MODULE 6 STRATEGIC MANAGEMENT

MODUL PERKULIAHAN

Strategic Management Pokok Bahasan:

Implementing and Administrating Strategy : Organizational Structure and Resource Allocation, Commitment, Culture , and Politics Fakultas

Program Studi

Tatap Muka

Pasca Sarjana

Magister Teknik Elektro

06

Abstract A general Framework for strategy Implementation. Building Capable Organization :Matching organization Structure to Strategy.;How structure Evolves as strategy evolves;The stages Model; The Strategy Related Pros and Cons of lternative Organization Forms;Perspectives on Matching strategy and Structure;Building a distinctive Competitive;Assembling Management Team Allocating and Focusing Resources on Strategic Objectives:Allocating resources;Budgets and Programs;Focusing Work Efforts on strategic Objectives .

Kode MK

Disusun Oleh

P541700006

DR Ir Iwan krisnadi MBA

Kompetensi —

Understanding the Implementating and Administrating Strategy

— Mastery in Implementating and Administrating Strategy

Abstract •

A general Framework for strategy Implementation.

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Building Capable Organization :

•

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Matching organization Structure to Strategy.

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How structure Evolves as strategy evolves

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The stages Model

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The Strategy Related Pros and Cons of Alternative Organization Forms

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Perspectives on Matching strategy and Structure

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Building a distinctive Competitive

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Assembling Management Team

Allocating and Focusing Resources on Strategic Objectives:

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Allocating resources

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Budgets and Programs

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Focusing Work Efforts on strategic Objectives

Strategic Management Dosen Penyusun: DR Ir Iwan Krisnadi MBA

Pusat Bahan Ajar dan eLearning http://www.mercubuana.ac.id

Pembahasan 6. Implementing and Administering Strategy: Organizational Structure and Resource Allocation A general framework for strategy implementation To implementing strategy is the number of variable which shape: 1.

what needs to be done to implement the strategy

2.

How fast to push implementation alon

3. What managerial approach to take to put the strategy in place

Figure 6.1 What Strategy Implementation Involves : A Framework and Overview Figure 6.1 illustrates the wide ranging adminitrative concerns that shape a general manager’s action agenda for implementing strategy.

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Four broad areas syand out :    

Which administrative tasks are central to the strategy implementation process How to create “fits” between strategy and various internal organizational processes so as to align the whole organization behind strategy accomplishment How to match “what to do” with the organization’s overall situation and the context of the setting in which implementation must take place What managerial approach and leadership style to adopt in including the needed organizational changes.

6.1. The General Manager’s role in the implementation process The general manager is the person most responsible for leading and keynoting the tone, pace, and style of strategy implementation.

Figure 6.2 The Administrative Aspects of Strategy Implementation Moreover , the GM selects which of the central administrative task (figure 6.2) to concedntrate on and why, which of the several administrative fits to work on first, and what steps to take to create the fits.

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6.2. Building A capable Organization From the standpoint of implementing and administrating strategy, three organizational issues stand out as dominant: 1. How to match the internal organization structure to the needs of strategy 2. How to build and nurture the distinctive competence in which the strategy may be grounded and to see, generally, that the organization has the managerial talents, technical skills, and competitive capabilities if needs 3. What kind of core executive group to assemble and who to put in the key positions.

6.3. Organization Structure There are essentially five strategy related approach to organization : 1. 2. 3. 4. 5.

Functional Organization Geographic Organization Decentralized business / product divisions Strategic business units Matrix structure featuring dual lines of authorithy and strategic priority.

6.3.1 Functional Organization A functional organization structure tends to be effective in a single – business units where key activities resolve around well-defined skills and areas of specialization, Two types of functional organizational approaches are diagrammed in figure 6.3

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Figure 6.3 Functional Organization Structure

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6.3.2 Geographic Forms of Organization Organizing according to geographic areas or territories is a rather common structural form for large scale enterprises whose strategies need to be tailored to fit the particular needs and features of different geographical areas. As indicated in Figure 6.4, geographic organization has its advantages and disadvantages, but the chief reason for its popularity is that, for one reason or another, it promotes improved performance.

Figure 6.4, geographic organization

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6.3.3 Decentralized Business Units From a business strategy implementation standpoint, it is far more logical to group all the different activities that belong to the same business under one organizational roof, thereby creating line0of-business units.

Figure . 6.5 A Decentralized Business / Division Type of Organization Structure

A typical line-of –business organizational structure is shown in figure 6.5, along with the strategy-related pros and cons of this type of organizational form.

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6.3.4 An SBU Type of Organization Structure. A strategic business unit (SBU) is a grouping of business units based on some important strategic element common to each; the possible elements of commonality include an overlapping set of competitors, acommon business mission, a common need to compete globally, an ability to accomplish integrated strategic planning, common key succes factors, and technologically related growth opportunities.

Figure 6.6 An SBU Type of Organization Structure Figure 6.6 illustrates the SBU form of organization, along with its strategy related pros and cons

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6.3.5 Matrix forms of organization A matrix form of organization is a structure with two (or more) channelsssss of command, two lines of budget authorithy, two sources of performance and reward, and so forth. The key feature of the matrix is that product (or business) and functional lines of authorithy are overlaid, and managerial authority over the activities in each unit/ cell of the matrix is shared between the product mamager and the functional manager – as shown in figure 6.7.

. Figure 6.7 A matrix Organization Structure

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6.4 Allocating and focusing resources on strategi objectives Keeping an organization squarely on the strategy implementation path requires that the general manager assume a central role in directing the resource allocation process. Two issues tus stand out : 1. What budgets and programs are needed by each organizational unit to carry out its part of the strategic plan 2. How to focus the energies of people on achieving organizationwide objectives as opposed to just carrying out their assigned duties.

6.5 Creating all the Administrative fits: The McKinsey 7-S Framework.

Figure 6.8 Creating a Full Complement of Adminsitrative Fits: The McKinsey 7-S Framework.

McKinsey & Co.., a leading consulting firm with wide ranging experiences in strategies analysis, proposes that the need for administrative fits extends accross seven broad areas:

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(1) Strategy, (2) Structure (3) Shared values and spirit among organizational members regarding “who we are and where we are headed” – that is, the values, attitudes, and philosophy that comprise an organization’s culture bonds (4) Approach to staffing the oragnization and its overall “people orientation” (5) Administrative systems, practices, and procedures used to run the organization on day to day basis, including the reward structure, formal and informal policies, budgeting and programs, training, cost accounting, and finacial controls (6) The organization’s skill, capabilities, and distinctive competences, (7) Style of top management (how they allocate their time and attention, symbolic actions, their leadership skills, the way the top management team comes across to the rest of the Organization. McKinsey has diagrammed these seven elements into what it calla the McKinsey 7-S Framework ( the seven S’s are strategy , structure, shared values, staff, systems, skills, and style- so labeled to promote recall), shown in Figure 6.8

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Daftar Pustaka Chandler, Alfred D. Strategy and Structure. Cambridge, Mas: MIT Press , 1962 Davis, Stanley M, and Paul R Lawrence. “Problems of Matrix Organizations. “ Harvard Business Review 56, no 3 (May – June 1978), pp 131 -42,

Rumelt, Richard, Strategy, Structure, and Economic Performance, Cambridge, Mass.: Harvard University Press, 1974

Thompson, Arthur A, Jr and Strickland III, Strategic Management:Concepts and cases, Business Publications Inc, 1984, chap 6 and 7

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MODULE 6 STRATEGIC MANAGEMENT

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