Strategy implementation is a term used to
describe the activities within an organization to
manage the execution of a strategic plan.
• Strategy implementation is the translation of chosen strategy
into organizational action so as to achieve strategic goals and
organizational structure, control systems, and culture to follow
strategies that lead to competitive advantage and a better
• Special value developing tasks and roles to the employees.
• Maximize efficiency, quality, and customer satisfaction.
Organizational control system
• Motivational Incentives
• Organizational Performance.
•Norms and Beliefs.
Excellently formulated strategies
•resource-allocation process, etc.
•Strategy implementation poses a threat to many managers and
employees in an organization.
•New power relationships are predicted and achieved.
•New groups (formal as well as informal) are formed whose values,
attitudes, beliefs and concerns may not be known.
•With the change in power and status roles, the managers and
employees may employ confrontation behaviour.
(what to do overall)
(How to do it
Day–to-day operations )
Strategy Formulation – Implementation:
• Strategy formulation and Strategy
Implementation are different and it
needs to be sound and excellent.
• Strategy fails because of failed
implementation and not because of
• The matrix shows various
combination of strategy
formulation and implementation.
Strategy Formulation – Implementation:
In cell 1 organization thrives, since it is
achieving what it aspires to achieve with
efficient output/input ratio. Where in cell
2 and cell 4 organization is doomed
unless it can establish strategic direction.
In cell 3 strategic direction is present to
ensure effectiveness even if rather too
much input is being used to generate
outputs. Thus to be effective is to survive
whereas efficiency is not sufficient for
ISSUES IN STRATERGY IMPLEMENTATION
•Implementation task tests strategist ability to allocate resources,
design structures, formulate functional policies, identify leadership
•Strategies leads to plans. Plans result in different kinds of programs
which includes goals, policies, procedures, rules and steps to be taken
in putting them into action.
•Programs leads to formulation of the project which is time scheduled
and costs are predetermined. It requires allocation of funds based on
capital budgeting of the organization.
•Projects creates need for infrastructure for day to day operations in
organization. Resource allocation is key to successful projects
•Sequence in which strategy implementation issues are to be
1.Project Implementation 2.Procedural Implementation
3.Resource Allocation 4.Structural Implementation
5.Functional Implementation 6.Behavioral Implementation
• Transition from strategy formulation to strategy implementation
requires shift in responsibility from strategist to divisional and
functional managers and their involvement should be maximum
during strategy formulation.
•In strategic planning, resource allocation is a plan for using
•It is the process of allocating scarce resources among the
various projects or business units.
There may be contingency mechanisms
• Priority ranking of items excluded from the plan
• Which items to fund if more resources should become available
• priority ranking of some items
• Sacrificed if total funding must be reduced.
There are a number of approaches to solving resource allocation
•Combination Of Both.
Procedural Issues In Strategy
Following the procedures laid down for implementation constitutes
an important component of strategy implementation in the Indian
•Foreign Collaboration Procedure
•Capital Issue Control Requirements
•Import and Export Requirements
•Incentives and Facilities Benefits
Licensing Procedure :
•Registration & Licensing of industrial undertaking rules. a
License is necessary for establishing
• new unit,
•manufacturing a ‘new article’,
•substantial expansion of capacity in existing business,
• changing location.
•Secretariat for Industrial Approvals (SIA)
•Project Appraisal Board Application
number of govt. agencies & ministries before a Letter of Intent is
After conditions are fulfilled , the Letter of Intent is converted
into an industrial license
Foreign Collaboration Procedure :
•Export oriented or high technology industries,
•Permitting existing foreign investment in non-priority areas up to
40% of the equity holding. This limit has been raised to 51% in 34
•All proposals to set up projects with foreign collaboration require
prior government approval.
•Preliminary evaluation by the promoter,
•obtaining industrial license (if necessary), or registration with the
Directorate General of Technical Development
•Obtaining clearance under the MRTP Act
•Applying for foreign collaboration to Foreign Investment Board
•Applying for import of capital goods (if required)
•Finalisation of agreement and clearance from the Reserve Bank of
MRTP Requirements :
•To prevent monopolistic & restrictive trade practices,
• The concentration of economic power.
•The mrtp act requires that any substantial expansion which
increases the assets or productive capacity or supply for distribution
not less than 25%, requires the approval of the central govt.
The MRTP Act applies to four types of undertakings:
•An undertaking having gross assets of Rs. 100 crore & above
•Interconnected Undertakings which together have assets of Rs. 100
crore or above
•A dominant undertaking having assets of Rs. 1 crore & above
•Interconnected dominant undertakings.
Capital Issue Control Requirements :
Capital Issue Control Requirements The issue of capital by
companies is regulated through the Capital Issues Control Act, 1956
& the Securities Contracts Regulation Act, 1956 for the purpose of
ensuring that investments are made in priority areas, & for the
promotion of capital markets & protection of shareholders. For the
purpose of strategy implementation, these acts are relevant so far as
the provision of financial resources is concerned. Apart from this,
these acts also affect mergers & amalgamations as they regulate the
capital reorganization plans for mergers.
The Controller of Capital Issues (CCI) under the Dept. of Economic
Affairs, Ministry of Finance, is the nodal agency for the
administration of the acts. All proposals for fresh issues of equity or
preference capital, issue of right shares, bonus shares, debentures,
etc. & capitalization of free reserves have to be scrutinized by the
Import & Export Requirements :
•The Import Trade Control Policy Book (popularly called the Red
Book) is an annual govt. publication which outlines the import
licensing policy for individual industries & for different categories
of importers (established, actual users & registered).
•Through the Import & Export Control Order, the govt. has
delegated the power to issue licenses & to administer the act to the
Chief Controller of Imports & Exports.
For capital goods imports, the Capital goods committee exercises the
powers. The Secretariat for industrial approvals handles the
procedural formalities. The detailed procedure for import licenses
for capital goods and raw materials is provided in Import Trade
Control Handbook of Rules & Procedures.
Benefits from Incentives & Facilities :
Benefits from Incentives & Facilities Project Implementation for
putting a strategy into action requires a consideration of various
incentives, subsidies, & facilities which can benefit an organization.
In providing incentives, etc. the govt. does not play a regulatory or
controlling role but a promotional role, which is manifested in