School of Business

Course Code: MBDS6003 Course Name: Strategic Management

Module 4:Strategy Implementation, Evaluation and

Control

Name of the Faculty: Dr. M C Rashid Program Name: MBA

 School of Business
Course Code: MBDS6003 Course Name: Strategic Management

Topics to be Covered
• Operationalizing the strategies
• Identifying annual objectives
• Developing functional strategies,
• Development of policies
• Organizational Structure Consideration
• Linking structure to strategy
• Resource management and control
• The balance scorecard

Name of the Faculty: M C Rashid Program Name: MBA

 School of Business
Course Code: MBDS6003 Course Name: Strategic Management

Operationalizing The Strategies

• A firm that is moving from strategy formulation to strategy
implementation has to give enough consideration to three
interrelated concerns:
a. Identification of measurable annual objectives,
b. Development of specific functional strategies,
c. Communication of concise policies to guide decisions.
• It is also important that employees from all the levels in the
organization are involved in strategy formulation.

Name of the Faculty: M C Rashid Program Name: MBA

 School of Business
Course Code: MBDS6003 Course Name: Strategic Management

Who Implements Strategy?

• Depending on how a corporation is organized, those who implement strategy
will probably be a much more diverse set of people than those who formulate
it.
• From large, multi-industry corporations to small entrepreneurial ventures, the
reality is that the implementers of strategy are everyone in the organization.
• Vice presidents of functional areas and directors of divisions or strategic
business units (SBUs) work with their subordinates to put together large-scale
implementation plans.
• Plant managers, project managers, and unit heads put together plans for their
specific plants, departments, and units.
Name of the Faculty: M C Rashid Program Name: MBA
 School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Identification of Long Term and Annual
objectives
• The identification of the long-term objectives of a strategy is a crucial step in the
successful implementation of a strategy.
• Market share, return on investment, return on equity, stock price and expansion into
new markets indicate the ultimate effectiveness of a chosen strategy.
• Annual objective is drawn from long term objectives
• The successful execution of the business's overall long term plan is based on the
accomplishment of these annual objectives.
• Annual objectives also provide a specific basis for monitoring and controlling
organizational performance.
• Such objectives can aid the development of "trigger points that alert top management

Name of the Faculty: M C Rashid Program Name: MBA

 School of Business
Course Code: MBDS6003 Course Name: Strategic Management

Developing Functional Strategies

• Functional strategy is the approach a functional area takes to achieve
corporate and business unit objectives and strategies by maximizing
resource productivity.
• It is concerned with developing and nurturing a distinctive
competence to provide a company or business unit with a
competitive advantage.
• Just as a multidivisional corporation has several business units, each
with its own business strategy, each business unit has its own set of
departments, each with its own functional strategy.

Name of the Faculty: M C Rashid Program Name: MBA

 School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Functional Strategies in Marketing

Key Function Key Consideration

Strategies

Product Type of product Key contributors to profitability, Product image,

Consumer need Changes that influence customers
Price Price as the basis of competition, Price modifications through
discounts, Uniformity in pricing, Target segments, Gross profit
margin
Place Level of market coverage, Priority geographic areas, Key distribution
channels Channel objectives, Change in marketing mix Sales force
organization territory, market, product)
Promotions Key promotion priorities and approaches, Advertising and
communication priorities Media

Name of the Faculty: M C Rashid Program Name: MBA

 School of Business
Course Code:
Functional MBDS6003
Strategies Finance / Accounting Course Name: Strategic Management

Key Function Strategies Key Consideration

Capital Acquisition Cost of capital, Proportion of short and long-terin debt,

Balance between internal and external funding, Appropriate
risk and ownership, Level and forms of leasing
Capital Allocation Priorities in allocation to projects, Basis of final selection of
projects, Capital allocation authority
Dividend and working capital Dividend-payout ratio, Stability of dividends Cash flow
management requirements, Credit policies Credit limits, terms of
repayment, and collection procedures, Payment timing and
procedure

Name of the Faculty: M C Rashid Program Name: MBA

 School of Business
Course Code: MBDS6003
Functional Strategies: Research and Development
Course Name: Strategic Management

Key Function Key Consideration

Strategies
Basic research versus Extent of innovation Vis-a-vis product development
commercial refinement and modification, New projects that support
development growth
Time horizon Emphasis on short term or long term

Organization fit Nature of research (in-house or contracted) Departmental

structure (centralized or decentralized) Relations with other
departments
Basic R&D Posture Offensive or defensive

Name of the Faculty: M C Rashid Program Name: MBA

 School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Functional Strategies : Production and Operations

Key Function Key Consideration

Strategies
Facilities and Importance of facilities, Extent of integration of processes,
equipment Size and capacity
Purchasing Sources Selection of suppliers and managing relations
Acceptable forward buying level
Operation Level of inventory, Inventory use, Key control efforts, Nature
Planning and of maintenance (preventive or market oriented), Job
control specialization and Plant safety

Name of the Faculty: M C Rashid Program Name: MBA

 School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Functional Strategies: Personnel and Human Resource

• The strategic importance of functional strategies in the area of human

resource management is now widely accepted.
• HRM contributes to the successful implementation of strategy of the
company by nurturing managerial talent, managing compensation,
and motivating employees.
• Functional strategies in the HRM are aimed at the effective utilization
of human resources in achieving the annual objectives of the firm
and bringing satisfaction to employees. .

Name of the Faculty: M C Rashid Program Name: MBA

 School of Business
Course Code: MBDS6003 Course Name: Strategic Management

Development of Policies
• Organizational policies are formal guidelines, rules, procedures, or
principles established by an organization to govern its operations and
guide the behavior of its employees.
• These policies are designed to ensure consistency, compliance, and
effective functioning within the organization. They cover a wide range
of areas including ethics, human resources, information technology,
finance, safety, and more.

Name of the Faculty: M C Rashid Program Name: MBA

 School of Business
Course Code: MBDS6003 Course Name: Strategic Management
How Is Strategy to Be Implemented? Organizing for
Action
• Strategy implementation is the process of putting a strategy into
action to achieve desired results. It involves developing programs,
allocating resources, defining roles and responsibilities, creating clear
communication and coordination channels and making changes to the
organization's structure and culture.
• Any change in corporate strategy is very likely to
require some sort of change in the way an organization
is structured and in the kind of skills needed in
particular positions.

Name of the Faculty: M C Rashid Program Name: MBA

 School of Business
Course Code: MBDS6003 Course Name: Strategic Management

Linking Structure to Strategy

• Linking structure to strategy is the process of designing an organizational structure
that supports the achievement of the organization's strategic goals.
• In other words, it is about aligning the way the organization is structured with the
way it wants to operate and achieve its goals.
A well-designed organizational structure can help to:
• Improve communication and collaboration between employees
• Clarify roles and responsibilities
• Facilitate decision-making
• Promote accountability
• Increase efficiency and effectiveness
Name of the Faculty: M C Rashid Program Name: MBA
 School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Structural Considerations: Stages of Corporate
Development
• The philosophy behind organizational structure consideration in
managing an organization involves designing a framework that
defines how tasks, roles, and responsibilities are allocated,
coordinated, and supervised to achieve the organization's objectives
efficiently and effectively.
• It's about creating a system that aligns with the organization's values,
culture, strategy, and desired outcomes. Different structures suit
different organizational needs and goals.

Name of the Faculty: M C Rashid Program Name: MBA

 School of Business
Course Code: MBDS6003 Course Name: Strategic Management

Simple Organizational Structure

• Simple Structure is typified by the entrepreneur or a small team, who
founds a company to promote an idea (a product or a service).
• The entrepreneur or team tends to make all the important decisions
and is involved in every detail and phase of the organization.
• The company has little formal structure, which allows the entrepreneur
or team to directly supervise the activities of every employee.
• Planning is usually short range or reactive. The typical managerial
functions of planning, organizing, directing, staffing, and controlling are
usually performed to a very limited degree, if at all.
• The greatest strengths of corporation are its flexibility and dynamism.

Name of the Faculty: M C Rashid Program Name: MBA

 School of Business
Course Code: MBDS6003 Course Name: Strategic Management

Functional Organizational Structure

• A functional organizational structure is a type of organizational
structure in which employees are grouped together based on their
functional area of expertise. This can include departments such as
marketing, sales, accounting, engineering, and human resources.
• The entrepreneur is replaced by a team of managers who have
functional specializations.
• The transition to this stage requires a substantial managerial style
change.
• Employees must learn to delegate; otherwise, having additional staff
members yields no benefits to the organization.
Name of the Faculty: M C Rashid Program Name: MBA
Functional Structure
 School of Business
Course Code: MBDS6003 Course Name: Strategic Management

Divisional Organizational Structure

• A divisional organization structure is a type of organizational structure
in which the company is divided into smaller units, or divisions, based
on a common characteristic, such as product, service, customer group,
or geographic location.
• Each division has its own team of employees who are responsible for all
aspects of that division's business, including sales, marketing,
production, and customer service.
• Divisional organization structures are often used by large companies
with multiple product lines or geographic locations. This type of
structure allows the company to focus on the specific needs of each
division and to make decisions more quickly and efficiently.
Name of the Faculty: M C Rashid Program Name: MBA
 School of Business
Course Code: MBDS6003 Course Name: Strategic Management

Matrix Organization
• A matrix organization structure is a type of organizational structure that has two or more
chains of command. Employees report to both a functional manager and a project
manager. The functional manager is responsible for the employee's development and
career progression, while the project manager is responsible for the employee's work on
specific projects.
• Matrix organization structures are often used by companies that need to be flexible and
responsive to change. The matrix structure is often found in an organization or SBU when
the following three conditions exist:
■ Ideas need to be cross-fertilized across projects or products.
■ Resources are scarce.
■ Abilities to process information and to make decisions need to be improved.
Name of the Faculty: M C Rashid Program Name: MBA
 School of Business
Course Code: MBDS6003 Course Name: Strategic Management

Resource Management and Control

• The principle of resource allocation is applied at every level in the organization.

• It is obvious that the strategic leader plans the overall strategy, but at the lower
levels of the management hierarchy, the allocation of time, raw material,
personnel, etc. is planned as part of a continuous scheduling activity.
• These plans are basically statements of intent.
• Thus, strategies are implemented when resources have been allocated and
used.
• The work of individual salespersons and shopfloor workers is affected by
strategic decisions. It is, therefore, important to ensure that daily activities are
directed by the strategy.

Name of the Faculty: M C Rashid Program Name: MBA

 School of Business
Course Code: MBDS6003 Course Name: Strategic Management

Corporate Resource Planning

• Corporate Resource Planning (CRP) is a comprehensive approach that integrates
all aspects of an organization's resources—such as human, financial, physical,
and information technology—to optimize efficiency, productivity, and strategic
alignment.
• Corporate Resource Planning involves strategically aligning and optimizing all
resources across an organization to achieve its objectives. This includes assessing
the availability, allocation, utilization, and development of human capital,
financial assets, technology infrastructure, and other critical resources.
• Human Capital Planning
• Financial Resource Planning
• Technology Resource Planning
• Physical Resource Planning

Name of the Faculty: M C Rashid Program Name: MBA

 School of Business
Course Code: MBDS6003 Course Name: Strategic Management

The Resource Allocation Process

• Resource allocation is the process of assigning and managing resources to

support the achievement of organizational goals. Resources can include
financial resources, people resources, technological resources, and physical
resources.
a) Identify the goals of the organization.
b) Identify the resources required to achieve the goals.
c) Assess the current availability of resources.
d) Identify any gaps in resources.
e) Develop a plan to allocate resources.
f) Implement the plan and monitor the results.
Name of the Faculty: M C Rashid Program Name: MBA
Evaluation: Measuring Performance
• Evaluation and control information consists of
performance data and activity reports.
• If undesired performance results because the strategic
management processes were inappropriately used,
operational managers must know about it so they can
correct the employee activity.
• Evaluation and control information must be relevant to
what is being monitored.
• One of the obstacles to effective control is the difficulty in
developing appropriate measures of important activities
and outputs.
Measuring Corporate Performance
• Measuring corporate performance is the process of assessing how well a company is
meeting its goals and objectives. It involves identifying key performance indicators (KPIs)
that are relevant to the company's specific industry and business model, and then
tracking and analyzing these metrics over time.
• Financial KPIs: Revenue, profit, profit margin, return on investment (ROI), return on
equity (ROE), debt-to-equity ratio, earning per share, cash flow
• Operational KPIs: Customer satisfaction, employee turnover, productivity, on-time
delivery, product quality, customer satisfaction
• Customer-centric KPIs: Net promoter score, customer lifetime value (CLV), churn rate
• Employee metrics: Employee engagement, employee turnover rate, etc.
Using Benchmarking To Evaluate
Performance
• Benchmarking is a process of comparing the performance of a
company to that of other companies in the same industry. It is a
valuable tool for identifying areas where a company can improve its
performance.
• This can be done using a variety of metrics, such as revenue growth,
profitability, customer satisfaction, and market share. Benchmarking
can help businesses to identify areas where they are excelling and
areas where they can improve.
Controls

• Controls can be established to focus on actual performance

results (output), the activities that generate the performance
(behavior), or on resources that are used in performance
(input).
• Input controls emphasize resources, such as knowledge,
skills, abilities, values, and motives of employees.
• Output controls specify what is to be accomplished by
focusing on the end result of the behaviors through the use of
objectives and performance targets or milestones.
• Behavior controls specify how something is to be done
through policies, rules, standard operating procedures, and
orders from a superior.
 School of Business
Course Code: MBDS6003 Course Name: Strategic Management

BALANCED SCORE CARD (BSC)

Name of the Faculty: M C Rashid Program Name: MBA

The Need for a Balanced Scorecard

• Increases the focus on the business strategy and its outcomes.

• Leads to improvised organizational performance through
measurements.
• Align the workforce to meet the organization's strategy on a day-to-day
basis.
• Targeting the key determinants or drivers of future performance.
• Improves the level of communication in relation to the organization's
strategy and vision.
• Helps to prioritize projects according to the timeframe and other
priority factors.
Mission
• Perspectives represents an over all achievement of the mission
• Identifies various areas that influence performance of an organization
• Facilitates evaluation and improvement in the performance of the
organization
Perspective of Balance Scorecard

• Financial Perspective. How do we appear to shareholders?

• a. Cash flow b. financial result quarterly/ yearly c. return on capital (ROI)
employed d. return on investment
• What must we do to create sustainable economic value?
• Internal Business Process. What must we excel at?
• To satisfy our stakeholders, what must be our levels of productivity, efficiency
and quality?
• This consists of measures such as cost and quality related to the business
processes.
a. Process bottlenecks b. Process automation c. number of activities per
person
Perspective of Balance Scorecard
• Learning and Growth Perspective. Can we continue to improve and
create value?
• How does our employee performance management system, including
feedback to employee support high performance?
• Customer Perspective. How do customers view us?
• What do our customers require from us and how are we doing
according to those requirements?
Perspective Objectives Generic Measurements

Financial Perspective Return of capital employed, economic value added, sales

growth, cash flow
Customer Perspectives Customer satisfaction, retentions, profitability, market
share

Internal Business Includes measurements along the internal value chain for:
Process Perspectives Innovation- measures of how well the company identifies
the customers’ future needs.
Operations- measures of quality, cycle time and costs
Post sales service- measures for warranty, repair and
treatment of defects and returns.

Learning and Growth Includes measurements for:

Perspectives People- employee retention, training, skills, morals
Systems- measure of availability of critical real time.
Key Success Factors while
implementing BSC
• Obtain executive sponsorship and commitment
• Involve a broad base of leaders, managers and employees in
scorecard development
• Beginning interactive (two-way) communication first
• View the scorecard as a long term journey rather than a short-term
project
• Getting outside help if needed
Pitfalls of Balance Scorecard
• The balance scorecard relies on a well defined strategy and
understanding of linkage between strategic objectives and metrics.
• Without this foundation the implementation could fail.
• Don’t just copy metrics from another firm. Identify the measures that
apply to your strategy and competitive position.
 School of Business
Course Code: Course Name: Strategic Management

References
• Strategic Management and Business Policy: Globalization,
Innovation, and Sustainability, Thomas L. Wheelen, J. David Hunger,
Alan N. Hoffman, and Charles E. Bamford, 15th Edition, Pearson
Education, 2018.
• Strategic Management, Hitt Michael A, Ireland R. Duane, Hoskisson
Robert E., 12th Edition, Cengage Learning, 2016

Name of the Faculty: Dr. M C Rashid Program Name: MBA