Chapter 10: Building an Organization Capable of Good Strategy Execution Flashcards
What does good strategy execution require?
A team effort.
What is the main reason for strategies failing?
Poor execution. Strategy execution is a critical managerial endeavor.
What are the 3 most important types of organization-building actions?
- Staffing the organization
- Acquiring, developing, and strengthening resources + capabilities
- Structuring the organization and work effort
What does structuring the organization and work effort involve?
- Instituting organizational arrangements that facilitate good strategy execution
- Establishing lines of authority
- Deciding how much decision-making authority to delegate
What should be the overriding aim in building a management team?
Assembling a critical mass of talented managers who can function as agents of change and spearhead excellent strategy execution.
How do firms develop dynamic capabilities?
By making capability-building activities a routine part of their strategy execution endeavours.
What are the 3 most common approaches to capability building?
- Developing and strengthening capabilities internally
- Acquiring capabilities through mergers and acquisitions
- Developing new capabilities via collaborative partnerships
What are capabilities the product of?
Bundles of skills and know-how that are integrated into organizational routines and deployed within activity systems.
What is the first step of building a capability?
Develop the ability to do something, however imperfectly or inefficiently.
What does an ability evolve into once personnel learn how to perform it consistently?
A tried-and-true competence.
What is required to turn an ability into a competence?
Continual investment of resources and systematic efforts to improve processes and solve problems creatively as they arise.
Which two forms do managerial actions to develop competitive capabilities generally take?
- Strengthening the company’s base of skills, knowledge, and experience
- Coordinating and integrating the efforts of the various work groups and departments
When are capabilities-motivated acquisitions essential? (2)
- The company des not have the ability to create the needed capability internally and
- industry conditions, technology, or competitors move at a rapid pace
What are the 3 basic ways to pursue collaborative partnership to access capabilities?
- Outsource the required function
- Collaborate with a firm in a joint venture, strategic alliance, etc.
- Engage in a collaborative partnership to learn how the partner does things and acquire its capabilities
A firm’s organizational structure should be matched to what to support good strategy execution?
To the particular requirements of implementing the firm’s strategy.
How can outsourcing contribute to better strategy execution?
Allows a company to concentrate its full energies on performing value chain activities that are at the core of its strategy, where it can create unique value.
What does a firm’s organizational structure comprise?
The formal and informal arrangement of tasks, responsibilities, lines of authority, and reporting relationships by which the firm is administered.
What does a simple structure consist of?
A central executive who handles all major decisions and oversees all operations with the help of a small staff.
What is a functional structure?
One that is organized along functional lines, where a function represents a major component of the firm’s value chain, such as R&D, engineering and design, manufacturing, sales and marketing, logistics, and customer service. Each functional unit is supervised by functional line managers who report to the CEO.
What is the primary advantage of functional structures over simple structures?
Greater task specialization, which promotes learning, enables the realization of scale economies, and offers productivity advantages not otherwise available.
What are the 4 basic types of organizational structures?
- Simple
- Functional
- Multidivisional
- Matrix
What do functional structures generally evolve into as firms continue to grow?
Multidivisional structures.
What is a multidivisional structure?
Decentralized structure consisting of a set of operating divisions organized along business, product, customer group, or geographic lines and a central headquarters to allocate resources and monitor activities.
What are other names for multidivisional structures?
Divisional structures or M-forms
What is a matrix structure?
This is a combination structure that overlays one type onto another, with multiple reporting relationships. Used to foster cross-unit collaboration.
What are other terms for matrix structures (2)?
Composite structures or combination structures.
How do matrix structures lower costs?
By enabling the realization of economies of scope as they facilitate the sharing of key resources.
How does the modern matrix structure look?
A single primary reporting relationship that can be overlaid with a temporary secondary reporting relationship as the need arises.
Which types of management generally employ matrix structures?
Project-based, process-based, team-based management. Often used in businesses involving projects of limited duration.
What are the 2 extremes to authority delegation?
- Centralize decision making at the top
- Decentralize decision making by giving managers and employees considerable decision-making latitude in the areas of their responsibility.
What is a network structure?
Arrangement linking a number of independent organizations involved in some common undertaking, with one firm typically taking on a more central role.
