Professional Documents
Culture Documents
Strategy Implementation and Control
Strategy Implementation and Control
Dr.Kismat Kaur
Associate Professor
CBSA,CGC
STRATEGY IMPLEMENTATION AND CONTROL
• Introduction
• Interrelationship Between Strategy Formulation and
Implementation
• Issues in Strategy Implementation
• Organization and Strategy Implementation
Allocation of resources to
new course of action
needs to be undertaken
besides need to adapt
organization’s structure
to the chose strategy.
Strategy Formulation – Implementation:
Interrelationship
SOUND
different and it needs to be A B (success)
STRATEGY FORMULATION
sound and excellent.
Efficient
with efficient output/input ratio. 1. Thrive
Slowly
Operational Management
Where in cell 2 and cell 4 organization
is doomed unless it can establish
strategic direction. In cell 3 strategic
direction is present to ensure
Inefficient
3. Survive 4. Die
effectiveness even if rather too much Quickly
input is being used to generate
outputs. Thus to be effective is to Effective Ineffective
• Procedural Implementation
• Resource Allocation
• Structural Implementation
• Functional Implementation
• Behavioral Implementation
• These activities are not performed in the same order (can be performed
simultaneously, can be repeated etc.).
• Transition from strategy formulation to strategy implementation requires
shift in responsibility from strategist to divisional and functional managers
and their involvement should be maximum during strategy formulation.
Issues in Strategy Implementation
New
Administrative
Problem Emerges
Organizational
New Strategy is
Performance
Formed
Declines
A New
Organizational
Organizational
Performance
Structure is
Improves Established
The Functional Structure
CEO
Financ e Produc tion Engineering Ac counting Sal es a n d M ark eti n g Human Re source s
Proper match between strategy and structure gives competitive edge or else it
will result into failure.
Companies must be flexible, innovative, and creative in global economy to
exploit their core competencies. Useful Information contributes the for the
formation and use of effective structures and controls, which yield improved
decision making.
The Functional Structure
SBU Disadvantages
• Difficulty with contact with higher management
• May cause of internal tension due to difficult access to internal and external sources of
funding,
• May be the cause of the unclear situation with regard to the management activities.
The Matrix Structure
• Can be used to examine the various activities of the firm and how they
interact in order to provide a source of competitive advantage by:
• Performing these activities better and At a lower cost than the competitors
Types of Firms Activities
• You next need to determine how you can use your company’s core
competencies to develop strategic responsiveness to gain competitive
advantage. High-performing companies develop new core competencies
and expand their existing ones to enter new and future markets.
• Apple’s unique competence seems to be its product design process. Simplicity
turned out to be the core attribute that made the iPod a revolutionary product,
one that changed consumer expectations.
• Company executives should be aware that even the most successful strategy
will fail unless it is continually monitored and refreshed to meet changing
market conditions.
Three Tests to True Core Competences:
Easy to Difficult to
imitate imitate
Resources Competences
Tangible Intangible
You can buy and sell You can acquire by „learnind by doing”
Analysing competences and core competences
The competence undertake the activities of the organisation. It shows how to link the
different activities together and how to deploy resources to sustain excellent performance
Bases of
competences
How well are matched the products/services to the identified needs of the
Value added
chosen customers. Value added activity must be done from the viewpoint
of the customer or user of the production or service.
• Core competencies are likely to be ore robust and difficult to imitate if they
relate to the management of linkages within the organization value chain
and linkages into supply and distribution chains.
• Specialization is key and so is coordination of activities.
• The management of internal linkages in the value chain would create
competitive advantage in number of ways such as:
• There may be important linkage between primary activities. ( high levels of
inventory may ease production but will add to overall cost of production).
• Linkages between Primary activities like Marketing and Production and so on.
• Staying on top of what is happening, closely monitoring progress, fretting out issues,
learning what obstacle lie in path of good strategic implementation.
• Promoting the culture of Esprit de corps that mobilizes and energizes organizational
members to execute strategy in competent fashion and perform at high level.
• Keeping organizations responsive to changing conditions, alert for new opportunities,
innovative ideas, ahead of rivals in developing competitively valuable competencies
and capabilities.
• Exercising ethics leadership and model conduct and Pushing corrective actions to
improve strategy execution and overall performance.
• The role of leader is Introducing Change, Integrating Conflicting Interests, Developing
Leadership Effectiveness of Managers, Developing Appropriate Organizational
Climate, Motivational system, Clarity of goals, Relationships, Involvement, Interest,
Monitoring, Change as and when required.
Leadership Role in Implementation
• Internal crises
• Revolutionary technologies
• New challenges
• Globalization
Creating a Strong Fit Between Strategy and Culture
Unhealthy Cultures
Adaptive Cultures
Characteristics of Strong Culture Companies
• Visible rewards for those following norms; penalties for those who don’t
How Does a Culture Come to Be Strong?
• Many subcultures
• Few values and norms widely shared
• Few strong traditions
• Little cohesion among the departments
• Weak employee allegiance to company’s vision and strategy
• No strong sense of company identity
Characteristics of Unhealthy or Low
Performance Cultures
• Politicized internal environment
• Emphasize frugality
• Ceremonial events to praise people and teams who “get with the program”
Substantive Culture - Changing Actions