LECTURE 10 (3 DECEMBER 2013)

The twelve weeks of lecture..

No lecture on eleventh week of lecture. Move on to the twelve week of semester..

BISMILLAHIRRAHMANIRRAHIM..

Dr Ummi started this lecture with quiz personality by Myers Briggs Type Indicator (MBTI).

1-1-1. http://en.wikipedia.org/wiki/Myers-Briggs_Type_Indicator
2. http://psychology.about.com/od/psychologicaltesting/a/myers-briggs-type-indicator.htm
3. http://www.personalitypathways.com/type_inventory.html

CHAPTER 10

BUILDING AN ORGANIZATION CAPABLE OF GOOD STRATEGY EXECUTION : PEOPLE, CAPABILITIES, AND STRUCTURE

Strategy Execution

1. Is operations-driven, involving management of both people and business processes.
2. Is a job for the whole management team, not just a few senior managers.
3. Can take years longer to develop as a real proficiency than implementing strategy.
4. Requires a determined commitment to change, action, and performance.

Building an organization capable of good strategy execution : Where to begin

• Assemble a strong management team and a cadre of capable employees.
•  Renew, upgrade, and revise resources and capabilities to match chosen strategy.
• Create an organizational structure that is strategy-supportive.

Approaches to build building competencies and capabilities

- Develop capabilities internally

- Acquire capabilities through mergers and acquisitions

- Access capabilities via collaborative partnerships

Managerial actions to develop competencies and capabilities

- Strengthen the firm's base of skills, knowledge, and intellect

- Coordinate and integrate the efforts of work groups and department

Approaches to acquiring capabilities from an external source

- Outsources the function requiring the capabilities to a key supplier or another provider.

- Collaborate with a firm that has complementary resources and capabilities.

- Engage in a collaborative partnership for the purpose of learning how the partner does things.

Training is important in :

1. Executing a strategy that requires different skills, competitive capabilities, and operating methods.
2. Organizational efforts to build skills-based competencies.
3. Supplying technical know-how to employees when rapidly changing technology puts a firm in danger of losing its ability to compete.  

Ensuring that structure follows strategy by :

• Deciding which value chain activities to perform internally and which to outsource.
• Aligning the firm's organizational structure with the strategy.
• Determining how much authority to delegate
• Facilitating collaboration with external partners and strategic allies

Structuring the work effort to promote successful strategy execution

Organizational approach to decision-making

1. Centralized decision making - Authority is retained by top management
2. Decentralized decision making - Authority delegated to lower-level managers and employees

Capturing cross-business strategic fit

• Enforcing close cross-business collaboration to avoid duplication of effort
• Centralizing related functions requiring close coordination at the corporate level

Matching structure to strategy

- Pick a basic organizational design that matches structure to strategy

- Supplement design with appropriate coordinating mechanisms

- Institute collaborative networking and communication arrangements

CHAPTER 11

MANAGING INTERNAL OPERATIONS : ACTIONS THAT PROMOTE GOOD STRATEGY EXECUTION

Managing for continous improvement

1. Benchmarking
2. Process reengineering
3. Six sigma quality programs - define, measure, analyze, improve, control
4. Total quality management
5. Best practices

Top-notch strategy execution and operating excellence

• Business process reenginering
• Aims at one-time quantum improvement
• Continuous improvement
• Aims at ongoing incremental improvements

Benefits of information technologies

* Enable better strategy execution through data-based decisions

* Strengthen organizational capabilities

* Allow for real-time tracking of implementation initiatives and daily operations

* Provide monitoring of empowered employee performance (electronic scorecard)

* Build closer relationships with customers

Key strategic performance indicators tracked by information system

- Customer data

- Operations data

- Employee data

- Supplier / collaborative ally data

- Financial performance data

Nonmonetary approaches to enhancing motivation

> Provide attractive perks and fringe benefits
> Give awards and other forms of public recognition
> Rely on promotion from within whenever possible
> Invite and act on ideas and suggestions
> Create a work atmosphere of caring and mutual respect
> State the strategic vision in inspirational terms
> Share the firm's critical information with employees
Provide a comfortable working environment

The firm's motivational approaches and rewards structure

• Rewards
• Commitment-generating incentives and rewards
• Punishment
• Adverse employment consequences

Guidelines for designing effective incentive compensations system
---> Make financial incentives a major, not minor, piece of total compensation package
---> Have incentives the extend to all mangers and all workers, not just top management
---> Administer the reward system with scrupulous objectivity and fairness
---> Keep the time between achieving targeted performance outcome and payment of the reward as short as         possible
---> Avoid rewarding effort rather than results
                                                                                                                                                           tq...:)