L18: Marketing strategy Implementation and Control Flashcards
Challenges when managing global firms:
- Integrating global production activities
- Making efficiency gains from global scale
- Learning across boundaries
- Developing national responsiveness
- Locating the central hub
- Devising global structure
- Coping with cultural diversity
Culture definition (OED)
the ideas, customs, and social behavior of a particular people or society; the attitudes and behavior characteristic of a particular social group.
Culture’s influences on the strategy
Step 1: Improve implementation
Step 2: Reconstruct or develop a new strategy
Step 3: Change of culture
Improve implementation by
Lowering cost, improving accepted ways of doing things, and tightening control
Reconstruct or develop a new strategy
Extending the market for businesses but operating in the same way they have been used to.
=> Challenge: managers find themselves constraint by path-dependent organizational routines and assumptions or political processes.
Change of culture
Usually rare and triggered by dramatic evidence of the redundancy of that culture such as a financial crisis or market share loss.
The purpose of culture web
a tool to understand the paradigm of culture and its effects on organization
Culture web includes
Paradigm, symbols, power structure, organizational structures, stories, rituals and routine, control systems.
Paradigm
- Taken for granted assumptions held in common.
- Difficult to observe internally so the other 6 visible manifestations help.
- Ex: a problem in an engineering firm is a tendency of people to focus on technical excellence of the product.
Symbols
- Objects, events, acts or people that convey, maintain or create meaning over and above their functional purpose.
- Ex: car and job titles are also the signals for status and hierarchy.
Power structure
Ability of individuals or groups to persuade, induce or coerce others into following certain courses of action
Organizational structure
Roles, responsibilities and reporting relationships in organisations
Stories
- Being told by members to others.
- Ex: Successes, disasters, heroes, villains and mavericks.
Rituals and routines
- Rituals are particular activities or special events in organisational life that emphasise, highlight or reinforce what is important in culture.
Ex: traning programs, interview panels, etc. - Routines are ‘the way we do things around here’ on a day-to-day basis.
Ex: engineers often tell customers what they need rather than listening to their needs.
Control systems
- Formal and informal ways of monitoring and supporting people within and around an organisation.
- Includes measurements and reward systems.
- Ex: public-service organization’s control system is more about accounting for spending rather than service quality.
Five basic structural types
Functional, Multidivisional, Matrix, Transnational, Project
Functional structure
It divides responsibility according to the organization’s primary specialist roles.
Functional structure’s pros and cons
- Pros: Greater control since all information channel upwards, Clear definition of role and task, Provide concentration of expertise.
- Cons: Cannot cope with product/geographical diversity, Danger of information overloaded at the top; Failure to adapt; Senior managers neglect strategic issues; Coordination between functions is difficult.
Multidivisional structure
- It includes divisions on the basis of products, services or geographical areas.
- Example: Alphabet => Google, Google X, Venture, Nest, Calico
Multidivisional structure’s pros and cons
- Pros: Flexible (add or divest divisions); Specialisation of competences; Training to take a strategic view; Control division by performance; Great ownership of divisional strategy
- Cons: Fragmentation and non-cooperation; Lack of knowledge sharing; Danger of loss of central control when divisions become too autonomous; Duplication of central and divisions functions.
Worldwide area division >< Worldwide product division
- High need for local responsiveness.
- Little pressure to coordinate activities to exploit experience and location economies, and to transfer distinctive competencies abroad.
- Decentralised structure required.
Global matrix structure
Combines different structural dimensions simultaneously
Ex: Product + Geography.
- Strong pressures, Global learning and High pressure to be locally responsive
Global matrix structure’s pros and cons
- Pros: Promote knowledge-sharing; Flexible for allowing different dimensions to be mixed together.
- Cons: Hard to control; Longer time to reach decisions; High degree of conflict; Unclear jobs and tasks, cost and profit responsibilities.
=> Managers must be good at sustaining collaborative relationship and coping with ambiguity/messiness it can bring.
Transnational structure
It combines local responsiveness and global coordination. Simultaneous ability to achieve global competences, local responsiveness, and organization-wide innovation and learning.
Transnational structure’s pros and cons
- Pros: Knowledge-sharing; more Specialisation and Network management than the matrix
- Cons: Same with matrix
The success of transnational structure depends on:
Managers’ willingness to work at both national BU and transnational as a whole.
Specialisation in transnational structure
Region or nation with expertise can achieve greater economies of scale by producing a particular product on behalf of other units.
Network management in transnational structure
It sets specialist role of each BU, then sustains the relationship and systems to make network operate in an integrated and effective manner.
Project-based structure
- Teams are created to undertake a project and then dissolved.
- For organizations that deliver large and expensive goods/services and those delivering time-limited events.
Project-based structure’s pros and cons
- Pros: Highly flexible, Clear tasks, Good control, Effective knowledge-sharing.
- Cons: Ill-coordinated due to short-term; Hinder accumulation of knowledge overtime or within specialism.
Strategy and structure fit
- Diversification (ability to control over various business): multi-divisional business
- Internationlization (global scale, horizontal coordination and local adpotion): matrix and transnational
- Innovation (knowledge creation and sharing): project-based and functional
Configurations
are the set of organizational design elements that fit together in order to support the intended strategy.
Structures
give people formally defined roles, responsibilities and lines of reporting with regard to strategy.
Systems
support and control people as they carry out structurally defined roles and responsibilities.
McKinsey 7S framework
- Act as a checklist of any organizational design exercise.
- Highlight the importance of fit among 7 elements: Strategy, Structure, System, Staff, Style, Skills, Superordinate goals.
Staff
the kind of people and they are developed via systems of selection, socialization, and reward.
Style
the leadership styles (collaborative, participative, directive or coercive)
Skills
Capabilities such as an organization’s training schemes, IT and reward system transform the organizational purpose.
Superordinate goals
the overarching goals or purpose as a whole - mission, vision, and objectives. All other elements support it.
Configuration dilemmas
Control vs Innovation ; Self vs Team/peer ; Formal power vs Informal power ; Efficiency vs Responsiveness; Silo vs Holistic behaviour.
Configuration problems
- It’s hard to adapt to specific needs.
- It’s costly to change all elements. If change one element will break the virtuous circle and make performance worse until overall fit is restored.
- Agility (detect and respond to opportunities and threat) and Resilience (capacity to recover from environemnt shocks fast and easily).
Configuration solutions
- Subdividing into different strategic SBU.
- Combining and re-organizing
Culture influence on
- Our world view, Our priorities, Our understanding of how others view us
- How we view SWOT, deal with other people, make decisions, respond to challenges, and perceive risk and reward
