1. WK12.1 Agenda Project presentation Olympic Evaluation Exam Part II next Friday August 27, 2010 1 MIB, BBA 2010

2. WK12.2 Agenda Evaluation & Suggestion Exam Part II next Friday August 27, 2010 Lecture Mind map MIB, BBA 2010 2

3. Strategy Implementation Formulation vs. Implementation~ Idea vs. Work Result Success story, Failure story? A strategic plan which is executed through programs, budgets, and procedures. Key Implementation Questions Who will implement the plan? What must be done to align with the company’s operations in the new direction? How is strategy to be implemented? MIB, BBA 2010 3

4. 1.) Who will implement the plan? VP of functional areas Directors of divisions SBUs Plant managers Project managers Unit heads Supervisors Employees Communication is the key. Involve all levels in the formulation and implementation MIB, BBA 2010 4

5. 2.) What must be done? MIB, BBA 2010 5

6. 3.) How is strategy to be implemented? Structure follows strategy: Always? New strategy is created. New administrative problems emerge. Economic performance declines. New appropriate structure is invented. Profit returns to previous level. Example: KU structure vs. UBU structure Corporate, business, functional strategy? Video Clips MIB, BBA 2010 6

7. Organizational Life Cycle MIB, BBA 2010 7

8. Changing Structural Characteristics of Modern Organizations Old Organization Design One large corporation Vertical communication Centralized, top down decision making Work/quality teams Functional work teams Minimal training Specialized job design focused on individuals MIB, BBA 2010 8 New Organization Design Mini business units and cooperative relationships Horizontal communication Decentralized participative decision making Outsourcing and virtual organizations Autonomous work teams Cross functional work teams Extensive training Value chain, team focused job design

9. Six Sigma: Quality & Efficiency A business philosophy that uses data and statistical tools to systematically improve quality and process to achieve the highest level of customer satisfaction. Motorola: reduce the defects to 3 parts/million DMAIC 5S: workplace organization methodology(sorting, setting in order, sweeping, standardizing, sustaining) Kaizen:eliminate waste in all systems of an organization through improving standardized activities and processes MIB, BBA 2010 9

10. Designing Jobs: Satisfaction & Motivation Job enlargement: more work Job rotation: more variety Job enrichment: more autonomy and control Use job characteristics model in job redesigning to improve job performance through job enrichment MIB, BBA 2010 10

11. International Issues in Strategy Implementation MNCsInternational Strategic Alliances(add value, contribute key strength but protect core competencies) Stages of International Development Domestic company Domestic company with export division Domestic company with international division MNC with multidomestic emphasis MNC with global emphasis Centralization vs. Decentralization Product-group structure: Global product, similar product around the world Geographic-area structure: Customized product for each region MIB, BBA 2010 11 Pressures for cost reductions Pressure for local responsiveness

12. Strategy Implementation: Staffing and Leading Staffing: focuses on the selection and use of employees (hiring, firing, and training). Leading: emphasizes the use of programs to better align employee interests and attitudes with a strategy. MIB, BBA 2010 12

13. Staffing follows strategy, Hiring & Training MIB, BBA 2010 13

14. Manager & Strategy MIB, BBA 2010 14

16. Insiders

17. Outsiders: No heir, Turnaround

18. Identifying Abilities and Potential

19. Performance appraisal system

20. Assessment centers: IBM, GE, SEARS

21. Job rotation: mix experiencesMIB, BBA 2010 15

23. Cultural flexibility

24. Organizational change possible

25. Commitment to strategy implementationMIB, BBA 2010 16

26. Managing Culture After an Acquisition Communicate the rationale for strategic changes. Integration: give and take, Renault&Nissan Assimilation: adopts the dominant acquiring culture Separation: no cultural exchange Deculturation: destructive method, confusion and stress MIB, BBA 2010 17

27. Example of an Action Plan Specific actions to be taken Dates to begin and end each action Person responsible for carrying out each action Person responsible for monitoring Expected financial and physical consequences of each action Contingency plan MIB, BBA 2010 18

28. Other Leading Topics Management By Objectives Total Quality Management (TQM):prevention Hofstede Dimension Put the right man at the right job at the right time MIB, BBA 2010 19

29. WK12.3 Agenda Lecture on evaluation & control Mind map Mission Possible Exercise Monday bring your note book for case study. Exam part II next Friday August 27, 2010. MIB, BBA 2010 20

31. 1.)What to measure? Performance is the end result of activity. Appropriate measures depends on the objective of the strategy. Air Asia, CPF UBU, RU, CU Measures: financial, customers, process, innovation and learning,human resource, IT, community Measure controls at all three levels(Corporate, Business, Functional) MIB, BBA 2010 22

32. 2.) Appropriate Measures MIB, BBA 2010 23

33. 2.)Appropriate Measures Leading indicator, Input Controls: lead to the desire result, can predict the result and can fix the result Control chart Lagging indicator, Output Controls: post mortem study, can not fix or change anything Profit and loss, Market share, ROI, ROE Behavioral Controls: when performance results are hard to measure but the cause and effect between the activities and results is clear.(ISO 14000) MIB, BBA 2010 24

35. Not adequate measures for corporate performance

36. Dot.com measurement examplesMIB, BBA 2010 25

37. 2.) Appropriate Measures Other standard measures Stakeholder Measures: impact of the corporate activities on stakeholder interests Ex: Air Asia New Advertisement Campaign MIB, BBA 2010 26

39. Ohishi EVA, Thai Bev MVA?MIB, BBA 2010 27

40. 2.) Appropriate Measures Other Standard Measures: Balanced Scorecard for the four areas Financial: ROI, ROE, Cash Flow, sales growth Customer: market share, customer satisfaction, #of complaints, brand recognition, etc. Internal business process: inventory turnover, waste reduction, respond time, cycle time, down time, etc. Innovation & Learning: turnover rate, job satisfaction MIB, BBA 2010 28

41. 2.) Appropriate Measures Other Standard Measures: Top management and the board of directors Short Term: Profitability such as ROI, ROE, EPS Long Term: Corporate direction, Team building, Leadership, Measures should come from the vision and mission and can include safety or quality as well. MIB, BBA 2010 29

42. 2.) Appropriate Measures Other Standard Measures: Measures for divisional and functional performance: Responsibility centers(cost, revenue, expense, profit, and investment): evaluate separate from the corporate Other Standard Measures: Benchmarking Locate the significant point, area or process. Select the measurement. Select the benchmark company. Calculate the gap and find the cause of the gap. Develop the program to close that gap. Implement. MIB, BBA 2010 30

43. 3-5)Measure and correction MIB, BBA 2010 31

44. International Measurement Issues MIB, BBA 2010 32

45. Strategic Information System Enterprise Resource Planning (ERP) Wiki definition: an integrated computer-based system used to manage internal and external resources, including tangible assets, financial resources, materials, and human resources Software provider: SAP, PeopleSoft, Oracle Divisional and functional IS support PRISM by Merrill Lynch, MRPERP MIB, BBA 2010 33

47. Monitor meaningful activities and results regardless of the difficulty in measurement, cooperation measurement?

48. Timely, leading variables

49. Long and short-term

50. Pinpointing exceptions: correction action for results outside tolerance

52. Goal displacement

53. Behavior substitution: quantifiable measures drive out non quantifiable measures, SEARS repair bill, University research number, student number

54. Suboptimization:unit optimization detriment the organization goal, Marketing vs. Manufacturing, Liberal art & other facultiesMeasurable Controllable MIB, BBA 2010 34

56. High growth measures: market share, sales growth

57. Low growth measures: ROI, cash generate

58. Long-term evaluation method: Stock or performance units reward to top management who stay with the company and perform well.

59. Strategic funds method: development expense is separate from operation expense, BBA

60. Separate strategic fundsdevelop weighted factor chart for each SBUMeasure performanceMIB, BBA 2010 35

61. Mind Map Summary MIB, BBA 2010 36

62. Mission Possible Exercise State your mission. Write your strategy, implementation, and your control measurement. Summarize to your friend and present to the class. MIB, BBA 2010 37