Strategy Implementation:

Organizing for Action

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 Strategy Implementation

Strategy Implementation:
– Is the sum total of the activities and
choices required for the execution of a
strategic plan.
– It involves the process by which
strategies and policies are put into action
through programs, budgets, and
procedures.

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 Strategy Implementation

Implementation Process Questions:

– Who are the people to carry out the
strategic plan?
– What must be done to align operations
with new direction?
– How is work going to be coordinated?

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 Strategy Implementation
• More time than planned
• Unanticipated problems
• Activities ineffectively
coordinated
• Crises defer attention away
• Employees capabilities
Problems in inadequate
Implementing • Inadequate employee
Strategic training
plans • Uncontrollable external
factors
• Inadequate leadership
• Poorly defined tasks
• Inadequate information
systems

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 Strategy Implementation

Programs:
The purpose of programs is to make the
strategy “action-oriented.”
• Compare proposed programs and activities with
current programs and activities.

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 Strategy Implementation

Budgets:
– Planning a budget is the last real
check a firm has on the feasibility of
the selected strategy.

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 Strategy Implementation

Structure Follows Strategy:

– Changes in corporate strategy lead to

changes in organizational structure

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 Strategy Implementation

Structure Follows Strategy cont………..

When new strategy is created:-
• New administrative problems emerge
• New appropriate structure is invented

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 Strategy Implementation

Stages of corporate development

• Simple Structure
• Functional Structure
• Divisional Structure
• Beyond SBU’s

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 Strategy Implementation

Simple Structure:
– Stage I:
• Entrepreneur
– Decision making tightly controlled
– Little formal structure
– Planning short range/reactive
– Flexible and dynamic

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 Strategy Implementation

Functional Structure:
– Stage II:
• Management team
• Functional specialization
• Delegation decision making
• Concentration/specialization in industry

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 Strategy Implementation

Divisional Structure:
– Stage III:
• Diverse product lines
• Decentralized decision making
• SBU’s
• Almost unlimited resources

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 Strategy Implementation

Matrix Structure:

• Temporary cross-functional task force

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 Matrix Structure
Top Management

Manufacturing Sales Finance Personnel

Manager: Manufacturing Sales Finance Personnel

Project Unit Unit Unit Unit
A

Manager: Manufacturing Sales Finance Personnel

Project Unit Unit Unit Unit
B

Manager: Manufacturing Sales Finance Personnel

Project Unit Unit Unit Unit
C

Manager: Manufacturing Sales Finance Personnel

Project Unit Unit Unit Unit
D

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 Strategy Implementation

Network Structure:
– “non structure” – elimination of in-
house business functions
– Termed “virtual organization”
• Useful in unstable environments
• Need for innovation and quick response

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 Network Structure

Packagers

Designers Suppliers

Corporate
Headquarters
(Broker)

Manufacturers Distributors

Promotion/
Advertising
Agencies

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 Strategy Implementation

Cellular Organization:
– composed of “cells”
• Self-managing teams
• Autonomous business units

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 Strategy Implementation

Reengineering:
– Radical design of business processes
to achieve major gains in cost,
service, or time.
– Effective way to implement a
turnaround strategy.

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 Strategy Implementation
• Job Design source of competitive
advantage

– Job design
• Study of individual tasks to increase relevance
– Job enlargement
• Combining tasks
– Job rotation
• Increase variety of tasks
– Job enrichment
• More autonomy and control to workers

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RESOURCE ALLOCATION AND CONFIGURATION

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The VRIO model

…….is a strategic analysis framework applied during the

internal analysis of strategic planning.

The framework is based on the evaluation of resources and

capabilities of an organization.

VRIO is the acronym for the four (4) basic questions the
framework evaluates over capabilities and resources:

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 Value:

• Does this resource/capability enable the organization to exploit an

opportunity or block an external threat?

• If it does, the resources/capability can be considered a strength of

the organization.

• The VRIO Value analysis generally starts with the review of the Value
Chain of the organization, looking for assets that have optimized
certain pieces of the chain.

• In most of the cases, this assets can be considered inside the Value
concept of VRIO.

• Another interpretation of the Value concepts is for those

resources/capabilities that increase the perceived value of the
customer. 24
Rarity:

•Does control of this resource/capability in hands of a few (in the

market)?

•The rarity concept of the VRIO framework requires that the

resource/capability enddures over time condition.

•If these are not met, the resource/capability cannot generate a

sustainable competitive advantage.

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Imitability:

•Is the resources/capability difficult to imitate?

•Or Does this resources/capability generate a cost disadvantage to the

competing organizations trying to obtain, develop, or duplicate it? 

•Imitation can occur in two ways: by directly imitating the

resource/capability or by providing the substituting with a
comparable resource/capability.

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Organization:

•Is the organization structured, built and able to exploit the

resources/capability? 

•The resource/capability do not guarantee any competitive advantage for

an organization by itself.

•The same needs to be organized to capture the value from them.

•The organization is based around management systems, processes,

policies ,structure and culture.

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