The document discusses the concept and processes of strategy implementation in organizations, emphasizing the link between strategy formulation and implementation. It elaborates on various organizational structures, such as simple, functional, multi-divisional, matrix, and network structures, along with their advantages and disadvantages for effective strategy execution. Additionally, it addresses the importance of evaluating and controlling strategies, strategic leadership, and managing change within dynamic business environments.

1. BBA 8th Semester
MGT 208 Business Strategy
By Rajesh Karki

2. Unit – 5
strategy Implementation
Concept of Strategy Implementation
Strategy implementation may be defined as the sum total of the
activities required for the successful execution of strategy. Strategy
formulation and implementation are viewed as the two sides of the
same coin. Strategy formulation is the planning of work whereas
strategy implementation is working of plan.

3. Process of Strategy Implementation/Operationalizing
the Strategy
• Determination of annual objectives and policies: Annual objectives
are set with the involvement of all managers in an organization.
Policies facilitate solving regular problems.
• Development of functional strategies and tactics: Functional
strategies are developed to achieve functional objectives. After
determinations of functional strategies, functional tactics should be
formulated. Tactics link formulation and implementation of strategy.
• Development of programs, budget and procedures
• Programs: Program makes a strategy action oriented. The new strategy
involves a sequence of new programs and activities.
• Budgets: Budget ensures the feasibility of strategy.
• Procedures: After the program and budgets are approved, procedures
must be developed.

4. Process of Strategy Implementation/Operationalizing
the Strategy
• Managing conflict: Establishing objectives can lead to conflict which
should be managed and resolved.
• Matching strategy with structure: When a firm changes its strategy,
the existing organizational structure may become ineffective. Changes
in strategy often require changes in organizational structure.
• Restructuring and reengineering: Restructuring involves reducing the
size of the firm in terms of number of employees, divisions or units,
and hierarchies. Reengineering is concerned more with employee and
customer well being. It involves redesigning work, jobs and processes
to improve cost, quality, service and speed.

5. Process of Strategy Implementation/Operationalizing
the Strategy
• Linking performance and pay to strategies: Successful
implementation of strategy demands linking performance and pay to
strategies.
• Managing resistance to change: People may fear change due to
economic loss, inconvenience, uncertainty and a break in normal
social patterns. Change must be viewed as an opportunity rather than
as a threat by managers and employees and managed accordingly.
• Creating a strategy supportive culture: New strategies may demand
different culture. Aspects of an existing culture that are incompatible
to a proposed strategy should identifies and changed.

6. Relationship between Strategy and Structure
• New strategy is formulated
• New administrative problem emerges
• Organizational performance decreases
• Organizational performance improves
• A new organizational structure is established

7. Organizational Structure for Strategy Implementation
• Simple / Entrepreneurial Structure: In simple structure, the owner/
manager makes all major decisions. He / she monitors all activities.
This structure is characterized by informal relationships, few rules,
limited task specialization and informal information systems.
Coordination is relatively high due to frequent and informal
communications between the manager and employees.

8. Simple / Entrepreneurial Structure
Advantages
• Has minimum hierarchy.
• Business decision are quick and effective since they are made by owner or
managers.
• It is suitable if the size of the organization is small.
• Motivation of owner or manager is high due to control over the business
activities.
• Through direct communication, congenial relationship may be maintained with
the supplier, customer and employees.
Disadvantages
• It is not suitable to address complex and dynamic business environment.
• Less chance of developing professionalism among the employees due to
improper allocation of jobs.

9. Organizational Structure for Strategy Implementation
• Functional structure: The functional structure consists of a chief
executive office with functional line managers in functional areas
such as production, accounting, marketing, R&D and human
resources. It allows for functional specialization.

10. Functional Structure
Advantages
• Functional specialization can be achieved since the work, responsibility and
accountability of the employees are clear.
• Efficiency of the employees increases due to the division of labour.
• The direst communication between the functional managers enhances their capability.
• This structure is simple and economical.
• It ensures proper allocation of resources among the functional units.
Disadvantages
• Unnecessary conflict may arise due to coordination among the functional units.
• There may be lack of responsibility for the overall organizational performance.
• Since the managers and employees are regularly involved in a particular unit only, it
may erode the innovativeness.
• It is difficult to identify the profitable products and activities.
• This structure can not address the environmental dynamism.

11. Organizational Structure for Strategy Implementation
• Multi Divisional Structure: The multidivisional structure consists of a
corporate office and operating divisions which represents a separate
business or profit center. The responsibility for day-to-day operations
are delegated to divisional managers.

12. Multi Division Structure
Advantages
• This structure is suitable for the business having multi products.
• The organizational effectives may be enhanced due to high
coordination among the functional units.
• Each functional unit can address the environmental components.
• It encourages the management to concentrate on the business and
functional strategy.
• It encourages management development.
• It enables the top management to monitor the performance of each
business accurately and look for ways of improving performance.
• It facilitates comparisons between divisions, which improves the
resources allocation process.

13. Multi Division Structure
Disadvantages
• Unnecessary conflict and misunderstand may emerge as a result of
poor communications among the divisions.
• Since the divisions work independently, there may be lack of
coordination among them.
• There may be problems in allocation of resources among the
departments.
• Organizational complexity may increase due to multiple divisions.

14. Organizational Structure for Strategy Implementation
• Matrix Structure: A matrix structure is the most complex of all
structures. A matrix structure depends on both vertical and horizontal
flows of authority and communication. It includes dual lines of budget
authority with dual sources of reward and punishment, shared
authority, dual reporting channels and a need for an extensive and
effective communication systems.

15. Matrix Structure
Advantages
• It enables organizational effectiveness by utilizing the resources in an
optimum way.
• Decisions are effective as it attempts to address the interest of
stakeholders.
• Decrease in bureaucracy due to direct coordination between
different levels or units of the organization.
• It facilitates communication by enhancing motivation and
commitment of the employees.
• The creativity of the employees can be enhanced by utilizing the
human resources scientifically.

16. Matrix Structure
Disadvantages
• There may be delay in decision making due to the involvement of
different units and departments.
• There may not be clarity in the responsibility and accountability
towards the work.
• The accountability of profit and cost center may not be clear.
• There may be conflict among the departments for the acquisition of
resources.
• This structure is complex and costly.

17. Organizational Structure for Strategy Implementation
• Network Structure: A network structure is also called virtual
structure or non-structure. It is a series of independent business
units linked together by computers information system that designs,
produces and markets a product or service. It is most useful when
the environment of a firm is unstable.

18. Network Structure
Advantages
• This structure is flexible to cope the environmental dynamism.
• It allows gathering efficiencies from other firms which enhances organizational
effectiveness.
• It allows an organization to concentrate in the core competency.
Disadvantages
• It involves many business units which may create unnecessary conflict among
them.
• It is difficult for the organization to control its network.

19. Evaluation and Control in Strategic Management
Strategy evaluation is important to ensure that stated objectives are
being achieved. It alerts management to problems before a situation
turns critical. Control is taking corrective actions if any deviation exists
between the standard and actual. It ensures that the organization is
using appropriate strategies to deal with the environmental
conditions.
Importance of evaluation and control
• Guides for the implementation of strategy.
• Provide early signals of the obstacles in the process of strategy
implementation.
• Provide the future direction to the strategy.

20. Process of Evaluation and Control
• Determine what to measure
• Set control standards
• Measure performance
• Compare performance to standards
• Determine the reasons for the deviations
• Take corrective actions

21. Types of Strategic Control
• Premise control: Is the management process of systematically and
continuously checking to determine whether premise upon which the
strategy is based are still valid.
• Special alert control: Is the management actions undertaken to thoroughly
and often vary rapidly, reconsider a firm’s strategy because of a sudden,
unexpected events.
• Implementation control: Is the management efforts designed to assess
whether the overall strategy should be changes in light of results
associated with the incremental actions that implement the overall
strategy.
• Strategic surveillance: Is the management efforts to monitor a broad range
of events inside and more often outside the firm that are likely to affect the
course of its strategy over time.

22. Criteria for Evaluating Strategies
• Consistency
• Consonance
• Feasibility
• Advantage

23. Characteristics of Strategic Evaluation
• Provides direction
• Continuous activity
• Top management activity
• Cost effective
• Focus on key performance
• Future oriented

24. Guidelines for Proper Evaluation and Control
• Economical
• Timeliness
• Provide true picture
• Action oriented
• Foster mutual understanding, trust and common sense
• Simple
• Convincing

25. Strategic Leadership
• Strategic leaders are people located in different parts of the firm
using the strategic management process to help the firm reach its
vision and mission. It is the ability to anticipate, envision, maintain
flexibility and empower others to create strategic change as
necessary.

26. The Role of Strategic Leadership
• Determining strategic direction
• Effectively managing the firm’s resource
• Providing information
• Sustaining an effective organizational culture and ethical practices
• Establishing balanced organizational controls
• Managing conflict
• Managing resistance to change

27. Leadership and Management
Management is also involved in controlling and decision making.
Control ensures that people’s behaviours are in line with the plan and
variance if any can be identified and corrected quickly. In contrast,
leadership is about changing people’s behaviour towards new
direction. It ensures that organizational vision is in line with the values
of the employees. In this way, management deals with complexity and
leadership deals with change.

28. An organization skilled at creating, acquiring and transferring
knowledge and at modifying its behaviour to reflect new knowledge
and insights is called learning organization.
Learning organizations are skilled at four main activities.
• Solving problems systematically
• Experimenting with new approaches
• Learning from their own experiences and past history as well as from
the experiences of others.
• Transferring knowledge quickly and efficiently throughout the
organization.
The Learning Organization

29. Leadership Role and Skill in Building Learning
Organization
Roles
• The leader as designer
• The leader as teacher
• The leader as steward
Skills
• Building a shared vision
• Surfacing and testing mental models
• System thinking

30. Emotional Intelligence and Leadership
Performance
Emotional intelligence is the ability to work with others. It is the ability
to recognize one’s own emotion and the emotions of others. It
manifests in;
• Self-awareness
• Self-regulation
• Motivation
• Empathy
• Social skills

31. Leadership Capabilities
• Sense making
• Relating
• Visioning
• Inventing

32. Impact of Leadership on Vision, Values and Culture
Leadership, vision and values
The top management checks whether the organization is going in the right
direction. They shape the organizational values and lead by example. They
are expert in promotion, protection and shaping of values. They guide,
direct and signal to shape values. An effective leadership fosters
stakeholders’ commitment to organizational vision and values.
Leadership and culture
An, effective strategic leaders recognizes when cultural change is needed.
He/she shapes and reinforces a new culture by communication and
problem solving along with selecting the right people, engaging in effective
performance appraisals and using appropriate reward systems.

33. Cultural Dimensions
• Individualism collectivism
• Power distance
• Masculinity femininity
• Uncertainty avoidance
• Long and short term orientation

34. Corporate Culture and Leadership
Corporate culture and leadership are the two sides of the same coin.
Hence, they go together. One simply cannot flourish without other.
When organization are started, there is always a leader with a certain
way of doing things and those ways are going to be imposed on all the
organizational members. The leader’s norms, values and preferences
are the first ways that the organizational members follow in a shared
way and become culture.

35. Leading Strategic Change
Concept of strategic change
• Strategic change involves changes in the content of a firm’s strategy
as defined by its scope, resource deployments, and competitive
advantages. Strategic drift demands change in strategy. It occurs
when the current strategy loses relevancy in terms of addressing the
environmental issues.

36. Understanding the Forces of Change
Business environment is dynamic. Dynamism results in rapid change in
strategic assumptions. With the change in assumptions, the current
strategies should be changed or adjusted. Both the external and
internal forces of the environment demand strategic change.
• External forces: They reside outside the organization and are
dynamic.
• Internal forces: They are within the organization. They are
controllable in long run.

37. Types of Strategic Chain
• Adaptation: It is the change which is accommodated within the
current paradigm.
• Reconstruction: It is a rapid type of change. It involves a big change
that causes a lot of confusion, worry and problems in an organization.
• Evolution: It involves change in strategy which requires paradigm
change in a long run.
• Revolution: It is a rapid and major strategic change. It involves
paradigm change.

38. The Importance of Context
• Time: It demands how quickly the change is needed.
• Scope: It refers to width and depth of strategic change.
• Diversity: It may be related to diversity of experience, views and opinions
within an organization.
• Capability: It involves the capability of the firm to cope up with the
changed strategy.
• Capacity: It refers to the capacity of the firm in terms of resources to meet
the changed strategy.
• Preservation: There may be certain aspects of the organization which must
be preserved irrespective of the change.
• Readiness: It refers to readiness for change throughout the organization.
• Power: It refers to presence of power in an organization to affect change.

39. Organizational Culture
Culture refers to shared values, beliefs and attitudes in an
organization. It can also be used to understand the problems and
requirements of strategic change.
Force-field Analysis
It provides an overview of the change problems likely to take place in
future. It identifies aspects of the organization and its culture that
might facilitate change.

40. Styles of Managing Change
• Education and communication: Education is related to persuading
people towards the strategic change. Communication is informing the
change to the stakeholders.
• Collaboration or participation: It is the involvement of those who will
be affected by strategic change in the change agenda.
• Intervention : Intervention is the coordination of the change process
and involves delegation of authority over the elements of the change
process by a change agent.
• Direction : It is the use of personal managerial authority to establish a
clear future strategy.

41. Roles in Managing Change
• Strategic leadership: The management of change is directly linked to
the role of a strategic change. Leadership is the process of influencing
an organization in its efforts towards achieving its goal.
• Middle managers: Its role is to translate the strategies set by top
management by ensuring resource allocation and control. They also
monitor the performance and behaviour of staff. They act as
facilitators of the strategy.
• Outsiders: In the change process, outsiders are also equally important
as the managers. They may take different forms:
• New chief executive
• New management
• Consultants

42. Levers for Managing Strategic Change
Levers are the components that drive the process of strategic change.
Some of the important levers of managing strategic change are:
• Structure and control: Strategic change may demand new structure
and control system.
• Organizational routines: Organizational routines are a central feature
of human organizations. They evolve over time. They should be
accommodated with the changed strategy.
• Symbolic processes: Symbols are objects, events, acts or people
which express more than their intrinsic content. They are meaningful
in the context of a particular situation or organization.

43. Levers for Managing Strategic Change
• Power and political process: Political process is the use of power and
social networking within an organization to achieve changes. Strategic
change requires support from an individual or group combining both
power and interest.
• Communicating change: Effective communication is an important
factor in overcoming resistance to change. Open communication
builds trust and enriches understanding.
• Change tactics: There are some change tactics that can be employed
to facilitate the change process. The tactics may be the right time of
change, delayering etc.

44. The End
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