BUSINESS POLICY

AND
STRATEGY
UNIT 4

Choice of Business Strategies

● BCG Model
● Stop-Light Strategy Model
● Directional Policy Matrix (DPM) Model
● Product/Market Evolution
● Matrix and Profit Impact of Market Strategy (PIMS) Model

Major Issues Involved in the Implementation of Strategy

● Organizational Cultural and Behavioral Factors
● Organization Structure
● Role of Leadership
 Behavioural Issues in Strategy Implementation
1) Influence Tactics :
The leaders and the top management of the organisation have to implement the strategies and objectives. The leaders therefore needs to influence the behaviour of
managers, employees and peers. They need to communicate effectively the vision of the organisation and motivate the employees to give their best performance.
2) Power :
Power is the potential ability of influencing the behaviour of others in an organisation Leaders effectively use their power to influence their subordinates to act in a
particular manner. The leaders have a formal authority which is derived from the position that they occupy in the organisation.
3) Empowerment :
Leaders cannot implement everything themselves. They need to delegate and empower their subordinates. The leader can empower the employees in many ways. Some
of the common techniques used are training, self managed work groups (which redefine organizational reporting relationships), and the extensive use of automation.
4) Political Implications of Power :
The organizations are also subject to politics. Organizational politics is the set of actions which people follow to acquire and increase power to achieve their preferred or
vested interests. The leaders need to manage the organizational politics so that it does not become an obstacle in the implementation of the strategy.
5) Managing Resistance to Change :
Rapid change in an organisation is often met by resistance from workers as they have to discard their existing ways of working. Top management can prepare the
workers in advance for the change and show the positive impacts that are likely to take place. This often reduces the resistance to change.
6) Managing Conflict :
Conflict occurs when one individual or business unit in an organisation deliberately obstructs another individual or business unit from achieving its objective. The
leaders have to manage these conflicts in order to achieve their goals.
7) Linking Performance and Pay to Strategies :
The organisation also has to plan the performance of its strategies if it needs to achieve its objectives. To do this, efficient co ordination of promotions, salary increases,
bonuses, etc., is required.
Procedural Issues in Strategy Implementation
In the context of strategy implementation, a procedural issue refers to a problem or challenge related to the
execution of specific processes, methods, or steps involved in carrying out a strategic plan. These issues can
arise when there are difficulties in implementing the planned actions, procedures, or protocols outlined in the
overall strategic framework of an organization.
Procedural issues can hinder the effective execution of the strategy and may include the following aspects:

1. Poorly Defined Processes: If the processes and procedures necessary for implementing the strategy are not
clearly defined, it can lead to confusion and errors during execution.
2. Lack of Coordination: Ineffective coordination among different departments or teams can result in
procedural issues. Smooth collaboration is crucial for successful strategy implementation.
3. Insufficient Resources: Inadequate allocation of resources, such as personnel, technology, or finances, can
impede the proper execution of strategic initiatives.
4. Resistance to Change: If there is resistance among employees to adopt new procedures or ways of working
as outlined in the strategy, it can create procedural challenges.
5. Communication Breakdowns: Ineffective communication about the procedures and steps involved in
strategy implementation can lead to misunderstandings and mistakes.
6. Inadequate Training: If employees are not adequately trained to carry out the procedures associated with the
strategy, it can result in errors and inefficiencies.
7. Monitoring and Feedback Mechanisms: Lack of proper monitoring and feedback mechanisms can make it
challenging to identify procedural issues early on and address them promptly.
Project implementation Issues in Strategy Implementation
Issues in implementing projects as part of a broader organizational strategy encompass challenges encountered during the execution of
specific projects aimed at achieving strategic objectives. These challenges can hinder the successful implementation of the overall
organizational strategy. Below are some prevalent problems associated with project implementation within the context of executing a
strategy:
1. Scope Expansion: Project scope may extend beyond initially defined boundaries, leading to heightened complexity, increased
resource requirements, and potential delays.
2. Resource Limitations: Inadequate allocation of resources, encompassing time, budget, and personnel, can impede the efficient
execution of the project and, consequently, the overarching strategy.
3. Ineffective Project Management: Suboptimal project management practices, such as unclear objectives, inefficient planning, or a
lack of coordination, can result in project failure and have adverse effects on strategy implementation.
4. Technological Challenges: Challenges related to technology, such as problems with software integration or the failure of new
systems, can disrupt project implementation and impede the attainment of strategic goals.
5. Collaboration Issues within Teams: Inefficient communication and collaboration among team members can lead to
misunderstandings, delays, and a lack of synergy, affecting the progress of the project.
6. Resistance to Change: Employees may oppose changes associated with project implementation, whether they involve new
processes, technologies, or work methods, hindering the achievement of strategic objectives.
7. Insufficient Stakeholder Engagement: Failure to involve key stakeholders throughout the project can result in a lack of support,
feedback, and alignment with organizational strategy.
8. Lack of Monitoring and Evaluation: Inadequate mechanisms for monitoring and evaluating project progress can lead to a lack of
awareness of potential issues, making it challenging to address them in a timely manner.
9. Impact of Environmental Factors: External factors such as regulatory changes, economic shifts, or unexpected market conditions
can affect project implementation and necessitate adaptability.
10.Incomplete Risk Management: Failure to identify and address potential risks can result in unforeseen obstacles during project
implementation, impacting the overall strategy.
CHOICE OF BUSINESS STRATEGY
 Shell’s Directional Policy Matrix (DPM)
• The Shell Directional Policy Matrix (DPM) is another refinement upon the Boston Consulting Group
(BCG) Matrix. Along the horizontal axis are prospects for business sector profitability, and along the
vertical axis is a company’s competitive capability.

• Business sector profitability includes the size of the market, expected growth, lack of competition, profit
margins within the market and other favorable political and socio-economic conditions.

• On the other hand company’s competitive capability is determined by the sales volume, the products
reputation, reliability of service and competitive pricing.

• As with the GE Business Screen, the location of a Strategic Business Unit (SBU) in any cell of the matrix
implies different strategic decisions.

• However decisions often span options and in practice the zones are an irregular shape and do not tend to be
accommodated by box shapes. Instead they blend into each other.
1. Divest: SBU’s running in losses with uncertain cash flows. They should be divested as the situation is not likely to improve
in the near future. These liquidate or move thee assets.

2. Phased withdrawal: SBU’s with weak competitive position in a low growth market with very little chance of generating
cash flows. They should be phased out gradually. The cash realized should be invested in more profitable ventures.

3. Double or quit: Gamble on potential major SBU’s for the future. Either invests more to use the prospects presented by the
market or else better to quit the business.

4. Custodial: SBU’s are just like a cash cow, milk it and do not commit any more resources. The corporate has to bear with
the situation by getting help from other SBU’s or get out of the scene so as to focus more on other attractive business.

5. Try harder: SBU’s could be vulnerable over a longer period of time, but fine for now. They need additional resources to
strength their capabilities. The corporate try harder to exploit the business prospects thoroughly.

6. Cash Generator: Even more like a cash cow, milk here for expansion elsewhere. SBU’s may continue their operations, at
least for generating strong cash flows and satisfactory profits. No further investments are made.

7. Growth: Grow the market by focusing just enough resources here. These SBU’s need funds to support product innovations,
R&D activities etc.

8. Market Leadership: Major resources are focused upon the SBU. It must receive top priority.
McKinsey 7s Model
Importance of the Tool