GMBA

November, 2010 Cohort - 2010 SPJCM

Global Business Strategy 2

Faculty: Prof. I. Contardo Sessions: 12 Credit: 1.0

Strategy Implementation & Corporate Change

The vast majority of newly-formulated business strategies - no matter how well crafted or ingenious they are - fail in their implementation. In some cases, they end up as faint, half-hearted replicas of the original plans; in other cases, they simply never materialize at all. Companies rise and fall not only due to their strategic brilliance or cleverness, but most importantly according to their ability to execute on their strategic intents. This advanced course addresses the managerial challenge of strategy implementation. It focuses more specifically on the behavioral aspects of strategic execution, namely on the thinking, speaking and behaving differently. At the core of the subject stands the idea that there are immense difficulties at work while changing an organization. Accordingly, the course relies on two overarching frameworks. The first is a model of organizational alignment; the second is a model for managing the change process. The course will emphasize application and practice, primarily by the use of cases. Participants will be asked, class after class, to take the position of a senior manager or an advisor to a manager, and develop answers to questions like these: What is the real problem here? How are the elements of the problem interconnected? What should be done? How, specifically, should we go about it? What lessons need to be learned for similar situations? This course is designed to help you gain awareness and appreciation of implementation issues of formulated strategies. It is particularly important and relevant for a broad array of students but particularly to those hoping to be line managers, consultants, investors, sound operations managers and entrepreneurs. We will be primarily taking the point of view of senior managers. However, the frameworks, tools, and skills you will develop will be useful to you early in your careers, as you face the need to manage change in your own subunits, as well as the need to comprehend and contribute to firm-wide changes.

The objectives are: 1. To develop an understanding of strategy implementation or execution in complex organizations. The focus is on developing a logical model of an approach to execution that highlights key decisions or actions and their relationships. 2. To understand how organizational context and managerial decisions are interdependent\ and critical to the successful execution of strategy. 3. To develop a sensitivity to the "realities" of organizations. It is necessary to see strategy implementation as a process of resource allocation, influence, and change that, to be successful, must take a number of factors into consideration, including how decisions affect individuals in the organization and their consequent commitment to execution efforts. We will be analyzing a number of cases and articles through discussion. For these debates, it is absolutely imperative that you prepare for the class. I will provide questions to direct your reading and analysis. You need to be prepared to answer questions regarding the companys situation, provide recommended courses of action and give reasons for your decisions. Preparation & Attendance I expect the participants to come to class prepared and take an active role in the daily activities. You can prepare individually and in your groups. I may call upon you to start the discussion on any day. If you have been unable to prepare adequately for the discussion, please tell me before the discussion session begins. Naturally your class participation grade will be adjusted accordingly. Needless to say that class attendance is compulsory. Pedagogy You will have a variety of opportunities to show your knowledge and learning. Class participation is the pillar of peer to peer learning. It allows you to display your understanding of the important concepts and techniques of strategic management. Presentations and analysis of articles together with contribution of Videos in class allows you to develop your analytic skills and your ability to think on your feet. Written essay questions and case analyses allow you to demonstrate your analytical skills in a formal way. A. Class participation 25% of final grade I will assign participation grades based on the quality of your participation, not just the quantity. Indeed, simply monopolizing air time without adding to the learning of the group will not garner credit and may even detract from it. Some of the criteria I will use to evaluate participation quality include: Are your points relevant to the discussion? Do you go beyond a mere recitation of case facts? Are your implications clearly drawn?

 Do you enhance the classs understanding of the issues? To help me evaluate class participation fairly, please choose and stay in the same seat throughout the term. That way, the probability of erroneous participation credit will be minimized. B. Quiz 5% of final grade C. Group Project 25% of final grade Each group will choose one case to analyze and produce a presentation of half an hour each session will showcase two groups. For this only your PowerPoint Presentation is required as Submission. Your front page should highlight your pictures with names. PowerPoint is due on the same day of presentation. D. Final exam 45% of final grade The final examination requires students to reply to essay questions. All students are expected to write the final exam. Any student choosing not to write the final exam will not receive a passing grade in the course. Required Readings All articles, cases (and an occasional book chapter) can be found either on BlackBoard or in the book: Contemporary Strategic Management, by Robert M. Grant.

Syllabus Part I: Conceptual Models of Execution and Change

Session 1 The World in Flux Readings: 1. Grant, Chapter 10: Industry Evolution & Strategic Change 2. PPT Lecture: Managing Change & Reconciling Dilemmas THT Model of the Onion Corporate Culture What is change and how to manage it? Why is strategy implementation so much more difficult than strategy formulation? What are the major obstacles to successful implementation? How do managers address execution in a logical way?

Session 2 Issues of Strategy Implementation: Neuroscience and High-Performance Readings: 1. Kotter, Leading Change: Why Transformation Efforts Fail, Harvard Business Review (March-April 1995). 2. Rock, Managing with the Brain in Mind, strategy+business, Booz&Co, (Autumn, 2009). What are the problems and issues raised by the articles? What are the solutions the authors recommend? What is right about Kotter model? What is wrong? Any change in paradigm you can determine from the Booz&Co article? What are the key differences and implications for strategy execution? Presentations by 2 Teams (Team 1&2)

Session 3 Reaching from Corporate to Business Strategy: What matters most? Reading: 1. Case: Portfolio Planning at Ciba-Geigy and the Newport investment proposal (HBS 9795-040) Should Ciba make the Newport investment? Which option? What problems do you anticipate between Corporate and Business levels due to the portfolio planning?

What are the purposes of portfolio planning, and what are its advantages and disadvantages in the context of the case? Does the model fulfill its purpose in this instance? If not then explain what are the learnings from the model

Session 4 Diagnosing Organizational Problems: Focusing on Alignment Readings: 1. Beer et al., Why Change Programs Dont Produce Change. Harvard Business Review (Nov-Dec, 1990). 2. Case: SMA Micro-Electronic Products Division (A) (HBS 9-400-084) Question: What are the problems besetting SMA? How might the critical path be employed here to overcome these? What are the strengths/benefits of such a decentralized structure? What are some possible weaknesses or problems? What can go wrong? What are the critical prerequisites for the success of such a structure? Presentations by 2 Teams (Team 3&4)

Session 5 A Dynamic Framework for Organizational Change in the 21st Century Readings: 1. Kaplan & Norton, Why System, Not Structure, is the way toward strategic alignment: A historical perspective, Balanced Scorecard Report Insight, experience & ideas for strategy-focused organizations (July, 2011). 2. Kim & Mauborgne, How Strategy Shapes Structure, Harvard Business Review (September, 2009). How does strategy affect structure? How do structure and the strategy-structure relationship affect organizational performance? What are process and purpose specialization? What is better, centralization and decentralization?

Session 6 Complicated Issues of Bureaucracy: What Happens as Firms Grow? Readings: 1. Greiner, Evolution and Revolution as Organizations Grow. Harvard Business Review (May-June 1998). 2. Case: Merck Latin America (A) (HBS 9-401-029) What is the strategic fitness process described in the case?

How does it help to overcome the bureaucracy and help the turnaround at Merck? How does bureaucracy develop? Presentations by 2 Teams (Team 5&6)

Part II: Major Balancing Acts in Strategy Implementation

Session 7 Translating Strategy into Short-term Objectives: The Balanced Scorecard Readings: 1. Kaplan & Norton, Balanced Scorecard: Measures that drive performance, Harvard Business Review (July-August, 2005). 2. Case: Chemical Bank - Implementing the Balanced Scorecard (HBS 9-195-210) What is the Balanced Scorecard? What purpose does it serve? Chemical seems to be quite taken with the Balanced Scorecard as a management tool. Why? What is your opinion of its utility in strategy implementation?

Session 8 Integration: Managing Interdependence, Coordination Requirements and Knowledge Transfer Reading: 1. Campbell, Whitehead and Finkelstein, Why good leaders make bad decisions, Harvard Business Review (February, 2009). 2. Case: McKinsey & Co: Managing Knowledge and Learning (HBS 9-396-357) Use the 7-S Framework to explain the situation Describe the interdependences in a consulting business: What challenges do they present for effective implementation? Are implementation issues or problems different in service organizations from industrial, B-to-B or B-to-C organizations, e.g. a large consulting firm? How does one share and coordinate knowledge across 69 offices worldwide and disseminate learning to 3800 consultants? How viable and sustainable is the model at McKinsey? Compare to that of Booz&Allen Presentations by 2 Teams (Team 7&8)

Session 9 Social Incentives and Leadership Styles in the Implementation of Strategy Readings: 1. Sims, Faraj and Yun, When should a leader be directive or empowering? Science Direct Kelley Shool of Business, 2009, 52, 149-158.

Session 10 Power and Influence of Organizations in the Markets. Readings: 1. Sutton et al., How to be a good boss, in a bad economy, Harvard Business Review (June, 2009). 2. Case: Innovation at the LEGO Group, (IMD382-PDF-ENG) What were the problems at the corporate strategic level? How does the group create a new approach to innovation? Explain the LEGO Matrix How to leverage the passionate group of LEGO Mindstorms users in the development of the next generation of toys? Finally, what else would you do to improve innovation across the company? Presentations by 2 Teams (Team 9&10)

Session 11 Tough Decisions - Implementing Diversification Strategies. Readings: 1. Collins and Montgomery, Competing on Resources, Harvard Business Review (JulyAugust, 2008). 2. Case: Vivendi(B) Revitalizing a French Conglomerate (HBS 9-703-418) What basic integration issues does the case raise? Is it possible to integrate these large global players swiftly and effectively in a merger of equals? What are the reasons behind the purchase of Seagram? What criteria drive decisions about what should be integrated and what should not?

Session 12 Implementing Global Strategies Readings: 1. Grant, Current Trends in Strategic Management, chapter 17. 2. Taylor, The Logic of Global Business, Harvard Business Review (March-April 1991): 91-105. 3. Case: Unisys: The Merger of Burroughs and Sperry (HBS 9-489-055)

What does the merger process look like at Unisys? What does the vision do? What are the prospects for partnership, meritocracy, unity, and dispatch between the two firms? Presentations by 2 Teams (Team 11&12)