GOVT.

COLLEGE UNIVERSITY LAHORE(GCUL)

B.COM SEMESTER 8(|SECTION B)
STRATEGIC MANAGEMENT (MGT-4201)
SYNOPSES CHAPTER 7“IMPLEMENTING STRATEGIES
(Management & Operational Issues)”

_Shift in Responsibility __ Formulation / Implementation. (Ref. page 261 12 Ed.)

_ The management issues of strategy implementation includes the following:
 Establishing the Annual Objectives & Devising policies (Ref. page 262/263/264
12 Ed.)
 Allocating Resources (Ref. page 265 12 Ed.)
 Altering an existing organizational structure (matching structure with strategy)
 Revising Reward & Incentive plans ( linking performance & pay to strategies)
 Minimizing/Managing resistance to change
 Developing a strategy supportive culture
 Adopting production / operation process

Some of the important issues are explained below:

1. MATCHING STRUCTURE WITH STRATEGY: Changes in strategy lead to

changes in organizational structure. Structure should be designed in such a way as
to facilitate implementation of strategies. When a firm changes its strategy, the
existing organizational structure may become inefficient. Changes in strategy can
facilitate strategy implementation efforts, but change in structure can not make a
bad strategy good, to make bad management good or to make bad product sell.
change in strategy requires changes in the way an organization is structured for 2
reasons: Firstly, structure dictates how objectives & policies will be established. e.g.
in a geo. Organization objectives & policies will be expressed in geo. terms.
Objectives & policies will be expressed in product terms in an organization which is
product based. Secondly, structure dictates how resources will be allocated. There
are 7 basic types of Organizational structure: By Function, By Geographic Area, By
product, By Customer, By Process, Matrix Structure & SBU ( Strategic Business
Unit)
** SBU Structure Groups similar Divisions in to Strategic Business Units &
delegates authorities and responsibilities for each unit to a Sr. Executive who
reports directly to the CEO. This change in strategy can facilitate strategy
implementation by improving co ordination b/w. similar divisions and channeling
accountability to distinct business unit.

2. LINKING PERFORMANCE & PAY TO STRATEGIES: a combination of

reward strategy incentives, such as salary rises, stock options, fringe benefits,
promotions, praise, recognition, criticism, fear, increased job autonomy and rewards
cab be used to encourage managers and employees to push hard for successful
strategic implementation.
 3. MANAGING/MANAGING RESISTANCE TO CHANGE: resistance to change
cab be considered greatest threat to successful strategy implementation. People
often resist strategy implementation b/c. they do not understand what is happening
or why changes are taking place. 3 Approaches for implementing changes: the 3
commonly used strategies are: Force change Strategy: giving orders & enforcing
those orders. Educative change strategy: presenting information to convince
people of need of change. Rational or Self interest change strategy: convincing
people that change is to their personal advantage.

4. CREATING/DEVELOPING A STRATEGY SUPPORTIVE CULTURE:

“Changing a firm/s culture to fit a new strategy is usually more effective than
changing a strategy to fit an existing culture.” Numerous Techniques are
available to alter an organizational culture including: Recruitment, promotion,
transfer, restructure of an organizational design, role modeling and positive
reinforcement.
5. PRODUCTION/OPERATION CONCERNS WHEN IMPLIMENTING
STRATEGY: A major part of the strategy implementation process takes place at
the production which constitute more than 70% of a firm’s total assets. The
following production- related decisions have great impact on the success or failure
of strategy implementation efforts: plant size, plant location, product design, choice
of equipment, kind of tooling, size of inventory, inventory control, quality control,
cost control, use of standards, job specification, employees training, Equipment &
resource utilization shipping and packaging technological innovation.

Note: some other managerial issues of strategy implementation include managing

conflicts, restructuring, reengineering, and managing natural environment and many
HRM concerns