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Abstract: This paper seeks to determine and prioritize some of the factors affecting the strategy
implementation. It is an academic paper to introduce and discuss a problem which can be a research agenda.
The research’s strategy, is reviewing existing literature about the issue and combining it with a known
conceptual model. Using this approach, some factors related to the strategy implementation are extracted
based on previous studies. Then, some factors which are more important from the author's perspective, are
combined with the selected conceptual model. At first, the importance of strategy implementation and the
amount of successful implementation of formulated strategies, has been proposed based on research results
published in Fortune and The New York Times. A number of factors affecting the strategy implementation are
listed based on previous studies, and the reasons for delegating the strategy implementation to the chance by
top management and corporate leaders were raised. Then, the used conceptual model for theoretical analysis
has been proposed‒ Hrebiniak and Joyce (1984) typology of strategy implementations. Based on this model,
four types of intervention can be done by management to strategy implementation. Each of these
interventions has its specific costs which can create new challenges for managers. Understanding the
characteristics of these four types of intervention and proper decisions and acts about each, can facilitate
strategy implementation and reduce costs of implementation. In addition, factors that are more important
from author’s perspective (strategy, organizational structure, organizational culture, institutional coordination
and information sharing, incentives and control, change management, operational planning and power) has
been proposed and explanations are presented about their driving and restraining effects on the strategy
implementation. Finally, some of the prioritized factors (structural complexity, decision making policy, cultural
dimension, institutional coordination and information sharing rate, incentives and control system, change
management procedures, operational planning type, Power distribution and human resources strategy)
combined with the proposed conceptual model and recommendations to improve strategy implementation
process has been proposed. It is suggested that to improve strategy implementation process, it’s formulation
and implementation must not be separated, and a supportive culture, an appropriate structure to aid strategy
and to avoid mode, and a mighty financial and human resources management must be created. Furthermore,
it is also essential for a fair reward and evaluation system to be established.
1. Introduction
“The strategic planning process only works when strategies are implemented. Formulating those strategies
is difficult. Executing them is much harder” (Springer, 2005), because many factors affect the strategy
implementation.
Despite the experience of many organizations, implementation of strategies and programs may still be
attributed to the individual performance (particularly to the senior management performance)‒ Kind of
strategy implementation so called evolutionary implementation by Hrebiniak and Joyce (Hrebiniak and Joyce,
1984), activities that are necessary to create a great business performance. But it is not an easy task, because
many companies have repeatedly failed to motivate their employees properly (Lubit, 2001; Khan, 2016; Dutta
and Kant, 2015). Many companies and organizations, know their business and strategies they need to succeed
well. Many of them, especially large companies, are always trying to turn theory into action plans. Plans that
enable strategy to run successfully. So, they have a strategy, but studies have shown that more than 70
percent of organizations which have developed strategies, failed in their implementation (Köseoğlu, Barca and
Karayormuk, 2009; Cândido and Santos, 2015; Holowka, 2015).
Seventy percent of CEOs who failed, do so not because of bad strategy, but because of bad execution
(Charan and Colvin, 1999). In another study of 200 companies in the Times 1000, 80 percent of directors said
they had the right strategies but only 14 percent thought they were implementing them well, no doubt linked
to the finding that despite 97 percent of directors having a “strategic vision”, only 33 percent reported
achieving “significant strategic success” (Moore, 2009).
Indeed, the effective implementation of the strategy is a key factor to achieve strategic success. As it was
stated, there are several factors that affect the strategy implementation. Including strategy by itself, political
factors, organizational structure, organizational culture, coordination, sharing information, resources
allocation, communications, human resources, incentive systems, change management, organizational values,
power and influence of management and many other factors.
Many managers think formulating and implementing a strategy are two distinct issues (Hrebiniak, 2006).
Hence, as Springer (2005) mentioned it, while strategies are most often developed by the board and
stakeholders with great thought and care, implementation is often left to chance due to: (1) Leaders and
managers feeling more comfortable with planning than implementation, (2) Leaders feeling that
implementation is best left to someone else and that it is not their responsibility, (3) Implementation taking
longer to accomplish and requiring adjustments as unforeseen circumstances occur and (4) Implementation
requiring more people to be involved and continued communication over time.
As the results of various studies show, there are many problems in the way of strategy implementation.
This paper try to determine the key factors affecting the strategy implementation, prioritize them as much as
possible, describe the driving factors and inhibitors of them and finally, combine the identified factors with
typology of strategy implementations considered by Hrebiniak and Joyce (1984) in a theoretical analysis
process and give some suggestions for improving the process of strategy implementation.
Implementation Horizon
Long Short
Sequential Complex
Strategic Problem Size
Large
Intervention Intervention
Evolutionary Managerial
Small
Intervention Intervention
In implementing the strategy, each of these methods creates its specific problems. “There is a logical
progression of costs among the four strategies” (Hrebiniak and Joyce, 1984: p. 20). Costs arise from
evolutionary strategic change, through managerial and sequential implementation, and ending with complex
implementations. Strategic problem size and implementation horizon are respectively two factors directly
related to the costs of strategy implementation. But the most important factor is strategic problem size.
In the following, characteristics of each four intervention proposed based on Hrebiniak and Joyce (1984)
viewpoints.
3.1 Strategy
In fact, the first key factor affecting the strategy implementation, is the strategy itself (Hrebiniak, 2013).
Because a successful implementation journey starts in the formulation stage (Rajasekar, 2014) and also, good
execution cannot overcome the shortcomings of a bad strategy or poor strategic planning effort (Hrebiniak,
2006). Good strategies that recognize the role of organization in the market, define it and associated executive
components with measurable goals, are the first effective element. Strategies should be linked to the
organization's portfolio and be designed for effective use of institutional strengths to gain advantages on the
market opportunities and challenges and show the internal weaknesses as well (Rahmanseresht, 2005).
The strategy is designed taking into account the strengths and weaknesses of the organization and the
opportunities and threats in the environment. This issue that the strategies chosen by the company are
growth, diversification, integration, joint ventures, divestiture strategy or etc., influence its implementation. In
the other words, if the strategies are not selected tailored to the strengths and weaknesses of the organization
and environmental opportunities and threats, implementation could not be successful. It may seem that
effective factors, are strengths and weaknesses and the opportunities and threats, but it should be noted that,
they are only effective when a factor as the strategy employ them. Organizational strengths and weaknesses
and environmental opportunities and threats are like tools which have no power and concept by themselves
and strategy uses them as a mechanic. One can understand that if the mechanic is not the appropriate person
to use them, what will happen.
3.8 Power
Finally, power is another critical factor for the successful implementation of the strategy (Hrebiniak, 2013).
If the strategy exceeds organizational values and the power structure, the implementation will fail. Power,
facilitates the development and implementation of strategy. Individuals, units and parts that are out of power
or influence, can and should form coalitions with those who have power and influence, to develop and support
the success. Of course, power can have negative performance in strategy implementation too. We have to
understand that, “People in power tend to want to stay there” (Hrebiniak, 2013) and powerful and influential
individuals or sectors, may insist on doing things that are inappropriate. when that happens, the board and
organization's leaders should change the strategy, structure, or methods of resources allocation, so change the
power structure that defines power relations again in favor of the correct implementation of the strategy.
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