ISSUES IN STRATEGY IMPLEMENTATION
Several challenges can hinder effective implementation, including:
1. Project Implementation: A one-shot, time-limited goal-oriented major activity that requires
the commitment of varied resources and skills
2. Procedural Implementation: Strategy implementation requires the execution of strategies
based on rules, regulations and procedures that are formulated by the government and
that of the organization;
3. Resource Allocation: The process of allocating the resources of the organization to
various divisions, departments and business units
4. Organizational Structures and Strategies: A company builds its organizational structure
based on its strategies. An organizational structure is known as the viewing glass or
perspective in which people can see, in bird’s eye view the organization and its
environment.
5. Functional Policies: coordination between and among the various functional units of the
organization takes place once its strategy is decided. Modification of the existing
functional policies may be deemed necessary in meeting the demands of the new
business.
6. Behavioral Implementation: This deals with aspects of strategy implementation that
poses an impact on the behavior of the people in the organization.
Factors Affecting Resource Allocation
1. Objectives of the Organization: Resources are allocated based on the organization's
goals and priorities. For example, if the primary objective is market expansion, more
resources will be directed toward marketing and distribution channels.
2. Preference of Dominant Strategies: The chosen strategy significantly influences where
resources go. For instance, a cost-leadership strategy might allocate more resources to
operational efficiency and cost control, while a differentiation strategy might focus on
innovation and product development.
3. Internal Politics: Conflicts or power dynamics within the organization can affect resource
allocation. Departments or leaders with greater influence may secure more resources,
regardless of the strategic importance of their projects.
4. External Influences: External factors like market conditions, competition, regulatory
requirements, or economic trends can dictate resource allocation. For example, an
increase in regulatory requirements might force the company to allocate more resources
to compliance efforts.
Difficulties in Resource Allocation
1. Scarcity of Resources: Limited financial, human, or material resources make it
challenging to meet the demands of all strategic initiatives. For example, a company
may need to delay certain projects due to budget constraints.
2. Import Restrictions: Government-imposed restrictions on importing materials or
equipment can hinder resource availability, especially for industries reliant on
international supply chains. This can delay or derail implementation plans.
3. Human Resources: A lack of skilled employees or high turnover rates can create
bottlenecks in executing projects. For instance, a software company may struggle to
allocate enough qualified developers to meet project deadlines.
4. Departmental Power Politics: Internal conflicts or competition among departments can
lead to inefficient allocation of resources. Departments with more influence may secure
more funding, leaving other critical areas underfunded, even if their projects align better
with strategic goals.
MCKINSEY’S 7S FRAMEWORK
The McKinsey 7S Framework is a management model developed by McKinsey &
Company to analyze and improve organizational effectiveness. It identifies seven interrelated
elements—both hard and soft—that need to align for an organization to successfully implement
its strategy. These elements are grouped as follows:
1. Hard Elements: These are tangible and directly influenced by management.
a. Strategy: The organization's plan to achieve long-term objectives and gain a
competitive advantage.
Example: A company’s strategy to enter new markets or adopt cost-leadership.
b. Structure: The hierarchy and arrangement of teams, departments, and reporting
lines.
Example: Centralized vs. decentralized decision-making.
The types of organizational structures are:
i. Functional Organizational Structure: Groups employees based on
specialized roles or functions, such as marketing, finance, operations, etc.
ii. Divisional Organizational Structure: Divides the organization into self-
contained divisions based on products, markets, or geographic regions.
Each division has its own resources and functions.
iii. Matrix Structure: Combines functional and divisional structures, with
employees reporting to both a functional manager and a project or
product manager.
iv. Flatarchy Structure: Minimizes hierarchy, giving employees more
autonomy and direct access to leadership.
c. Systems: Processes, procedures, and workflows that support day-to-day
operations.
Example: IT systems for customer relationship management or quality control
mechanisms.
2. Soft Elements: These are intangible and harder to manage but equally critical.
a. Shared Values: The core beliefs and cultural norms that guide organizational
behavior.
Example: A commitment to sustainability or customer-centric service.
b. Style: The leadership style and management approach within the organization.
Example: Collaborative leadership vs. authoritarian decision-making.
c. Staff: The workforce, including their skills, roles, and motivation levels.
Example: Recruiting skilled employees and providing opportunities for
development.
d. Skills: The competencies and capabilities of the organization and its people.
Example: Expertise in product innovation or digital marketing.
STRATEGY EVALUATION
Strategy evaluation ensures that strategic plans remain relevant, effective, and aligned
with organizational goals in a dynamic environment. Its importance includes:
1. Performance Assessment: Measures whether objectives are being met.
2. Adaptation: Identifies the need for strategic adjustments due to external or internal
changes.
3. Accountability: Holds leaders and teams responsible for results.
4. Sustainability: Ensures resources are utilized effectively to achieve long-term goals.
Strategy Evaluation Process
1. Establish Performance Metrics: Define key performance indicators (KPIs) aligned with
strategic objectives.
Example: Improving customer satisfaction may set KPIs such as average response time
for customer inquiries or percentage of repeat customers
2. Monitor Progress: Continuously track and analyze performance data
Example: Develop a dashboard to monitor customer service response times
3. Identify Deviations: Detect areas where actual performance diverges from expected
outcomes.
Example: Response time increased by 2 minutes indicating slower response to customer
concerns and inquiries
4. Analyze Cause: Investigate root causes of deviations, whether internal (e.g., resource
mismanagement) or external (e.g., market changes).
Example: Decline in sales
Internal Cause: Poor customer services
External Cause: Existence of competitors drew customers away
5. Make adjustments: Update strategies or implementation plans to improve operations
Example: Increases training for customer service staff; launching of a loyalty program to
retain customers