UNIT-4

Strategy Implementation
Strategy Implementation refers to the execution of the plans and strategies, so as to accomplish the long-
term goals of the organization. It converts the opted strategy into the moves and actions of the
organization to achieve the objectives.Simply put, strategy implementation is the technique through which
the firm develops, utilises and integrates its structure, culture, resources, people and control system to
follow the strategies to have the edge over other competitors in the market.

Strategy Implementation is the fourth stage of the Strategic Management process, the other three being a
determination of strategic mission, vision and objectives, environmental and organisational analysis, and
formulating the strategy. It is followed by Strategic Evaluation and Control.

NATURE OF STRATEGIC IMPLEMENTATION

1) Action oriented
2) Comprehensive scope
3) Demanding varied skill
4) Wide ranging environment
5) Integrated process

Process of Strategy Implementation

1. Building an organization, that possess the capability to put the strategies into action successfully.
2. Supplying resources, in sufficient quantity, to strategy-essential activities.
3. Developing policies which encourage strategy.
4. Such policies and programs are employed which helps in continuous improvement.
5. Combining the reward structure, for achieving the results.
6. Using strategic leadership.

The process of strategy implementation has an important role to play in the company’s success. The
process takes places after environmental scanning, SWOT analyses and ascertaining the strategic issues.

Prerequisites of Strategy Implementation

  Institutionalization of Strategy: First of all the strategy is to be institutionalized, in the sense that
the one who framed it should promote or defend it in front of the members, because it may be
undermined.
 Developing proper organizational climate: Organizational climate implies the components of the
internal environment, that includes the cooperation, development of personnel, the degree of
commitment and determination, efficiency, etc., which converts the purpose into results.
 Formulation of operating plans: Operating plans refers to the action plans, decisions and the
programs, that take place regularly, in different parts of the company. If they are framed to indicate
the proposed strategic results, they assist in attaining the objectives of the organization by
concentrating on the factors which are significant.
 Developing proper organisational structure: Organization structure implies the way in which
different parts of the organisation are linked together. It highlights the relationships between
various designations, positions and roles. To implement a strategy, the structure is to be designed
as per the requirements of the strategy.
 Periodic Review of Strategy: Review of the strategy is to be taken at regular intervals so as to
identify whether the strategy so implemented is relevant to the purpose of the organisation. As the
organization operates in a dynamic environment, which may change anytime, so it is essential to
take a review, to know if it can fulfil the needs of the organization.

Aspects of Strategy Implementation

 Creating budgets which provide sufficient resources to those activities which are relevant to the
strategic success of the business.
 Supplying the organization with skilled and experienced staff.
 Conforming that the policies and procedures of the organisation assist in the successful execution
of the strategies.
 Leading practices are to be employed for carrying out key business functions.
 Setting up an information and communication system, that facilitate the workforce of the
organisation, to perform their roles effectively.
 Developing a favourable work climate and culture, for proper implementation of the strategy.

Issues Of Strategy Implementation

Research suggests that a majority of organizations fail to execute strategy implementation plans. Here are
the various issues of strategy implementation you should be looking out for.

1)Friction is inevitable among team members who have been working together for a long period of time.
You need to have a strong communication strategy in place that’ll facilitate honesty and transparency.
Organize regular team meetings and get everyone on the same page.

2)Once the implementation process begins, employees often struggle to meet the demands. Find the right
training options and encourage your team to upskill or reskill themselves. This further prevents too much
downtime and strengthens employee skills and expertise.

3)One of the most pressing issues of strategy implementation is the inability to follow through. The plan
will take its own time to develop and you need to find ways to check-in and monitor progress.

1)Activity strategy

Activating strategy is the first and foremost phase of an strategy implementation which prepare a ground
for managerial task and activities of strategic implementation.
It consists of three part :-

1)Project implementation-Project Implementation is the last stage before the analysis of the outcome
where all such actions take place.This stage is the most challenging one in terms of implementation, details,
and high team coordination requirements.The Project Implementation phase has two essential functions:
execution of the work and proper delivery. The resources used in the implementation have to be
accurate.Based on the implementation, the project’s fate is decided. The success and effectiveness can
only be known after proper monitoring and feedback. This phase of delivering provides the client with an
outlook of the project.

The key to a successful implementation is proper structuring and coordination at the managerial level. The
primary ingredients that form the base of project implementation are:

Key Ingredients of Successful Project Implementation

For the successful implementation of a project, you need to

1. Execute the planned details into a full-proof action plan

2. Document every little detail in this stage, from decisions to results at every step
3. Have an efficient line of communication in place across the hierarchy
4. Take quick decisions if the need for a change of plan felt instantly.
5. Form a consensus about the changes and implement immediately

A project is managed by following 5 phases :

1) Initiating
2) Planning
3) Executing
4) Controlling
5) Closing

2)Procedural implementation-Procedural Implementation deals with the different aspects of the

regulatory framework that Indian companies have to consider. Any organisation which is planning to
implement strategies must be aware of the regulatory framework within which the plans, programmes ,
and projects have to be approved by the government (central and state).
3)Resource allocation :-Resource allocation is a process which supports the company goals by managing
authorities and assets in a result-driven manner to achieve strategic goals.Optimization of resources is the
latest trend in the world of business today.But, we never really understood what resources they are
optimizing and how they are locating those resources. The allocation of resources is a process of managing
as well as assigning the assets, which supports the organizations’ strategy and goals.

Resource allocation includes various things such as controlling the tangible assets, for example, hardware
which can be used for the human capital.

The process of resource allocation wants a balance between the needs and wants of an organization.
Resource allocation determines the practical course of action so that it can maximize the use of limited
resources. It helps to gain a generous return on the sum of investment.

How does the Resource Allocation work?

Resource allocation is an enormous task, and it needs precise administrative skills for planning and
speculating the best possible way in which the resources could be optimized. People involved in the
project will have to give due importance to the process of allocation.

People and workers are the most crucial resources, which, if managed well, will ensure the success of any
project. They include –writers, editors, user experience designers, traffic managers, directors, accountants,
contract resources, developers, freelancers, testers. These people are crucial in developing and offering
direction to your project in the best possible way. And they are one of the vital areas for resource
investment.

Another essential factor for resource allocation in the context of any project is time. As the project often
requires weeks or months for completion, one needs to make sure the work concludes by the deadlines.

Accomplishing this could be difficult without the adequate allocation of resources. An organization may
require increments to make sure their projects stay on track and to ensure that it completes on time.

Tools, capitals, and equipment are an essential part of any project. Their availability can be planned
skillfully with strategies of resource allocations for project management.

Factors that affect Resource Allocation

1. The changes in the timeline

2. Availability of resources

3. Dependencies of projects

4. Objective of organization

5. Preference of dominent strategy

6. Internal politics
7. External influence

6 Steps of Resource Allocation

1. Divide the Project into Tasks

2. Assign the Resources

3. Determine resource attributes

4. Resource Leveling

5. Re-allocate as necessary

6. Track resource utilization

Resource allocation deals with:-

1) Procurement
2) Commitment and distribution of finance
3) Human resource
4) Information and physical resource to strategic task for the achievement of organizational objective

Difficulties in resource allocation:-

1) Scarcity of resources
2) Restriction on generating resources
3) Over Statement of needs
4) Tendency to imitate competitors

Strategic Budgeting

Strategic Budgeting is a budget prepared by the companies that takes into consideration long term
objectives and costs that take more than one year to achieve. This involves preparing multiple budgets and
forecast for short term costs that are aligned with the long term. And thereafter allocating and categorizing
funds depending on the activities.

 A long-term strategic plan usually spreads out the 5-year plan to set goals. There are annual
operating short-term plans to achieve a long-term goal eventually. Similarly, Strategic Budgeting
manifests the details of the annual plan and allotment of funds to specific areas.
 Spending and the areas have to be in sync. Otherwise, the company might end up spending on
short term projects yielding no results or unaligned with long term goals.
 If the company modifies the long-term strategic plan, then it can accordingly change the strategic
budget to meet the needs.
 It can be very crucial to the company for effective planning and prioritizing. The costs have to be
prioritized to satisfy the stakeholders. Usually, the areas with the highest amount of dollar
allocation come in high priority tasks.
Strategic Budgeting Process

There are four dimensions we need to look for when we are in the process of converting the goals into a
budget. That is, Objectives, Strategies, Measures, and Targets. Let us define these step by step, which helps
in designing the strategic budget.

 Objectives – This defines what exactly we are trying to achieve, which are our goals.
 Strategy – The second step would be to develop a strategy to achieve a set goal.
 Measures – After implementing the strategy, we need to track and evaluate its performance using
relevant standards.
 Target – Finally, the goal is the place where we aim to be by the end of the period.

In the whole process, we need to allocate funds to all the functional departments and help them achieve
their objective to achieve the final target. Significant steps in designing the budget would be as follows –

 Forecast the short-term cost and factorize them in the budget

 Allocate categorized funds depending on the activities
 Make multiple budgets for the short term, which align with the long term ones.

Examples of Strategic Budget

 Product Development – This is the department that works on years of research and development
to design a product and finally launch the product. So having a long term budget in place helps the
product team to allocate their resources wisely.
 Programs – As discussed earlier short-term programs and stepping stone to achieve the long term
goals, a strategic budget plays a vital role here for both. For instance, an aeronautics company takes
ten years to develop a rocket. So in this long tenure, this budget helps them to achieve their end
goal.
 Infrastructure Budgets – These are the projects which can develop a nation, city, or any
organization. If the projects are long term and may take several years to complete, like railways or
national highways, long term budget always helps to function.
 Productivity and Capability – Most of the organizational goals are long term. However, midway, if
there are any process-centric changes like an adaption of new technology, risk management, and
many more, the strategic budget allocates for such needs too.

What Is an Organizational Structure?

An organizational structure is a system that outlines how certain activities are directed in order to achieve
the goals of an organization. These activities can include rules, roles, and responsibilities.

The organizational structure also determines how information flows between levels within the company.
For example, in a centralized structure, decisions flow from the top down, while in a decentralized
structure, decision-making power is distributed among various levels of the organization.

 An organizational structure outlines how certain activities are directed to achieve the goals of an
organization.
 Successful organizational structures define each employee's job and how it fits within the overall
system.
 A centralized structure has a defined chain of command, while decentralized structures give almost
every employee receiving a high level of personal agency.
 Types of organizational structures include functional, divisional, flatarchy, and matrix structures.
  Senior leaders should consider a variety of factors before deciding which type of organization is
best for their business, including the business goals, industry, and culture of the company.

1) functional structure

2) Strategic business unit organizational structure

3) divisional structure
4) Enterpreneurial structure

5) Network organizational structure

Matching Strategy And Structure

There is no one optimal organizational design or structure for a given strategy or type of organization.
What is appropriate for one organization may not be appropriate for a similar firm. The choice of structure
must be determined by the firm's strategy.

Matching Organization Structure To Strategy

All of the basic organizational form have their strategy related strengths and weaknesses, thus the best
organizational arrangement is the one that best fits the firm's situation at the moment.

The following five sequence procedure is a useful guide for fitting structure to strategy:

1. Pinpoint the key functions and tasks necessary for successful strategy execution.
2. Reflect on how strategy critical functions and organizational units relate to those that are routine
and to those that provide staff support.
3. Make strategy critical business units and functions the main organizational building blocks.
4. Determine the degrees of authority needed to manage each organizational unit bearing in mind
both the benefits and costs of decentralized decision making.
5. Provide for coordination among the various organizational units.

Behavioural Issues in Strategy Implementation

Leadership and Power

Directing and staffing

Values and Ethics

Managing change

Managing conflict

Leadership

Leadership success is linked to the ability of a

leader to exercise the right kind of influence at
the right time,

Influence Tactics

Consultation

Persuasion

Inspirational appeal

Coalition

Pressure tactics

Upward appeal
Exchange tactics

Power

Leaders use power to influence and implement

strategy

Types of Power

Formal Power

Legitimate

Reward

Punishment

Coercive

Informal power

Referent

Charisma

Information

Leadership Style and Strategy

Implementation

Growth Strategy with Concentration

Dynamic industry expert

Growth Strategy with Diversification

Analytical portfolio manager

Stability:

Cautious profit planner

Retrenchment to save company

Turnaround specialist

Retrenchment to close company

Professional liquidator

Values
Values represent basic convictions that ‘a
specific mode of conduct or end-state of
existence is personally or socially preferable to
an opposite mode of conduct or end-state of
existence.

We have a hierarchy of values that forms our

value system. This system is identified by the
relative importance we assign to values such
as freedom, pleasure, self-respect, honesty,
obedience, and equality.

Ethics
Study of moral issues and choices

Concerned with right vs. wrong, good vs. bad

Ethics try to set the standard for the ultimate

end or the highest good to be pursued

Normative; judgmental

Unstructured; abstract

corporate culture

Corporate culture is the collection of values, beliefs, ethics and attitudes that characterize an organization
and guide its practices.A corporate culture that reflects the broader culture is usually more successful than
one that is at odds with it. For example, in the current global culture, which values transparency, equality
and communication, a secretive company with a strictly hierarchical structure is likely to have trouble
recruiting and retaining workers and appealing to customers and partners.

Corporate culture is also sometimes considered to be synonymous with workplace culture. However, some
experts classify workplace culture as a separate idea that specifically and narrowly describes the conditions
under which employees conduct their work -- what has come to be referred to, in part, as the employee
experience. According to this view, workplace conditions are shaped by and ultimately reinforce the overall
corporate culture.

Social Responsibility

Social responsibility is also referred to as Business Responsibility, Corporate Responsibility, Business

Citizenship or Community Relations. Social responsibility largely represents the link between a corporation
and the wider society in which the corporation operates. It is acknowledgment on the part of the
commerce that ‘for profit’ entities do not live in a void, and that a large part of any accomplishments they
enjoy is as a direct consequence of the environment in which the entity operates. The social and the
environmental surrounding that a company operates in can determine the level that the company may
succeed in some cases. It is very important for an organization to give back to the society in which it
operates as a sign of appreciation and good will.

Building a Capable Organization

In strategy implementation, a very high priority is given to building a capable organization. Giving top
priority on this issue is justified because successful implementation of strategy depends to a great extent
on a sound organization.And, an organization becomes sound when its employees are competent, its
management structure has matched with its requirements, and it has high competitive capabilities. These
are organization-building actions concerned with effective strategy implementation.

3 Components for Building a Capable Organization are;

1. Developing competent personnel.

2. Competitive organizational capabilities.
3. Dynamic organization structure.
Financial plan & policy:-
Source of fund
Usage of fund
Management of fund

Personnel plan and policy:-

Personnel system
Organizational and employ characteristic
Industrial relation

Marketing Plans and Policies:-

Product
Price
Place
promotion