Chapter 10: Building an organization capable of good strategy execution

People, Capabilities, and Structure
The principal components of the strategy execution process
1. Staff the organization with managers and employees capable of executing the strategy well
2. build the organizational capabilities required for successful strategy execution
3. Create a strategy supportive organization structure
4. Allocate sufficient budgetary and other resources to the strategy execution effort
5. Institute policies and procedures that facilitate strategy execution
6. Adopt best practices and business processes that drive continuous improvement in strategy execution activities
7. Install information and operating systems that enable company personnel to carry out their strategic roles proficiently
8. Tie rewards and incentives directly to the achievement of strategic and financial targets
9. Instill a corporate culture that promotes good strategy execution
10. exercise the internal leadership needed to propel strategy implementation forward.
Building an organization capable of good strategy execution
- staffing the organization: putting together a strong management team, recruiting and retaining employees with the needed experience, technical skills, and intellectual capital
- building and strengthening core competencies and competitive capabilities: developing proficiencies in performing strategy critical value chain activities and updating them to match changing market conditions and customer expectations
-structuring the organization and work effort: organizing value chain activities and business processes, establishing lines of authority and reporting relationships, deciding how much decision making authority to delegate to lower level managers and front line employees, and managing external relationships.
An organization structure matched to the requirements of successful strategy execution
- decide which value chain activities to perform internally and which ones to outsource
- align the organizational structure with the strategy
- decide how much authority to centralize at the top and how much to delegate to the bottom line managers and employees
- facilitate collaboration with external partners and stratefic allies
organizational structure
comprises the formal and informal arrangements of tasks, responsibilities, lines of authority, and reporting relationships by which the firm is administered.
Simple structure
consists of central executive who handles all major decisions and oversees all operations with the help of a small staff
functional structure
is organized into functional departments, with departmental managers who report to the CEO and small corporate staff
multi divisonal stucture
is a decentralized structure consisting of a set of operating divisions organized along business, product, customer group, or geographic lines, and a central corporate HQ that allocates resources, provides support functions, and monitors divisional activities.
matrix structure
is a structure that combines two or more organizational forms, with multiple reporting relationships. it is used to foster cross unit collaboration
Centralized decision making
authority is retained by top management
Decentralized decision making
authority delegated to lower level managers and employees
network structure
is the arrangement linking a number of independent organizations involved in some common undertaking
creating a network structure: using "relationship managers" to build and maintain cooperative arrangements of value both parties
- strategic alliances
- outsourcing arrangements
- joint ventures
- cooperative partnerships