EXAM 3

• The 3 components of building a capable organization are:

  1. Staff the organization with the right people to execute the strategy
  2. Build the organizational capabilities required for successful strategy execution
  3. establish a strategy-supportive organizational structure 
• What is a good way to recruit, train, and retain capable employees?

  • Intensively screen
  • rotate through skill stretching positions
  • stimulating work environment
  • financial incentives to perform 
  • coach average perfomers (succession plan)
• Marginal actions to develop core competencies and competitive capabilities internally generally take one of two forms:

  1. strengthening company's skills, knowledge, & experience
  2. coordinating and integrating efforts of various departments.
• In order to coordinate and control the complex set of activities, managers must ensure

  the various parts of the organizational structure are aligned with one another and are also matched to the requirements of the strategy.
• Disadvantages of the centralized organization:

  • lengthens response times
  • discourages responsibility & initiative of lower-level managers & rank-and-file employees
  • diverts authority away from those closest to, and most knowledgable about, the situation for actions
• what is generally the cheapest way for a company to raise some cash

  Take out a loan
• The 6 sigma process of define, measure, analyze, improve, and control (DMAIC) is

  an improvement system for existing processes falling below specification and needing incremental improvement
• The broad areas that internal information business systems need to cover include

  1. financial performance data
  2. supplier/strategic partner data
  3. customer data
  4. operations data
• Management’s most powerful tool for mobilizing organizational commitment to competent strategy execution and operating excellence is the

  proper use of a reward structure with motivational incentives and rewards
• A company’s corporate culture is BEST defined and identified by

  1. the company's shared values
  2. ingrained attitudes
  3. core beliefs
  4. company traditions that determine norms of behavior
  5. accepted work practices of "how we do things around here"
  6. styles of operating.
• A company’s culture is typically founded on and shaped by

  its core values and the bar it sets for ethical standards
• A work environment where the culture is in sync with the chosen strategy & is conducive to good strategy execution is considered a valuable managerial ally because.


  it provides company personnel with clear guidance regarding "how we do things around here" and produces significant peer pressure from co-workers to conform to culturally acceptable norms
• Work environment


  Where the culture is in sync with the chosen strategy & is conducive to good strategy execution
• Valuable managerial ally


  • Provides company personnel with clear guidance regarding "how we do things around here"
  • Produces significant peer pressure from co-workers to conform to culturally acceptable norms
• Wells Fargo's culture under Mr. Stumpf

  Strong but unhealthy
• First step in changing a problem culture

  Recognize and believe you have a problem culture
• Countable nouns


  "Amount" vs "Number"
• The ____ of users that Spotify has

  Number (countable)
• I listen to Spotify for a huge _____ of time

  amount (not countable)
• The typical ____ of students on a glo-bus team

  number
• Superior strategy execution might be the only sustainable competitive advantage you have because everyone has the same commodities
• Signs of good strategy execution

  1. operating excellence
  2. beating performance targets
• Operational Excellence is when your company can deliver products or services at lower costs than competitors, while maintaining quality.
• 3 steps for good strategy execution

  1. staffing with the right people
  2. Building capabilities
  3. establishing a strategy supportive to the org structure
• most valuable resource


  the right people
• most important aspect of building an organization

  talent base
• 3 approaches to building capabilities

  1. develop internally
  2. Acquire
  3. partnerships
• Develop Internally - build internal talent pool by training employees on new skills needed to execute strategy
• Acquire - buy companies that have the expertise/capabilities needed to implement strategy
• Partnerships - partner with other firms who can bring their own unique set of skills or resources to complement your firm's strengths
• Organizational structure: who you formally and informally report to
• 4 types of organizational structure:

  1. Simple structure
  2. function
  3. Multidivisional
  4. matrix
• simple structure is best when there are few people, little specialization, and low complexity
• multidivisional structure is best when there are many people, high specialization, and high complexity
• Function Structure: 


  managers over each department, task specialization
• problem with functional structure


  common to only understand own department ("Throw it over the wall")
• Matrix structure


  every department sits together, better communication, more customer-focused, task specialization
• Centralized authority advantages

  • eliminate conflicting decisions
  • quick decision making under crisis
• centralized authority disadvantages

  • lengthens response time
  • doesn't encourage responsibility
  • discourages lower-level managers
• Decentralized authority advantages

  • encourage employees to take initiative
  • think more creatively
  • Greater motivation