STRATEGY IMPLEMENTATION:

ORGANIZING AND STRUCTURE

Prepared by:
Wilma G. Nonato, CHP,Ph.D.
STRATEGY IMPLEMENTATION

Strategy implementation is the sum total of the

activities and choices required for the execution
of a strategic plan. It is the process by which
objectives, strategies, and policies are put into
action through the development of programs
and tactics, budgets, and procedures.
 PRE-REQUISITES OF STRATEGY
IMPLEMENTATION

1. Institutionalization of strategy
2. Developing proper organizational climate
3. Formulation of operating plans
4. Developing proper organizational
structure
5. Periodic review of strategy
Who Implements Strategy?

Depending on how a corporation is organized,

those who implement strategy will probably be a
much more diverse set of people than those who
formulate it. From large, multi-industry
corporations to small entrepreneurial ventures,
the reality is that the implementers of strategy are
everyone in the organization.
WHAT MUST BE DONE?

DEVELOPING PROGRAMS, BUDGETS, AND PROCEDURES

Programs and Tactics

The purpose of a program or a tactic is to make a strategy action-oriented.

Competitive Tactics
A tactic is a specific operating plan that details how a strategy is to be
implemented in terms of when and where it is to be put into action.
Timing Tactics: When to Compete
A timing tactic deals with when a company implements a strategy. The first
company to manufacture and sell a new product or service is called the
first mover (or pioneer).
Market Location Tactics: Where to Compete
A market location tactic deals with where a company
implements a strategy. A company or business unit can
implement a competitive strategy either offensively or
defensively.
An offensive tactic usually takes place in an established
competitor’s market location.
A defensive tactic usually takes place in the firm’s own
current market position as a defense against possible attack
by a rival.
Budgets
After programs and tactical plans have been
developed, the budget process begins. Planning a
budget is the last real check a corporation has on the
feasibility of its selected strategy. An ideal strategy
might be found to be completely impractical only
after specific implementation programs and tactics
are costed in detail.
Procedures
After the divisional and corporate budgets are approved,
procedures must be developed. Often called Standard
Operating Procedures (SOPs), they typically detail the
various activities that must be carried out to complete a
corporation’s programs and tactical plans. Also known as
organizational routines, procedures are the primary means
by which organizations accomplish much of what they do.
ACHIEVING SYNERGY

Synergy is said to exist for a divisional corporation if the return on investment

of each division is greater than what the return would be if each division
were an independent business.
According to Goold and Campbell, synergy can take place in one of six
forms:
■ Shared know-how
■ Coordinated strategies
■ Shared tangible resources
■ Economies of scale or scope
■ Pooled negotiating power
■ New business creation
HOW IS STRATEGY TO BE IMPLEMENTED?
ORGANIZING FOR ACTION

STRUCTURE FOLLOWS STRATEGY

In a classic study of large U.S. corporations such as DuPont, General Motors, Sears, and
Standard Oil, Alfred Chandler concluded that structure follows strategy—that is, changes in
corporate strategy lead to changes in organizational structure.
Chandler, therefore, proposed the following as the sequence of what occurs:
1. New strategy is created.
2. New administrative problems emerge.
3. Economic performance declines.
4. New appropriate structure is created.
5. Economic performance rises.
STAGES OF CORPORATE DEVELOPMENT

Stage I: Simple Structure

Stage II: Functional Structure
Stage III: Divisional Structure
Stage IV: Beyond SBUs Even with the
evolution
ORGANIZATIONAL LIFE CYCLE
The organizational life cycle describes how organizations grow,
develop, and eventually decline. It is the organizational equivalent of
the product life cycle in marketing. These stages are Birth (Stage I),
Growth (Stage II), Maturity (Stage III), Decline (Stage IV), and Death
(Stage V).
REENGINEERING AND STRATEGY
IMPLEMENTATION

Reengineering is the radical redesign of

business processes to achieve major gains in
cost, service, or time. It is not in itself a type of
structure, but it is an effective program to
implement a turnaround strategy.
SIX SIGMA

Six Sigma is an analytical method for achieving near-perfect results on

a production line. Although the emphasis is on reducing product
variance in order to boost quality and efficiency, it is increasingly
being applied
The process of Six Sigma encompasses five steps.
1. Define a process where results are poorer than average.
2. Measure the process to determine exact current performance.
3. Analyze the information to pinpoint where things are going wrong.
4. Improve the process and eliminate the error.
5. Establish controls to prevent future defects from occurring to
accounts receivable, sales, and R&D.
DESIGNING JOBS TO IMPLEMENT STRATEGY

Job design refers to the study of individual tasks in an attempt to

make them more relevant to the company and to the
employee(s). To minimize some of the adverse consequences of
task specialization, corporations have turned to new job design
techniques: job enlargement (combining tasks to give a worker
more of the same type of duties to perform), job rotation
(moving workers through several jobs to increase variety), job
characteristics (using task characteristics to improve employee
motivation), and job enrichment (altering the jobs by giving the
worker more autonomy and control over activities).
Theoretical Models of Job Design

Organizations may employ various theoretical

approaches for job design. These include Taylorism,
Socio-Technical Systems Approach, Core
Characteristics Model, and Psychological
Empowerment Theory. Each approach emphasizes
different aspects to be considered in effective job
design.
Taylorism

Taylorism, also known as scientific management, is a

foundation for systematic job design. Frederick Taylor
developed this theory in an effort to develop a “science”
for every job within an organization according to the
following principles:
- Create a standard method for each job.
- Successfully select and hire proper workers.
- Effectively train these workers.
- Support these workers.
The Socio-Technical Systems Approach

The Socio-Technical Systems Approach is based on the evolution from individual

work to work groups. This approach has the following guiding principles:
- The design of the organization must fit its goals.
- Employees must be actively involved in designing the structure of the
organization.
- Control of variances in production or service must be undertaken as close to
their source as possible.
- Subsystems must be designed around relatively self-contained and recognizable
units of work.
- Support systems must fit in with the design of the organization.
- The design should allow for a high-quality working life.
- Changes should continue to be made as necessary to meet changing
environmental pressures.
Core Characteristics Model

Another modern job design theory is the Core

Characteristics Model, which maintains five important
job elements that motivate workers and performance:
- Skill variety
- Task identity
- Task significance
- Autonomy
- Job feedback
Psychological Empowerment Theory

Psychological Empowerment Theory posits

that there is a distinction between
empowering practices and cognitive
motivational states. When individuals are
aware of the impact they have, they benefit
more than if they cannot attribute positive
impact to any of their actions.
REFERENCES

Job design. (n.d.). OER Services.

https://courses.lumenlearning.com/suny-opmanagement/chapter/8-
1-job-design/

Wheelen, T.L., Hunger, J.D., Hoffman, A.N., & Bamford, C.E. (2018).
Strategic management and business policy globalization, innovation
and sustainability. Pearson Education Limited.