Chap 4 - Issues in Implementation

CHAPTER 4 - IMPLEMENTATION OF STRATEGIC MANAGEMENT
MBA Quynh Anh Nguyen

quynhanh10m@gmail.com
ISEF- APD
CHAPTER 4 - IMPLEMENTATION OF STRATEGIC MANAGEMENT
• Strategy Implementation:a translation of
strategic thought into action
• Successful strategy formulation does not
guarantee successful strategy implementation
Strategy-formulation
The concepts and Strategy
tools nearly the implementation
Strategy implementation
same among actions varies
different types remarkably
and sizes of among different
organizations. types and sizes of
organizations.
• Strategy implementation actions:????

• Transition from strategy formulation to strategy implementation requires
a shift in responsibility from strategists to divisional and functional
managers.
• Why problems?
• Managers and employees are motivated more by perceived self-
interests than by organizational interests
• Solution?
• Divisional and functional managers should be involved as much as
possible in both strategy-formulation and strategy-implementation
activities.
• Agency problems
Production/
Operations
Management Human
Information
System(MIS) Resource
IMPLEMENTATION
OF STRATEGIC
MANAGEMENT
Research and
Development(R Marketing
&D)
Finance/
Accounting
Strategic production/operations Issues
• Majority of the strategy-implementation process takes place at the

production site.
• Strategic production-related decisions:???
(1)restructuring/reengineering
(2) managing resistance to change
(3) deciding where/how to produce

goods
• Restructuring : reducing the size of the firm in terms of number of employees,
number of divisions or units, and number of hierarchical levels .
benefit : downside :
cost reduction reduced employee commitment
the uncertainty and trauma of
employee layoffs.
• Concern primarily with shareholder well-being rather than employee well-being

• Restructuring in IBM in 2023 due

to working capital needs
• Reengineering : reconfiguring or redesigning work, jobs, and processes for the

purpose of improving cost, quality, service, and speed.
• Reengineering: NO affect the organizational structure or chart, NO imply job
loss or employee layoffs.
• Concern more with employee and customer well-being than shareholder well-
being.
Restructuring Reengineering
Concern shareholder well-being than Concern employee and customer well-

employee well-being being than shareholder well-being
Eliminating or establishing,
shrinking or enlarging, moving
Changing the way work is carried out
organizational departments and
divisions
Strategic (long-term, affecting all Tactical (short-term, business-

business functions) decisions function-specific) decisions
• Resistance to change : sabotaging production machines, absenteeism, filing

unfounded grievances, and unwillingness to cooperate.
• Why?
• People fear economic loss, inconvenience, uncertainty, and a break in
normal social patterns.
• Changes in structure, technology, people, or strategies can disrupt
comfortable interaction patterns.
Approaches for implementing changes
an educative change a rational / self-interest

a force change strategy
strategy change strategy
Strategic
production/operations Issues
Decide Where and How to

Produce Goods
(1)restructuring/reengineering
(2) managing resistance to change
(3) deciding where/how to produce

goods
• Where? Considering factors including :
• the availability of major resources
• the prevailing wage rates in the area
• transportation costs related to shipping and receiving
• the location of major markets
• political risks in the area or country
• the availability of trainable employees.
• How? Just-in-time (JIT) production approaches

Strategic Human resource Issues
• (1) linking performance and pay to strategy

Strategic • (2) balancing work life with home life
• (3) developing a diverse work force
Human • (4) using caution in hiring a rival’s employees
Resource • (5) creating a strategy-supportive culture

• (6) using caution in monitoring employees’
Issues social media

• (7) developing a corporate wellness program
• Linking Performance and Pay to Strategy
• Decisions on salary increases, promotions, merit pay, and bonuses need to
support the long-term and annual objectives of the firm
• How to do ?
• Reward strategy incentives: salary raises, stock options, fringe benefits,
promotions, praise, recognition, criticism, fear, increased job autonomy, and
awards
• Balance Work Life and Home Life
• “Work and family strategies now represent a competitive advantage”
• Develop a Corporate Wellness Program
• Corporate wellness has become a major strategic issue in companies.

• Legal issue of insurance
• Firm’s reputation
• Long-term strategy
• Develop a Diverse Workforce
• “an organization can perhaps be most effective when its workforce mirrors the
diversity of its customers”
• Use Caution in Hiring a Rival’s Employees
• Create a Strategy-Supportive Culture
• All organizations have a unique culture
=> Strategists should strive to preserve, emphasize, and build on

aspects of an existing culture that support proposed new strategies
• Use Caution in Monitoring Employees’ Social Media
Approve Against
• Protect firm’s reputation • Invasion of privacy
• Social media records can be • Many personal information
used as evidence against the irrelevant to a company or its
company business
• Know the nature of employees’
communication
Strategic Marketing Issues
• Engage customers in social media.

1
• Segment markets effectively

2
• Develop and use product-positioning/perceptual maps

3
Strategic
Marketing
Issues
Social Media
Marketing
Strategic Marketing Issues
• Market Segmentation: subdividing a market into distinct subsets
of customers according to needs and buying habits
• Why important?
• Increase sales
• Operate firms with limited resources
• Directly affect marketing mix variables: 4P
• Product Positioning and Perceptual Mapping:deciding how to meet
the needs and wants of particular consumer groups
Strategic Finance/Accounting Issues
• EXAMPLE:
1. To raise capital with short-term debt, long-term debt, preferred stock, or common
stock
2. To lease or buy fixed assets
3. To determine an appropriate dividend payout ratio
4. To use last-in, first-out (LIFO), first-in, first-out (FIFO), or a market-value accounting
approach
5. To extend the time of accounts receivable
6. To establish a certain percentage discount on accounts within a specified period of
time
7. To determine the amount of cash that should be kept on hand
Acquire Needed Capital
•
Projected Financial Statements
• Projected financial statement analysis : technique allowing an organization to examine the expected results
of strategies being implemented
1. Prepare the projected income statement before the balance sheet (forecasting sales)
2. Use the percentage-of-sales method to project cost of goods sold (CGS) and the expense
3. Calculate the projected net income.
4. Subtract dividends to be paid to net income and add remaining to retained earnings
5. Project the balance sheet items
6. List commentary (remarks) on the projected statements.
Strategic Research and Development (R&D) Issues
Strategic Research and Development (R&D) Issues
• 3 major R&D approaches for implementing strategies:
The first firm The The low-cost

to market innovative producer by
new imitator of mass-
technological successful producing
products products products
Strategic Management Information Systems (MIS) Issues
• Effectively gathering, assimilating, and evaluating external and internal
information most = gaining competitive advantages
• Information = a valuable organizational asset that can be controlled and
managed
• Good MIS:
• Reduce costs
• Allow remote-working
• Secure and safeguard corporate communications, files, orders, and business
Strategic Management Information Systems (MIS) Issues

Chap 4 - Issues in Implementation

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Chap 4 - Issues in Implementation

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CHAPTER 4 - IMPLEMENTATION OF STRATEGIC MANAGEMENT

MBA Quynh Anh Nguyen

• Strategy implementation actions:????

• Majority of the strategy-implementation process takes place at the

(2) managing resistance to change

(3) deciding where/how to produce

• Concern primarily with shareholder well-being rather than employee well-being

• Restructuring in IBM in 2023 due

• Reengineering : reconfiguring or redesigning work, jobs, and processes for the

Concern shareholder well-being than Concern employee and customer well-

Strategic (long-term, affecting all Tactical (short-term, business-

• Resistance to change : sabotaging production machines, absenteeism, filing

an educative change a rational / self-interest

Decide Where and How to

(2) managing resistance to change

(3) deciding where/how to produce

• How? Just-in-time (JIT) production approaches

• (1) linking performance and pay to strategy

Resource • (5) creating a strategy-supportive culture

Issues social media

• Corporate wellness has become a major strategic issue in companies.

=> Strategists should strive to preserve, emphasize, and build on

• Engage customers in social media.

• Segment markets effectively

• Develop and use product-positioning/perceptual maps

The first firm The The low-cost

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