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Implementing Strategy: Structure, Leadership, and Culture

Chapter Summary

This chapter examined the idea that a key aspect of implementing a strategy is the institutionalization of the strategy so it permeates daily decisions and actions in a manner consistent with long-term strategic success. The "recipe" that binds strategy and organization involves three key ingredients: organizational structure, leadership, and culture.

Five fundamental organizational structures were examined, and the advantages and disadvantages of each were identified. Institutionalizing a strategy requires a good strategy-structure fit. This chapter dealt with how this requirement often is overlooked until performance becomes inadequate and then indicated the conditions under which the various structures would be appropriate.

Organizational leadership is essential to effective strategy implementation. The CEO plays a critical role in this regard. Assignment of key managers, particularly within the top-management team, is an important aspect of organizational leadership. Deciding whether to promote insiders or hire outsiders is often a central leadership issue in strategy implementation. This chapter showed how this decision could be made in a manner that would best institutionalize the new strategy.

Organizational culture has been recognized as a pervasive influence on organizational life. Organizational culture, which is the shared beliefs and values of an organization's members, may be a major help or hindrance to strategy implementation. This chapter discussed an approach to managing the strategy-culture fit. It identified four fundamentally different strategy-culture situations and provided recommendations for managing the strategy-culture fit in each of these situations.

The chapter concluded with an examination of structure, leadership, and culture for twenty-first century companies. Networked organizations, with intense customer focus, and alliances are keys to success. Talent-focused acquisitions, success sharing, and leaders as coaches round out the future success scenario.

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