CHAPTER 7: implementing Strategies: Management and Operations issues

Question 1

establishing annual objectives

Answer 1

a decentralized managerial activity that directly involves all managers in an organization and determined appropriate/desired targets to achieve by region/product/service

Question 2

annual objectives

Answer 2

• desire targets to achieve; used to focus/direct/channel efforts and activities of organization members. They represent the basis for allocating resources, are a primary mechanism for evaluating managers, are the major instruments for monitoring progress toward achieving long-term objectives, and establish organizational, divisional, and departmental priorities.
• short term milestones, usually one year, that organizations must achieve to reach long-term targets/goals

Question 3

horizontal consistency of objectives

Answer 3

objectives that need to be compatible across functions (for example, if marketing wants to sell 10% more than production must produce 10% more)

Question 4

vertical consistency of objectives

Answer 4

comparability objectives from the CEO (corporate level) down to the presidents (divisional level) on down to the managers (functional level)

Question 5

policies

Answer 5

specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work towards started goals

Question 6

resource allocation

Answer 6

a central strategy implementation activity that entails distributing financial, physical, human, and technological assets to allow for strategy execution

Question 7

conflict

Answer 7

a disagreement between two or more parties on one or more issues

Question 8

avoidance

Answer 8

a method for reducing conflict through such actions such as ignoring the problem in hopes that the conflict will resolve itself or physically separating the conflicting individuals (or groups)

Question 9

defusion

Answer 9

a method of reducing conflict includes playing down differences between conflicting parties when accentuating similarities and common interests, or compromising so that there is neither a clear winner nor loser, or resorting to majority rule, or appealing to a higher authority, or redesigning present positions

Question 10

confrontation

Answer 10

a method of reducing conflict exemplified by exchanging members of conflicting parties so that each can gain appreciation of the other’s point of view, or holding a meeting at which conflicting parties present their views and work through their differences

Question 11

strategic business unit (SBU) structure

Answer 11

this type of organizational design groups similar divisions together into units; widely used when a firm has many divisions/segments in order to reduce span of control reporting to a COO

Question 12

functional structure

Answer 12

this type of organizational design groups tasks and activities by business functions, such as production/operations, marketing, finance/accounting, research and development, and management information systems

Question 13

divisional (decentralized) structure

Answer 13

this type of organizational design is based on having various profit centers or segments by geographic area, by product or service, by the customer, or by the process. With this type of organizational design, functional activities are performed centrally and in each separate division.

Question 14

matrix structure

Answer 14

this type of organizational design places functional activities along the top row and divisional projects/units along the left side to create a rubric where managers have two bosses, both of functional boss and a project boss, thus creating the need for extensive vertical and horizontal flows of authority and communication

Question 15

restructuring

Answer 15

modifying the firm’s chain of command and reporting channels to improve efficiency and effectiveness

Question 16

reengineering

Answer 16

reconfiguring or redesigning work, jobs, and processes in a firm, for the purpose of improving quality, service, and speed

Question 17

benchmarking

Answer 17

• a management technique associated with value chain analysis, whereby a firm compares itself on a wide variety of performance-related criteria against the best firms in the industry, thus establishing standards of excellence
• an analytical tool used to determine how a firm’s value chain and activities compare to rival firms in order to better gain and sustain competitive advantages

Question 18

delayering

Answer 18

reducing the number of divisions or units or hierarchical levels in a firm’s organizational structure; also called as downsizing and rightsizing

Question 19

profit sharing

Answer 19

a form of incentive compensation whereby some of a firm’s earnings are distributed to employees/managers based upon some pre-determined formula; used to motivate individuals to support strategy-implementation efforts

Question 20

gain sharing

Answer 20

a form of incentive compensation whereby employees and/or managers receive bonuses when actual results exceed some pre-determined performance targets

Question 21

bonus system

Answer 21

a form of incentive conversation whereby employees and/or managers receive a year-end or period-end reward, usually cash, based on some organizational performance criteria, such as sales, profit, production efficiency, quality, and safety; used to motivate individuals to support strategy-implementation efforts

Question 22

resistance to change

Answer 22

a natural human tendency to wary of new policies/strategies due to potential negative consequences; if not managed, this could result in sabotaging production machines, absenteeism, filing unfounded grievances, and an unwillingness to cooperate