Strategic Management Essays, The quality of your answer is much more important than its quantity. You do not need to use in-text citation, nor reference in answering the questions.
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Module11StrategyImplementationv22.pdf
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Learning Objectives
On successful completion of this modules students will be able to
Understand and appl McKinse s 7s to a strategic change initiati e Discuss the link between organisational structure, strategy and control Know the strategic change management process and the key issues
involved.
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Key Questions
1. What is McKin le 7S Frame ork for strategy implementation? What are the strengths and weaknesses of the main structural types? How do structure, systems and control align? How do skills, shared values, styles and staff contribute
2. What are the main types of strategic change?
3. What do we need to consider to when implementing a strategic initiative Diagnosing the change contexts, Leading Change, Managing Change programs Forcefield analysis, Leadership style, and Change levers.
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What changes to be made to put proposed strategy in action?
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A framework for strategy implementation McKinsey 7-S Framework: What to change
The three hard Ss of 7Ss
Strategy What is it? Corporate, business or functional Cooperative or go-alone?
Structure Structures give people formally defined roles, responsibilities and lines of reporting with regard to strategy. What organisational structure at the corporate and SBU levels is appropriate?
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LO1
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Structures, systems and their configurations
Systems Systems support and control people as they carry out structurally defined
roles and responsibilities. They include Operating systems, Information systems, Control systems, Financial and budgeting systems,
Decision-making system, Reward systems
Configurations are the mutually supporting elements that make up an organisation s design.
How strategy, structure and systems should be aligned and balanced to effectively pursue the organisation s strateg
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Building blocks of organisational structure
Differentiation - specialization It is the way in which a company allocate people and resources to organisational tasks to create value.
Vertical differentiation It is concerned with the distribution of decision-making authority in the organization to control the value creation.
Horizontal differentiation It is concerned about how to divide people and tasks into functions and divisions to increase their ability to create value
Integration - coordination It refers to the coordination of people and functions to accomplish organizational tasks.
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Corporate centre
Division BDivision A Division C
Production Marketing Accounting
SBU A
Horizontal differentiation (basic type of
organisational structure)
V e
rtica l d
iffe re
n tia
tio n
Strategic control processes
The configuration of an organization
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Structural types
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Functional Multidivisional
Matrix Multinational/ Transnational
Project-based
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The functional structure
The functional structure divides responsibilities according to the organisation s primary specialist roles such as production, research and sales.
e.g., most small- or medium-sized businesses, or SBUs in a large corporation
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A Functional Structure
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The multidivisional structure
The multidivisional structure is built up of separate divisions on the basis of products, services or geographical areas.
It is widely used in most of corporations competing in the global economy, such as BHPBilliton, Wesfarmers
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A Multidivisional Structure
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The matrix structure
The matrix structure combines different structural dimensions simultaneously, for example product divisions and geographical territories or product divisions and functional specialisms.
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A Matrix Organisation in a School
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A Multinational Matrix Structure
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Systems and control
Planning systems They plan and control the allocation of resources and monitor their utilisation Control systems
Input vs output, direct vs indirect
Cultural systems Selection, socialisation, and reward
Performance targeting systems Key Performance Indicators (KPIs)
Information systems What information will be collected, distributed, and used? How, and Why, by whom?
Operational systems Process, quality control, order processing, inventory
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The Four Soft Ss
Skills Do we have the skills needed to implement the strategy proposed What new skills are needed?
Staff Do we need to recruit new staff, particularly new senior and middle managers?
Style What management style do we need to implement the Change This will be covered in change management
Shared value (Culture) Vision, missions, strategic goals
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2. WHAT ARE THE MAIN TYPES OF STRATEGIC CHANGE?
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Types of strategic change
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Types of strategic change
Four types of strategic change: Adaptation – can be accommodated with the existing culture and can occur incrementally.
e.g., new service development, related diversification/M&As
Reconstruction (Turnaround) – rapid change but without fundamentally changing the culture.
The strategy is clear, but implementation is the major problems in Realignment New strategic alignment or adjustment: The change needed for Myer currently
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LO3
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T pes of strategic change (cont d)
Revolution – fundamental changes in both strategy and culture. e.g., AMP
Evolution both strategic and cultural changes are required but this can be accomplished over time.
New strategic direction and new organisational culture are needed in Transformation e.g., CBA?, many organisations in public sector, such as WA Police (changed its culture from WA Police Force to WA Policing Services)
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What do we need to consider to when implementing a strategic initiative
Diagnosing the change contexts, Leading Change, Managing Change programs Forcefield analysis, Leadership style, and Change levers.
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Diagnosing the change situation
Types of strategic change
The context of change
Forcefield analysis
Styles of change leadership
Levers for change
A compelling case for change
Changing the taken-for-granted
Changing operational processes & routines
Symbolic changes Power & political systems
Education; collaboration; participation; direction; coercion
Change tactics
Analysing
Thinking/ preparing
Implementing
A framework of managing strategic change
The importance of context - The Change Kaleidoscope
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Forcefield analysis
A forcefield analysis provides an initial view of change problems that need to be tackled by identifying forces for and against change.
Various concepts and frameworks are useful here: Stakeholder mapping. The culture web. The 7-S framework.
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Strategic leadership roles
Leadership is the process of influencing an organisation (or group within an organisation) in its efforts towards achieving an aim or goal.
Three key roles in leading strategic change: Envisioning future strategy. Aligning the organisation to deliver that strategy. Embodying change.
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Styles of managing change
Education/ Delegation
Participation Collaboration
Direction Coercion
Styles of Managing Change
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Styles of managing change (1)
Education and delegation – Small group briefings to discuss and explain things. The aim is to gain support for change by generating understanding and commitment.
Advantages – Spreads support for change. Ensures a wide base of understanding. Disadvantages – Takes a long time. For radical change it may not be enough to convince people of the need for change. Easy to voice support, then do nothing.
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Styles of managing change (2)
Collaboration – Widespread involvement of the employees on decisions about what and how to change.
Advantages – Spreads not only support but ownership of change by increasing levels of involvement.
Disadvantages – Time-consuming. Little control over decisions made. May lead to change within existing paradigm.
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Styles of managing change (3)
Participation – Involvement of employees in how to deliver the desired changes. May include limited collaboration o er aspects of ho to change as ell as
hat to change. Advantages – Spreads ownership and support of change, but within a more controlled framework. Easier to shape decisions. Disadvantages – Can be perceived as manipulation.
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Styles of managing change (4)
Direction – Change leaders make the majority of decisions about what to change and how. Use of authority to direct change.
Advantages – Less time-consuming. Provides a clear change of direction and focus. Disadvantages – Potentially less support and commitment, and therefore proposed changes may be resisted.
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Styles of managing change (5)
Coercion – Use of power to impose change. Advantages – Allows for prompt action. Disadvantages – Unlikely to achieve buy-in without a crisis.
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Styles of change leadership according to organisational capability and readiness
Levers for change
A compelling case for change
Challenging the taken-for- granted
Changing operational processes and routines
Symbolic changes
Power and political systems
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Kotter’s eight steps for change
Source: J. Kotter, Leading change: h transformation efforts fail , Harvard Business Review, March April, 1996, p. 61.
Module summary
We have Discussed the link between organisational structure, strategy and control Identified and appl McKinsle s 7s to a strategic change initiati e Discussed the strategic change management process.
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We have addressed the following key questions
1. What is McKin le 7S Frame ork for strategy implementation? What are the strengths and weaknesses of the main structural types? How do structure, systems and control align? How do skills, shared values, styles and staff contribute
2. What are the main types of strategic change?
3. What do we need to consider to when implementing a strategic initiative Diagnosing the change contexts, Leading Change, Managing Change programs Forcefield analysis, Leadership style, and Change levers.
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Next Week
Module 12 Course Summary
Further explanation to the final assessment
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