STRATEGIC FORMULATION USING THE SWOT MATRIX: A
PRACTICAL APPROACH
ARIZONA STATE UNIVERSITY
WPC 480 - STRATEGIC MANAGEMENT
WEEK 5
A. Learning Outcomes:
The orientation of learning outcomes at the eleventh meeting is that students can
conduct business analysis using the SWOT matrix method and can determine what strategies
are appropriate to use in facing competition.
B. Material:
1. Swot Analysis, Opportunity Search and Portfolio Analysis in Strategy Formulation
a. SWOT Matrix Strategy Formulation Method:
1) SWOT Analysis:
To develop the right strategy, you need to integrate two analyses: an internal analysis
of your company with the external environment and an industry analysis to identify
external opportunities and threats. The two analyses are integrated to provide an analysis of
ULPA, opportunities, threats, strengths and weaknesses. Analytical strategy formulation is
commonly known as SWOT analysis, or strengths, weaknesses, opportunities, or threats
(Kotler. 2012).
SWOT analysis is an analytical framework that integrates into the external and
internal environment of the company by building a SWOT approach. The SWOT analysis
approach is a traditional analytical tool that integrates external and internal perspectives
(Kotler. 2012).
As a result of the SWOT analysis, the company should strive to improve its resource
capacity and capabilities. All this should be dictated in the context of strategic competition.
SWOT analysis can basically provide an overview of how you need to work to establish a
basic view for developing the capabilities and resource capabilities of the company
(Kaplan, et, al., 2001). The basic view of enterprise resource development is called the
resource-based view or RBV.
The RBV (Resource Based View) is an important view of strategic managers for
supports the preparation of strategic analysis. The key to this strategic analysis is the need
to investigate opportunities and threats from the external environment and systematically
compare internal resources and capabilities in the form of company strengths and
weaknesses with a structured approach (Kotler. 2012).
The most important thing in the first level of SWOT analysis is to provide strategic
design expertise, the basis of expertise that can be used to the company's advantage. This
must be done to coordinate or adjust the opportunities that the organization can obtain
while surviving in the face of threats from the external environment. From the results of
the SWOT analysis, the following results were obtained (Kotler. 2012):
a) Identify the benefits of your company's resources, capabilities, and competitiveness.
b) Identify company resources and competitive weaknesses.
c) Identify threats to the company's future profits.
In addition to the analysis results, you can also get value from the SWOT analysis
results:
a) A brief description of the results of the SWOT analysis, especially the conclusions
regarding the overall state of the company.
b) Coordinating existing resources with appropriate or superior corporate strategies to
increase market opportunities, and efforts to correct existing weaknesses and defend
against dangerous external threats.
Case Example: Higher Education Institution
The following aspects describe degree programs related to the external and internal
environment.
a) University External Environment (IPT):
(1) Graduate user companies
(2) Families and parents
(3) Courses that already exist in other IPTs
(4) Demographic population
(5) Information from government agencies related to the implementation of IPT that
provide scholarships is very important for program managers. Information is
available for example from the Directorate General of Higher Education, the
Coordinator of Private Universities (Kopertis), or the Association of Private
Universities (APTISI).
b) Internal College Environment:
(1) College image
(2) Competencies personnel teaching and education personnel
(3) Adequate learning facilities
(4) Attraction of students who are studying
(5) Cost organizing of education that is sufficient
(6) Focus on research and science development
(7) Senate and foundation credibility
SWOT analysis is essentially a decision-making process. You can conduct a SWOT
analysis as a group or individually as part of the decision-making process. There are
specific recommendations. The group approach is excellent at providing organization,
clarity, objectivity and focus.
c) External Environment Research on External Opportunities and Risks As strategic
decision-makers for their institutions, IPT managers need to have a comprehensive
insight into the course's external environment. Decision-makers should keep an eye
on any developments that are closely related to higher education. After all, this is
certainly not just an understanding, but also expecting the right decisions.
All information about the economy, demographic changes, and the
acceptability of working conditions and employment conditions for high school
graduates must be taken into account Information from parents, newspapers, college
magazines and conferences. These are all potential sources of information on which
to base decisions.
Taking into account the changing demographics of the local population can
provide opportunities to solve existing problems and pave the way for development.
You need to consider the state and development of industries or companies that
graduates of the courses offered by IPT can later adopt. Any different forms of
threats also need to be investigated. For example, parents of affected prospective
students may change their choices if economic conditions worsen. Private IPTs will
be affected if public schools receive more government support. Public interest in
existing IPTs, new courses, and new courses in the environment must be considered.
The number of graduates and the increasing interest of high school graduates in
general must also be taken into account.
Of course, it's also important to remember that opportunities and risks are not
absolute. You may not be able to immediately capitalize on what you initially see as
an opportunity because everything depends on internal conditions such as: B.
Organizational resources and community expectations. On the other hand, what we
perceive as weaknesses don't necessarily have to be. Now is the time to analyze your
company's strengths. There may be resources and efforts that can be applied to turn
these weaknesses into opportunities.
d) Survey of the Company's Internal Conditions:
The form of internal analysis carried out by a campus, to be able to attract new
students is to build a comprehensive educational marketing network, namely making
campus strengths as a basic strategy, for example optimizing big names,
achievements, education costs, education systems, facilities, and professional
teaching staff. All of these things are packaged in the form of marketing, so that the
message is conveyed and becomes useful information for recruiting new students.
Existing weaknesses such as accreditation, curriculum, facilities and
infrastructure, and so on need to be covered with the advantages they have. So that it
does not have the impact of decreasing the interest of new students. The most
important thing is to package excellence as an attraction, and involve competent
parties as marketing agents.
An internal strength IPT is usually not difficult to notice and analyze. There are
some possibilities that are the opposite of things that could be weaknesses. For
example, we could note that: The tuition is not too expensive for the target audience;
the strong dedication of the teaching staff and their motivation; a strong reputation
for providing necessary training for new employees; and diversity among the student
population.
SWOT analysis can be conducted en masse, and IPT can establish an
evaluation team responsible for conducting surveys, focus groups, interviews with
existing students and graduates, and a variety of sources others). Once the
weaknesses and strengths are clear, the team can review the points together.
2) SWOT Strategy Matrix:
Companies that have internal benefits with opportunities in the external environment are
in the first quadrant with a focus on growth (Kotler. 2012). The strategy options to be
implemented are market development strategy, product development strategy, market
penetration strategy, agglomeration growth strategy, horizontal integration strategy, and
forward integration strategy.
Market Development Strategy is a strategy to introduce new or existing products to new
market areas or segments. Product development strategy is a strategy to increase sales by
focusing on the development of new and existing products through the improvement of
existing products and stronger and more optimal marketing activities. Conglomerate growth
strategies are A strategy to expand a company's business activities and can be either internal
or external expansion through acquisitions. Horizontal integration strategies pursue ownership
of competitors and gain control over competitors by acquiring one or more companies that
also operate at the stage of the product marketing chain that forms the grand strategy. A
forward integration strategy is an attempt to take ownership or control over a distributor or
retailer.
Innovation Strategy is a company strategy that is oriented towards growth by
developing new products to increase production and sales capabilities. This strategy allows
the company to take better opportunities. Because the possibility of product innovation is to
have a positive effect or impression on the market, so the response rate is very high.
STUDY CASE PT TMI (TOTAL MANAGEMENT INSTITUTE)
Company Summary Data:
is a leading management training, research and consulting services company in
Indonesia. Although only recently established
For 10 years, the company has been ranked among the top 10 management training companies
in Indonesia. This ranking was issued by a leading business magazine in Jakarta, which
together with a research institute conducted a survey on management training services in
Indonesia.
This company has a mission to help organizations, whether they are business or non-
business organizations, carry out best management practices, both at the organizational, group
and individual levels (Rangkuti, 1998). The managers of this company believe that a good
concept should have practical aspects that should be utilized by the community management
of the organization. Therefore, this company emphasizes the continuous development of its
human resources. Whether it is a trainer (a term for training facilitator), researcher, or
consultant, they must continue to have insight into the organization.
Cutting-edge business concepts in accordance with their respective fields of expertise.
Although they strongly believe in management and business concepts, companies emphasize
their application to their clients or customers (Rangkuti, 1998). For them, if what is given in
training, recommended in consulting or products of their research publications, must have a
positive impact on the company, or has not been successful, is not a concept that they
consider good. They want anyone who uses TMI's services to be able to utilize them. So the
emphasis on the services provided by TMI is the implementation and results obtained by their
clients after getting services from TMI. Since the last 4 years, TMI has successfully obtained
ISO 9000:2000 certification for its Quality Management System in the field of training
services. This was felt necessary because TMI management feels that the demand for the
services they offer starts with trust in the institution and TMI now has the following 23 senior
trainers and 10 junior trainers. Five of the senior trainers are certified by international
organizations. Of the 33 senior trainers, some of them also act as consultants. For research
purposes, whose products are publications as well as knowledge for trainers and consultants,
there are eight researchers with one director. Three of these researchers are also involved in
training and consulting activities. For modules where TMI does not have the resources, TMI
has relationships with associate trainers, i.e. trainers from outside who are paid according to
the specific training. The composition of training with these associate trainers is about 25%.
The main users of TMI services are medium to large companies. Indeed, it is companies
like these that do have a training budget for their human resources, or a budget to use
consulting services. Similarly, for research, usually companies that use research services or
order business research are medium-sized and large companies. Since its orientation, TMI has
managed to have more than 11,000 people in its network, most of whom are in developed
companies in Indonesia. Generally, those who are satisfied with TMI's services recommend
the HR department where they are located, or send their subordinates to receive training
services at TMI.
After five years of operation, TMI managed to build its own building, a permanent 3-
story building with an area of 4000 m2 . This luxurious building consists of office spaces and
classrooms for training. The facilities provided, both in the office building and in the
classrooms, are high quality.
Training Services:
Of the three above, the Management training service is the service that accounts for
60% of TMI's revenue. The program or capital offered is actually not that distinctive, but TMI
always strives for the development of both the existing module material, or add to new
modules that are in demand by the market. The training products are divided into six major
groups:
a) Human Resource Management
b) Operations Management
c) Marketing Management
d) Financial Management
e) General Management
f) Strategic Management
In addition to the functional division, TMI also divides levels for its products. The
levels are entry level; middle manager and top manager. In addition to these main groupings,
TMI is sometimes also involved in the development of Taylor-made training, for example
TMI has developed special training for lecturers in universities. Some government agencies
also request for customized products, such as modules with the theme: "building the spirit of
entrepreneurship" in the institution of SOE.
To expand its services and communication efforts, TMI also runs business management
seminars. These seminars are used as a medium to present the results of its research institute's
publications or hot topics. From the seminar participants, TMI expects to build a network that
will later be utilized for training products and consulting services. This strategy seems to be
quite successful. As evidenced by the fact that 80% of the registrants for the modules in the 6
main areas above, which have been scheduled annually, meet the required quota. In fact, for
certain modules such as HR Management, there is often an excess of participants so TMI has
to add more training schedules. In general, the increase in revenue from this training division
has increased by 15%-30% per year.
The training services business situation in Indonesia is still growing. Apart from the
increasing awareness of companies to continue developing their human resources, this is also
because the economic situation is generally improving, so that companies have budget
allocations for training. However, this situation also implies the emergence of new training
service companies, which consider themselves established, do not need to rely on companies,
and should set up their own companies. These new companies, because of their relatively
small scale, are more flexible with their training rates. Many of them offer training rates
below those offered by TMI or similar companies, with relatively similar benefits.
In order to be perceived as an excellent training institution, TMI will seek more
certifications for its trainers, so as to be a clear differentiator from these new emerging
competitors.
Consulting and Research Services:
TMI's corporate consulting services can still grow because of the good network built by
the training division. Usually, these clients come from the trainees. For example, a person
who holds a position determine in a company following a particular training, and he or she is
interested in the concepts trained being introduced more widely and implemented in their
place.
Most of the demand for consulting services is still mostly on assessment/new employee
recruitment services. While this is not a potentially profitable service, its value is not very
high. Meanwhile, the resulting hassles and utilization of organizational resources are quite
high.
Compared to private companies, companies within the government are more interested
in becoming TMI clients. TMI management feels that the order book for consulting services is
still quite low. Revenue growth from consulting projects is still limited, irregular and
fluctuating. The low growth in the consulting division is related to the productivity of the
research division. So far, the research projects obtained by TMI are still limited, both in terms
of number and financial value. The same applies to the scope and depth of the studies. Most
of them are still in the form of orders from company, so the results should not be publicized.
Meanwhile, projects that should emerge from within are few in number. Not only because the
funding for research allocation is not much, but the ability of researchers and consultants to
write is still not very high. In fact, it is the main key to the success of research publications,
which will later raise the image of TMI. On the other hand, the dynamics of competition are
getting higher, especially from foreign companies. TMI management feels that the
opportunity to become a researcher, either self-funded or funded by third parties such as
government agencies or foreign NGOs, is still quite large.
The summarized data above, of course, is not enough to make a comprehensive SWOT
analysis, therefore, TMI Management tries to explore more information related to the external
and internal situation. From the results of the exploration, the Management team succeeded in
making a SWOT analysis, along with the proposed strategies to be implemented by TMI.
TMI: SWOT Analysis Strengths:
a) Become perpetrator services Management consulting services one of the top 10
b) Have a research division in developing consultant insights
c) Having certified trainers
d) The network of seminar participants is quite extensive
e) ISO 900:2000 certified
f) Own building
Weakness:
a) Limited research publications, and
b) Small research capability
Opportunities:
a) Development HR by the company is seen as important
b) More sources of external research funding
The important aspects of corporate strategy are threefold:
a) Comprehensive strategy, the company looks at all factors carefully, so that the strategy
set can provide better benefits. This method gives top management the opportunity to
look at various effective possibilities.
b) Take a look at market The company needs to examine market behavior. Whether the
products sold have characteristics commensurate with the market, so that they can be
attracted and purchased.
c) Good governance, the company must be able to use the management function as it
should, so that all resources and human power can be utilized carry out activities properly
and correctly.
In the corporate level strategy, there are several strategies that will be discussed,
including (Rangkuti, 1998):
a) A growth strategy:
This strategy is in its infancy and the company has plenty of resources, so it can maximize
existing potential and drive business growth.
b) Portfolio Strategy:
Another aspect that falls within the scope of business strategy, in addition to direction
setting strategy, is Portfolio strategy (Kusnandi, 2000). In this strategy, many things must be
considered, because the business has complex diversification:
(1) Mobilize all funds to maximize resource movement.
(2) Conduct periodic evaluations, so as to resolve internal and external issues.
Another strategy that is often used is portfolio management, which involves managing
an entire business unit based on experience.
Excellence:
(1) Top management cares more about the business unit, and pays attention to the entire
process.
(2) Top management is aware of external factors
(3) Management to maintain cash flow, so that operations are maintained
(4) Strengthen the work team, as a means of sharpening the objectives to be achieved.
Weaknesses of Portfolio Analysis:
(1) The company does not focus on one market
(2) Many business units, therefore, demand many strategy, so optimization is reduced
(3) Too market-focused, so conceptualization is lacking
(4) Difficult to apportion costs to various activities, thus risking a decrease in revenue.
c) Corporate Parenting:
To look at strategic parenting the steps are:
(1) Strengthening business unit fundamentals
(2) Primary/priority oriented
(3) Promote observation and analysis as the basis for strengthening business concepts.
d) Business Level Strategy:
The company focuses on competitive positioning, by observing the market and competition,
resulting in solutive actions against the risks it will face.
e) Functional Level Strategy
(1) The goal of your marketing strategy is to improve performance through the use of basic
such as segmentation, positioning and targeting, improving customer service, designing
special deliveries specialized and developing new market segments.
(2) The objective of the operational strategy is to improve operational performance through
the use of program boards to reduce costs, reduce staff, continue development, and
reduce work cycle times.
(3) The objective of the HR strategy is to improve operational performance by using
platforms such as programs employee engagement programs, multi-skills, employee
career planning, education and skill development, and skills, and increased participation.
(4) The objective of the technology strategy is to improve operational performance through
the use of infrastructure such as internal technology development, acquisition of new
technology, and use of technology information/computer devices.
(5) The purpose of R&D is to improve operational performance by using various strategies,
including: Competitive comparison, new product development, product alternative
analysis, and product quality improvement.
C. Exercise:
As a learning evaluation, students are asked to be able to:
1. Explain the concept of SWOT analysis theoretically!
2. Make a SWOT matrix of the company's business, based on the criteria of strengths,
weaknesses, opportunities, and threats!
STRATEGIC EVALUATION
A. Learning Outcomes:
The orientation of learning outcomes at the twelfth meeting is that students understand
the strategic evaluation process and are able to describe the evaluation results.
B. Material:
1. Key Processes of Strategic Evaluation:
The business environment is becoming increasingly dynamic as companies are an
important element of both domestic and foreign markets. Success today is not necessarily
success tomorrow. Economic conditions may be unstable, product life cycles may be short,
technical benefits may be short, and changes may occur frequently.
In accordance with the strategic plan, the monitoring carried out is strategic. There are
three things that are usually monitored by strategic monitoring, including (Fatimah, 2016):
a. Behavioral control, administrators can monitor with the support of various tools such as
policy rules, procedures, standard operating procedures (SOPs).
b. Monitoring results. Leaders need to pay attention to how results are achieved and their
quality. So that adjustments are made to each process.
c. Process supervision, not only the results need to be reviewed, the process is actually the
most crucial stage, so the role of leaders in reviewing is very important.
d. Supervision of resources, leaders need to realize that optimization is not only in terms of
employees, but the support of work facilities must be adequate and appropriate.
Evaluating strategy is an art in itself. If we judge managers too strictly, it could lead to
something counterproductive and could also incur high costs. On the contrary, if the
evaluation is done loosely, the condition can definitely get worse (Warren, 2008).
As with any monitoring process, any mention of an evaluation process and control
strategy begins with establishing what is to be evaluated or measured by setting criteria
performance and take measurements. If this does not meet expectations, corrective action
must be taken. There are several things you can do with strategic evaluation, including
(Porter, 1997):
a. Decide what to measure:
In the early days of business science development, companies often focused only on
financial analysis (Fatimah, 2016). This is a pretty weak point, as everything is based on
analyzing the past. The process and implementation of the strategy evaluates what needs
to be done. You need to focus on the most important items, which play the biggest role
in spending or other performance issues. Traditionally, companies believe that strategic
evaluation only evaluates the company's performance based on various questions,
including: Has its wealth increased? Has your profitability increased? Has your
productivity increased? How is your return on investment? ROI = net profit after tax /
total assets (%) and many other assumptions, if the above indicators are satisfactory, it
means that our strategy is working as expected. However, this type of method can be
misleading. Because the company's strategy is not only short-term, but also long-term.
b. When conducting actual performance measurement, it is necessary to measure at a
specified time (Fatimah, 2016). For example, meetings are held once every three
months. The impetus is felt in the evaluation session. In formal situations, managers are
usually encouraged to look their best so that they can perform the best activities. The
existence of an appraisal period can be a psychological effect for employees, so that it
becomes a concern, that work is supervised, assessed, and given reciprocity. This
system can help companies strengthen morale, which in turn leads to a concern for
quality processes. This will not work if leaders do not implement appraisal time
management.
c. Leaders need to create a comparison system, between realization and target
(Fachruddin, 2016). This system encourages employee morale to work with purpose, so
that there is always motivation that arises in every work activity, but several things need
to be considered, so that realization is maintained:
1) Take note trends productivity, leaders see the rise/fall of work
performance/achievement
2) Accuracy and suitability process with standards
3) Evaluate results against standards
4) Overall evaluation of work activities
This review is necessary to avoid repeating mistakes, as the real loss is
incompetent employees, causing long-term risks (Katsioloudes & Abouhanian, 2009).
2. Characteristics of Effective Strategic Evaluation:
There are many forms of management characteristics that can be used as strategic steps,
it is needed as an effective step in eliminating unnecessary activities/costs, including
(Fatimah, 2016):
a. Economic aspects. This evaluation focuses on monitoring discrepancies, irregularities,
risks, losses, and other things that cause material and non-material losses. This
technique is very effective in creating efficiency, so it must be presented in inherent
supervision. Managers must apply this strategy, as a realistic step towards operational
dynamics. The advantage of this strategy is to collect as much information as possible to
see all activities as they actually occur, so that leaders can understand the situation in
the field, and try to adjust alternatively.
b. Benefit aspect. This evaluation focuses on the impact of each outcome and process
(Hossler, 1990). In other words, what is done and produced is not only beneficial in the
short term, but also seen in relation to various factors and the benefits caused in the long
term. Thus, every result and activity will be based on mature conceptual work.
c. Time aspect. Evaluation is best when time is considered as a constraint. This gives a
sense of correctness and appropriateness at the operational level. Workers are made
aware of periodic limits on the results and work performed (Hossler, 1990).
3. Contemporary Measurement Model:
In advancing the company, leaders need to consider other strategies, such as the
Balanced Scorecard. This strategy not only examines financial elements, but other elements
such as human resources, technology, and materials are involved (Stewart & Carpenter-
Hubin, 2001). Of course, with this strategy, the company can conduct a comprehensive
review, so that progress will be easier to make.
a. Balanced Scorecard: Measurements that Drive Performance:
The Balanced Scorecard (BSC) concept, developed by Harvard Business School
professors and management consultants David P. Norton Robert S. Kaplan, aims to
predict the shortcomings of financial analysis in measuring business performance
improvement (Stewart & Carpenter-Hubin, 2001). Besides being able to provide a
performance framework framework that is comprehensive to implement the company's
vision and mission, BSC measurements cover other key aspects: customers, business
processes, and people (learning and growth). It provides a complete picture. Kaplan and
Norton say that BSC can be a dashboard for company performance, so management can
easily monitor it.
b. Strategy Folder; Measuring Assets Intangible Assets and How Companies Create
Value:
The concept of Balanced Scorecard, Kaplan and Norton after being widely recognized
by continuing to develop the BSC model. One form of development is the Strategy Map
concept. In this new concept, Kaplan and Norton wanted to show how the cause and
effect of using the corporate strategy. A distinctive feature of the Strategy Map is that
both of these experts offer approaches to measure the important intangible assets of the
company, human capital, organizational capital and technology capital. This is a
picture of intangible assets, indeed, the higher their role in the success of the company
(Henry, 2021). Thus, the measurement of the company becomes more complete, and at
the same time can be used as a tool to improve strategy (Stewart & Carpenter-Hubin,
2001).
c. Economic Value Added:
The concept of economic value added developed by Sten Steward & Co is a
management consulting company. Its presence is based on the consideration that
companies need to have adequate measures and measurement tools to see how
companies create and maximize value (value-maximization). The concept of Economic
Value Added is a measurement tool that allows a manager to see if they are getting a
decent return? If the return is lower than what should be expected for an investment of
equal risk (i.e. below the cost of capital), then EVA will be negative, and this means that
the company will be dealing with flight of capita~ or low share value.
4. Strategy Implementation:
The strategies that have been created need to be implemented, and preparation is
required in the process (Stewart & Carpenter-Hubin, 2001).
a. The company must appoint someone who is able to lead, and implement the strategic
plan.
b. The company must be able to determine who is worthy of being an operational executor
c. Establish a set of reasons and objectives as to why the strategy needs to be implemented.
d. Establish the benefits of strategy implementation
e. Seeing the success rate, the extent to which people actually implement the strategy as
expected.
5. How Strategy Implemented: Organizing
To ensure that all implementation work runs smoothly, companies need to organize
everything properly. Who is assigned to specific jobs and how are they coordinated? Does
decision-making need to be centralized? Should the director be strict or a little loose? How
do you categorize existing work?
Therefore, there is the treasure of strategic management, a famous term popularized by
Alfred Chandler, a strategic management expert. According to Chandler, "Structure should
follow strategy". Running different strategies, different forms of organizational structure. The
statement suggests a parallel between strategy and organizational structure (Burgelman, et, al.,
1996). In fact, strategy can inspire how the structure is shaped, so that it is more realistic in
achieving goals.
6. Ability to Respond from the Organization:
The organization's response to the dynamics of the environment is the main factor, how
then the strategy is born, as well as changes in structure. Thus, the right adaptation process
occurs, and the company avoids various risks (Shrivastava, 1986). Ansoff et, al. (1990)
explained that the ability to respond is the organization's maturity attitude towards the
environment, both internal and external.
a. Operational responsiveness. Here the concentration of the organization is on how to
minimize the operational costs of the company.
b. Competitive responsiveness that maximizes the company's profitability.
c. lnovative responsiveness that develops the potential to be able to obtain profits or profits
in the short term.
d. Entrepreneurial responsiveness which develops the potential for long-term profitability.
7. Structure Type and Organizational Lifecycle:
With the above understanding, we can then turn our discussion to the forms of
organizations that we are familiar with. In summary, we can see the common forms of
organizational structure that generally depend on the stage of development of the organization
itself (Wheelen & Hunger, 2011).
Phase I Simple Structure
Small organizations realize that many limitations encourage the establishment of a
leaner management structure,
Phase II Division Structure:
With progress and more activities, the company thinks there is a need for additional
management structures, for example in the form of divisions / departments. This form is
made with the aim, so that every business progress and needs can be carried out in a
focused, correct, and consistent manner.
Stages Ill Advanced Division Structure:
As the business unit grows, and the complexity of the work increases. So creating work
groups that can handle each department or division is needed. Thus the division's goals
or targets are achieved.
Stage IV Beyond SBU:
As organizations get larger, where work units have become specialized, they often face
greater external challenges. This requires organizational development, which is
outward-oriented, i.e. building a network to sustain a stronger and more stable business.
A matrix organization structure is one that combines functional and product/project
simultaneously. So a person in a position can have two roles above, one each for functional
and project. Usually this type of structure is used when (Hill, Jones, & Schilling, 2014):
a. Ideas are expected to be generated from the project/product
b. Has limited resources
c. Improve the ability to process information and make decisions.
8. Design work to anticipate strategies:
Work design is the study of making a person's job more relevant (more useful to the
company) in their business (Joyce, 1999). Here are some ways to do so:
a. Job extension: Combines similar jobs that are running simultaneously.
b. Job enrichment: Giving employees more work, responsibility and autonomy than usual.
Employees are given roles to gain a sense of involvement, resulting in emotional
attachment that leads to strengthened job responsibility and commitment.
c. Job Rotation: Rotating several different jobs for one employee to provide diversity and
additional knowledge/skills.
9. Strategy Implementation Challenges:
Variety of problems is always a challenge in strategy implementation, Joyce (1999)
argues:
a. The low competence of human resources is a complex problem, and a very big obstacle.
b. Top management is not open and unwilling to accept change
c. Lack of communication and task sharing
d. Employees are not ready to implement
e. Implementers' sense of concern for the organization is low
f. Lack of operational budget, causing the organization to not run effectively
g. Weak management support and low leadership competence in implementing strategic
management policies
C. EXERCISE:
As a learning evaluation, students are asked to be able to:
1. Describe the main process of strategic evaluation!
2. Explain model measurement model contemporary in conducting strategic evaluation!
