With an understanding of developing business-level, corporate level, and international strategies, firms must execute their strategies to be successful. The way a firm organizes itself is critical to its ability to implement strategy. This chapter addresses why organizational structure is important to achieving a firm’s strategic goals—which types of structures are deployed by firms, what control systems are used by firms, and what are the options for establishing a legal entity. These organizational decisions should support and align with an organization’s mission, vision, and values to ensure ethical as well as strategic outcomes. The role of social responsibility and ethics in a corporate setting will be discussed in detail in the next and final chapter.
The word executing used in this chapter’s title has two distinct meanings. These meanings were cleverly intertwined in a quip by John McKay. McKay had the misfortune to be the head coach of a hapless professional football team. In one game, McKay’s offensive unit played particularly poorly. When McKay was asked after the game what he thought of his offensive unit’s execution, he wryly responded, “I am in favor of it.”
In the context of business, execution refers to how well a firm such as GE implements the strategies that executives create for it. This involves the creation and operation of both an appropriate organizational structure with an aligned organizational control process. Executives who skillfully orchestrate structure and control are likely to lead their firms to greater levels of success. In contrast, those executives who fail to do so are likely to be viewed by stakeholders such as employees and owners in much the same way McKay viewed his offense: worthy of execution.