Strategy implementation involves mobilizing employees and managers to execute organizational strategies through various activities. These include developing strategic objectives and policies, allocating resources, managing conflicts that may arise, restructuring organizational structures as needed, and developing incentive systems to align employee performance with strategic goals. Effective strategy implementation requires coordination across different levels of the organization and managing resistance to change.

1. Strategy Implementation
• The activity performed according to a plan in order to achieve
an overall goal.
• It means mobilizing employees and managers to put
formulated strategy into actions. It is action stage
• It includes developing a strategy supportive culture,
redirecting marketing efforts, developing and utilizing
information system, linking employee incentives to
organizational performance
• The basic strategy - implementation activities are establishing
annual objectives, devising policies, and allocated resources,
managing conflict, restructure, reengineering-
engineering,rewards and incentive plan, minimizing
resistance to change, matching managers with strategies,
adapting p/o process, developing effective HRM functions.
• Strategy implementation also includes the making of
decisions with regard to matching strategy and organizational
structure; developing budgets, and motivational systems

2. Strategy Formulation vs. Implementation
Strategy Formulation (SF)
• Positioning forces before
the action
• Focus on effectiveness
• Primarily intellectual
• Requires good intuitive
and analytical skills
• Requires coordination
among a few people
Strategy Implementation (SI)
• Managing forces during
the action
• Focus on efficiency
• Primarily operational
• Requires special
motivation and leadership
skills
• Requires coordination
among many people

3. • Shift in responsibility
Nature of Strategy Implementation
SI problems can arise because of the shift in responsibility,
especially if SF decisions come as a surprise to middle- and
lower-level managers. Therefore, it is essential to involve
divisional and functional managers in SF.
Divisional or
Functional
Managers
Strategists

4. Management Issues Central to Strategy
Implementation
• Establish annual objectives
• Devise policies
• Allocate resources
• Alter/change existing
organizational structure
• Restructure & reengineer
• Revise reward & incentive
plans
• Minimize resistance to
change
• Match managers to strategy
• Develop a strategy-supportive
culture
• Adapt production/operations
processes
• Develop an effective human
resources function
• Downsize & furlough (give a
leave of absence) as needed
• Link performance & pay to
strategies

5. Purpose of Annual Objectives
Basis for resource allocation
Mechanism for management evaluation
Major instrument for monitoring progress
toward achieving long-term objectives
Establish priorities (organizational, divisional,
and departmental)

6. Resource allocation
• Resource allocation is a central management
activities that allows for strategy execution.
• if organization do not use strategy management
approach resource allocation is often based on
political and personal factors.
• Strategy management enables resource to be
allocated according to priorities established by
annual objectives.
• All organization have at least four types of
resources that can be used to achieve desire
objectives.

7. 1. Financial resources
2. Physical resources
3. Human resources
4. Technological resources
Four Types of Resources

8. Factors prohibit effective Resource
allocation
• Overprotection of resources
• Organizational politics
• Vague strategy targets
• A reluctance to risk
• Lack of sufficient knowledge
• Over emphasis on short term criteria
sometime, Strategy management itself is referred
to as a resource allocation program.

9. Managing conflict
• Interdependence of objectives and competition
for limited resource often lead to conflict.
• Conflict can be defined as a disagreement
between two or more parties on more or one
issues
• Establish annual objectives can lead to conflict
because individual have different expectation
and perception, scheduled created pressure,
personalities are incompatible,
misunderstanding between line managers.

10. Understanding about Conflict
 Conflict not always “bad”
 Lack of conflict may signal apathy and
indifference
 Can energize opposing groups to action
 May help managers identify problems

11. Approaches for Resolving conflict
• Avoidance: includes such actions as ignoring
the problem in hopes that the conflict will
resolve itself or physically separating the
conflicting individual
• Diffusion: playing down differences between
conflicting parties, emphasis on common
interest, resorting to majority rule, appealing
to a higher authority
• Confrontation: holding a meeting at which
conflicting parties present their views and work
through their differences.

12. MATCHING STRUCTURE WITH STRATEGY
• Changes in strategy often require changes in the way an organization is
structured because: (1) structure largely dictates how objectives and
policies will be established (e.g., objectives and policies established under
a geographic organizational structure are couched in geographic terms)
and (2) structure dictates how resources will be allocated (e.g., if an
organization’s structure is based on customer groups, then resources will
be allocated in that manner).
• Structure should be designed to facilitate the strategic pursuit of a firm
and, therefore, follow strategy.
• When a firm changes its strategy, the existing organizational structure may
become ineffective. For example, new strategies to reduce payroll costs
may require a change in span of control.

13. Basic Forms of Structure
 Functional Structure
 Divisional Structure
 Strategic Business Unit Structure
(SBU)
 Matrix Structure

14. Functional Structure
• Groups tasks and activities by business
function (e.g., production, finance,
marketing, R&D, HR, IT, etc.).

15. Functional Structure

16. Divisional Structure
• Can be organized in one of four
ways:
–By geographic area
–By product or service
–By customer
–By process

17. Divisional Structure

18. Strategic Business Unit Structure (SBU)
• Groups similar divisions into
strategic business units and
delegates authority and
responsibility for each unit to a
senior executive who reports
directly to the chief executive
officer.

19. Matrix Structure
• The most complex of all structures
because it depends upon both vertical
and horizontal flows of authority and
communication.

20. Restructuring
 Restructuring - reducing the size of an organization. Also
called:
Downsizing
Rightsizing
Delayering
These methods involve, respectively, reducing the number of
employees, number of divisions, and number of hierarchical
levels in a firm’s organizational structure. Reducing the size of an
organization is intended to improve its efficiency and
effectiveness.

21. Reengineering
• The argument for a firm to reengineering as
follows:
• Over time passes managers and employees mind
sets being defined by their particular function
rather than by overall customers services, product
quality, or corporate performance.
• The logic is that all firm tend to bureaucratize over
time.
• Politics take precedence over performance
• Walls that exist in the physical work place can be
reflections on mental walls.

22. Reengineering
• In reengineering a firm uses a information technology to
breakdown functional barriers and create a work system
based on process, product or output rather function or
input.
• Cornerstones of reengineering are decentralization,
reciprocal interdependence and information sharing.
• It is also called process management, process innovation,
or process redesign
• It involves redesigning work, jobs, and process for the
purposes of improving cost, quality, service, and speed.
• It is concerned more with employee and customers well
being than shareholder wellbeing.

23. Managing Resistance to Change
Resistance to change –
– Single greatest threat to successful strategy
implementation

24. Managing Resistance to Change
Change raises anxiety over fear of:
– Economic loss
– Inconvenience
– Uncertainty
– Break in status-quo

25. Change Strategies
• Force Change Strategy
• Educative Change Strategy
• Rational or Self-Interest Change Strategy