CHAPTER 8

 Strategy Implementation – is the sum total of the activities and choices required for the execution of a strategic
plan.
 Program – to create a series of new organizational activities.
 Budget – to allocate funds to the new activities.
 Procedures – to handle the day-to-day activities.
 Matrix of change – help managers decide how quickly change should proceed.
 Synergy – the interaction or cooperation of two or more organizations to produce a combine effect greater than the
sum of their separate effects.
 Structure Follows Strategy – changes in corporate strategy lead to changes in organizational structure.
 Stages of Corporate Development
1. Stage 1 Simple Structure – typified by the entrepreneur, who founds a company to promote an idea.
2. Stage 2 Functional Structure – the point when the entrepreneur is replaced by a team of managers who
have functional specialization.
3. Stage 3 Divisional Structure – typified by the corporation’s managing diverse product lines in numerous
industries.
4. Stage 4 Beyond SBUs – corporation has grown too large and complex to be managed through formal
programs and rigid systems.
 Loyalty to comrades – this is good at the beginning but soon becomes a liability as “favoritism”
 Task oriented – focusing on the job is critical at first but then becomes excessive attention to detail
 Single-Mindedness – a grand vision is needed to introduce a new product
 Working in isolation – his is good for a brilliant scientist but disastrous for a CEO with multiple constituencies.
 Organizational Life Cycle – describes how organizations grow, develop and eventually decline.
 Matrix Structure – Employees have two superiors, a product or project manager, and a functional manager.
 Network Structure – a “non-structure” because of its virtual elimination of in-house business functions.
 Cellular Organization – composed of cells which can operate alone but which can interact with other cells to
produce a more potent and competent business mechanism.
 Reengineering – the radical redesign of business processes to achieve a major gain in cost, service, or time.
 Six Sigma – an analytical Method for Achieving near-perfect results in a production line.
 Bill Smith – Father of six sigma.
 DMAIC – used for projects aimed at improving an existing business process.
 Job Design – refers to the study of individual tasks in an attempt to make them more relevant to the company
and to the employees. Managers must specify what each of these jobs will do and get done.
 Job design involves specifying the content and methods of jobs.
1. Job simplification- is the process of configuring, or designing, jobs so that jobholders have only a small
number of narrow activities to perform.
2. Job rotation- is the practice of periodically shifting workers through a set of jobs in a planned sequence.
3. Job enlargement- is the allocation of a wider variety of similar tasks to a job in order to make it more
challenging.
4. Job enrichment- is the process of upgrading the job task mix in order to increase significantly the potential
for growth, achievement, responsibility, and recognition.
 Multinational Corporation (MNC)
- is a highly developed international company with a deep involvement throughout the world, plus a
worldwide perspective in its management and decision making.
 Global Industries – competitors compete in all markets and offer homogeneous products.
 Multi-domestic industries – firms compete in each national/separable market independently of other markets.
 Centralization – is the process of systematically retaining power and authority in the hands of higher-level
managers.
 Decentralization – it is the process of systematically delegating power and authority throughout the
organization to middle and lower-level managers.

CHAPTER 9
 Strategy Implementation through:
1. Acquisition Strategy or Merger – the act or process of combining two or more businesses into one
business.
2. Retrenchment Strategy – a large number of people may need to be laid off or fired.
 Integration Managers
- His job is
a. to prepare a competitive profile of the of the combined company in terms of strengths and weaknesses;
b. draft an ideal profile of what the combined company should like;
c. develop action plans to close the gap between the actuality and the ideal; and
d. establish training programs to unite the combined company and to make it more competitive.

 Staffing – involves hiring new people with new skills, firing people with inappropriate or substandard skills,
and/or training existing employees to learn new skills.
 Strategy – a careful plan or method for achieving a particular goal usually over a long period of time.
 Staffing follows Strategy
1. Changing Hiring and Training Requirements
2. Matching the Manager to the Strategy
 Career life cycle of top executives
a. Learning Stage – during the early years of executives’ tenure, for example, they tend to experiment
intensively with product lines to learn about their business.
b. Harvest Stage – their accumulated knowledge allows them to reduce experimentation and increase
performance.
c. Decline Stage – when they reduce experimentation still further, and performance declines.
 Types of Executives
a. Dynamic Industry Expert – for example, a corporation following a concentration strategy emphasizing
vertical/horizontal growth would probably want an aggressive new chief executive with a great deal of
experience in a particular industry.
b. Analytical Portfolio Manager – A diversification strategy, in contrast, might call for someone with an
analytical mind who is highly knowledgeable in other industries and can manage diverse product lines.
c. Cautious Profit Planner – a person with a conservative style, a production or engineering background, and
experience with controlling budgets, capital expenditures, inventories, and standardization procedures.
 Turnaround Specialist – weak companies in a relatively attractive industry tend to turn to a type of challenge-
oriented executive known as a turnaround specialist to save the company.
 Professional Liquidator – if a company cannot be saved, a professional liquidator might be called on by a
bankruptcy court to close the firm and liquidate its assets.
 Downsizing – it refers to the planned elimination of positions or jobs.
 Leading – coaching people to use their abilities and skills most effectively and efficiently to achieve
organizational objectives.
 Corporate Culture – has a strong tendency to resist change (mission, objectives, strategies, or policies) because
it’s very reason for existence often rests on reserving stable relationships and patterns of behavior. “Corporate
Culture should support the strategy”
 Communication – key to the effective management of change.
 METHODS OF MANAGING DIFFERENT CULTURE
a. Integration- Equal merger of both cultures into a new corporate culture
b. Assimilation- Acquiring firm’s culture kept intact, but subservient to that of acquiring firm’s corporate
culture
c. Separation-Conflicting cultures kept intact, but kept separate in different units
d. Deculturation-Forced replacement of conflicting acquired firm’s culture with that of the acquiring firm’s
culture
 Action plan – states what actions are going to be taken
 Management by Objectives (MBO)- technique that encourages participative decision making through shared
goal setting at all organizational levels and performance assessment based on the achievement of stated
objectives.
 Total Quality Management (TQM)-is an operational philosophy committed to customer satisfaction and
continuous improvement
 DIMENSIONS OF CULTURAL DIFFERENCES
a. Power distance (PD) – extent to which a society accepts an unequal distribution of power in organizations.
b. Uncertainty avoidance (UA) – extent to which a society feels threatened by uncertain
and ambiguous situations
c. Individualism-collectivism (I-C) – extent to which a society values individual freedom and independence of
action compared with a tight social framework and loyalty to the group.
d. Masculinity-femininity (M-F) – extent to which society is oriented toward money and things (which
Hofstede labels masculine) or toward people (which Hofstede labels feminine).
e. Long-term orientation – extent to which society is oriented toward the long versus the short-term.

CHAPTER 10
 Evaluation and control process – ensures that a company is achieving what it set out to accomplish.
 Performance – is the end result of activity.
 Steering controls – measure variables that influence future profitability.
 Output controls – specify what is to be accomplished by focusing on the end result of the behaviors through the
use of objectives and performance targets or milestones.
 Behavior controls – specify how something is to be done through policies, rules, standard operating
procedures, and orders from a superior.
 Input controls – emphasize resources, such as knowledge, skills, abilities, values, and motives of employees.
 Activity-Based Costing – is a recently developed accounting method for allocating indirect and fixed costs to
individual products or product lines based on the value-added activities going into that product.
 Enterprise Risk Management (ERM) – is a corporate-wide, integrated process for managing the uncertainties
that could negatively or positively influence the achievement of the corporation’s objectives.
 Shareholder Value – defined as the present value of the anticipated future stream of cash flows from the
business plus the value of the company if liquidated.
 Balanced Scorecard – combines financial measures that tell the results of actions already taken with operational
measures on customer satisfaction, internal processes, and the corporation’s innovation and improvement activities.
 Key performance measures – measures that are essential for achieving a desired strategic option.
 Management Audit – are very useful to boards of directors in evaluating management’s handling of various
corporate activities.
 Strategic Audit – provides a checklist of questions, by area or issue, which enables a systematic analysis of various
corporate functions and activities to be made.
 Responsibility centers – used to isolate a unit so that it can be evaluated separately from the rest of the corporation.
 Standard cost centers – center that is primarily used in manufacturing facilities.
 Revenue centers – production is measured without consideration of resource costs.
 Expense centers – resources are measured in dollars, without consideration for service or product costs.
 Profit centers – performance is measured in terms of the difference between revenues and expenditures.
 Investment centers – measured in terms of the difference between its resources and its services or products.
 Benchmarking – is the continual process of measuring products, services, and practices against the toughest
competitors or those companies recognized as industry leaders.
 Strategic information systems – help businesses and organizations categorize, store, process and transfer the
information they create and receive.
 Enterprise resource planning (ERP) – this means that employees in different divisions—for example, accounting
and sales—can rely on the same information for their specific needs.
 Radio-frequency identification (RFID) – is the use of radio waves to read and capture information stored on a
tag attached to an object.
 Short-term orientation – is when you are focused on the present or past and consider them more important
than the future.
 Goal Displacement – a situation in which the original goals of the organization are superseded by the
new goals which are developed during the course of time.
 Behavior substitution – a phenomenon where employees substitute activities that do not lead to accomplishing
their assigned goals.
 Sub-optimization – it refers to the practice of focusing on one component of a total and making changes
intended to improve that one component.
 Strategic Incentive Management – the way organizations should formulate compensation strategies keeping in
mind their employees’ interest.
 Weighted-Factor Method – incentive management base on how well the company performs.
 Long-term evaluation method – incentive and reward of the managers/employees depends on the
tenacity/tenurity.