Strategic Management - Strategy Implementation
Process of Implementation
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Implementation includes the following steps. Many of the steps are discussed in the earlier lessons.
Process of Implementation
Implementation includes the following steps. Many of the steps are discussed in the earlier lessons. We will now briefly discuss them.
i) Resource allocation
ii) Organisation structure design
iii) Planning framework
iv) Leading and staffing
v) Change and communication.
vi) Evaluation
This has vital significance in strategy implementation. In a single product firm, it may involve assessment of the resource needs of different functional departments. In a multi divisional organisation, it implies assessing the resource needs of different SBUs or product divisions. Methods of resource allocation include use of:
1. Percentage of sales or profits
2. BCG matrix
3. Budgeting system
Appropriate organization structure is to be designed to make strategy implementable. The relation between strategy and structure is established based on organizational life cycle, corporate development stages and international businesses. Organization design involves changes like:
1. Job design- Making the jobs more challenging by job analysis and role redefinition.
The managers involved in implementation should plan and develop programmes, budgets and procedures. They should also work for achieving synergy among the divisions and functional areas in order to maintain distinctive competence.
Programmes make strategy action oriented. Ex: Reliance vertical (forward) integration strategy for growth.
This begins after programmes. It is a check on the feasibility of selected strategy. Budget is expression of programmes in quantitative terms. Without budgets implementation becomes impractical
After programmes and budgets, studied operating procedures (SOPS) must be developed. They detail the various activities that must be carried out to complete a corporation’s programme. The change during the change process, Ex: Mc Donald’s developed very detailed procedure to ensure that policies are carried out in its fast food retail outlets.
Implementation involves leading people to utilize their abilities and skill efficiently and effectively to meet organisational goals. Leaders are the key organic elements, who help the organization cope with changes. Failure of leadership may result in goal incongruence, communication break down, ambiguity etc,. Leaders help in transformation in three phases
2. Creating a new vision
3. Institutionalizing change
A leader may follow any of the following leadership styles
1. Entrepreneurial-risk taking, dynamic , change oriented.
2. New scientific – Questioning the existing practices and discovering and experimenting new approaches.
3. Quasi-scientific- Balancing the tradition and innovation to maintain stability.
4. Muddling through – Pushing through different situations with reactive planning
5. Conservative –Making approaches of implementation carefully as per procedures.
6. Democratic-Participative in style involving people indecision making.
7. Middle of the road- Using an approach that is in between the democratic and task oriented.
Staffing issues involve hiring new people with new skills, firing unskilled or inappropriately skilled people, or training employed to acquire new skills. Staffing requirements are likely to follow a change in human resource strategy relating to number and quality of people.
GE’s aircraft engine group used training to maintain its market shone even though work force was cut from 42,000 to 33,000 between, 1991 to 1993.
‘Downsizing’ has become one of the practices of late in modernization strategy of banks. It involves planned elimination of positions or jobs during strategy implementation. It involves.
1. Elimination of unnecessary work
2. Contract out those works that can be done cheaper
3. Plan long run efficiencies
4. Communicate the resources for downsizing
6. Develop value added jobs.
Change is inevitable during implementation. Rationale for strategic changes should be communicated to workers through news letters and speeches and even in training programmes. Companies in which major cultural changes took place have the following.
1. The CEO with strategic vision, who communicated their vision to employees at all levels and constantly compared themselves with competitors for updating.
2. Vision , that is translated into key elements for implementation. They are widely communicated through contests, recognition, rewards etc,
The importance of strategic evaluation lies in its ability to coordinate the tasks performed by individual managers, and also groups, division or SBUs, through the control of performance. In the absence of coordinating and controlling mechanisms, individual managers may pursue goals, which are inconsistent with the overall objectives of the department, division, SBU or the whole organization. We will now discuss evaluation and control in detailed way.
Implementation includes the following steps. Many of the steps are discussed in the earlier lessons. We will now briefly discuss them.
i) Resource allocation
ii) Organisation structure design
iii) Planning framework
iv) Leading and staffing
v) Change and communication.
vi) Evaluation
Resource allocation
This has vital significance in strategy implementation. In a single product firm, it may involve assessment of the resource needs of different functional departments. In a multi divisional organisation, it implies assessing the resource needs of different SBUs or product divisions. Methods of resource allocation include use of:
1. Percentage of sales or profits
2. BCG matrix
3. Budgeting system
Organization structure design
Appropriate organization structure is to be designed to make strategy implementable. The relation between strategy and structure is established based on organizational life cycle, corporate development stages and international businesses. Organization design involves changes like:
1. Job design- Making the jobs more challenging by job analysis and role redefinition.
2. Reengineering- Reengineering is a radical redesign
of business process to achieve major gains in cost, service and time. It is an
effective way of implementing turn around strategy. It breaks away old rules
and procedures
Planning frame work
The managers involved in implementation should plan and develop programmes, budgets and procedures. They should also work for achieving synergy among the divisions and functional areas in order to maintain distinctive competence.
Programme
Programmes make strategy action oriented. Ex: Reliance vertical (forward) integration strategy for growth.
Budgets
This begins after programmes. It is a check on the feasibility of selected strategy. Budget is expression of programmes in quantitative terms. Without budgets implementation becomes impractical
Procedures
After programmes and budgets, studied operating procedures (SOPS) must be developed. They detail the various activities that must be carried out to complete a corporation’s programme. The change during the change process, Ex: Mc Donald’s developed very detailed procedure to ensure that policies are carried out in its fast food retail outlets.
Leadership and staffing
Implementation involves leading people to utilize their abilities and skill efficiently and effectively to meet organisational goals. Leaders are the key organic elements, who help the organization cope with changes. Failure of leadership may result in goal incongruence, communication break down, ambiguity etc,. Leaders help in transformation in three phases
1. Recognising
need for revitalization
2. Creating a new vision
3. Institutionalizing change
A leader may follow any of the following leadership styles
1. Entrepreneurial-risk taking, dynamic , change oriented.
2. New scientific – Questioning the existing practices and discovering and experimenting new approaches.
3. Quasi-scientific- Balancing the tradition and innovation to maintain stability.
4. Muddling through – Pushing through different situations with reactive planning
5. Conservative –Making approaches of implementation carefully as per procedures.
6. Democratic-Participative in style involving people indecision making.
7. Middle of the road- Using an approach that is in between the democratic and task oriented.
Staffing issues involve hiring new people with new skills, firing unskilled or inappropriately skilled people, or training employed to acquire new skills. Staffing requirements are likely to follow a change in human resource strategy relating to number and quality of people.
GE’s aircraft engine group used training to maintain its market shone even though work force was cut from 42,000 to 33,000 between, 1991 to 1993.
‘Downsizing’ has become one of the practices of late in modernization strategy of banks. It involves planned elimination of positions or jobs during strategy implementation. It involves.
1. Elimination of unnecessary work
2. Contract out those works that can be done cheaper
3. Plan long run efficiencies
4. Communicate the resources for downsizing
5. Invest in
remaining employees
6. Develop value added jobs.
Change and communication
Change is inevitable during implementation. Rationale for strategic changes should be communicated to workers through news letters and speeches and even in training programmes. Companies in which major cultural changes took place have the following.
1. The CEO with strategic vision, who communicated their vision to employees at all levels and constantly compared themselves with competitors for updating.
2. Vision , that is translated into key elements for implementation. They are widely communicated through contests, recognition, rewards etc,
Evaluation
The importance of strategic evaluation lies in its ability to coordinate the tasks performed by individual managers, and also groups, division or SBUs, through the control of performance. In the absence of coordinating and controlling mechanisms, individual managers may pursue goals, which are inconsistent with the overall objectives of the department, division, SBU or the whole organization. We will now discuss evaluation and control in detailed way.
Tags : Strategic Management - Strategy Implementation
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