Strategic Management: Formulation, Implementation, and Structures
**Understanding the Formulation and Implementation Process**
- Successful strategy formulation does not guarantee successful strategy implementation.
- Implementation is *”difficult to do something”*, while formulation is easy to say *”going to do it”*.
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**Formulation:**
- Positions forces before the action
- Focuses on effectiveness
- Primarily an intellectual process
- Requires good intuitive and analytical skills
- Requires coordination among few individuals
- Needs to involve divisional and functional managers
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**Implementation:**
- Manages forces during action
- Focuses on efficiency
- Primarily an operational process
- Requires motivation and leadership skills
- Requires coordination among many people
**Understanding the Management Issues in the Implementation Process**
**Policies**
- Boundaries
- Constraints
- Limits
**Resource Allocation**
Central management activity that allows for the execution of strategy.
**Types of Resources**
- Financial resources
- Physical resources
- Human resources
- Technological resources
**Managing Conflict**
Disagreement between two or more parties on one or more issues.
Conflict is not always “bad”:
- No conflict may signal apathy
- Can energize opposing groups to action
- May help managers identify problems
**Conflict Management & Resolution**
- Avoidance
- Diffusion
- Confrontation
**Resistance to Change**
The single greatest threat to successful strategy implementation.
- Raises anxiety; fear concerning:
- Economic loss
- Inconvenience
- Uncertainty
- Break in status-quo
**Change Strategies**
- Force Change Strategy
- Educative Change Strategy
- Rational or Self-Interest Change Strategy
**Restructuring**
- Reducing the size of the firm, employees, divisions or units, and hierarchical levels
- Benchmarking against competitors when ratios are out of line
**Reengineering**
- Focuses on employee and customer well-being
- Redesigns work, jobs, and processes
- Aims for improvement in costs, quality, service, and speed
**Understanding Functional, Divisional, and Matrix Organizational Structures**
**Functional Organizational Structure**
A functional organizational structure is one in which the tasks, people, and technologies necessary to do the work of the business are divided into separate “functional” groups (such as marketing, operations, and finance) with increasingly formal procedures for coordinating and integrating their activities to provide the business’s products and services.
**Divisional Organizational Structure**
A divisional organizational structure is one in which a set of relatively autonomous units, or divisions, are governed by a central corporate office, but where each operating division has its own functional specialists who provide products or services different from those of other divisions. This expedites decision-making in response to varied competitive environments. The division is usually given profit responsibility.
**Matrix Organizational Structure**
The matrix organizational structure is one in which functional and staff personnel are assigned to both a basic functional area and to a project or product manager.
The matrix form is intended to make the best use of talented people within a firm by combining the advantages of functional specialization and product-project specialization.