Fluent Essays

Work #1: How would you describe the structural organization of your company’s top-management team? Is some decision making decentralized and delegated to individual managers? If so, explain how the decentralization works. Or are decisions made more by consensus, with all co-managers having input? What do you see as the advantages and disadvantages of the decision-making approach your company is employing?  Be certain to incorporate our coursework (Thompson text and other material) from this week into your initial posting.  Your initial response to the discussion question should be 250-300 words. You must have at least our course text and one non-course scholarly/peer reviewed source in your initial posting.  Sources require in-text citations and must be incorporated into the body of the post in addition to a full APA citation at the end of the post. Work #2: Facebook, Inc. is an American online social media and social networking service company based in Menlo Park, California. It was founded by Mark Zuckerberg along with other fellow Harvard College students. As of the end of 2018, the number of Facebook employees reached 35,587 full-time staff. It is considered one of the Big Four technology companies along with Amazon, Apple, and Google.  From our Thompson text, read Chapter 10 Assurance of Learning Exercise #3 related to Facebook’s Career page and click on the website link to provide you with information to use in your response to the following: How do Facebook’s internal management training programs integrate the traits and stated goals on the Careers page into specific and tangible construction of employee capabilities?  How does this apply to our reading of the week? How does the internal training Boot Camp program prepare Facebook employees of all types to “move fast and break things”?  How does this apply to our readings of the week? What does this case have to do with overall organizational Strategy? Submission Details:  Your analysis should be between 1000 and 1500 words. Incorporate a minimum of at least our course text and one non-course scholarly/peer reviewed source in your paper.  All written assignments must include a coverage page, introductory and concluding paragraphs, reference page, be double-spaced, and proper in-text citations using APA guidelines. Note: Please refer Thompson text which I provided to you previously and find attached ppt may be useful. chapter 10 Building an Organization Capable of Good Strategy Execution: People, Capabilities, and Structure © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. Copyright Image Source/Getty Images Chapter 10 gives an overview of strategy execution and discusses staffing the organization, building the organizational capabilities, and creating an organizational structure. © McGraw-Hill Education 3–1 Learning Objectives After reading this chapter, you should be able to: Understand what managers must do to execute strategy successfully. Understand why hiring, training, and retaining the right people constitute a key component of the strategy execution process. Recognize that good strategy execution requires continuously building and upgrading the organization’s resources and capabilities. Identify and establish a strategy-supportive organizational structure and organize the work effort. Comprehend the pros and cons of centralized and decentralized decision-making in implementing the chosen strategy. © McGraw Hill (c) McGraw-Hill Education 10-2 Executing Strategy Strategy execution: Is operations-driven, involving management of both people and business processes. Is a job for the whole management team, not just a few senior managers. Can take many more years to develop as a real proficiency than implementing strategy. Requires a determined commitment to change, action, and performance. © McGraw Hill Good strategy execution requires a team effort. All managers have strategy-executing responsibility in their areas of authority, and all employees are active participants in the strategy execution process. (c) McGraw-Hill Education 10-3 A Framework for Executing Strategy Committing to executing a strategy: Entails figuring out the specific techniques, actions, and behaviors necessary for a smooth strategy-supportive operation. Following through to get things done and deliver results. Making things happen (leadership) and making them happen right (management). © McGraw Hill When strategies fail, it is often because of poor execution. Strategy execution is therefore a critical managerial endeavor. The two best signs of good strategy execution are whether a company is meeting or beating its performance targets and whether they are performing value chain activities in a manner that is conducive to company-wide operating excellence. (c) McGraw-Hill Education 10-4 FIGURE 10.1 The 10 Basic Tasks of the Strategy Execution Process Access the text alternative for slide images. © McGraw Hill Staff the organization with managers and employees capable of executing the strategy well. Develop the resources and organizational capabilities required for successful strategy execution. Create a strategy-supportive organizational structure. Allocate sufficient resources (budgetary and otherwise) to the strategy execution effort. Institute policies and procedures that facilitate strategy execution. Adopt best practices and business processes that drive continuous improvement in strategy execution activities. Install information and operating systems that enable company personnel to carry out their strategic roles proficiently. Tie rewards and incentives directly to the achievement of strategic and financial targets. Instill a corporate culture that promotes good strategy execution. Exercise the internal leadership needed to propel strategy implementation forward. (c) McGraw-Hill Education 10-5 Building an Organization Capable of Good Strategy Execution: Three Key Actions Staffing the organization—putting together a strong management team, and recruiting and retaining employees with the needed experience, technical skills, and intellectual capital. Acquiring, developing, and strengthening the resources and capabilities required for good strategy execution. Structuring the organization and work effort. © McGraw Hill Putting together a talented management team with the right mix of experiences, skills, and abilities to get things done is one of the first steps to take in launching the strategy-executing process. (c) McGraw-Hill Education 10-6 FIGURE 10.2 Building an Organization Capable of Proficient Strategy Execution: Three Key Actions Access the text alternative for slide images. © McGraw Hill Staffing the organization. This includes putting together a strong management team and recruiting and retaining talented employees. Acquiring, developing and strengthening key resources and capabilities. This action includes developing a set of resources and capabilities suited to the current strategy; updating resources and capabilities as external conditions and the firms strategy change; and finally, training and retaining company personnel to maintain knowledge-based and skills-based capabilities. Structuring the organization and work effort. The steps for this action include instituting organizational arrangements that facilitate good strategy execution; establishing lines of authority and reporting relationships; and deciding how much decision-making authority to delegate. These actions will lead to both strategy-supportive resources and capabilities, and a strategy-supportive organizational structure. (c) McGraw-Hill Education 10-7 Staffing the Organization Putting together a strong management team: Planners who ask tough questions and figure out what needs to be done. Implementers who can select, manage, and lead the right people. Executors who turn decisions into actions that drive the changes that produce sustainable competitive advantage. Key takeaway: A critical mass of talented activist managers. © McGraw Hill In many industries, adding to a company’s talent base and building intellectual capital are more important to good strategy execution than additional investments in capital projects. (c) McGraw-Hill Education 10-8 ILLUSTRATION CAPSULE 10.1 Management Development at Deloitte Touche Tohmatsu Limited Learning and development programs that contribute to Deloitte’s successful execution of its talent strategy: Clear path to partnership. Formal training programs. Special programs for high performers. Sponsorship, not mentorship. © McGraw Hill In the beginning, the employee gains broad exposure through building a broad consulting experience. Next, an employee will focus in a field of interest, driving delivery and building expertise within this field. Finally, eminence is developed in the chosen field, and it is here that the expertise is broadly applied. A clear path to partnership, formal training programs, special programs for high performers, and sponsorship, not mentorship, are all learning and development programs that contribute to Deloittes successful execution of its talent strategy. (c) McGraw-Hill Education 10-9 Recruiting, Training, and Retaining Capable Employees Intensively screen and evaluate applicants to ensure selecting those who are best-suited and best-fitted. Provide training programs throughout employee careers. Offer challenging, interesting, and skill-stretching assignments. Rotate people through jobs that span functional or geographic boundaries. Make the work environment stimulating and engaging so that the firm is considered a great place to work. Encourage employees to propose creative ways of operating better and to push ideas for new products or businesses. Use assorted financial incentives and perks to retain employees. Coach average performers to improve their skills and capabilities, while weeding out underperformers. © McGraw Hill The best companies make a point of recruiting and retaining talented employees; the objective is to make the firm’s entire workforce (managers and rank-and-file employees) a genuine competitive asset. (c) McGraw-Hill Education 10-10 Developing and Building Critical Resources and Organizational Capabilities Approaches to Building and Strengthening Capabilities Developing organizational capabilities internally Acquiring capabilities through mergers and acquisitions Access capabilities through collaborative partnerships © McGraw Hill Building new competencies and capabilities is a multistage process that occurs over a period of months and years. It is not something that is accomplished overnight. (c) McGraw-Hill Education 10-11 Developing Capabilities Internally 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 departments. © McGraw Hill A company’s capabilities must be continually refreshed and renewed to remain aligned with changing customer expectations, altered competitive conditions, and new strategic initiatives. In order to develop competencies and capabilities internally, managers should strengthen the firms base of skills, knowledge, and intellect. They should also coordinate and integrate the efforts of work groups and departments. (c) McGraw-Hill Education 10-12 Setting Stretch Goals: From Capability to Competence Access the text alternative for slide images. © McGraw Hill Five steps take a stretch goal from capability to competence: Thinking strategically about a firms knowledge and skills base Setting a stretch goal of developing an organizational ability to do something well Evolving the ability into a competence or capability by performing it well and at an acceptable cost Thinking strategically about a firms opportunities and challenges Refreshing, updating, and upgrading competencies and capabilities as necessary to gain and maintain competitive advantage (c) McGraw-Hill Education 10-13 Acquiring Capabilities through Mergers and Acquisitions A question of… Description A question of market opportunity: When a market opportunity can slip by faster than a needed capability can be created internally. A question of competitive necessity: When industry conditions, technology, or competitors are moving at such a rapid clip that time is of the essence. A question of successful integration: Tacit knowledge and complex routines may not transfer readily from one organizational unit to another. © McGraw Hill (c) McGraw-Hill Education 10-14 Accessing Capabilities through Collaborative Partnerships Approaches to Acquiring Capabilities from an External Source: Outsource 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. © McGraw Hill Acquiring capabilities from an external source can be done by: Outsourcing the function requiring the capabilities to a key supplier or another provider Collaborating with a firm that has complementary resources and capabilities Engaging in a collaborative partnership for the purpose of learning how the partner does things (c) McGraw-Hill Education 10-15 The Strategic Role of Employee Training Training is important in: Executing a strategy that requires different skills, competitive capabilities, and operating methods. Organizational efforts to build skills-based competencies. Supplying technical know-how to employees when rapidly changing technology puts a firm in danger of losing its ability to compete. © McGraw Hill Increasingly, companies are expecting employees at all levels are expected to take an active role in their own professional development and assume responsibility for keeping their skills up to date and in sync with the company’s needs. (c) McGraw-Hill Education 10-16 Strategy Execution Capabilities and Competitive Advantage Superior strategy execution capabilities: Are difficult to imitate and socially complex processes that take a long time to develop. Maximize organizational resources and competitive capabilities in support of the business model. Lower costs and permit firms to deliver more value to customers. Enable a firm to react more quickly to market changes, beat competitors to market with new products and services, and gain uncontested market dominance. © McGraw Hill Superior strategy execution capabilities are the only source of sustainable competitive advantage when strategies are easy for rivals to copy. (c) McGraw-Hill Education 10-17 ILLUSTRATION CAPSULE 10.2 Zara’s Strategy-Execution Capabilities Strategy is focused on rapid value chain execution: Quick and flexible design-to-production process. Close proximity to manufacturing factories. Lower percentage of commitment to fashion lines than competitors to keep in-store items fresh. Small lot-size orders reduce retail discounting, and encourage impulse-buying and frequent shopping. Placement of goods in proximity to high-fashion stores as a substitute for advertising. © McGraw Hill (c) McGraw-Hill Education 10-18 Matching Organizational Structure to the Strategy 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 its strategy. Determining how much authority to delegate. Facilitating collaboration with external partners and strategic allies. © McGraw Hill A company’s organizational structure should be matched to the particular requirements of implementing the firm’s strategy. (c) McGraw-Hill Education 10-19 FIGURE 10.3 Structuring the Work Effort to Promote Successful Strategy Execution Access the text alternative for slide images. © McGraw Hill To create an organizational structure that is matched to the requirements of successful strategy execution, the following actions should be taken 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 down-the-line managers and employees Provide for cross-unit coordination Finally, facilitate collaboration with external partners and strategic allies This will structure the work effort to promote successful strategy execution (c) McGraw-Hill Education 10-20 Deciding Which Value Chain Activities to Perform Internally and Which to Outsource Outsourcing’s execution-related benefits: Helps in outperforming rivals in strategy-critical activities and in turning a competence into a distinctive competence. Decreases bureaucracies, flattens structure, speeds decision making, and shortens response time to changing market conditions. Adds to a firm’s capabilities and contributes to better strategy execution through partnerships with suppliers and channel partners. © McGraw Hill Wisely choosing which activities to perform internally and which to outsource can lead to several strategy-executing advantages: lower costs, heightened strategic focus, less internal bureaucracy, speedier decision making, and a better arsenal of organizational capabilities. (c) McGraw-Hill Education 10-21 ILLUSTRATION CAPSULE 10.3 Which Value Chain Activities Does Apple Outsource and Why? How important is outsourcing to Apple’s marketplace success? Is outsourcing to low-wage overseas manufacturers to avoid paying higher wages in markets where it sells the majority of its products a failure of corporate social responsibility by Apple? © McGraw Hill (c) McGraw-Hill Education 10-22 Aligning the Firm’s Organizational Structure with Its Strategy Organizational structure: Comprises the formal and informal arrangement of tasks, responsibilities, lines of authority, and reporting relationships for the firm. Structure is aligned with strategy when: Its design contributes to the creation of value for customers. Its parts are aligned with one another and also matched to the requirements of the strategy. It lowers operating costs through lower bureaucratic costs and operational efficiencies. © McGraw Hill A firm’s organizational structure comprises the formal and informal arrangement of tasks, responsibilities, lines of authority, and reporting relationships by which the firm is administered. (c) McGraw-Hill Education 10-23 Matching a Type of Organizational Structure to Strategy Execution Requirements Simple Structure (Line-and-Staff) Functional Structure (Departmental or Unitary) Multidivisional Structure (Divisional or M-form) Matrix Structure (Composite or Combination) Strategy Execution Requirements: Chosen Strategy. Capabilities and Competencies. Centralized or Decentralized Control. © McGraw Hill Determining How Much Authority to Delegate Organizational Approaches to Decision Making: Centralized Decision Making: Authority is retained by top management. Decentralized Decision Making: Authority is delegated to lower-level managers and employees. © McGraw Hill Basic Tenets of Centralized Versus Decentralized Decision Making Centralized Organizational Structures Decentralized Organizational Structures Basic tenets Basic tenets Decisions on most matters of importance should be in the hands of top-level managers who have the experience, expertise, and judgment to decide what is the best course of action. Decision-making authority should be put in the hands of the people closest to, and most familiar with, the situation. Lower-level personnel have neither the knowledge, time, nor inclination to properly manage the tasks they are performing. Those with decision-making authority should be trained to exercise good judgment. Strong control from the top is a more effective means for coordinating company actions. A company that draws on the combined intellectual capital of all its employees can outperform a command-and-control company. © McGraw Hill (c) McGraw-Hill Education 10-26 Chief Advantages of Centralized Versus Decentralized Decision Making Centralized Organizational Structures Decentralized Organizational Structures Chief advantages Chief advantages Fixes accountability through tight control from the top. Encourages company employees to exercise initiative and act responsibly. Eliminates potential for conflicting goals and actions on the part of lower-level managers. Promotes greater motivation and involvement in the business on the part of more company personnel. Facilitates quick decision making and strong leadership in crisis situations. Spurs new ideas and creative thinking. NA Allows for fast response to market change. NA Entails fewer layers of management. © McGraw Hill Efforts to decentralize decision making and give company personnel some leeway in conducting operations must be tempered with the need to maintain adequate control and cross-unit coordination. (c) McGraw-Hill Education 10-27 Primary Disadvantages of Centralized Versus Decentralized Decision Making Centralized Organizational Structures Decentralized Organizational Structures Primary disadvantages Primary disadvantages Lengthens response times by those closest to the market conditions because they must seek approval for their actions. May result in higher-level managers being unaware of actions taken by empowered personnel under their supervision. Does not encourage responsibility among lower-level managers and rank-and-file employees. Can lead to inconsistent or conflicting approaches by different managers and employees. Discourages lower-level managers and rank-and-file employees from exercising any initiative. Can impair cross-unit collaboration. © McGraw Hill The ultimate goal of decentralized decision making is to put authority in the hands of those persons closest to and most knowledgeable about the situation. (c) McGraw-Hill Education 10-28 Capturing Cross-Business Strategic Fit in a Decentralized Structure Capturing Cross-Business Strategic Fit Through: Enforcing close cross-business collaboration to avoid duplication of effort. Centralizing related functions requiring close coordination at the corporate level. © McGraw Hill Capturing cross-business strategic fit includes enforcing close cross-business collaboration to avoid duplication of effort, as well as centralizing related functions requiring close coordination at the corporate level. (c) McGraw-Hill Education 10-29 Facilitating Collaboration with External Partners and Strategic Allies Strategic alliances. Outsourcing arrangements. Joint ventures. Cooperative partnerships. Creating a Network Structure: Using “relationship managers” to build and maintain cooperative arrangements of value for both parties. © McGraw Hill Relationship managers can be used to build and maintain cooperative arrangements of value to both parties. They facilitate strategic alliances, outsourcing arrangements, joint ventures, and cooperative partnerships. (c) McGraw-Hill Education 10-30 Further Perspectives on Structuring the Work Effort 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. © McGraw Hill A network structure is a configuration composed of a number of independent organizations engaged in some common undertaking, with one firm typically taking on a more central role. (c) McGraw-Hill Education 10-31 End of Main Content © 2022 McGraw Hill. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill. Because learning changes everything.® www.mheducation.com Text Alternates for Slide Images © McGraw Hill Figure 10.1 The 10 Basic Tasks of the Strategy Execution Process, Text Alternative Return to slide containing the original image. The action agenda for executing strategy: Staff the organization with managers and employees capable of executing the strategy. Develop the resources and capabilities required for successful strategy execution. Establish a strategy-supportive organizational structure. Allocate sufficient resources to the strategy execution effort. Institute policies and procedures that facilitate strategy execution. Adopt business management processes that drive continuous improvement. Install information and operating systems that support strategy execution activities. Tie rewards directly to the achievement of performance objectives. Foster a corporate culture that promotes good strategy execution. Exercise the leadership needed to propel strategy execution forward. Return to slide containing the original image. © McGraw Hill (c) McGraw-Hill Education 10-34 Figure 10.2 Building an Organization Capable of Proficient Strategy Execution: Three Key Actions, Text Alternative Return to slide containing original image. Staffing the organization. This includes putting together a strong management team and recruiting and retaining talented employees. Acquiring, developing and strengthening key resources and organizational capabilities. This action includes developing a set of resources and capabilities suited to the current strategy; updating resources and capabilities as external conditions and the firms strategy change; and finally, training and retaining company personnel to maintain knowledge-based and skills-based capabilities. Structuring the organization and work effort. The steps for this action include instituting organizational arrangements that facilitate good strategy execution; establishing lines of authority and reporting relationships; and deciding how much decision-making authority to delegate. These actions will lead to both strategy-supportive resources and capabilities, and a strategy-supportive organizational structure. Return to slide containing original image. © McGraw Hill (c) McGraw-Hill Education 10-35 Setting Stretch Goals: From Capability to Competence, Text Alternative Return to slide containing original image. Five steps take a stretch goal from capability to competence: Thinking strategically about a firms knowledge and skills base. Setting a stretch goal of developing an organizational ability to do something well. Evolving the ability into a competence or capability by performing it well and at an acceptable cost. Thinking strategically about a firms opportunities and challenges. Refreshing, updating, and upgrading competencies and capabilities as necessary to gain and maintain competitive advantage. Return to slide containing original image. © McGraw Hill Figure 10.3 Structuring the Work Effort to Promote Successful Strategy Execution, Text Alternative Return to slide containing original image. To create an organizational structure that is matched to the requirements of successful strategy execution, the following actions should be taken: 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 down the line. Provide for cross-unit coordination. Facilitate collaboration with external partners and strategic allies. This will structure the work effort to promote successful strategy execution. Return to slide containing original image. © McGraw Hill