Strategy Implementation
• Strategy implementation is the sum total of the activities and choices
required for the execution of a strategic plan. It is the process by which
objectives, strategies, and policies are put into action through the
development of programs, budgets, and procedures. Although
implementation is usually considered after strategy has been formulated,
implementation is a key part of strategic management. Strategy formulation
and strategy implementation should thus be considered as two sides of the
same coin.
• Who are the people to carry out the strategic plan?
• What must be done to align company operations in the intended direction?
• How is everyone going to work together to do what is needed?
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.
• In most large, multi-industry
corporations, the implementers are
everyone in the organization.
Programmes, Budgets &
Procedures
• Program – a statement of activities or steps
needed to accomplish a single-use plan in
strategy implementation.
• Budgets – A statement of a corporation’s
program in terms of money required.
• Procedures (SOPs)– A list of sequential steps
that describe in detail how a particular task or
job is to be done.
Problems associated with
implementation
• Time
• Unanticipated problems and events
• Ineffective coordination
• Competing activities and crises
• Inefficient capabilities
• Lack of training
• Poorly defined tasks
• Information issues etc
Keys to Strategy Implementation
• Resources and competencies
• Functional area sub-strategies
• Specific decisions and actions
Resources and competencies
Organizational Structure
• Taken for granted and assumed immutable
• Formal framework of departments, units, and
groups into which people and the activities
they perform are organized
• Some structures are better suited to certain
strategies than other structures
• A carefully chosen structure can give an
organization a sustainable competitive
advantage
Organizational Structure
•Organizational design
– Selecting the structure and control
systems that are most strategically
effective for pursuing sustainable
competitive advantage.
•The role of structure and control
– To coordinate strategy implementation.
– To motivate and provide incentives for superior
performance.
Organizational Design Decisions
• Organic
Mechanistic
Organization
Organization
– Highly
A rigid flexible
and tightly
andcontrolled
adaptablestructure
structure
• Non-standardized
High specializationjobs
• Fluid
Rigid team-based structure
departmentalization
• Little
Narrow direct supervision
spans of control
• Minimal formal rules
High formalization
• Open
Limitedcommunication network(downward)
information network
• Empowered
Low decisionemployees
participation
10–10
Departmentalization by Type
• Functional
– Grouping jobs by functions performed
• Product
– Grouping jobs by product line
• Geographic
– Grouping jobs on the basis of territory or geography
10–11
Departmentalization by Type
• Process
– Grouping jobs on the
basis of product or
customer flow
• Customer
– Grouping jobs by type
of customer and needs
10–12
Designing jobs to implement
strategy
• Strategy implementation also involves
redesigning the way jobs are done
• Job design refers to the design of individual
tasks in an attempt to make them more
relevant to the company
– Job Enlargement
– Job Rotation
– Job Enrichment
Activity ..
Select a company –
explain how it has
been structured.
Structure Follows Strategy:
Changes in corporate strategy lead
to changes in organizational
structure
15
Structure Follows Strategy:
• Structure Follows Strategy:
• New strategy is created
• New administrative problems emerge
• Economic performance declines
• New appropriate structure is invented
• Profit returns to its previous levels
16
What if strategy follows
structure?
Strategy follows Structure?
• Structure is not simply an organization chart.
• Structure is all the people, positions, procedures,
processes, culture, technology and related
elements that comprise the organization.
• It defines how all the pieces, parts and processes
work together (or don’t in some cases).
• When an organization changes its structure and
not its strategy, the strategy will change to fit the
new structure. Structure supports strategy.
Strategy and Culture
• Strategy-Culture Compatibility:
– Consider the following:
• Is the planned strategy compatible with the
firm’s current culture?
• Can the culture be easily modified to make it
more compatible with new strategy?
• Is management willing to make major
organizational changes?
• Is management committed to implementing the
strategy?
19
Organizational Culture
•Ways of transmitting organizational culture:
Strategy Implementation
Actions
Strategy Implementation Actions (I)
• Overall strategy broken down into
manageable parts
• Scope of each part defined in detail
• Goals and deadlines set for accomplishment
• Appropriate resources allocated
Strategy Implementation Actions (II)
• Right numbers and types of people assigned
• Policies and procedures to guide their actions
• One person assigned overall responsibility for
each part
• Progress measured and tracked
• Changes and adjustments when appropriate
Examples of Strategy Implementation Actions (I)
• Marketing campaigns – new, refocus, expand
or contract, discontinue, different media, test
pilots
• Facilities – new, expand, repurpose, close
• Products/services – new (create, develop,
invent), redesign, add new features,
discontinue
• Product prices – raise, lower, bundle or
unbundle products
Examples of Strategy Implementation Actions (II)
• Operating processes – reengineer, tasks (new,
reorder, combine, separate, perform
differently or less expensively)
• Departments, offices, teams – new, refocus,
discontinue, expand, split up
• Employees – new, transfer, retrain or develop,
lay off
• New systems for monitoring and measuring
operating performance
Elements in a Strategy Action Plan
• Policies
• Procedures
• Methods
• Rules
• Objectives
• Time deadlines
• Personnel assignments