Strategy implementation involves organizing resources, building culture, and leading change to execute strategy. It requires coordination across functions and motivating managers and employees. Key aspects of implementation include allocating resources, setting policies and procedures, tying rewards to goals, and developing a strategy-supportive culture. Challenges can arise from transitioning responsibility to divisional managers with differing interests from the organization.

1. Chapter 7

2. Strategy implementation is an internal,
operations-driven activity involving organizing,
budgeting, motivation, culture building,
supervising and leading to “make the strategy
work” as intended!

3. • Its easier to say “going to do it” – Strategy Formulation
• But more difficult to “do” something – Strategy Implementation
Strategy ImplementationStrategy Formulation
Requires coordination among many
persons
Requires coordination among a few
individuals
Requires motivation and leadership skills
Requires good intuitive and analytical
skills
Primarily an operational processPrimarily an intellectual process
Focuses on efficiencyFocuses on effectiveness
Managing forces during the actionPositioning forces before the action

5. Implementing Strategy involves
• Creating fits between way things are done & what it takes for effective
strategy execution.
• Executing strategy proficiently & efficiently.
• Producing excellent results in timely manner

6. Transition to Strategy Implementation
Shift in responsibility from strategists to divisional and functional
managers thus Implementation problems may arise.
Important Implementation Concerns
Managers & employees motivated more by self-interests than
organizational interests
Need to involve divisional and functional managers in strategy formulation

7. Implementing Strategy involves
1. Building a firm capable of carrying out strategy successfully
2. Allocating ample resources to strategy-critical activities
3. Establishing strategy-supportive policies & procedures
4. Tying reward structure to achievement of results
5. Creating a strategy-supportive corporate culture
6. Exerting strategic leadership to influence motivation
7. Managing Change & Conflict

9. Establishing Annual Objectives
• Basis for allocating resources
• Mechanism for evaluating managers
• Monitor progress toward long-term objectives
• Establish organizational, divisional, and departmental priorities
Devising Policies
Policy refers to specific guidelines, methods, procedures, rules, forms and administrative
policies established to support & encourage work toward stated goals.
Policies are instruments for strategy implementation.
• Basis for solving recurring problems
• Sets boundaries, constraints, and limits on administrative actions
• Sets expectations for managers and employees
• Basis for management control and coordination

10. • Allows for strategy execution
• Sets allocation plan based on annual objectives
• Allocation based on four types of resources: financial, physical, human, and
technological
• Function
• Divisional
• SBU Structure
• Matrix Structure

11. Restructuring
• Reducing size of firm
Employees, Divisions or units,
Hierarchical levels
• Benchmarking against competitors
Ratios out of line
• Primary benefit = cost reduction
• Downsizing, Rightsizing, Delayering
Reengineering
• Employee/customer well-being
Redesign work, Redesign jobs,
Redesign processes
• Improvement in:
Costs, Quality, Service, Speed
Revising Reward & Incentive Programs
• Pay-for-performance plans
• Flexibility in compensation systems is necessary
• Bonus system
Annual objectives, Long-term objectives
• Profit Sharing

12. • Raises anxiety/fear
• Force change strategy
• Educative change strategy
• Rational or self-interest change strategy
Most desirable
• Customer & employee sensitivity to environment
• Legal requirements
• Earth has become a stakeholder for all firms
• Preserve and conserve natural resources
• Emphasis on developing environmental perspective

13. Creating a Strategy-Supportive Culture
• Determine changes in a firm’s culture that could benefit strategy
• Weak linkages between strategic management and organizational culture can
jeopardize performance and success
• Senior executives must personally lead to create a strategy-supportive culture
Matching Culture & Strategy Entails
• Openness to new ideas
• Challenging status quo
• Energizing employees to make new strategy happen
• Repeating new messages again & again
• Rewarding people exhibiting new cultural norms
• Creating events where all managers must listen

15. • Harmony is normal and conflict is abnormal.
• Conflicts and disagreements are the same.
• Conflict is the result of “personality problems.”
• Conflict and anger are the same thing.
MISCONCEPTIONS ABOUT CONFLICT

16. SUBSTANCE
PROCEDURES RELATIONSHIPS
On-the-ground resource situation; concrete
content of the conflict
processes used to make the
rules of interaction
Relations between parties such
as power, history, reputation

17. • Production processes typically constitute more than 70% of firm’s total
assets
• Decisions on:
Plant size, Inventory/inventory control, Quality control, Cost control, Technological
innovation
• Assessing staffing needs and costs
• Develop performance incentives
• Employee Stock Ownership Plan (ESOPs)
• Child-care policies
• Work-life balance

18. • Strategy implementation means change
• Successful implementation requires:
• Support
• Discipline
• Motivation
• Hard work