Module 4

Strategy Implementation
• The framework of Strategic Implementation:
Concept
• Inter-relationship between
formulation and implementation
• Issues in strategy implementation, Resource
allocation
• Steps and approaches to strategy implementation
• Strategic Leadership
 The Framework of Strategy Implementation

Strategic implementation refers to the process of executing plans and

strategies. These processes aim to achieve long term goals within an
organization.

Strategic implementation, in other words, is a technique through which

a firm develops. It utilizes and integrates new processes into the
structure of an organization.
Meaning
The task of strategic management is far from complete after strategies
have been formulated and a concrete strategic plan has been prepared.
Then it is the job of strategists to put the plan into action. There are
several aspects of implementation that strategists have to consider.

DEFINITION: According to Steiner, “the implementation of polices and

strategies is concerned with the design and management of systems to
achieve the best integration of people, structures, processes, and
resources, in reaching organizational purpose”. Inter-relationship
between strategy formulation and implementation Two phases of
strategic implementation 1. Forward linkage 2. Backward linkage
Nature of Strategy Implementation
It is possible to turn strategies and plans into individual actions,
necessary to produce a great business performance. But it's not easy.
Many companies repeatedly fail to truly motivate their people to work
with enthusiasm, all together, towards the corporate aims.

Most companies and organizations know their businesses, and the

strategies required for success. However many corporations - especially
large ones - struggle to translate the theory into action plans that will
enable the strategy to be successfully implemented and sustained.
Here are some leading edge methods for effective strategic corporate
implementation. These advanced principles of strategy realization are
provided by the very impressive Foresight Leadership organization, and
this contribution is gratefully acknowledged.
Most companies have strategies, but according to recent studies,
between 70% and 90% of organizations that have formulated
strategies fail to execute them.
A Fortune Magazine study has shown that 7 out of 10 CEOs, who fail,
do so not because of bad strategy, but because of bad execution. In
another study of Times 1000 companies, 80% of directors said they
had the right strategies but only 14% thought they were implementing
them well.
https://mec.edu.in/mvlc/ppt/l_mba/ppt_sm.pdf
Inter-relationship between Strategy Formulation and Strategy
Implementation

Strategy formulation and strategy implementation are

interdependent processes designed to guide and ensure that
a company or organization achieves its objectives. Both are
part of an overall business management and corporate
strategy scheme.
In the strategy formulation stage, plans and decisions are
made regarding the organization’s strategic goals and how to
achieve them.
The necessary forces, such as materials, labor and other
resources that the plan requires, are assembled. The
emphasis is on the effectiveness of the planned
activities.
The implementation - stage highlights efficiency and puts
the plans into operation. As the plans become reality, the
focus shifts to managing the processes.
The strategic formulation plans are used as a guide to keep
the implementation process on track and ensure that the
overall goals remain in sight.
Strategic Management Process

•The strategic management process means defining the

organization’s strategy. It is also defined as the process by which
managers make a choice of a set of strategies for the organization
that will enable it to achieve better performance.
•Strategic management is a continuous process that appraises the
business and industries in which the organization is involved;
appraises it’s competitors; and fixes goals to meet all the present
and future competitor’s and then reassesses each strategy.
Strategic management process has following four steps:

1.Environmental Scanning- Environmental scanning refers to a

process of collecting, scrutinizing and providing information
for strategic purposes.
2.It helps in analyzing the internal and external factors influencing
an organization.
3.After executing the environmental analysis process,
management should evaluate it on a continuous basis and strive
to improve it.
2. Strategy Formulation - Strategy formulation is the process of deciding
best course of action for accomplishing organizational objectives and
hence achieving organizational purpose.
• After conducting environment scanning, managers formulate
corporate, business and functional strategies.

3. Strategy Implementation - Strategy implementation implies making

the strategy work as intended or putting the organization’s chosen strategy
into action.
Strategy implementation includes designing the organization’s structure,
distributing resources, developing decision making process, and managing
human resources.
Strategy evaluation is the final step of strategy management process.
•The key strategy evaluation activities are: appraising internal
and external factors that are the root of present strategies,
measuring performance, and taking remedial/corrective actions.
•Evaluation makes sure that the organizational strategy as well as
it’s implementation meets the organizational objectives.
•These components are steps that are carried, in chronological
order, when creating a new strategic management plan.
•Present businesses that have already created a strategic management
plan will revert to these steps as per the situation’s requirement, so
as to make essential changes.
Components of Strategic Management Process
Issues in Strategy Implementation

•For modern business, strategic adjustments can take various shapes.

A new vertical focus, a fresh leadership style, or an inventive product
pivot could all be possibilities. A sound business strategy sharpens
the organization’s focus and establishes the foundation for future
growth and development.
•A corporate strategy is critical. The difficulty lies in doing it correctly.
Every business requires a strategic plan. A broad plan – make, sell, profit
– is sufficient to get any business off the ground, but to innovate,
expand, and develop, a company must restrict its vision. Companies
might use a strategic strategy to slough off the things they aren’t
excellent at so they can focus on the things they are.
A strategic plan also establishes the framework for improving the areas
that require some (or a lot of) attention. The appropriate vision
demonstrates to corporate leaders where they should focus their time,
human capital, and financial resources.
•A lack of objectives for personnel, wrong resource allocation, a lack
of structure and leadership, and a lack of communication are all signs
of a poorly executed plan. That’s why it’s crucial to get it right.
•The causes for failing strategies vary, but the majority of them
revolve around the fact that plan implementation is time-consuming
and difficult. Understanding the most prevalent problems in strategy
implementation can help you avoid them and better position the
organization for success.
 1.Ineffective Strategy
A new vision is the goal of a plan. If you’re embarking on a huge,
company-wide endeavor, start small to ensure that the objectives
are feasible and attainable.
Don’t assign ambiguous responsibilities, get caught up in buzzwords, or
overburden departments with too much information too quickly.
2. Lack of Training - Finding the correct training choice saves
money by avoiding unnecessary downtime, improves or teaches new
abilities, and provides follow-up to ensure that employees use what
they’ve learned in their everyday work.
Strategic projects have a short schedule, and for them to succeed, the
personnel must be adequately trained and understand the new approach.
3. Resources are scarce
•The consultants or board members brought in to develop, execute, and
give training, as well as the cost of any new associated technology, is
the most prevalent direct costs of implementing a new strategy. This
can be prohibitive for businesses of any size, particularly small to
mid- sized businesses and non-profit organizations.
•That’s why it’s crucial to start modest and only grow once the initial
goals have been reached. Consider the knowledge you already have
on staff.
•This is a prevalent issue in businesses. It’s crucial to know what
kinds of dependencies can exist and what kind of function is required
to meet those needs.
•The problem is not confined to Human Resources; it also includes a
digital resource that assists employees and management in
achieving their objectives.
•To launch the strategic initiatives, the business must plan what kind
of software and infrastructure is required.
•To stay competitive, 86 percent of stakeholders believe that selecting
and funding the proper initiatives is critical, as is managing
resources efficiently rather than holding them back due to poor
budget allocation.
•Starting with a focus group and scaling up as you see results is
always a good idea; this way, you won’t exhaust your resources all at
once, and you’ll avoid wasting them on initiatives that may or may
not deliver the promised outcomes.
4. Communication breakdown
•From the top-down, an effective communication strategy must
be implemented.
•It’s not uncommon for teams to be resistant to change, especially if
they’ve been working together for a long time. And nothing
sabotages the success of a strategic execution more quickly than a
lack of team participation. Each person’s new function, importance to
the result, and the ultimate benefit of a change in their present routine
should be communicated clearly from the start.
5. Failure to follow-through
•Any new strategy’s implementation is never complete. Regular
formal evaluations of the new strategy should be conducted to
examine procedures, confirm that the plan is working as intended,
and make any necessary adjustments.
•As a result, training should be part of this ongoing process assessment.
This type of continual training is cost-effective, team-oriented, and
can be based on a curriculum that changes as the company’s strategy
changes.
6. Not Setting Objectives
•It might be tough to come up with a strategic goal because there are
so many variables to consider, such as geography, culture,
organizational objectives, resources, and skill set.
•To accomplish so, you must choose a goal-setting process that is
compatible with organization’s DNA rather than one that you
are familiar with.
•Before deciding on a goal planning approach or framework, you
must conduct a SWOT analysis, benchmarking, and a study of the
previous year’s goals.
7. Unrealistic expectations
•We all know that day-to-day task execution is critical for a
successful implementation. Setting the correct expectations across all
departments is great, as is setting small milestones along the road to
keep you and your workers on track. It also provides a sense of
accomplishment and serves as a motivator.
•You may utilize project management software to assist you not
only define microtasks and milestones but also track how you’re
progressing toward your final goal.
•This will ensure that your implementation goes smoothly and
without issues.
Resources allocation: Resource allocation is the process of allocation
organizational resources to various divisions, department, and strategic
business units(SBUs).
Factors affecting resource allocation:
1. Objectives of the organization
2. Preference of dominant strategists
3. Internal politics
4. External influences
Difficulties in Resource Allocation

1. Scarcity of resources
2. Import restrictions
3. Human resources
4. Departmental power politics
Approaches to Resource Allocation
1. Using analytical conceptual models: There are growth share
matrixes, stop-light and directional policy matrix models are
widely used for resource allocation especially in case of multi-SBU
firms.
2. Product life system of budgeting: The resources requirements
vary with each stage of product life cycle as these stages have
their own characteristics and implications.
I. capital budgeting
II. Performance budgeting
III. Zero-base budgeting
3. Strategic budgeting: Budgets drive businesses and organizations
by laying out its financial limitations and tracking spending and
revenue throughout time.
https://www.studocu.com/in/document/university-of-
calicut/bcom/strategic-implementation/57163750

https://managementstudyguide.com/strategic-management-
process.htm
Strategy Implementation and its steps
Strategy implementation is the translation of chosen strategy into
organizational action so as to achieve strategic goals and objectives.
•Strategy implementation is also defined as the manner in which an
organization should develop, utilize, and amalgamate organizational
structure, control systems, and culture to follow strategies that lead
to competitive advantage and a better performance.
•Organizational structure allocates special value developing tasks
and roles to the employees and states how these tasks and roles can
be correlated so as maximize efficiency, quality, and customer
satisfaction-the pillars of competitive advantage. But, organizational
structure is not sufficient in itself to motivate the employees.
• An organizational control system is also required. This control system
equips managers with motivational incentives for employees as well as
feedback on employees and organizational performance. Organizational
culture refers to the specialized collection of values, attitudes, norms
and beliefs shared by organizational members and groups.
Following are the main steps in implementing a strategy:
• Developing an organization having potential of carrying out
strategy successfully.
• Disbursement of abundant resources to strategy-essential activities.
• Creating strategy-encouraging policies.
• Employing best policies and programs for constant improvement.
• Linking reward structure to accomplishment of results.
• Making use of strategic leadership.
Excellently formulated strategies will fail if they are not properly
implemented. Also, it is essential to note that strategy implementation is
not possible unless there is stability between strategy and each
organizational dimension such as organizational structure, reward
structure, 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.
Strategy Formulation vs Strategy Implementation
Strategy Formulation Strategy Implementation
Strategy Formulation includes planning and decision-making involved in Strategy Implementation involves all those means related to
developing organization’s strategic goals and plans. executing the strategic plans.

In short, Strategy Formulation is placing the Forces before the action. In short, Strategy Implementation is managing forces during
the action.

Strategy Formulation is an Entrepreneurial Activity based on Strategic Implementation is mainly an Administrative

strategic decision-making. Task based on strategic and operational decisions.

Strategy Formulation emphasizes on effectiveness. Strategy Implementation emphasizes on efficiency.

Strategy Formulation is a rational process. Strategy Implementation is basically an operational process.

Strategy Formulation requires co-ordination among few individuals. Strategy Implementation requires co-ordination among many
individuals.

Strategy Formulation requires a great deal of initiative and logical Strategy Implementation requires specific motivational and
skills. leadership traits.

Strategic Formulation precedes Strategy Implementation. Strategy Implementation follows Strategy Formulation.
Strategic Leadership

•Strategic leadership refers to a manager’s potential to express

a strategic vision for the organization, or a part of the
organization, and to motivate and persuade others to acquire that
vision.
•Strategic leadership can also be defined as utilizing strategy in
the management of employees. It is the potential to influence
organizational members and to execute organizational change.
•Strategic leaders create organizational structure, allocate resources
and express strategic vision. Strategic leaders work in an ambiguous
environment on very difficult issues that influence and are influenced
by occasions and organizations external to their own.
 The main objective of strategic leadership is strategic productivity.
Another aim of strategic leadership is to develop an environment in
which employees forecast the organization’s needs in context of their
own job. Strategic leaders encourage the employees in an organization to
follow their own ideas.
•Strategic leaders make greater use of reward and incentive system for
encouraging productive and quality employees to show much better
performance for their organization. Functional strategic leadership is
about inventiveness, perception, and planning to assist an individual
in realizing his objectives and goals.
•Strategic leadership requires the potential to foresee and
comprehend the work environment. It requires objectivity and
potential to look at the broader picture.
A few main traits/characteristics/features/qualities of effective
strategic leaders that do lead to superior performance are as follows:

1.Loyalty- Powerful and effective leaders demonstrate their loyalty

to their vision by their words and actions.
2.Keeping them updated- Efficient and effective leaders keep
themselves updated about what is happening within their
organization. They have various formal and informal sources of
information in the organization.
3.Judicious use of power- Strategic leaders makes a very wise use
of their power. They must play the power game skillfully and try to
develop consent for their ideas rather than forcing their ideas upon
others. They must push their ideas gradually.
4.Have wider perspective/outlook- Strategic leaders just don’t have
skills in their narrow specialty but they have a little knowledge about
a lot of things.
5.Motivation- Strategic leaders must have a zeal for work that goes
beyond money and power and also they should have an inclination
to achieve goals with energy and determination.
6.Compassion- Strategic leaders must understand the views and
feelings of their subordinates, and make decisions after
considering them.
7.Self-control- Strategic leaders must have the potential to control
distracting/disturbing moods and desires, i.e., they must think
before acting.
8.Social skills- Strategic leaders must be friendly and social.
9.Self-awareness- Strategic leaders must have the potential to
understand their own moods and emotions, as well as their impact
on others.
10. Readiness to delegate and authorize- Effective leaders are
proficient at delegation. They are well aware of the fact that
delegation will avoid overloading of responsibilities on the leaders.
They also recognize the fact that authorizing the subordinates to make
decisions will motivate them a lot.
11. Articulacy- Strong leaders are articulate enough to communicate
the vision(vision of where the organization should head) to the
organizational members in terms that boost those members.

12. Constancy/ Reliability- Strategic leaders constantly convey

their vision until it becomes a component of organizational culture.

To conclude, Strategic leaders can create vision, express vision,

passionately possess vision and persistently drive it to accomplishment.