MGMT 449 - CH11 - FINAL

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MGMT 449 - CH11 - FINAL
2015-05-05 17:30:09

MGMT 449 - CH11 - FINAL
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  1. Allocating  Resources to Support  Strategy  Execution
    • vFunding strategic initiatives that can
    • make
    • a contribution to strategy implementation

    • vFunding efforts to strengthen
    • competencies
    • and capabilities or to create new ones

    • vShifting resources — downsizing
    • some areas, upsizing others, killing
    • activities no longer justified, and funding
    • new activities with a critical strategy role
  2. Creating  Strategy-Supportive Policies  and  Procedures
    nRole of new policies

    • vChannel behaviors and decisions
    • to promote strategy execution

    • vCounteract tendencies of
    • people to resist chosen strategy

    nToo much policy can be as stifling as

    vWrong policy or as

    vChaotic as no policy

    • nOften, the best policy is empowering
    • employees, letting them operate
    • between the “white lines” anyway they think best
  3. nKey tools to promote continuous improvement
    vSix Sigma quality controlvBusiness process reengineeringvTQM
  4. nThe best practice must have a proven
    record in
    • vSignificantly
    • lowering costs

    • vImproving
    • quality or performance

    • vShortening
    • time requirements

    • vEnhancing
    • safety or

    • vDelivering
    • some other highly positive operating outcome
  5. nTo be valuable and transferable, a best
    practice must
    • vDemonstrate
    • success over time

    • vDeliver
    • quantifiable and highly positive results


    Be repeatable
  6. Characteristics  of  Benchmarking
    • nInvolves
    • determining how well a firm performs
    • particular activities and processes when compared against

    • v“Best in
    • industry” or “Best in world” performers

    • nGoal  Æ Promote achievement of operating excellence in performing
    • strategy-critical activities

    • nCaution Æ Exact duplication of best
    • practices of other firms is not feasible due
    • to differences in implementation situations

    • nBest approach – Best practices of
    • other
    • firms need to be modified
    • or adapted
    • to fit a firm’s own specific situation
  7. What  Is  Total  Quality  Management?
    • nA philosophy of managing a set of business
    • practices that emphasizes

    • vContinuous improvement in all phases of
    • operations

    v100 percent accuracy in performing activities

    • vInvolvement and empowerment
    • of employees at all levels

    vTeam-based work design

    vBenchmarking and

    Total customer satisfaction
  8. Popular  TQM Approaches
    • Deming’s 14 Points
    • Crosby’s 14 Quality Steps
    • Baldridge Award Criteria
    • The Juran Trilogy
  9. Six  Sigma Quality  Control
    • nSix Sigma is a
    • disciplined,
    • statistics-based system aimed at having not more than 3.4 defects
    • per million iterations for any business practice

    nTwo approaches to Six Sigma

    • vDMAIC process (Design, Measure,
    • Analyze, Improve, Control)

    • «An improvement system for existing
    • processes falling below specification
    • and needing incremental improvement

    • «A great tool for improving performance
    • when there are wide variations in
    • how
    • well an activity is performed

    • vDMADV process (Define, Measure, Analyze, Design, Verify) or DFSS (Design for Six
    • Sigma)

    • «An improvement system used to develop new processes or products at
    • Six Sigma quality levels
  10. Characteristics  of Six Sigma  Quality  Programs
    nSix Sigma is based on three principles

    • 1.  All work
    • is a process

    • 2.  All
    • processes have variability

    • 3.  All
    • processes create data to explain variability

    • nDMAIC process is a good
    • approach to improve
    • performance when wide
    • variations in how well an activity is performed exist

    nEvidence exists that innovation can be stifled by Six Sigma programs

    • nBlended
    • approach to Six Sigma implementation involves

    • vPursuing incremental
    • improvements
    • in operating efficiency and

    • vGiving freer rein to
    • R & D and other processes
    • focusing on new ways to offer value to customers
  11. Approach  of the  DMAIC  Process

    vWhat constitutes a defect?


    • vCollect data to find out why, how,
    • and how often the defect occurs

    • nAnalyze – Involves 
    • vStatistical analysis of the metrics
    • vIdentification of a “best practice”

    • nImprove 
    • vImplementation of the documented “best practice”

    • nControl 
    • vEmployees are trained on the “best practice”
    • vOver time, significant improvement in quality occurs
  12. nKey challenges in implementing Six Sigma quality programs
    1.  Obtain managerial commitment

    2.  Establish a quality culture

    3.  Full involvement of employees
  13. Business  Process Reengineering vs.  Total  Quality  Programs

    • vAims at quantum gains of
    • 30 to 50% or more

    nTotal quality programs

    Stress incremental progress
  14. What  Areas Should Information  Systems  Address?
    nCustomer data

    • nOperations
    • data

    nEmployee data

    • nSupplier/partner/collaborative
    • ally data

    • nFinancial
    • performance data
  15. Balancing  Positive vs.Negative  Rewards
    nElements of both are necessary

    • vChallenge and competition are
    • necessary for self-satisfaction

    nPrevailing view

    • vPositive approaches work better
    • than negative ones in terms of




  16. Management’s most powerful tool for mobilizing
    employee commitment to competent strategy execution and operating excellence is
    . a properly designed reward structure.
  17. A well-designed reward system
    • makes strategically relevant
    • measures of performance the dominant basis for incentive compensation.
  18. From a strategy-implementing/strategy-executing perspective, a company's operating budget should
    be strategy-driven and based primarily on how much each organizational unit needs to carry out its piece of the strategic plan efficiently and effectively.
  19. rescribing policies and operating procedures aid the task of implementing strategy by
    by providing top-down guidance about how certain things need to be done, helping ensure consistency in how strategy-critical activities are performed, and by promoting the creation of a work climate that facilitates good strategy execution.
  20. A  "best practice"
    is a method of performing an activity that has been shown consistently deliver superior results compared to other methods.
  21. Using benchmarking and best practices as a means of achieving operating excellence
    is a four-step process that entails (1) benchmarking how well a company performs specific tasks and activities against best-in-industry or best-in-world performers, (2) adapting the various best practices to fit the company's situation and then implementing them, (3) continuing to benchmark company performance of activities against best-in-industry or best-in-world performers, and (4) continuing to improve and refine the company's performance of its activities and thereby move closer to operating excellence.
  22. Business process reengineering is a tool for
    pulling the pieces of strategy-critical activities out of different departments and unifying their performance in a single department or cross-functional work group that has charge over the whole process and can be held accountable for performing the activity in a better, cheaper, and/or more strategy-supportive fashion.
  23. Total quality management (TQM)
    s a philosophy that entails creating a total quality culture bent on continuously improving the performance of every task and value chain activity.
  24. Six Sigma quality program
    utilizes advanced statistical methods to improve quality by reducing defects and variability in the performance of business process
  25. The use of state-of-the-art information and operating systems
    not only enable better strategy execution but also strengthen organizational capabilities (perhaps enough to provide a competitive edge over rivals).
  26. Management's most powerful tool for mobilizing employee commitment to competent strategy execution and operating excellence is
    a properly designed reward structure.
  27. Which of the following is not characteristic of a compensation and reward system designed to help drive successful strategy execution?
    Keeping performance incentives and bonuses to less than 15% of total compensation