© 2016 Robert M. Grant
www.contemporarystrategyanalysis.com 1
Instructors’ Manual to Accompany Contemporary Strategy Analysis (9th edn. Wiley, 2016)
CHAPTER 6. ORGANIZATION STRUCTURE AND MANAGEMENT
SYSTEMS: THE FUNDAMENTALS OF STRATEGY IMPLEMENTATION
Introduction
The chapter covers the fundamental aspects of strategy implementation. It begins with strategy
execution—the challenge of translating strategic plans into action and goes on to consider the core
principles of organizational design.
Issues of strategy implementation—in particular the design of organizational structure and management
systems—arise in virtually all strategy cases. Indeed, in analyzing organizational capabilities,
The key areas of learning that I try to cover in this session are:
• The processes of strategy execution: how is strategy—as formulated in strategic planning
processes—translated into action? Here I look in particular at the role of capital expenditure
budgets, operating plans, and performance management systems.
Class Outline
Gaining appreciation of why companies are organized the way they are and the opportunities for
improving organizational design requires the exploration of real-world examples. Hence, I typically begin
either with a case (see below) or by exploring some examples of real-world organizations—preferably
organizations that students are familiar with. For example, asking students how their business school is
In terms of illuminating the environmental and strategic influences that determine the choice of
organizational structure, it is useful to look as a company undergoing or contemplating a change in its
organizational structure. For example:
• The classic example of the product-division structure was GM, with its separate Chevrolet,
Cadillac, Oldsmobile, Buick, Truck, and Parts divisions. Since the early 1980s these product
divisions have been increasingly collapsed so that by the late 1990s GM possessed a single North
Cases
Manchester United: Preparing for Life without Ferguson ((R.M. Grant, Contemporary Strategy Analysis:
Text and Cases, 8th edn. Wiley, 2013. Available from the Instructor Companion Site of
www.contemporarystrategyanalysis.com).
Although this case is primarily concerned with the sources of competitive advantage in professional soccer,
Procter & Gamble’s Organization 2005 Project (Available from the Instructor Companion Site of
www.contemporarystrategyanalysis.com).
In June 2000, Procter & Gamble’s newly appointed CEO A. G. Lafley faces a critical decision: whether to
endorse or cancel “Organization 2005”, a far-reaching program of organizational restructuring launched
Reorganizing the Royal Dutch Shell Group. (Available from the Instructor Companion Site of
www.contemporarystrategyanalysis.com).
The Shell Group is one of the world’s largest and most complex organizations. During the early 1960s
under the guidance of McKinsey & Company it adopted a matrix structure. The 200 or so operating
This is a classic case in the problems of organizing the multinational, multiproduct corporation. The case
looks at the design of a matrix structure and the problems encountered in its implementation. There are
several videos to support this case.