Implementing Strategy

Question 1

Elements of Organizational STructure

Answer 1

Controls/Incentives: measuring output
Structure
Culture: set of norms and values
Processes: won’t talk about today

Question 2

Types of Structures

Answer 2

Typical Functional Structure

• difficultly when adding product lines
• organized based on value chain activities

Multidivisional Structure
- problem is the value chain activities are duplicated
organized based on division

Matrix Structure in a High- - Tech Firm

• close coordination between all activities in development
• twice as many meetings
• competition for talented employees
• less accountability for project going wrong

Question 3

Methods of Control

Answer 3

Personal: supervision small firms
Bureaucratic: budgets formal system of written control ie. budget
Output: performance goals measure identifiable tasks
Incentive: bonuses

Question 4

Culture

Answer 4

• Specific collection of values and norms shared by people and groups in an organization
• Culture can exert a profound influence on the way people behave within an organization, on the decisions that are made, on the things that the organization pays attention to, and ultimately, on the strategy and performance of the firm.

Question 5

Low Integration/High Integration

Answer 5

Low Integration

• Bureaucratic controls
• Output controls

High Integration

• Output controls will also be applied to cross-functional product development teams.
• Incentive controls can be used to align behaviours

Question 6

Functional Strategy: Efficiency

Answer 6

Measured by the quantity of inputs that it takes to produce a given output. ratio of output for input

Improve efficiency in 3 ways:

• Economies of scale: cost decrease as volume increase (not unit cost)
• Learning effects: unit cost decrease through troubleshooting
• Experience curves:

Question 7

Functional Strategy: Quality

Answer 7

Customer-focused
Total employee involvement
Process-centered 
Data oriented
Continual improvement

Question 8

Functional Strategy: Innovation

Answer 8

• Most important source of competitive advantage.
• Innovative products or processes gives a company competitive advantage that allows it to:
  
  • differentiate its products and charge a premium price.
  • lower its cost structure below that of its rivals.

Functionally, this means that R&D and marketing are closely aligned
Problem: most innovations are failures…WHY

Question 9

Functional Strategy: Customer Responsiveness

Answer 9

Functionally, this means better marketing but also other areas.

• improving response time in materials management
• training HR to think like customers
• bringing customers into R&D process
• allowing for flexible manufacturing to customize products