Business Strategy Chp 10 - Strategy Execution practice exam with verified solutions.

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 years longer to develop as a real proficiency than developing a strategy - Requires a determined commitment to change, action, and performance Superior Strategy Execution Capabilities - 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 Superior strategy execution capabilities are the only source of ________________ when strategies are easy for rivals to copy sustainable competitive advantage 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 1. meeting or beating its performance targets 2. performing value chain activities in a manner that is conducive to companywide operating excellence 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) Action Agenda for Executing Strategy (chapter 10) 1. Staff the organization with the RIGHT PEOPLE for executing the strategy 2. Build organizational CAPABILITIES required for successful strategy execution 3. Establish a STRATEGY-SUPPORTIVE ORGANIZATIONAL STRUCTURE 1. Staff the organization with the RIGHT PEOPLE for executing the strategy Putting together a talented management team with the right mix of experiences, skills, and abilities to get things done 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 **A critical mass of talented activist managers In many industries, ____________________ are more important to good strategy execution than additional investments in capital projects adding to a company's talent base and building intellectual capital 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 - Rotate promising people through challenging, and skill-stretching international assignments - Make the work environment stimulating and engaging so that the firm is considered a great place to work - Use an assortment of financial incentives and other perks to retain employees - Coach average performers to improve their skills and capabilities, while weeding out under-performers 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 2. Three Approaches to building organizational CAPABILITIES required for successful strategy execution 1. Develop capabilities internally *most common* 2. Acquire capabilities through mergers and acquisitions 3. Access capabilities via collaborative partnerships Building new competencies and capabilities is a __________ that occurs over a period of months and years. It is not something that is accomplished overnight Multistage Process (1) Managerial actions to developing capabilities internally 1. Strengthen the firm's base of skills, knowledge, & intellect 2. Coordinate & integrate the efforts of work groups & departments 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 A company's capabilities must be continually refreshed and renewed to remain aligned with ____________________ Changing customer expectations, altered competitive conditions, & new strategic initiatives (2) Three reasons (questions?) for using mergers and acquisitions to develop capabilities - Question of market opportunity - Question of competitive necessity - Question of successful integration Question of market opportunity When a market opportunity can slip by faster than a needed capability can be created internally Question of competitive necessity When industry conditions, technology, or competitors are moving at such a rapid clip that time is of the essence Question of successful integration Tacit knowledge and complex routines may not transfer readily from one organizational unit to another (3) Three approaches to acquiring capabilities from an external source 1. Outsource the function requiring the capabilities to a key supplier or another provider 2. Collaborate with a firm that has complementary resources and capabilities 3. Engage in a collaborative partnership for the purpose of learning how the partner does things 3. Establish a STRATEGY-SUPPORTIVE ORGANIZATIONAL STRUCTURE (four steps in matching structure to strategy) 1. Decide which value chain activities to perform internally and which ones to outsource 2. Align organizational structure/chart to the strategy 3. Decide how much authority to centralize at the top and how much to delegate to down-the-line managers and employees 4. Facilitate collaboration with external partners and strategic allies Outsourcing's Execution-Related Benefits - Helps in outclassing rivals in strategy-critical activities and in turning a core competence into a distinctive competence - Decreases bureaucracies, flattens structure, speeds decision making, and shortens respond time to changing market conditions