Module 4

Strategy Implementation:

Prof Bhavya Vinil, School of Management, CMR University

 Concept,

Inter-relationship between formulation and

implementation,
Issues in strategy implementation
Contents:
The framework of Resource allocation,
Strategic
Steps and approaches to strategy implementation.
Implementation:
Strategic Leadership,

Strategies for competing in Globalizing markets and

internet economy [ Refer Assignment ]

Prof Bhavya Vinil, School of Management, CMR University

Prof Bhavya Vinil, School of Management, CMR University
Implementation is the fourth stage of
the Strategic Management process, the
other three being a determination of
strategic mission, vision and objectives,
environmental and organisational
analysis, and formulating the strategy.
It is followed by Strategic Evaluation
and Control.

Prof Bhavya Vinil, School of Management, CMR University

Strategy Implementation
Meaning: Strategy Implementation refers to the execution of the plans
and strategies, to accomplish the long-term goals of the organization.
It converts the opted strategy into the moves and actions of the
organisation to achieve the objectives.

Definition: Strategy implementation is the process by which an

organisation translates its chosen strategy into action plans and
activities, which will steer the organisation in the direction set out in
the strategy and enable the organisation to achieve its strategic
objectives.
Prof Bhavya Vinil, School of Management, CMR University
Strategy implementation is the time-taking part of the overall process, as it puts
the formulated plans into actions and desired results.

The process of strategy implementation has an important role to play in the

company’s success. The process takes places after environmental scanning, SWOT
analyses and ascertaining the strategic issues.

Even the best-formulated strategies fail if they are not implemented in an

appropriate manner. Effective implementation is possible only if there is an
alignment between strategy and other elements like resource allocation,
organizational structure, work climate, culture, process and reward structure,

Prof Bhavya Vinil, School of Management, CMR University

 Poor goal setting.

The 5 Most Lack of alignment.

Common Strategy
Inability to track progress.
Execution
Challenges: People not connected to the strategy.

No measurements or leading indicators.

• - “You manage what you measure”

Prof Bhavya Vinil, School of Management, CMR University

Prof Bhavya Vinil, School of Management, CMR University
 75% of organizations don’t
60% of organizations don’t
link employee incentives to
link strategy to budgeting
strategy

86% of business owners and

95% of the typical workforce
managers spend less than
doesn’t understand their
one hour per month
organization’s strategy.
discussing strategy

Prof Bhavya Vinil, School of Management, CMR University

Strategic implementation relies on a few factors:

People: Do you have enough

people to implement the
strategy? Are these people the
best candidates? You need your
current employees to
demonstrate the required skills
and competencies.
Structure: The organizational
structure should be clear-cut,
Resources: This refers both to
with leadership and authority
financial and non-financial
established. Each member knows
support.
who they are accountable to and
who they are responsible for.

Culture: Are all employees

Systems: What systems,
comfortable in their roles? Do
capabilities, and tools are in place
they understand the overall
to facilitate strategic
objectives of the company? Are
implementation? What are their
employees aligned with the
functions?
brand’s values and mission?

Prof Bhavya Vinil, School of Management, CMR University

 Make the strategic goals clear. Use a methodology like OKRs to give
Clarity the goals more structure.

Set executive goals and demonstrate the leadership team’s focus on

Goals strategy.

Recommendations: Transparency Make all strategic goals transparent to everyone. Show how each
executive’s goals weave together.

Use technology, as transparency and real-time tracking cannot be

Technology accomplished otherwise.

Show that you are measuring what matters, managing what matters
Measure and—more importantly—that you're going to attain what matters.

Prof Bhavya Vinil, School of Management, CMR University

 Strategy Implementation
Techniques and Best Practices
1. Ensure that plans are aligned with organisational
mission, vision and values
2. Build an effective leadership team
3. Create an implementation plan
4. Allocate budgetary resources
5. Assign objectives and responsibilities
6. Align structures and processes
7. Align people
8. Communicate the strategy
9. Review and report on progress
10. Make strategic adjustments as necessary
11. Develop an organisational culture that supports
the strategy Prof Bhavya Vinil, School of Management, CMR University
 There are several factors that has a major impact
on an organization's ability to Implement Strategy.

Commitment.

Ability and willingness to change.

An organizational structure that supports the strategy.

Ability to measure progress.

A clear understanding of priorities

Prof Bhavya Vinil, School of Management, CMR University
Aspects of Strategy Implementation

Creating budgets which provide sufficient resources to those activities which are relevant to the
strategic success of the business.
Supplying the organization with skilled and experienced staff.

Conforming that the policies and procedures of the organisation assist in the successful execution of
the strategies.
Leading practices are to be employed for carrying out key business functions.

Setting up an information and communication system, that facilitate the workforce of the
organisation, to perform their roles effectively.
Developing a favourable work climate and culture, for proper implementation of the strategy.

Prof Bhavya Vinil, School of Management, CMR University

 Action Requires
Oriented Leadership
Nature of
strategy
implementation Employee
Challenging
Managerial
Involvement
Job
Issues/ Barriers of Strategy Implementation
Nonparticipation of
Lack of
employee during Resource Limitation
communication
strategy formulation

Lack of coordination Behavioural Barriers Poor Leadership

Poor Management

Prof Bhavya Vinil, School of Management, CMR University

FACTORS THAT SUPPORT STRATEGY IMPLEMENTATION:

• People
There are two questions that must be answered: “Do you
have enough people to implement the strategies?” and “Do you have
the right people in the organization to implement the strategies?”
• Resources
One of the basic activities in strategy implementation is the allocation of
resources. These refer to both financial and non-financial resources that (a)
are available to the organization and (b) are lacking but required for
strategy implementation.

Prof Bhavya Vinil, School of Management, CMR University

• Structure
The organizational structure must be clear-cut, with the lines of authority and
responsibility defined and underlined in the hierarchy or “chain of command”.
Each member of the organization must know who he is accountable to, and who he
is responsible for.
• Systems
What systems, tools, and capabilities are in place to facilitate the implementation
of the strategies? What are the specific functions of these systems? How will these
systems aid in the succeeding steps of the strategic management process, after
implementation?
• Culture
This is the organizational culture, or the overall atmosphere within the company,
particularly with respect to its members. The organization should make its
employees feel important and comfortable in their respective roles by ensuring that
they are involved in the strategic management process, and that they have a very
important role Prof Bhavya Vinil, School of Management, CMR University
 STEPS IN STRATEGY IMPLEMENTATION

Step #1 Evaluation and communication of the Strategic Plan

Step #2 Development of an implementation structure

Step #3 Development of implementation-support policies and programs

Step #4 Budgeting and allocation of resources

Step #5 Discharge of functions and activities

Prof Bhavya Vinil, School of Management, CMR University

Step #1: Evaluation and communication of the Strategic Plan

Align Strategy Align the strategies with the initiatives.

Align Budget Align budget to the annual goals and objectives.

Communicate Communicate and clarify the goals, objectives and strategies to all
and clarify members of the organization.

Prof Bhavya Vinil, School of Management, CMR University

Step #2: Development of an implementation structure

Establish Establish a linking or coordination mechanism between and among the various departments and their respective divisions and units.

Formulate Formulate the work plans and procedures to be followed in the implementation of the tactics in the strategies.

Determine the key managerial tasks and responsibilities to be performed, and the qualifications required of the person who will
Determine perform them.

Determine the key operational tasks and responsibilities to be performed, and the qualifications required of the person who will
Determine perform them.

Assign Assign the tasks to the appropriate departments of the organization.

Evaluate the current staffing structure, checking if you have enough manpower, and if they have the necessary competencies to
Evaluate carry out the tasks..

Communicate Communicate the details to the members of the organization. This may be in the form of models, manuals or guidebooks.

Prof Bhavya Vinil, School of Management, CMR University

Step #3: Development of implementation-support policies and programs

Establish Establish a performance tracking and monitoring system.

Establish Establish a performance management system.

Establish Establish an information and feedback system

Communicate Communicate these policies and programs to the members of the organization.

Prof Bhavya Vinil, School of Management, CMR University

Step #4: Budgeting and allocation of resources

Allocate Allocate the resources to the various departments, depending on the results of financial
assessments as to their budgetary requirements.

Disburse Disburse the necessary resources to the departments, and make sure everything is properly and
accurately documented.

Maintain Maintain a system of checks and balances to monitor whether the departments are operating
within their budgetary limits, or they have gone above and beyond their allocation.

Prof Bhavya Vinil, School of Management, CMR University

Step #5: Discharge of functions and activities

Engagement Continuous engagement of personnel by providing trainings and reorientations.

Enforce Enforce the applicable control measures in the performance of the tasks.

Evaluate performance at every level and identify performance gaps, if any, to enable adjusting
Evaluate and corrective actions

Implement Make the changes when necessary.

Prof Bhavya Vinil, School of Management, CMR University

 Strategic Leadership

• Strategic leadership refers to a manager’s potential to express a strategic vision for 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.
• 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

Prof Bhavya Vinil, School of Management, CMR University

Prof Bhavya Vinil, School of Management, CMR University
Prof Bhavya Vinil, School of Management, CMR University
WHO ARE THE MOST CREATIVE AND
SUCCESSFUL BUSINESS MINDS?

Prof Bhavya Vinil, School of Management, CMR University

Prof Bhavya Vinil, School of Management, CMR University
 Export strategies
Strategies for
competing in Licensing strategies
Globalizing
markets Franchising strategies

Strategic alliances and joint ventures

Alliances with foreign partners

Prof Bhavya Vinil, School of Management, CMR University

 The size of the company need not be too large to create a global
market. Even small firms can take advantage of this growing
phenomenon.

Features of The distinctions of national markets are still prevailing even after
the globalization of markets. These distinctions require the

Prof Bhavya Vinil, School of Management, CMR University

Globalization companies to formulate different strategies for each market.

of Markets Most of the foreign markets are the markets for non-consumer
goods like industrial products, machinery, equipment, raw
materials, computers, software, financial products etc.

The global firms compete with each other frequently in different

national markets including home markets. For example, Coca Cola
is the global rival of Pepsi, Boeing and Airbus. Though these
companies compete with each other they create a global market.
 Large-scale industrialization enabled mass production. Consequently,
the companies found that the size of the domestic market is very small
to suffice the production output and thus opted for foreign markets.

Companies globalize markets in order to increase their profits and

achieve goals.

Reasons for
The adverse business environment in the home country pushed the
Globalization companies to globalize their markets.

To cater to the demand for their products in the foreign markets.

The failure of the domestic companies in catering the needs of their

customers pulled the foreign countries to market their products.

Prof Bhavya Vinil, School of Management, CMR University

Advantages of Globalization of Markets

Free flow of technology from developed countries to developing countries.

Spread production facilities throughout the globe.
Increase in production and consumption of outputs.
Commodities available at lower price with high quality.
Cultural exchange and demand for a variety of products in foreign market.
Increased job opportunities and income.
Balanced welfare and prosperity of the country’s economy.

Prof Bhavya Vinil, School of Management, CMR University

Disadvantages of Globalization of Markets

Globalization kills domestic (small) businesses.

Exploitation of human resource in global firms.

Leads to unemployment and underemployment in developing countries.

The demand for domestic products decreases.

National sovereignty at stake.

Prof Bhavya Vinil, School of Management, CMR University

 WHY
COMPANIES GAINING ACCESS TO NEW ACHIEVING LESSER COSTS

EXPAND CLIENTS. AND HENCE ENHANCE FIRM’S

Prof Bhavya Vinil, School of Management, CMR University

COMPETITIVENESS.

INTO
FOREIGN
MARKETS?
CAPITALIZING ON ITS CORE SPREADING FIRM’S BUSINESS
COMPETENCIES. RISK.
Prof Bhavya Vinil, School of Management, CMR University
1) International Companies

✓ The operations of such companies lie in

one single home country as the base
center.
✓ These companies only export or import
products from the home country.
✓ The offices, hence, only exist in the
home country and there is no foreign
direct investment in other countries.
✓ The functioning and strategies are
derived mostly from the primary market
which is the domestic home country
market.
✓ They have to continuously adjust to
trading norms of the home country.
✓ Spencers is an example in the Indian
context.

Prof Bhavya Vinil, School of Management, CMR University

2) Multinational Companies
✓ As the name suggests, these
companies have direct
operations in more than a single
country, however, it is usually not
a very large number.
✓ However, MNC’s have a
centralized structure, with the
head office in the home country
calling all the shots.
✓ In this case, products are decided
and developed by the head office
and subsidiary offices do have
options to adapt to local markets
if needed.
✓ Adidas is an amazing example
to explain multinational
companies.
Prof Bhavya Vinil, School of Management, CMR University
3) Transnational Companies
✓ These companies are operating in
multiple countries, having foreign
direct investment in all of them.
✓ Such companies follow a flexible
approach, understanding and
adapting to the local culture and
demand of each country.
✓ Hence, offices in each country work
in a decentralized manner with
decision-making powers.
✓ Infact, subsidiary offices can launch
and make products which might not
be manufactured in the original
home country, if there is a chance of
demand.
✓ Nokia is one of the examples in the
Indian context.

Prof Bhavya Vinil, School of Management, CMR University

4) Global Companies
✓ These companies work to have a
foothold in a large number of
countries, usually larger than a
Multinational Corporation.
✓ They, however, do not follow the
system of having an official head
office.
✓ Various subsidiaries are set but
standard products are sold, without
any flexibility in terms of adapting to
local consumers.
✓ There is no change in branding or
information about a global company,
even if the country of operations
changes.
✓ McDonald’s – a fast-food chain, is an
exemplary example of this kind of
companies.
Prof Bhavya Vinil, School of Management, CMR University
Prof Bhavya Vinil, School of Management, CMR University
Prof Bhavya Vinil, School of Management, CMR University