6 strategy implementation
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Strategy Implementation
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6 strategy implementation
- 1. Strategy ImplementationStrategy Implementation By KMIBy KMI
- 2. âș Establish annual objectivesEstablish annual objectives âș Devise policiesDevise policies âș Allocate resourcesAllocate resources âș Alter an existing organizational structureAlter an existing organizational structure âș Restructure and reengineerRestructure and reengineer âș Revise reward and incentive plansRevise reward and incentive plans âș Minimize resistance to changeMinimize resistance to change âș Match managers with strategyMatch managers with strategy âș Develop a strategy supportive cultureDevelop a strategy supportive culture âș Adapt production/operation processesAdapt production/operation processes âș Develop an effective human resource functionDevelop an effective human resource function âș Downsize and furlough as neededDownsize and furlough as needed âș Link performance and pay to strategiesLink performance and pay to strategies By KMI
- 3. Organizational StructureOrganizational Structure âș Too many levels of managementToo many levels of management âș Too many meetings attended by too manyToo many meetings attended by too many peoplepeople âș Too much attention being directed towardToo much attention being directed toward solving interdepartmental conflictssolving interdepartmental conflicts âș Too large a span of controlToo large a span of control âș Too many unachieved objectivesToo many unachieved objectives âș Declining corporate or business performanceDeclining corporate or business performance âș Losing ground to rival firmsLosing ground to rival firms By KMI
- 4. Criteria for Evaluating StrategiesCriteria for Evaluating Strategies âșConsistency - Goals and policies areConsistency - Goals and policies are mutually consistent.mutually consistent. âșConsonance - Adaptive to changes in theConsonance - Adaptive to changes in the environment.environment. âșAdvantage - Provides a competitiveAdvantage - Provides a competitive advantage.advantage. âșFeasibility - It is possible with availableFeasibility - It is possible with available resources.resources. By KMI
- 5. Difficulties in strategy evaluationDifficulties in strategy evaluation âș A dramatic increase in the environmentâs complexityA dramatic increase in the environmentâs complexity âș The increasing difficulty of predicting the future withThe increasing difficulty of predicting the future with accuracyaccuracy âș The increasing number of variablesThe increasing number of variables âș The rapid rate of obsolescence of even the bestThe rapid rate of obsolescence of even the best plansplans âș The increase in the number of both domestic andThe increase in the number of both domestic and world events affecting organizationsworld events affecting organizations âș The decreasing time span for which planning can beThe decreasing time span for which planning can be done with any degree of certaintydone with any degree of certainty By KMI
- 6. Quantitative CriteriaQuantitative Criteria âșReturn on investment (ROI)Return on investment (ROI) âșReturn on equity (ROE)Return on equity (ROE) âșProfit marginProfit margin âșMarket shareMarket share âșDebt to equityDebt to equity âșEarnings per shareEarnings per share âșSales growthSales growth âșAsset growthAsset growth By KMI
- 7. Corrective ActionCorrective Action âș Alter the firmâs structureAlter the firmâs structure âș Replace one or mare key individualsReplace one or mare key individuals âș Divest a divisionDivest a division âș Alter the firmâs vision and/or missionAlter the firmâs vision and/or mission âș Revise objectivesRevise objectives âș Alter strategiesAlter strategies âș Devise new policiesDevise new policies âș Install new performance incentivesInstall new performance incentives âș Raise capital with stock or debtRaise capital with stock or debt âș Add or terminate salespersons, employees, orAdd or terminate salespersons, employees, or managersmanagers âș Allocate resources differentlyAllocate resources differently âș Outsource (or rein in) business functionsOutsource (or rein in) business functionsBy KMI
- 8. ProcessesProcesses By KMI Input Output Direct Supervision Planning Processes Performance Targets Balanced scorecard Indirect Cultural processes Self-control Internal markets
- 9. Balanced Score CardBalanced Score Card By KMI
- 10. By KMI Advantage Comment Control Senior management can exercise greater control over the activities of the organization and co-ordinate their subordinates or sub-units more easily Standardization Procedures can be standardized throughout the organization Corporate view Senior managers can make decisions from the point of view of the organization as a whole, whereas subordinates would tend to make decisions from the point of view of their own department or section Balance of power Centralized control enables an organization to maintain a balance between different functions and departments Experience counts Senior managers ought to be more experienced and skilful in making decisions Lower overheads When authority is delegated, there is often a duplication of management effort at lower levels of hierarchy Leadership In times of crises, the organization may need strong leadership by a central group or senior managers
- 11. By KMI Advantage Comment Workload It reduces the stress and burden of senior management Job It provides subordinates with greater job satisfaction by giving them more say in making decisions which affect their work Local knowledge Subordinates may have a better knowledge than senior management of âlocalâ conditions affecting their area of work Flexibility and speed Delegation should allow greater flexibility and a quicker response to changing conditions affecting their area of work Training Management at middle and junior levels are groomed for eventual senior management positions Control By establishing appropriate sub-units or profit centres to which authority is delegated, the system of control within the organization might be improved
- 12. OutsourcingOutsourcing Outsourcing enables organizationsOutsourcing enables organizations to benefit from their suppliersâ scaleto benefit from their suppliersâ scale economies.economies. By KMI
- 13. Points for considerationPoints for consideration âș Outsourcing major advantage is reducingOutsourcing major advantage is reducing managersâ workload and they get more time tomanagersâ workload and they get more time to concentrate on core activitiesconcentrate on core activities âș Standardization of processes will make itStandardization of processes will make it easier to outsource â some processes may beeasier to outsource â some processes may be commoditizedcommoditized âș Outsourcing important for peripheral activitiesOutsourcing important for peripheral activities âș Outsourcing core activities could lead to theOutsourcing core activities could lead to the collapse of an organizationcollapse of an organization âș External suppliers may capture economies ofExternal suppliers may capture economies of scale and experience effects â proving lessscale and experience effects â proving less expensive than in-house servicesexpensive than in-house servicesBy KMI
- 14. Points for considerationPoints for consideration âșSuccessful relationship managementSuccessful relationship management neededneeded âșSuccessful outsourcing depends onSuccessful outsourcing depends on Specify with precision what is to beSpecify with precision what is to be suppliedsupplied The ability to measure what is actuallyThe ability to measure what is actually suppliedsupplied The ability to make adjustments ifThe ability to make adjustments if specifications are not achievedspecifications are not achievedBy KMI
- 15. AdvantagesAdvantages âșCan save costsCan save costs âșIncrease effectiveness where supplierIncrease effectiveness where supplier deploys higher level of expertisedeploys higher level of expertise âșAllows the organization to focus on its coreAllows the organization to focus on its core skillsskills âșQuicker than in-house processesQuicker than in-house processes âșService level agreementsService level agreements âșCost controlCost control By KMI
- 16. DisadvantagesDisadvantages âș Single supplier for a complex process difficultSingle supplier for a complex process difficult to findto find âș Firms may be unwilling to outsource the wholeFirms may be unwilling to outsource the whole process due to confidentiality concernsprocess due to confidentiality concerns âș Loss of control, especially quality issuesLoss of control, especially quality issues âș Depending on supplierDepending on supplier âș Contracts may be long or inflexibleContracts may be long or inflexible âș If specialist skills are involved, moving to a newIf specialist skills are involved, moving to a new supplier can become difficultsupplier can become difficult By KMI