This integrative course examines the strategic decision-making processes of top management, focusing on the formulation, implementation, and evaluation of corporate strategies and policies. Students will develop critical thinking and analytical skills by applying strategic frameworks, conducting industry and environmental analyses, and exploring competitive positioning. Key topics include corporate governance, business ethics, competitive advantage, and strategy execution. Through case studies and real-world applications, students will gain a holistic understanding of strategic management and its role in organizational success, preparing them to navigate complex business environments and drive strategic initiatives effectively.

1. Strategic
Management
CBME 2
Professor: Rommel R. Regala, Ph.D.
Sorsogon State University

2. Strategy Implementation
and Organizational Structure

3. Strategy Execution and Performance Alignment

4. Introduction
• Strategy execution is the process of turning a company’s strategic plans into
action to achieve organizational goals. While strategy formulation defines what
a company intends to do, strategy execution focuses on how these plans are
implemented effectively across different functions and business units.
• Wheelen et al. (2018) emphasize that effective strategy execution requires
translating corporate strategies into functional and operational plans and
ensuring performance alignment across business units. Companies must
integrate their strategies into daily activities, establish performance measures,
and foster coordination across departments to achieve long-term success.

5. Strategy Execution
and Performance
Alignment

6. Translating Corporate
Strategies into Functional
and Operational Plans
• A. Corporate-Level Strategy → Functional
Strategies → Operational Plans
1. Corporate-Level Strategy: Defines the
overall direction of the firm (e.g.,
growth, diversification, cost
leadership).
2. Functional Strategies: Aligns business
functions (marketing, finance,
operations, HR) with corporate goals.
3. Operational Plans: Details specific day-
to-day activities and processes to
support functional strategies.

7. • B. Key Steps in Translating Strategy into Action
1. Establish Clear Goals and Objectives
• Convert strategic priorities into SMART (Specific,
Measurable, Achievable, Relevant, Time-bound) goals.
2. Develop Functional Strategies
• Each business function (finance, HR, operations, R&D,
IT) creates detailed strategies to support corporate
goals.
3. Design Operational Processes
• Identify specific actions, workflows, and KPIs to
implement functional strategies efficiently.
4. Allocate Resources Effectively
• Distribute financial, technological, and human
resources based on strategic priorities.
5. Monitor and Adjust Strategies
• Use real-time data and feedback loops to modify plans
and ensure alignment with corporate objectives.
Translating
Corporate
Strategies into
Functional and
Operational Plans

8. Strategy Execution and
Performance Alignment
• 2. Performance Alignment Across
Business Units
• Achieving strategic goals requires
synchronizing efforts across all
business units to ensure consistency
and efficiency. Performance
alignment means that all
departments and employees work
toward the same strategic
objectives, minimizing inefficiencies
and conflicts.

9. Performance
Alignment Across
Business Units
• A. Importance of Performance
Alignment
• Ensures all teams are working
towards common goals.
• Improves efficiency by
eliminating redundant efforts.
• Encourages cross-functional
collaboration.
• Enhances accountability and
performance measurement.

10. Performance Alignment
Across Business Units
• B. Frameworks for Performance Alignment
• 1. The Balanced Scorecard (BSC)
• The Balanced Scorecard (Kaplan & Norton) is a widely used tool
for aligning business units by translating strategy into
measurable performance indicators across four perspectives:
• Financial Perspective (Are we achieving financial objectives?)
• Customer Perspective
(Are we delivering value to customers?)
• Internal Business Processes Perspective
(Are operations efficient?)
• Learning & Growth Perspective
(Are employees and systems improving?)
• Example: Apple uses the Balanced Scorecard to align R&D,
marketing, and supply chain operations with its corporate vision
of innovation and premium product offerings.

11. Performance Alignment
Across Business Units
• B. Frameworks for Performance Alignment
• 2. Key Performance Indicators (KPIs) and OKRs
• Key Performance Indicators (KPIs) and Objectives
& Key Results (OKRs) help measure and align
business unit performance with strategy.
• Example:
• Google’s OKR:
• Objective: Become the leader in AI-driven
search.
• Key Result 1: Launch AI-powered search
features in 50+ countries.
• Key Result 2: Increase AI-driven ad revenue
by 20%.

12. Performance
Alignment Across
Business Units
• C. Methods for Ensuring Performance Alignment
• 1. Cascading Goals Across Business Units
• Corporate strategy should be broken down into business unit,
departmental, and individual goals to ensure alignment.
• 2. Cross-Functional Collaboration
• Encouraging cooperation between departments (e.g., marketing
and R&D working together) ensures that initiatives are aligned.
• 3. Real-Time Data and Feedback Mechanisms
• Companies should use AI-powered analytics, dashboards, and
performance tracking tools to assess execution progress.
• 4. Incentive Systems and Rewards
• Aligning employee incentives (bonuses, promotions) with
strategic goals ensures motivation and accountability.
• 5. Leadership and Communication
• Strong leadership is required to continuously communicate
strategic priorities, address resistance to change, and foster
commitment at all levels.

13. Conclusion
• Strategy execution and performance alignment are essential
for transforming corporate goals into measurable results.
Companies must translate strategies into functional and
operational plans and ensure that all business units are
working in sync.
• By leveraging tools like the Balanced Scorecard, KPIs, and
OKRs, organizations can track performance, allocate
resources efficiently, and ensure sustained competitive
advantage. Ultimately, successful strategy execution requires
clear objectives, cross-functional collaboration, real-time
monitoring, and strong leadership to drive corporate success.

14. Organizational Structures for Strategy Execution

15. • Effective strategy execution depends on how an organization structures its internal operations,
decision-making processes, and workflows. Organizational structure determines authority,
communication flow, coordination of activities, and resource allocation to ensure strategic objectives
are met.
• Wheelen et al. (2018) emphasize three critical aspects of organizational structures for successful
strategy execution:
• 1.Structural Designs: Functional, divisional, matrix, and network structures.
• 2.Centralization vs. Decentralization: Decision-making approaches that influence strategic agility.
• 3.Restructuring and Business Process Reengineering (BPR): Methods for enhancing efficiency and
competitiveness.
Introduction

16. Organizational Structures
for Strategy Execution
• 1. Structural Designs: Functional,
Divisional, Matrix, and Network
Structures
• Different structural designs impact
how strategies are implemented,
ensuring coordination between
departments, resources, and
decision-making units.

17. Structural Designs: Functional, Divisional,
Matrix, and Network Structures
• A. Functional Structure
• A functional structure organizes a company
based on specialized departments (e.g.,
marketing, finance, operations, R&D).
• Key Characteristics:
• Each department has a specific role
(e.g., HR, sales, IT).
• Centralized decision-making at top
management.
• Clear hierarchy and chain of command.

18. Functional Structure
• Advantages:
• Efficiency due to specialization.
• Strong expertise within
functions.
• Cost-effective with economies of
scale.
• Challenges:
• Poor cross-functional
communication.
• Slow decision-making due to
hierarchy.
• Rigid structure, making
adaptability difficult.
• Example: Procter & Gamble (P&G)
organizes its business into functional
units like R&D, marketing, and supply
chain to streamline operations.

19. • B. Divisional Structure
• A divisional structure groups employees based on
products, geography, or customers. Each division
operates as a semi-autonomous unit with its own
resources.
• Key Characteristics:
• Each division functions like a separate business unit.
• Divisions have their own R&D, marketing, and sales
teams.
• Greater focus on products, customers, or regions.
Structural Designs:
Functional, Divisional, Matrix,
and Network Structures

20. Divisional Structure
• Advantages:
• Faster decision-making at the divisional level.
• Greater flexibility and adaptability to market
changes.
• Encourages accountability and innovation.
• Challenges:
• Duplication of resources across divisions (higher
costs).
• Competition between divisions may reduce
collaboration.
• Can lead to inefficiencies in coordination.
• Example: Johnson & Johnson operates divisions focused
on pharmaceuticals, medical devices, and consumer
health products, each with its own strategic focus.

21. Structural Designs: Functional,
Divisional, Matrix, and
Network Structures
• C. Matrix Structure
• A matrix structure is a hybrid model
that combines functional and divisional
structures, allowing employees to
report to multiple managers (e.g., a
project manager and a functional
manager).
• Key Characteristics:
• Employees have dual reporting
relationships.
• Encourages collaboration across
functions and divisions.
• Used in organizations requiring
high flexibility and coordination.

22. Matrix Structure
• Advantages:
• Enhances cross-functional teamwork and
knowledge sharing.
• Improves responsiveness to changing
business environments.
• Maximizes resource utilization across
departments.
• Challenges:
• Confusion in authority due to dual reporting.
• Requires strong coordination mechanisms to
avoid conflicts.
• High complexity, making management
difficult.
• Example: Boeing uses a matrix structure for
aircraft development, integrating engineering,
marketing, and production teams across projects.

23. Structural Designs: Functional,
Divisional, Matrix, and
Network Structures
• D. Network Structure
• A network structure is a flexible,
decentralized model that relies on
outsourcing, partnerships, and
virtual teams to execute strategies
efficiently.
• Key Characteristics:
• Emphasizes collaboration with
external partners.
• Small core team manages
external relationships.
• Leverages technology and
digital platforms.

24. Network Structure
• Advantages:
• Reduces fixed costs (less reliance on
in-house teams).
• Enables fast scaling and innovation.
• Promotes global talent access.
• Challenges:
• Less control over outsourced
functions.
• High dependency on external
partners.
• Communication and coordination
challenges.
• Example: Nike follows a network
structure, outsourcing manufacturing
while focusing on brand management,
R&D, and marketing.

25. Organizational
Structures for
Strategy
Execution
• 2. Centralization vs. Decentralization
in Strategic Execution
• The level of decision-making
authority influences how well
strategies are executed across the
organization.

26. Centralization vs. Decentralization
in Strategic Execution
• A. Centralization
• In a centralized organization, strategic
decisions are made at the top
management level, with limited
delegation to lower levels.
• Key Characteristics:
• Suitable for cost leadership
strategies requiring strong
control.
• Ensures consistency in operations
and brand image.

27. Centralization
• Advantages:
• Strong control and coordination
over business units.
• Consistency in decision-making.
• Cost-efficient due to
standardization.
• Challenges:
• Slower response to market
changes.
• Limited innovation at lower
levels.
• Overburdened top
management.
• Example: McDonald’s follows a
centralized structure, ensuring
uniform quality and pricing
worldwide.

28. Centralization vs.
Decentralization in
Strategic Execution
• B. Decentralization
• In a decentralized organization,
decision-making power is
distributed across business units
and teams.
• Key Characteristics:
• Suitable for differentiation
strategies requiring agility.
• Encourages innovation and
local market responsiveness.

29. Decentralization
• Advantages:
• Faster decision-making at local
levels.
• Empowers employees, leading to
higher motivation.
• Enables better customer and
market responsiveness.
• Challenges:
• Risk of inconsistent decisions
across business units.
• Higher operational costs.
• Difficult to coordinate strategies
across multiple units.
• Example: Google follows a
decentralized model, allowing teams
autonomy to innovate and develop
new technologies.

30. Organizational
Structures for
Strategy
Execution
• 3. Restructuring and Business Process Reengineering (BPR) for
Efficiency
• Restructuring and Business Process Reengineering (BPR) focus
on optimizing organizational structures and workflows to
enhance efficiency, reduce costs, and improve overall
performance.

31. Restructuring and Business Process
Reengineering (BPR) for Efficiency
• A. Organizational Restructuring
• Restructuring involves reorganizing the company’s
structure, processes, or workforce to improve efficiency
and strategic execution.
• Types of Restructuring:
• 1. Downsizing – Reducing workforce or eliminating
redundant roles.
• 2. Delayering – Removing unnecessary layers of
management for faster decision-making.
• 3. Divestment – Selling underperforming divisions
to focus on core competencies.
• Example: General Motors restructured after the 2008
financial crisis, closing unprofitable brands (Pontiac,
Saturn) and focusing on core operations.

32. Restructuring and Business
Process Reengineering (BPR)
for Efficiency
• B. Business Process Reengineering (BPR)
• BPR is the radical redesign of business
processes to achieve significant
improvements in cost, quality, service, and
speed.
• Key Steps in BPR:
• 1. Identify inefficient processes.
• 2. Redesign workflows using
automation, AI, and lean principles.
• 3. Implement changes and continuously
optimize performance.
• Example: Ford reengineered its accounts
payable process, replacing paper invoices
with an electronic system, reducing errors
and processing time.

33. Conclusion
• Organizational structures play a crucial
role in strategy execution. Companies
must choose between functional,
divisional, matrix, or network structures
based on their strategic needs.
Additionally, centralization vs.
decentralization affects decision-
making efficiency and flexibility. When
necessary, businesses must undergo
restructuring or business process
reengineering (BPR) to remain
competitive and agile.
• Ultimately, aligning organizational
structure with strategy execution
ensures that businesses can efficiently
implement plans, optimize resources,
and achieve long-term success.

34. Global Strategy Implementation

35. Introduction
• In today’s interconnected world, companies
seek global expansion to tap into new
markets, increase revenue, and leverage
competitive advantages. However, expanding
internationally requires a well-structured
global strategy that aligns with the firm’s
resources, market opportunities, and external
factors such as cultural and institutional
differences.
• According to Wheelen et al. (2018), two key
aspects of global strategy implementation are:
• 1. Modes of international expansion –
Different entry strategies companies use
to enter foreign markets.
• 2. Managing cultural diversity and
institutional differences – Ensuring
smooth operations across diverse
markets.

36. Global Strategy
Implementation
• 1. Modes of International
Expansion
• A company can expand
globally through various
modes, depending on its risk
tolerance, resource
commitment, and control
requirements.
• The five major modes of
international expansion are:

37. Modes of
International
Expansion
• A. Exporting
• Exporting is the simplest and least risky mode of international expansion,
where a company sells goods produced in its home country to foreign markets.
• Types of Exporting:
• 1. Direct Exporting – The company handles export operations
independently.
• 2. Indirect Exporting – The company uses intermediaries (agents or
distributors) to enter foreign markets.

38. Exporting
• Advantages:
• Low investment risk – No need for production
facilities abroad.
• Quick market entry – Easier than establishing
operations in a foreign country.
• Retains control over production – Quality control
remains centralized.
• Challenges:
• High transportation and tariff costs – Can make
products less competitive.
• Limited market knowledge – Relies on local
distributors or agents.
• Exposure to currency fluctuations – Affects pricing
and profitability.
• Example: Coca-Cola exports its concentrate to bottlers
worldwide instead of setting up full-fledged
manufacturing units in every country.

39. Modes of
International
Expansion
• B. Licensing
• Licensing is a contractual
agreement where a company
(licensor) allows a foreign
company (licensee) to use its
brand, technology, or
intellectual property for a fee
or royalty.

40. Licensing
• Advantages:
• Low financial commitment – No need to
invest in foreign facilities.
• Fast market entry – Leverages the local
firm’s knowledge and networks.
• Reduces political risk – The local partner
handles regulatory compliance.
• Challenges:
• Limited control over quality – The licensee
manages production and branding.
• Risk of intellectual property theft –
Technology or brand misuse may occur.
• Dependence on the licensee’s
performance – If the local firm fails, the
brand reputation suffers.
• Example: Disney licenses its characters to toy
manufacturers worldwide instead of
manufacturing them in-house.

41. Modes of
International
Expansion
• C. Franchising
• Franchising is similar to licensing but focuses on business
models instead of products. The franchisor grants a foreign
firm the right to operate under its brand name and business
format in exchange for royalties.

42. Franchising
• Advantages:
• Rapid global expansion – Uses local
entrepreneurs to scale operations.
• Franchisee investment – Reduces the
franchisor’s financial risk.
• Maintains brand consistency –
Standardized business practices.
• Challenges:
• Control issues – Franchisees may not
fully adhere to brand standards.
• Market adaptation – Business models
may need localization.
• Profit-sharing – Revenue is shared with
franchisees.
• Example: McDonald's operates in over 100
countries, using franchising to expand its
brand globally while adapting to local tastes.

43. Modes of
International
Expansion
• D. Joint Ventures (JVs)
• A joint venture is a partnership between a foreign company
and a local firm to co-own and manage a business in the target
country.

44. Joint Ventures (JVs)
• Advantages:
• Shared investment risk – Both parties contribute
capital and resources.
• Local market expertise – The local partner
understands the culture and regulations.
• Access to government incentives – Some
countries mandate local partnerships.
• Challenges:
• Potential conflicts – Differences in management
style and objectives.
• Profit-sharing – Revenue and decision-making
are divided.
• Regulatory challenges – Government policies
may restrict foreign ownership.
• Example: Starbucks formed a joint venture with Tata
Global Beverages to enter the Indian market,
leveraging Tata’s local market knowledge.

45. Modes of
International
Expansion
• E. Wholly Owned Subsidiaries (WOS)
• A wholly owned subsidiary is a foreign operation fully
owned and controlled by the parent company. It requires
establishing new facilities (greenfield investment) or
acquiring an existing company (acquisition).

46. Wholly Owned
Subsidiaries (WOS)
• Advantages:
• Full control over operations and brand.
• Higher profit potential – No profit-sharing with
local partners.
• Strong presence in the foreign market.
• Challenges:
• High capital investment – Requires significant
financial resources.
• Political and economic risks – Exposure to
foreign regulations and instability.
• Longer time to establish – Especially in
greenfield projects.
• Example: Tesla set up a wholly owned subsidiary in
China, becoming the first foreign automaker to own
a factory in the country without a local partner.

47. Global Strategy
Implementation
• 2. Managing Cultural Diversity
and Institutional Differences in
Global Operations
• Global companies must navigate
cultural and institutional
differences to ensure smooth
operations, avoid
misunderstandings, and maximize
productivity.

48. Managing Cultural
Diversity and Institutional
Differences in Global
Operations
• A. Managing Cultural Diversity
• Cultural differences impact communication,
leadership styles, negotiation, and customer
behavior. Companies must develop cross-cultural
competencies to avoid misalignment between
corporate strategy and local practices.

49. Managing
Cultural Diversity
• Key Cultural Dimensions (Hofstede’s Model):
• 1. Power Distance – Acceptance of hierarchical authority.
• High: China, Russia (top-down leadership).
• Low: Sweden, Denmark (egalitarian approach).
• 2. Individualism vs. Collectivism – Focus on personal goals
vs. group harmony.
• Individualistic: USA, UK (self-reliance).
• Collectivist: Japan, Mexico (team-based decisions).
• 3. Uncertainty Avoidance – Tolerance for risk and ambiguity.
• High: Germany, Japan (strict rules and planning).
• Low: Singapore, Sweden (flexible and risk-tolerant).
• 4. Masculinity vs. Femininity – Emphasis on competition vs.
work-life balance.
• Masculine: USA, Japan (achievement-driven).
• Feminine: Netherlands, Norway (quality of life-focused).
• Example: Walmart struggled in Germany due to cultural
differences in customer service expectations and labor
practices, leading to its exit from the market.

50. • B. Managing Institutional Differences
• Institutional differences refer to
variations in legal, economic, and
regulatory environments across
countries. Companies must adapt
their strategies to meet local
requirements.
Managing Cultural
Diversity and Institutional
Differences in Global
Operations

51. Managing Institutional Differences
• Key Institutional Factors:
• Legal Systems – Compliance with regulations
(e.g., GDPR in the EU).
• Tax Policies – Understanding local taxation
laws (e.g., VAT in Europe).
• Trade Barriers – Managing tariffs, quotas, and
restrictions.
• Political Stability – Assessing risks in volatile
regions.
• Economic Conditions – Adjusting pricing and
operations based on economic trends.
• Example: Uber faced regulatory challenges in
several countries due to labor classification laws,
forcing it to adapt its business model to comply
with local employment rules.

52. Conclusion
• Implementing a global strategy requires choosing the right mode of
international expansion based on risk tolerance, control, and investment
capacity. While exporting, licensing, franchising, joint ventures, and wholly
owned subsidiaries offer different advantages and challenges, managing
cultural diversity and institutional differences is equally crucial for success.
• By understanding cultural behaviors, adapting to regulatory environments,
and building local partnerships, companies can effectively execute global
strategies and achieve long-term growth.

53. Reference
• Wheelen, T. L., Hunger, J. D., Hoffman,
A. N., & Bamford, C. E. (2018).
Strategic Management and Business
Policy: Globalization, Innovation, and
Sustainability (15th ed.). Pearson
Education.

54. To God be the Glory!
Prepared by :
Rommel R. Regala, Ph.D.