The initial step in strategy implementation is defining the strategy. The Rose Company aims to transition from a centralized manufacturing organization to a decentralized system, with the general manager supervising operations at the production site. To accomplish this, the company intends to construct a new plant that will facilitate the adoption of novel processes and methods. Nevertheless, priority lies in executing rather than evaluating the strategy.
When implementing a defined strategy, general managers must take into account several considerations. Firstly, they need to ensure that both broad and detailed functional policies align with the pursued strategy. In other words, which functional policies should be put into action to achieve the restructuring strategy? In our case, James Pierce has been assigned the task of making a decentralized operation run smoothly, thereby encountering altered relationships.
Instead of reporting to their functional counterparts in the home office, the heads of the departments will now be under the authority of the general plant manager, James Pierce. He will be responsible for managing and administering all functions and personnel (except sales) at the Jackson plant. While these new policies align with the current strategy, there is a potential threat of constraints within the company. It is worth noting that James Pierce is new to the Jackson plant and this is his first major line job assignment.
Pierce’s ability to implement the strategy will determine its success or failure. Creating an implementation plan requires the general manager to utilize and enhance various analytic, administrative, and leadership skills. According to the information presented in the case, James Pierce has shown aptitude in analysis, possesses overall administrative capabilities, and is well-liked by his peers. From the perspective of top management, he possesses a necessary tenacity to complete all crucial tasks. If the statements about Mr. Pierce are indeed accurate, then he is suitable for this assignment.
Furthermore, in order for a strategy to be effectively executed, it is necessary to establish alignment between the strategy and the structure, processes, and systems of the organization. Currently, the main strategy for the Rose Company is to change its organizational structure, which will consequently have an impact on all major systems and processes. Specifically, Mr. Pierce is required to create a functional control system that allows him to supervise all activities at the Jackson plant. Exhibit 2 illustrates the proposed new organizational structure, which includes a dotted line relationship between plant employees and home office executives.
Dotted-line reporting refers to an arrangement where an employee has a secondary supervisor/leader who offers extra supervision and guidance in carrying out their work. In the case of Mr. Pierce, who has no prior experience at the main production facility, establishing cross functional relationships could assist him in overseeing the actual production or other areas where he lacks expertise. However, the existence of cross functional relationships represented by dotted lines often leads to ambiguity within the organizational structure.
By connecting individual employees with dotted lines to functional vice presidents, confusion can arise regarding who has the authority to direct the employees’ tasks. As stated earlier, Mr. Pierce is new to the plant and in order to successfully implement changes, he must establish his authority from the beginning. Therefore, the general manager should be responsible for all directions given and have full control over all functional units at the Jackson plant. Considering these factors, prior to accepting the position, Mr. Pierce should insist on having direct control relationships with his employees.
