STRATEGY IMPLEMENTATION

Before we proceed further, we must consider the

interrelationship between the formulation and implementation of strategies.
The division of strategic management into different phases is only for the
purpose of orderly study. In real life, the formulation and implementation
processes are intertwined. Two types of linkages exist between these two
phases of strategic management. The forward linkages deal with the impact
of the formulation on implementation which the backward linkages are
concerned with the impact in the opposite direction.

F O R W A R D L I N K A G E: The formulation of new strategies

need many changes have to be effected within the organisation. A whole lot
of changes have to be undertaken in operationalising the formulated
strategies. Clearly, the strategies formulated provide the direction to
implementation. In this way, the formulation of strategies has forward
linkages with their implementation.

B A C K W A R D L I N K A G E S: Just as implementation is
determined by the formulation of strategies, the formulation process is also
affected by factors related with implementation.
Past strategic actions also determine the choice of strategy.
Organisations tend to adopt those strategies which can be implemented with
the help of the present structure of resources combined with some additional
efforts. Such incremental changes, over a period of time, take the
organisation from ‘where it is’ to ‘where it wishes to be’.

IMPLEMENTATION PROCESS: The choice of strategy itself is

constrained by the ability to alter past resource commitments, organizational
structures, policies, and administrative systems. If the strategy calls for
major alterations in these areas, strategists must be willing and able to
change and make plans to do so. If the strategy choice process is to be
effective, the implementation process must go hand in hand.

The implementation process involves an integrated set of

choices and activities that are used to allocate resources, organize, assign
key managers, set policies, and establish an administrative system to
reinforce, control, and evaluate a strategy.

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 R E S O U R C E A L L O C A T I O N: A strategic plan is the
representation of the hopes and aspirations of strategists. Project
implementation is meant for the creation of an infrastructure to enable them
to put such a plan into action. Procedural implementation provides the ‘go-
ahead’ signal. But nothing really happens until resources are procured and
allocated to tasks for the accomplishment of objectives.

Resource allocation deals with the procurement and

commitment of financial, physical, and human resources to strategic tasks of
the achievement of organisational objectives. Organisational resources in
tandem with organisational behaviour constitute the foundation for the
creation of strengths and weaknesses, synergistic advantages, core
competencies, and organisational capability, ultimately leading to the
competitive advantage that an organisation has.

Resource allocation is both a one-time and a continuous

process. When a new project is implemented, it would require the allocation
of resources. An on-going concern would also require a continual infusion of
resources. Strategy implementation should deal with both these types of
resource allocation.

The different types of resources – financial, physical, and human-are

derived from different sources. But finance is generally considered to be the
primary source; it is used for the creation and maintenance of other
resources.

Resource allocation process is highly complex; create several

difficulties for the strategists. The major difficulty arises due to a scarcity of
resources. Financial, physical, and human resources are hard to find. Firms
will usually face difficulties in procuring finance. Overstatement of needs is
another frequent problem in a bottom-up approach to resource allocation.

ORGANISATIONAL I MP L E M E N T A T I O N:

Strategic management posits that the strategy and the organization

structure used by the firm must match. In essence, the top manager looks at
the organization now and asks, Do we have the right organization for our
strategy? Structural change may be needed when organizations experience
problems or are faced with strategic shifts.

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 Organization involves dividing up the work among groups and
individuals (division or labour) and making sure that the parts are linked
together in such a way that they will work together effectively
(coordination).

Thus several basic questions are being addressed by the managers.

1. What tasks are needed to accomplish the strategy?
2. To whom should these tasks be assigned?
3. To what extent are these tasks interdependent?
4. How can we be sure that the tasks assigned will be performed?

The first two questions deal with dividing up labour. The latter two
address issues of coordination and control.

P L A N & P OL I C Y I M P L E M E N T A T I O N:

Policies are guides to action. They indicate how the tasks assigned to
the organization might be accomplished and provide a basis for lower-level
managers on which to make decisions about the use of the resources which
have been allocated.

Changes in strategic direction do not occur automatically. Operational

plans and tactics must be established to make a strategy work. While middle
level managers in functional areas usually make such decisions, they need to
be guided by the strategy so that the plans and tactics are geared to the
accomplishment of desired objectives. Thus plans and policies for the
functional areas of the business are established to assist in this process.

An enterprise could develop hundreds of policies to cover the

important areas of the business. But a policy does not tell the manager how
to handle a specific promotion or add a specific product. It serves as a guide
to middle and supervisory managers in making certain choices.

Plans and policies are developed to ensure that (1) the strategic
decision is implemented, (2) there is a basis for control, (3) the amount of
time executives spend for making decisions is reduced, (4) similar situations
are handled consistently, and (5) coordination across units will occur where
necessary.

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 Creating plans and policies leads to conditions where subordinate
managers will know what they are supposed to do and willingly implement
the decision. Managers create plans and policies to make the strategies work.
Policies provide the means for carrying out plans and strategic decisions.
The critical element is the ability to factor the grand strategy into plans and
policies that are compatible, workable, and not just “theoretically sound.”

The amount of planning and policy making in the formal sense will
vary with the size and complexity of the firm. If the firm is small, or if it is a
simple business, a few policies and plans will suffice.

The adequacy of plans and policies developed would include the

following:
 Do they reflect present or desired company practices and behaviour?
 Are they practical, given existing or expected situations?
 Do they exist in areas critical to the firm’s success?
 Are they consistent with one another, and do they reflect the timing needed to
accomplish goals?

Specialists develop plans and policies for each in much more breadth and
depth. Most of the areas are like:
 Financial and Accounting Policies and Plans
 Marketing Policies and Plans
 Production-Operations Management policies and Plans
 Research and Development Policies and Plans
 Personnel, Legal, and Public Relations Policies and Plans

L EA D E RS H I P I M P L E M E NT A T I O N :

Personnel plans and policies dealing with executive personnel are of

crucial significance to the firm and its ability to implement ( as well as
formulate) strategy. The real test of a strategic decision whether you
put the right people in the job you’ve just identified as crucial. Here
we focus on some of the key issues associated with providing for
appropriate leadership skills as a critical component of the
administrative system to implement strategy. These are important
because leaders can help organizations cope with change, and people
will not necessarily cooperate according to the policies or plans.
Effective leaders are the major component in assuring that a follow-

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through of the policies occurs as planned. Firms accomplish
leadership implementation in several ways:

1. through changes in current leadership at appropriate levels : It is to make

sure that the right strategists are in the right positions for the strategy
chosen for that SBU or firm. The questions pertaining to leadership
implementation are as follows: (a) who holds the current leader ship
positions,? (b) Do they have the right characteristics to assure that the
strategy with work well? (c) Who should be assigned which types of
tasks?

2. by developing appropriate leadership styles and climates: It is a crucial

aspect of leadership implementation also. Essentially this aspect of
leadership implementation relates to these questions: (a) Can the strategist
lead the division effectively and relate well to peers, superiors, and
subordinates with his or her present style? (b) Can the strategist change the
leadership style if that is necessary to make the new strategy work? (c)
Can the strategist develop the right climate and culture for the strategy?

3. by getting involved in career development for future strategists : More

attention is being devoted to the career development of strategists. Several
elements are necessary to effectively plan for executive development: (a)
the types and numbers of executives needed for future strategy must be
anticipated (b) the current talent available must be reviewed (c) promotion
and recruitment schedules should be prepared (d) plans for the
development of individuals for promotion should be made and (e) reward
systems to attract and hold key managers must be established.

Generally it is useful for a firm to reinforce the motivation to achieve

strategic objectives by tying the strategist’s compensation to strategic
achievements. The nature of the incentive compensation used, the timing
of incentive payments, and other dimensions can accomplish this mission.

4. by using organization development techniques to effect changes: The final

aspect of leadership implementation deals with change processes. This is,
if new strategies or policies are being implemented, former policies and
plans, people, and the climate are likely to undergo some sort of change.
Typical reactions include denying, ignoring, accepting, adapting to, and
embracing change. It is up to leaders to see that readiness for change and
commitment to new activities will come about. This is easier said than
done.

To implement change, consultants and managers use a variety of activities

and techniques. These include survey feedbacks, confrontation meetings,
team building, transactional analysis, and various packaged approaches.

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IMPLEMENTING STRATEGY IN INTERNATIONAL SET
T I N G: