Strategy in Action

Question 1

In order to put the strategy n action there are 3 types of structures which needs to be put into work. They are:

Answer 1

Organisational structure, Organisational Systems and Leading strategic change

Question 2

Explain the difference between the 3 types of structures - Organisational structure, Organisational Systems and Leading strategic change

Answer 2

1. Organisational structure - formal roles, lines of report. 3 types:
   functional, divisional and matrix;
2. Organisational systems - to support and control people
   within an organisation. E.g. performance targeting, performance planning;
3. Leading strategic change - style of leadership, purposes,
   and characteristics of strategic change programs

Question 3

The Organisational Structures - Functional

Answer 3

Having a chief executive at the top, and the rest are equally lined - Production department, sales and marketing department, Finance and accounting department, and personnel department.

Question 4

A divisional product (P-grouping) structure

Answer 4

Having a director only;
pros - everyone is involved in the process of making the product
cons - double-work

Question 5

A divisional geographic ( G-grouping) structure

Answer 5

Having director only;
Pros- you can imagine;
Cons - as well, maybe political, economical and local

Question 6

A divisional market (M-grouping structure)

Answer 6

Having director only;
pros -Specialization in specific clients’ needs
cons - independent units

Question 7

A multidivisional structure

Answer 7

Such as the political one, you have a president at the top and then vice presidents of the separate regions, then assistants, etc.
Pros - Flexible (add or divest divisions)
* Control by performance;
* Specialisation of competences;
Cons - Duplication of central and divisional functions;
* Fragmentation and non-cooperation;
* Danger of loss of central control

Question 8

Types of control systems

Answer 8

Direct Supervision -> employees’ effort;
Planning Systems -> inputs;
Cultural Systems-> norms + behaviors;
Performance Targets-> outputs;

Question 9

Direct supervision systems

Answer 9

Direct supervision direct control of strategic decisions by one or a few individuals, typically focused on the effort of employees (small organisations).

Question 10

Planning systems

Answer 10

Planning systems plan and control the allocation of resources and monitor their utilisation. The focus is on the direct control of inputs.
1. The strategic planning style
* Center (Director): Strong planning influence
* SBUs: relatively relaxed performance accountability
3. The strategic control style
* Center (Coach): Lies in the middle with a more consensual approach to strategy
* SBUs: Moderate levels of business unit accountability
2.The financial control style
* Center (Buddy): Involves very little central planning
* SBUs: strictly accountable for their performance and financial results

Question 11

Cultural systems

Answer 11

Cultural systems aim to standardize norms of behavior within an
organization in line with strategic objectives. Cultural systems are
an indirect form of control and rely on the self-control of
employees
1. Recruitment – selecting people who ‘fit’
2. Socialisation – behavior is shaped by social processes
3. Rewards – appropriate behavior receives rewards in the form
of pay, promotion or praise

Question 12

Performance targeting systems

Answer 12

Performance targets focus on the outputs of an organisation (Key performance
indicators KPI) such as product quality, revenues or profits.
2. What systems
can be used?
Problems in setting targets:
* Inappropriate measures
* Inappropriate target levels
* Excessive internal competition

Question 13

Balanced scorecards (BSC) (Kaplan & Norton)

Answer 13

Balanced scorecards set performance targets according to a range of perspectives:
1.Financial (How do we look to our shareholers?) –profit, margin, growth, risk, cash flow;
2. Customer (How do our customers see us?) –delivery times, service levels, timing
3. Internal (What should we be best at?) –value + support
processes + good citizenship process (stakeholder relationship)
4.Innovation & learning (How can be improve and take
value?) –activities important in the long-term, training or
research

Question 14

Balanced Score Card process

Answer 14

1. Involve the right people (Top management, line
   management & HR)
2. Formulate SMART KPIs
3. Place KPIs inside each perspective + add sub-goals
4. Draw a strategic plan

Question 15

The matrix structure

Answer 15

Having head teachers, bla bla all the head people and the students
Pros - Integrate knowledge
* Flexible
* Allow dual dimension
Cons -Length of time in taking a
decision
* Unclear job and task
responsibility
* Unclear cost and profit
responsibility

Question 16

Balance scorecards can be used to set performance targets, it focus on 4 issues: financial, customer, internal, innovation and learning.

Answer 16

Great!