execution Process, Text Alternate

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The Action Agenda for Implementing and Executing Strategy:

What to change or improve? How to get it done?

Staffing the organization and developing the resources, capabilities, competencies, and organizational structure to execute the strategy successfully.

Steering the needed financial and organizational resources to execution-critical value chain activities.

Ensuring that policies and procedures facilitate rather than impede strategy execution.

Adopting best practices and employing process management tools to drive how value chain activities.

Installing information are performed and operating systems that enable company personnel to carry out their strategic roles proficiently.

Tying rewards and incentives directly to the achievement of strategic and financial performance targets.

Instilling a corporate culture that promotes good strategy execution.

Exercising strong leadership to drive the execution process forward and attain companywide operating excellence as rapidly as feasible.

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FIGURE 10.2 Building an Organization Capable of Successful Strategy Execution: Three Key Actions, Text Alternate

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A well-staffed company with the Resources, Competencies, Capabilities, and Organizational Structure to Execute Strategy Successfully.

Staffing the organization:

Putting together a strong management team.

Recruiting and retaining talented employees.

Acquiring, Developing, and Strengthening the Resources and Capabilities Important to Good Strategy Execution:

Building competitively strong proficiencies in performing strategy-critical value chain activities.

Updating the Competitive value of the firm’s resources and capabilities as externa conditions and the firm’s strategy change.

Training and retraining company personnel as needed to maintain knowledge-based and skills-based capabilities.

Structuring the Organization and Work Effort

Instituting organizational arrangements, lines of authority, and reporting relationships that facilitate good strategy execution.

Deciding how much decision-making authority to delegate to lower-level managers and frontline employees.

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FIGURE 10.3 Structuring the Work Effort to Promote Successful Strategy Execution, Text Alternate

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An organization structure matched to the requirements of successful strategy execution.

Decide which value chain activities to perform internally and which ones to outsource.

Make internally performed strategy-critical activities the main building blocks in the organization structure.

Decide how much authority to centralize at the top and how much to delegate to down-the-line managers and employees.

Strategic Management week 7 Discussion

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