Professional Documents
Culture Documents
Management and Operation Issues: Implementing Strategies
Management and Operation Issues: Implementing Strategies
1. Annual objective serve as guidelines for action, directing and channeling effort and activities of
organization members
2. They provide a source of legitimacy in an enterprise by justifying activities to stake holders
3. They serve standard of performance
4. They serve as an important source of employee motivation and identification
5. They give incentives for managers and all employees to perform
6. They provide a basic for organization design
Company Strategy
Acquire a chain of retail stores to meet our sales growth and profitability objectives.
Supporting Policies
1. “All stores will be open from 8 am to 8 pm Monday through Saturday” (this policy could
increase retail sales if stores currently are open 40 hours a week)
2. “All stores must submit a Monthly Control Data Report” (this policy could reduce
expense-to-sales ratio)
3. “All stores must support company advertising by contributing 5% of their total monthly
revenues for this purpose (this policy could allow the company to establish a national
reputation)
4. “All stores must adhere to the uniforms pricing guidelines set forth in the Company
Handbook (this policy could help assure customers that the company offers a consistent
product in terms of price and quality in all its stores)
Telkom University
Divisional Objectives
Increase the division’s revenues from $ 10 million in 2007 to $ 15 million in 2008.
Supporting Policies
1. “Beginning in January 2008 each one of this division’s salespersons must file weekly
activity report” (this policy could ensure that salespersons do not place too great an
emphasis in certain areas)
2. “Beginning in January 2008 this division will return to its employee 5% of its gross
revenues in the form of holiday bonus” (this policy could increase productivity)
3. “Beginning in January 2008 inventory level carried in warehouse will be decreased by
30% in accordance with a just-in-time (JIT) manufacturing approach” (this policy could
production expenses and thus free funds for increased marketing effort)
Telkom University
Supporting Policies
1. “Beginning in January 2008 , employee will have the option of working up to 20 hours of
overtime per week” (this policy could minimized the need to hire additional employees)
2. “Beginning in January 2008 perfect attendance award in the amount $ 100 will be given
to all employee who do not miss a workday in a given year ” (this policy could decrease
absenteeism and increase productivity)
3. “Beginning in January 2008 new equipment must be leased rather than purchased ”
(this policy could reduce tax liabilities and thus allow more funds to be invested in
modernizing production process)
Change in Strategy
require change in • Structure dictates how resource will be allocated. If an organization’s
Organizational structure is based on customer group, then resource will be allocated in
Structure that manner, if based on functional business lines, then resource will be
Why ?
allocated by functional area
Chandler’s Strategy-Structure Relationship
General
Manager
Marketing Production
Manager Manager
Quality
Advertising Sales Control
Advantage Disadvantage
BOD BOD
General General
Affair Affair
BOD BOD
General General
Affair Affair
Divisional Structure • Org’ whose strategies need to be tailored to fit the particular need
by geographic and characteristic of customers in different area
Advantage Disadvantage
Chief Executive
Conoco Product’s Org’ Chart Officer
Adhesive Flexible
Tubes / Cores High Density Film Metal Ends
Packaging Paper Division Reels Division Packaging Rigid Division
Division Division Division
Division Division
Chief Executive
Officer
Chief VP Human
Chief Finance Chief Strategy Chief Information VP Marketing
Operating Resource
Officer (CFO) Officer (CSO) Officer (CIO)
Officer (COO)
Project-1 A B C D E F
Project-2 G H I J K L
Project-3 M N O P Q R
Advantage Disadvantage
• Project objective are clear • Requires excellent vertical and
horizontal flows of communication
• Employee can clearly see result of
their work • Costly because create more manager
position
• Shutting down a project is easily • Violate unity of command principle
accomplished
• Creates dual lines of budget authority
• Facilitates uses of special
equipment/ personal/ facilities • Creates dual sources of reward and
punishment
• Functional resources are shared • Creates shared authority and
instead of duplicated as in a reporting
divisional structure • Requires mutual trust and
understanding
Restructuring also called downsizing, right sizing, or delayering involve reducing the size of the
firm in term of number of employee, number of division, number of hierarchical level in the
organization
Are people talking more about their activities and taking pride in early success
Does the plan capture attention ?
under the plan ?
Does employee understand the plan Can participants explain how it works and what they need to do to earn
? the incentive
Is the plan improving Do employees know more than they used to about the company’s mission, plans
communication ? & objective?
Does the plan pay out when it Are incentive being paid for desired result-and being withheld when objective
should are not met ?
Is the company or unit performing Are profits up ? Has market share grown ? Have gains resulted in part from the
better ? incentive ?