The Strategic Management Process

Types of Organizational Strategies

Corporate Strategies Competitive Strategies Functional Strategies

Corporate Strategies : Top managements overall plan for the entire organization and its strategic business units Competitive Strategies : Strategy for how an organization will compete in its business(es) Functional Strategies : Strategies used by an organizations various units to support the competitive strategy

The BCG Matrix

First-Mover AdvantagesDisadvantages

Advantages
Reputation for being innovative and industry leader Cost and learning benefits Control over scarce resources and keeping competitors from having access to them Opportunity to begin building customer relationships and customer loyalty

Disadvantages
Uncertainty over exact direction technology and market will go Risk of competitors imitating innovations Financial and strategic risks High development costs

Exhibit 72

Types of Plans

Exhibit 98

Events and Activities in Constructing an Office Building

Exhibit 99

A Visual PERT Network for Constructing an Office Building

Critical Path: A - B - C - D - G - H - J - K

Allocating Resources: Analysis (contd)

Breakeven Analysis
Is used to determine the point at which all fixed costs have been recovered and profitability begins.
Fixed cost (FC) Variable costs (VC) Total Fixed Costs (TFC)

Price (P)

The Break-even Formula:

Total Fixed Costs Breakeven: Unit Price - Unit Variable Costs

Organizational Design Decisions

Mechanistic Organization
A rigid and tightly controlled structure
High specialization Rigid departmentalization Narrow spans of control High formalization Limited information network (downward) Low decision participation

Organic Organization
Highly flexible and adaptable structure
Non-standardized jobs Fluid team-based structure Little direct supervision Minimal formal rules Open communication network Empowered employees

Exhibit 105

Mechanistic versus Organic Organization

High specialization

Cross-functional teams

Rigid departmentalization
Clear chain of command Narrow spans of control Centralization High formalization

Cross-hierarchical teams
Free flow of information Wide spans of control Decentralization Low formalization

Exhibit 107

Strengths and Weaknesses of Traditional Organizational Designs

Stages of Group Development

Stages in Group Development

Forming
Members join and begin the process of defining the groups purpose, structure, and leadership.

Performing
A fully functional group structure allows the group to focus on performing the task at hand.

Storming
Intragroup conflict occurs as individuals resist control by the group and disagree over leadership.

Adjourning
The group prepares to disband and is no longer concerned with high levels of performance.

Norming
Close relationships develop as the group becomes cohesive and establishes its norms for acceptable behavior.

1113

The Relationship Between Cohesiveness and Productivity

Conflict and Group Performance

Conflict-Management Techniques

Source: Adapted from K.W. Thomas, Conflict and Negotiation Processes in Organizations, in M.D. Dunnette and L.M. Hough (eds.) Handbook of Industrial and Organizational Psychology, vol. 3, 2d ed. (Palo Alto, CA: Consulting Psychologists Press, 1992), p. 668. With permission

Attribution Theory

Gen Y Workers

Source: Bruce Tulgan of Rainmaker Thinking. Used with permission.

Three Common Organizational Communication Networks and How They Rate on Effectiveness Criteria

Herzbergs Motivation-Hygiene Theory

Contrasting Views of Satisfaction-Dissatisfaction

Job Characteristics Model

Equity Theory

Exhibit 171

Seven Traits Associated with Leadership

Source: S. A. Kirkpatrick and E. A. Locke, Leadership: Do Traits Really Matter? Academy of Management Executive, May 1991, pp. 4860; T. A. Judge, J. E. Bono, R. llies, and M. W. Gerhardt, Personality and Leadership: A Qualitative and Quantitative Review, Journal of Applied Psychology, August 2002, pp. 765780.

Exhibit 174

Findings of the Fiedler Model

Contingency Theories (contd)

Hersey and Blanchards Situational Leadership Theory (SLT)
Creates four specific leadership styles incorporating Fiedlers two leadership dimensions:
Telling: high task-low relationship leadership Selling: high task-high relationship leadership

Participating: low task-high relationship leadership

Delegating: low task-low relationship leadership
2007 Prentice Hall, Inc. All rights reserved. 1726

Contingency Theories (contd)

Hersey and Blanchards Situational Leadership Theory (SLT)
Posits four stages follower readiness:
R1: followers are unable and unwilling R2: followers are unable but willing R3: followers are able but unwilling

R4: followers are able and willing

2007 Prentice Hall, Inc. All rights reserved.

1727

Exhibit 177

Path-Goal Theory

What Is Control?
Controlling
The process of monitoring activities to ensure that they are being accomplished as planned and of correcting any significant deviations.

The Purpose of Control

To ensure that activities are completed in ways that lead to accomplishment of organizational goals.

The PlanningControlling Link

Managerial Decisions in the Control Process

Seven Quality Control Tools

Pareto Analysis Flow Chart Check Sheet Histogram Scatter Diagram SPC Chart Cause-and-Effect Diagram
1 2 3 4
Dirt Old Temp Fault

Process 1 2 3 4 5

x x x

x x x x x x

x xx x x x UCL

LCL

Pareto Chart
NUMBER OF DEFECTS
80 16 12 7 4 3 3 125

CAUSE

PERCENTAGE 64 % 13 10 6 3 2 2 100 %

Poor design Wrong part dimensions Defective parts Incorrect machine calibration Operator errors Defective material Surface abrasions

Control Chart

Cause-and-Effect Diagram
Measurement
Faulty testing equipment Incorrect specifications Improper methods

Human
Poor supervision Lack of concentration Inadequate training

Machines
Out of adjustment Tooling problems Old / worn

Inaccurate temperature control

Quality Problem
Defective from vendor Not to specifications Poor process design Ineffective quality management Deficiencies in product design

Dust and Dirt

Materialhandling problems

Environment

Materials

Process