Strategy Implementation

Strategy Implementation:
Organizing for Action
1
Strategy Implementation
--Sum total of activities & choices

required for the execution of a
strategic plan
--Process by which strategies and

policies are put into action through
programs, budgets, and procedures
--Everyone in the organization is

involved in the process
2
WHAT DOES STRATEGY
IMPLEMENTATION INCLUDE?
•Building a firm capable of carrying out strategy

successfully
•Allocating ample resources to strategy-critical
activities
•Establishing strategy-supportive policies
•Instituting best practices & programs for continuous
improvement
•Installing support systems
•Tying reward structure to achievement of results
•Creating a strategy-supportive corporate culture
•Exerting strategic leadership
3
Key Questions in the

Implementation Process –
–Who carries out strategic plan?

–What needs doing to align operations
with new direction/strategy?
–How is work going to be coordinated?
4
Common Implementation
Problems
More time than planned

Unanticipated problems
Activities ineffectively coordinated
Crises deferred attention away
Problems in
Employees w/o capabilities
Implementing
Inadequate employee training
Strategic plans
Uncontrollable external factors
Inadequate leadership
Poorly defined tasks
Inadequate information systems
5
Programs – Defining Activities

– Purpose is to define activities and to
make the strategy action oriented
– The Matrix of change – It is a tool to check
for:
 Feasibility, sequence of execution, location of activities,
pace & nature of change, and stakeholder’s evaluation.
– It compare proposed and existing

programs and activities and can be used
to address the following types of
questions:
1. How quick change should proceed?
2. In what order change should take place?
3. Is the proposed system stable and coherent?
6
The Matrix of Change
7
Budgets – Allocate funds to the new
activities
–Define how much implementation
will cost.
–The budget is the last real check a
firm has on the feasibility of the
selected strategy.
Procedures – Handle the day-to-day

details
–Standard Operating Procedures
(SOP’s) detail the various activities
that must be carried out to complete
a corporation’s programs
8
Achieving Synergy – between and
among functions and business
units.
– It occurs if ROI is greater than what it
would be if division was an independent
business.
It takes place in one of the six

forms:
1. Shared know-how
2. Coordinated strategies
3. Shared tangible resources
4. Economies of scale or scope
5. Pooled negotiating power
6. New business creation
9
Structure follows strategy view–

Changes in corporate strategy lead
to changes in org. structure as
follows:
–New strategy is created

–New administrative problems emerge
–Economic performance declines
–New appropriate structure is invented
–Profit returns to previous level
10
STRUCTURE: Stages of Corporate Development
Stage I: Simple Structure (Entrepreneur)

Flexible and dynamic
Decision making tightly controlled
Little formal structure
Planning short range/reactive
Stage II: Functional Structure

Functional specialization
Delegation of decision making
Concentration/specialization in industry
Stage III: Divisional Structure (SBU)

Diverse product lines
Decentralized decision making
Stage IV: Beyond SBU’s: Matrix, Network, and Cellular

Increasing environmental uncertainty & Tech
advances
More empahsis on Teams
11
Advanced Types of OrganizationalStrategy Implementation
Structures –
1) Matrix Structure – Combine division with function
form.
–Cross-functional task forces / teams
–Employees with two superiors
2) Network Structure or “non structure” (virtual
organization)
–Elimination of in-house business functions -
OUTSOURCING
–Useful in unstable environments when there is need
for innovation and quick responses
3) Cellular Organization: New type composed of
“cells”
–Includes dispersed entrepreneurship from
DIVISIONAL, customer responsiveness of the MATRIX,
and self-organizing knowledge and asset-sharing of
the NETWORK
–Self-managing / autonomous teams and business
units
–Modular 12
Network Structure
13
Organizational Life Cycle
Organization Life Cycle Approach
(Instead of Stage of Development
approach)
Describes how organization grows,
develop and eventually declines
Impact of each stage on strategy and

structure
14
TRENDS: Changing Structural Characteristics of Modern Organizations
15
Reengineering & Strategy
Implementation
 Radical redesign of business

processes to achieve major gains in
cost, service, or time
 Effective way to implement a

turnaround strategy
16
Designing Jobs to Implement Strategies
 Making jobs more relevant to the
company and employees serves as
a source of competitive advantage
 New Job Design Techniques:

1. Job enlargement: Combining tasks
2. Job rotation: Increase variety of tasks
3. Job enrichment: More autonomy and control to
workers
17
International Issues
International Development Stages–

–Domestic company
–Domestic company w/export division
–Domestic company w/int’l division
–MNC w/ multidomestic emphasis
–MNC w/global emphasis
Decision Issues for MNC’s:

Strategic alliances to enter new markets
Product-group vs. Geographic-area structure
Centralization vs. Decentralization of
Authority
–Decentralization - pressure for local responsiveness
–Centralization - pressure for efficiency / low cost
18

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Strategy Implementation:

Organizing for Action

--Sum total of activities & choices

--Process by which strategies and

--Everyone in the organization is

•Building a firm capable of carrying out strategy

Key Questions in the

–Who carries out strategic plan?

More time than planned

Programs – Defining Activities

– It compare proposed and existing

Procedures – Handle the day-to-day

It takes place in one of the six

Structure follows strategy view–

–New strategy is created

Stage I: Simple Structure (Entrepreneur)

Stage II: Functional Structure

Stage III: Divisional Structure (SBU)

Stage IV: Beyond SBU’s: Matrix, Network, and Cellular

Impact of each stage on strategy and

 Radical redesign of business

 Effective way to implement a

 New Job Design Techniques:

International Development Stages–

Decision Issues for MNC’s:

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