xaTURE OF STRATEGY IMPLEMENTA Tigy “Gating Sateies 313 + mplementation concerns the mana sat) "plan devised by the organisatio, ‘pe ategies, by themselves, do not lead Berial exercise mn Peeeoses the manner in wie to action. Th, . They are, ina Ategies, therefore, have te Of utting a freshly chose "n strategy into place.’? the strategies could be sted belo Mey iplementation. W 1 orientation The essential nature of st * alementation involves putting the formulate tional process of practice. « Comprehensive in 00s a different aspects involved in strategy implementation cover practically everything that is included in the discipline of management studies. As we will observe in tis and the chapters that follow, strategy implementation traverses a wide range of functions and activites. In fact, youcan think of anything that involves managerial action and that wll be apart of strategy implementa. tion. A marketing manager may develop the marketing budget, allocate sales to sales territories, launch anadvertising campaign or initiate a market research project. All these activities are a part ofthe strategy implementation process. Similarly, various other activities such as establishing cost control procedures, setting operations schedules, designing training programmes or altering the organisation’s information system are al strategy implementation activities. + Demanding varied skills Since strategy implementation involves a wide range of activities, a strategist has to bring to his or her task, a wide range of knowledge, skills, attitudes and abilities. ‘The implemen- tation tasks put to test the strategists’ abilities, for instance, to allocate resources, design structures and ‘ystems, formulate functional policies, take into — the leadership styles required and plan operational effectiveness, besides dealing with various other issues. ieee * Wide-ranging involvement As opposed to strategy formation, stich i Deel sagen "syonsbliy, strategy implementation necessitates the svotvemen’ of middle it ina 22s thatthe strategic plan has to be properly communi “stefore they can play an effective roe in strategy implementation ies Theyre * Integrated process The various tasks in strategy implemen er. Each task or activity i to act in a holistic manne Ftd i a a aid network, the hub of which has to be the 001 ; i‘ Jy on teamed is related to another, creating an inition proces is moving forward simultaneously ategic plan. The implement flow of the strategy , s, Observe how ral f cents its strategies. Het lokat rowan negrt txt en ert Noman ihe soit 10-1 to Tearn how ft egies into action, ga ‘We will shorly return to this network “voltae there translates Stat ges, We s Were ®: Programmes and projec : on, “lero the barriers to strategy implementatl Limited val Enterprise 104 Strategy implementation at Nahar Industrial vated tote mares COVeITG te ee . ically-intea! vaymade garmer — toy Maing from spinning, weaving Ree based at Ludhian® wal family group companies: covering value chain—— tt = \, of steal, oils and soaps and integrated forward into retailing gy through integration, added focus on internationalisation 314 Strategic Management and Business Policy of textiles and divested its non-related businesses i 7 trate ‘All this required embarking on 2” ‘expansion st 1 ete related field of toxtle e-commerce: plementing an expansion pian envisaging 2 en ‘and future diversification it a NEL ISI into action, For puting integration ts nes such as augmenting production capacity and i 00 crore. This plan has various program oe ae re rontise cutlets for its Cotton County randed garments. The finance for putting strategies eS and through term loans, reign CUrency ‘onvertible bonds and internal accruals ‘Apart of strategy implementation at NEL requires the overhaul of varios functional strategies. For instance, the tunctional strategy of marketing Invoke ‘geographical expansion into Southern India where the group is ‘boosting its presence, as well 8 geographical extension DY MONG from its mainly small-town presence to bigger aiis, Market development invoWves weoking opportunities in apparels for WOMEN and children from its present focus on menswear, while product erelopment seeks to expand the range Om garments to undergar- rents. Another functional area of information ‘ranagement got a boost with the implementation of an enterprise resource planning project. Wee not ae i all of NIEL's plans, programmes and projects have gone ahead smoothly. For instance, it had to shelve an expansion project at Raisen, Madhya ragosh as it did nat get the land allotted by the State govern: ment. Sources: business, focus on textiles, The Economic Th rarer Oct 8, 2006; “Nahar rtal pump in Rs. 430 crore Th Nahar plans Rs. 800 crore expansion”, The Financial Express, 20 May, 2006; "Nahar to exit nor-co® imes, Aug 8, 2006; "Nahar weaves Rs. 814 crore spread”, Business 1@ Economic Times, Sept 13, 2007. 10.2 BARRIERS TO STRATEGY IMPLEMENTATION In wategy literature, we often come across statements like it’s much more difficult to implement a ste than to formulate i’ or “a good enough strategy, implemented well is better than an excellent stratezy i ‘mented awfully’. Itis indeed true that doing is more difficult than thinking about doing. Strategies often| not because they were not formulated well, but for the reason that they were not implemented effectively Research studies: report that strategists often find that strategy implementation is ‘much more | ifficultit seeay Semele Strategists have developed skills to formulate strategies well but when it coms” Ee ne ee oa ao bbe desired. For instance, a consulting agency’s report conclude SE Se al es Le deploy their strategies effectively. A study in the Indian context or ee and around Delhi, atempied to uncover the reasons . eee eet tasdequte management ils, sy Ted 1 most rue reasons oF Scaitckd eapeneermonizenal ‘comprehension of roles, inadequate leadership Hrebiniak points some general, overarching is oP he sacl al ea ‘ing issues that im ng gers are offer pede strate; yn. AMON yetbeing done by two different grou plementation; formulation and implementation being iM" fc, son, pting pressure onthe Turoups of managers; typically, implementation aking Tonges tan within an organisatic show results; i yore Ps wihinan organisation than des formation Vie mar oxid 5 ‘ ‘ : a ‘An inability to manage change empirical findings listed the Poor or vague strategy fot having guidelines or a model t © Poor or i 0 guide i inadequate information chan mPlementation efforts aring »ie —— Se, Activating Strategies 315 «s Unclear responsibility and accountability § Working against the organisational power structure ‘Although there could be several ways to improve upon the implementation process in the light of the shortcomings we noted above, the means to overcome the barriers to strategy implementation usually revolve round the following two main suggestions ‘e Adopting a clear model of strategy implementation Often, implementation activities take place accord- {ng to the abilities and initiatives of the managers involved in them. Even though it being a process, implementation moves in fits and starts. This uneven progress of the process does not do much good for the effectiveness of the implementation efforts. Again, managers often do things which they consider to be important; they do not do things which are important enough to be done. This results in a lot of confusion and uncoordinated actions. What is required is a clear model of the strategy implementation cocess that can provide unambiguous guidelines to the managers implementing the strategy. Such a model should lay down the elements, or at least the major themes, of the implementation process so that there is a high level of understanding about how the process has to proceed. At the same time, there needs to be a comprehension of how the various elements or themes are interconnected. «Effective management of change in complex situations Implementation almost always creates the need to manage change in complex organisational contexts. Many of these areas of change are behavioural in nature and are therefore, multifaceted and messy in nature. For instance, leadership style changes re- quired to implement different kinds of strategies or the cultural changes to be brought about to facilitate new strategy implementation are intricate matters that call for careful handling. No wonder, managers often fail to manage these complex organisational issues satisfactorily, creating conditions for a sub- optimal implementation of strategies. Our effort in the remaining part of this book would be to focus on these issues. First, we would be describ- ing a clear process of implementation, highlighting the major themes that dominate the process. This would be done in this chapter. Secondly, we would be devoting considerable space to the discussion of complex issues requiring management of change. These issues would be the subject matter of the chapters that will follow. 10.3 INTERRELATIONSHIP OF FORMULATION AND IMPLEMENTATION of the major themes in implementing strategies, it is important to consider mentation of strategies. mnagement 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, as shown in Exhibit 10.2. The forward linkages deal with the impact of the formulation on implementation, while the backward linkages are con- cemed with the impact in the opposite direction. The forward linkage is stronger and is therefore, shown in a bigger-sized arrow as compared to the backward linkage Before we move to an examination the interrelationship of the formulation and impler Itis to be noted that the division of strategic may Exhibit 10.2 Two-way linkage between formulation and implementation of strategy ‘STRATEGY FORMULATION STRATEGY IMPLEMENTATION (THOUGHT) (ACTION)-— 316. Strategic Management and Business POY a ae siarting with the various constituents of stay in ‘ion, ‘The differeiPelements in strategy formula epi alternatives, strategic analysis and hg raisal, st tt ronmental and organisational app! t SoS : roa eran, determine the course that. a organisation adopt fo self. With tna eeecen or reformulation reading to modified strategies: many changes ected vi cha i i ve has to undergo a change in the light of the eqs. For instance, the organisational strve esofthe nodified of new strategy: The style of leadership has to be ape tobe formulation of gies, A whole lot ofchanges have be undertaken in operationalising *he co stale Cleat Strategies formulated provide the direction for implementation. In this Ways lation of strategies forward linkages with their implementation. Backward Linkages Just as implementation is determined by the formulation ofstrategies, the formulation process sasoatie: by factors related with implementation, Recall that in the previous chapter, while dealing with stag hoice, we observed that past strategic actions also determine the choice of strategy. Organisations ted sdopt those statepies which can be implemented with the help of the present structure of resources, bined with some additional efforts. Such ineremental changes, over 2 period of time, take the organistin from where it is to where it wishes to be. roars noted that while strategy formulation is primarily an entrepreneurial activity based onstrag dechiommaking the implementation of strategy is mainly an administrative task, based on svat asd se operational decision-making, Looked at from another angle, formulation is @ ‘managerial task rey ‘abyss and thinking, while implementation primarily rests on action and doing. ‘The two-way linkage between strategy formulation and implementation is brought to the fore: quite welt a clase anicle by Henry Mintzberg. He suggested that the strategies that are formulated do su'# implemented in the intended way. Rather, implementation faces unforeseen circumstances SO that, in pach strategists have to manoeuvre around the emerging circumstances, dropping some of the parts of the in strategy that is the unrealised strategy and adding some other elements that are the emergent sie Ultimately, what is implemented is the realised strategy.* The way how this happens is shown in Exhibit! In order to understand Mintzberg's thoughts, imagine that there is a company P that started with strategy of related diversification through forward integrati Petes a isi" Be el cnay Wine Uacdialy down lacie cae Its strategic plan envisaged the eat that company owing to exorbitant price demand: ai lementing its strategy it found that it could mi new factory. In this manner, the company a revision of the strategic plan was made te ‘company (unrealised strategy), established a ne me an intended strategy, could not acquit sttegy of unrelated diversification through forward integton Wectanh troy and achieved iy Not many of the assumptions made durin; rd integration, Real-life business situali™s yf strategy formulation turn out to be true. Thet® # revisions of the strategic plan, Over ; . Overall, the end i the circumstances, toward i See a : se : 5 the pee de a e ahead, surmounting the ot e Formulation and impl smusted ditection, so jective Oe ‘ip. ive | Bae ear mains forward and backward linkage: ee ee aon an i eae! nection, the nates a linkages between formulation 2 ot sumstances. Which keeps changing according * aActivating Strategies 317 Exhibit 10.3 Mintzberg’s conception of the types of strategy Formulated strategy Implemented strategy Intended strategy Realised strategy Deliberate strategy / Emergent | strategy ‘Source: Based on H. Mintzberg, "Patter in strategy formation’, Management Science, May 1978, 24, 9, p. 945. ‘The next section focuses on the major themes in the implementation of strategies, 10.4 AMODEL OF STRATEGY IMPLEMENTATION __ Exhibit 10.4 presents a model of strategy implementation that attempts to capture the major themes in strat- egy implementation and the activities that make up each theme. The forward linkage from strategic plan guides the implementation process and connects it to the preceding phase of strategy formulation. The feed- back flowing in reverse from the following step of strategy evaluation and control moves through the imple- mentation phase and goes back to strategy formulation establishing the backward linkage. 8 Exhibit 10.4 A model of strategy implementation MANAGING ACHIEVING Sraarecies Chance ePPECTIVENESS o pRovEGT IMPLEMENTATION as PROCEDURAL IMPLEMENTATION RESOURCE 7" pete FUNCTIONAL, IMPLEMENTATION ‘STRUCTURAL IMPLEMENTATION Pawo LEADERSHIP EVALUATION ® IMPLEMENTATION CONTROL BEHAVIOURAL OPERATIONAL IMPLEMENTATION IMPLEMENTATION f ary 322 Strategic Management and Business Policy There are four models of organisational effectiveness: the goal model, resource-based model, inter, Process model and the conflicting values model. The goal model suggests measuring how well the ors tion achieves its goals. The resource-based model lays emphasis on the ability of the organisation g.gn resources. The internal process model focuses onthe internal activities ofan organisation to assess hoy ya they are working. The conflicting values model is an integrative framework that attempts to conso}, different viewpoints and suggests that organisations do many things and have many outcomes, s diya indicators of performance should be used simultaneously.” : e The measures of organisational effectiveness depend on which model is used. Common measures inj 0al model of organisational effectiveness include profitability growth, marketshare, quality andefceny The resource-based mode! may use measures such as the ability of the organisation to obtain finance ‘materials, human resources, information and other resources. The internal process model may employ indog ‘ors of internal health and efficiency such as the quality of corporate culture, organisational climate, tea work and communication. The conflicting values model relies on the use of a wide variety of measure, broadly placed under organisational focus, which is whether dominant values within organisation concen ‘issues that are external or internal to the organisational and organisation structure which pertains tothe extey of stability versus flexibility The methods of achieving and the means to improve organisational effectiveness cover a wide anay of managerial activities. These include, for instance, financial management, marketing management, operations management, human resource management and information management. You are well aware of several qf these activities covered in various courses that you study in your management education programme. For the Purpose of orderly discussion, we have identified two activity areas of functional and operational implemen tation—the battleground where organisational effectiveness is sought to be achieved—that we will discuss in Chapter 14. Tet us get back to the start of the strategy implementation process and focus on the first step of project implementation for activating strategies. 10.5 PROJECT IMPLEMENTATION As markets get more competitive, senior managers are realising that to get the strategy implemented, they need to make sure that the right projects get done on time, within budget provisions and to specifications. Projects are not something that are an appendage to strategy implementation but need to be a significant pat ofthe overall strategy, supported by the right approach, processes and tools and techniques, AS we mentioned earlier, strategies lead to plans, programmes and projects. A projec is the basic ui! wes beamme: A programme is a portfolio of projects that may be interrelated and interdependent in complet ways. Several programmes are required to implement a plan. A number of plans are involved in implement ig a strategy. At any given time, in an organisation, there might be several Projects underway: facto’ capansion, machines installation, product development, business process outsourcing, business software velopment, website development, employee empowerment and so on, Knowledge related to project formulation, implementation and evaluation is covered under the disciple of project management. The disci at ipline of project management has grown tremendously over the yeats has developed professional standards and a body of knowledge of its own. Yet, it is still widely pereeiv@4” bea technical function, dealing with typical 'y large-scale construction projects. As a result, proje 7 r 'ge-scale construction projects. ReActivating Strategies 323 is project management. Projects and Project Management A widely accepted definition of project and of project man Institute of the U.S. It defines a project as ‘a temporary end to which project management can be applied, regardless ofthe project’s size budget or timeline." Project management is “the application of knowledge, skills, tools and techniques to a broad range of ativitis in order to meet the requrements of a particular project.”"' Of significance is the fact, that a project is defined asa lemporary endeavour irrespective of how big itis, how much money is spent and what time is required So long as it is undertaken to achieve a special purpose, it is a project nevertheless, Project management is generally thought of as comprising of five sequential processes as listed below: ¢ Initiating Projects are initiated as a part of a programme used to execute a plan to implement strategies. * Planning A project plan document is prepared, providing details of identification of activities, sequence of activities, cost estimates, time schedules, resource requirements and risk assessment. A formal plan document may also be necessary in case itis required for submission to financial institutions for funding purpose, # Executing The major part of project management where the activities identified in the project plan, are put into action. ‘© Controlling Keeping track of the execution process through controls exercised on cost, time, resource utilisation and risk. © Closing The formal end of the project involving an administrative closure and handing over to the opera tive personnel. Itis to be noted that the above processes in project management are more relevant to new sets of activities that are performed to implement expansion and diversification strategies. But for other minor projects, like relocation of facilities, modernisation or improvement of technology, a similar, though less detailed process may be followed. widest desire ith to ‘According tothe Project Management Institute, there are nine knowledge areas that deal wit the manage ment expertise required for project management. These nine knowledge areas are: project integration, projec 5 fi lity, project human resources, project communications, project Scope, project time, project cost, project quality, Prod he wide variety of skills and expertise required risk management and project procurement. We may note here the wide variety to implement a project. trategy Implementation bay nna ae that organisations formulate and implement business strate- ‘vehicles to implement strategies. Project management is com- sae '. In such situations, organisations need to ensure that h jgnment of project management and the objectives sought to be ‘agement is provided by the Project Management leavour undertaken to achieve a particular aim and Contemporary management literatur tis and in doing so, project ae chosen as veils monly considered as an important business proc Projects are executed fully i tine with the strategies iy eee a aie ness strategy helps organisations to focus on the right P! . achieved, |? i Project management is the key enabler of strategy imPCt Presents a schematic representation of how strategy imP Jementation within organisations. Exhibit 10.6 ation might be done through project manage- project (0 demonstrate the manner in which widing a set of clear projett targets to be ks for other projects that may be a part of a 1e project by pro ‘arrangement worl Sttategy implementation could help initiate th lieved. It must be remembered that a similarVv Ea in cc fe Sa Cr Ga 6K % ay \ "i 324. Strategic Management and Business Policy ceeding step of strategic evaluation and control woulg providing a set of control measures. These contol me! ich project effectiveness would be assessed. = programme under the strategic plan. The suce the controlling stage of the project process by are the performance criteria on the basis of whi Exhibit 10.6 Strategy implementation through project management STRATEGIC MANAGEMENT PROCESS eee ‘STRATEGY EVALUATION STRATEGY IMPLEMENTATION AND CONTROL PROJECT OBJECTIVES | INITIATING || PLANNING >} EXECUTING f+} CONTROLLING |> CLOSING Lie nts wine op PROJECT MANAGEMENT PROCESS The linking of the project management process with strategy implementation helps in creating # pris oriented organisation. Creating such a linkage may however, pose a complex organisational challeng® ‘managers as this requires a high level of coordination. But once achieved, the significance of project mat” ment changes; project management merges more and more with the strategy implementation frame" Overall, this exercise could enhance the ability of the organisation for successful project mansee™ thereby augmenting the effectiveness of the strategy implementation process," Read Exhibit 10.7 to learn about a company that launched an IT project in line with its busi Note how the company adopts a structured approach to project management in line wi strategies. iness tae sth its bosie® Exhibit 10.7 IT project implementation at Madura Garments Madura Garments, a unit of Aditya Birla Nuvo, is one of the leading and fastest growing branded apparel om nies nthe county tht owns intemaona brands ke Allen Soly, Louis Phiipe, Peter England a= a8 ive chain of stores selling products of German fashion major, Espirt. The o™ ea jor, Espirit. The supoiies to rtomational brands ke Marks & Spencer's, Tommy Hilfiger Polo and Ralph aun. oe Bcvantage of he opportunites inthe growing Indian etal industry, the corgpany pans to laure TAY Bite grocn's magtom product to lifestyle and enter into bigger retaling formats from wholes gf or AN Bit group's indian Rayon acquired Madura Garments from Coats Vvela ofthe U.K a 1990. an corpo brea arin sastaen Arve established as a major textile producer, AV- Bite a” into the premium menswear m: ed Its Pre menswear segment by the late 1990s, Madura Garments See nee tad ant eaateeetd =2ane sa°er zS34 SS “Se. ee Activating Strategies 325 market. A formal, structured approach was adoy ii m fast, flexible, integrated, robust and effcont, The Boer ae a business processes, The IT system installed was Arne ares ie only the area of IT systems but also the rigorous selection process. The project resources included tinct I eanhonumareaticoneny 1al team members and technical per: from the company and the external consultants. The project scope covered th ae design studio and the factories connected to the SAP server at the heed, office oma Naar ao Rows pee fibre optic cables. The schedule of the project was about a year from August 1, 2001 through July 7, The project was implemented within the time schedule and achieved its objectives of providing a transparent Information system in real-time, ensuring a tighter and more integrated environment. It helped to reduce re- “sponse time to both internal and external customers, boosting the company’s capability to react in a timely fashion to the dynamic apparel market in India. Sources: M. Bhatnagar, “Indian Rayon pockets Madura Garments”, Dec 21, 1999, http:/www.domain-b.com/ ~ companies/companies_vindian_rayon/19991223indian_rayon_madure. html, Retrieved Sept. 21, 2007; "Madura Garments: Weaving a success story with tech”, Aug 20, 2004 http://smbzone. .indiatimes.com/articleshow/ "866565.cms, Retrieved Sept. 21, 2007; “McKinsey to shape up Birlas' retail plans", The Economic Times Aug 29, |-2006; T. Deshpande & G. Seshan, “Madura Garments plans brand extension’, Business Standard, Sept 21, Most internal projects of a functional and operational nature, implemented by Indian companies, may not require any external intervention, except perhaps advice and support solicited from management and techn- cal consultants. But bigger projects like creating anew company, setting upa factory or entering into foreign collaboration, necessitate interacting with the regulatory authorities of the government, requiring many pro- cedural formalities to be dealt with. The next topic of our discussion would be procedural implementation. 10.6 PROCEDURAL IMPLEMENTATION Regulation i a fact of life for businesses and indu atl within whic any inde or HST are egution ound te wv fen for products and services, if jeties and governments respond to them. For replaced wi snallenges arise and societ en ae Smit ewer ones as mye ¢ bs protection led to the Kyoto Protocol, requiring ee. ie ey 7 Tele for cont for envio Faion of carbon dioxide and the need for ed Se eth ts in eee veut Fon control. Italso led to the creation & ‘anew 1 increased cost of emissi . i its from benign ones. ‘edits where more prolific polluters can buy carbon credits lation, that is intended to loosen the perates and let the market forces determine supply and stries, Despite deregul:326 Strategic Management and Business Policy “Forcompanesinmany nations, regulatory policy inreasingly shapes he Stuctre and cond Tiny, tries and sets in motion major shifts in economic value... The far-reaching impact of regulation mean for companies to maximise their long-term value, they must link up their Tegulatory strategies yi Product, business unit and corporate strategies.”!* There are controversies galore on Suestion gy whether or not regulation needs tobe there and if regulation is needed, then how much ofits nese . self regulation better than imposed regulation and so on. Many industrialists and managers consije tion as a necessary evil, to be tolerated somehow. They have a point as regulation does add tg and corruption. For organisations, there are costs of compliance with regulation and usually highe, a non-compliance too. Yet, regulation is necessary as businesses and industries have to operate Within bg limits set by the society. Regulation isa sort of contract between the business and society. We yi ak Pragmatic view here and consider regulation as.a given factor in the business environment that ANY organi, tion has to respond to, Note that we consider the regulatory environment as a part ofthe business environney in Section 3,2. incising Regulatory Mechanisms in india Any organisation which is planning to implement strategies must be aware of the procedural framevon within which the plans, programmes and projects have to be approved by the government at the central, sp and local levels. The procedural framework consists ofa number of legislative enactments and administatvg orders besides policy guidelines issued by different levels ofthe government from time to time sine regulatory mechanisms for trade, commerce and industry in India span a wide legel framework co sisting ofthe Constitution of India, the Directive Principles, central laws, state laws, general laws, sect repli laws and industry-specific laws and the rules and procedures preseribed by the ‘implementing authorities at various leveis of the government. Following the procedures laid down for Project implementation constitutes an important component of strategy implementation in the Indian c ‘ontext. The Government has an elaborate set of procedures depending rst ed onthe prevailing proeaie rules and regulations and proce where India is fast adapting to the im"‘Activating Strategies 327 | ratory elements t be reviewed are as below sen a pensing rOCeSUTES i 9, Liensing Td Exchange Board of India (SEBD requirements ‘ and Restrictive Trade Practices (MRTP) requirements & foreign collaboration procedures import and export requirements 6 Paentng and rade marks requirements | §, Labour legislation requirements $, Environmental protection and pollution control requirements ‘0. Consumer Pr 1, Incentives an tion of Company The formation of a company is governed 6 and consists of promotion, registration and floatation. Prom se of registration and floatation, Registration involves registering the memorandum of the oe ociation and the agreements with the Registrar of Companies who issues a certificate Formation of non-profit organi- ind Multi-State ‘ tection requirements iL d facilities benefits. by the provisions of the Companies Act, 195 ‘otion denotes the preliminary steps taken forthe purpos company, articles 0 sfieeorporaton. Floatation means raising the capital to commence business ‘ations may be-done under the Societies Registration Act, 1860, Indian Trusts Act, 1882 at Cooperative Societies Act, 2002. Corporate strategies such as integration and diversification may lead an organisation to form a separate company to expand or enter a new business. In such a situation, it becomes important for the organisation to plan forthe procedural implementation for the creation of a new comply, This may involve several steps fuch as obtaining clearance for the name of the company, drawing up the articles and memorandum of asso- ciation and creating a board of directors. There are important strategic management tasks to be done. For instance, the setting of the vision and mission needs to be accomplished at this stage, to guide the writing of tticléecnd memorandum of association. Corporate governance mechanisms need {0 be set for the effective working of the board. Licensing Procedures The system of planning (or plat mens consisting of the Industrial Policy Resolution, 1956, Act, 1951 and the Statements of 1978, 1980, 1982 and 1991. Act 1951 provided fora licensing system for the development and regulation of scheduled industries—those inusties listed in the Schedule of the Act. A license is a written permiss'0™ from the Government to an ‘Industrial undertaking to manufacture specified articles included in the Schedule, The licensing procedure aires the applicant to approach the Secretariat for Industrial Assistance (SIA), which is a common secre- aan receiving and processing all types of applications related to medium- and large-sized industrial One ofthe significant liberalisation measures has been to abolish industrial licensing, irrespective of the *l of investment, for all industries except a few. ‘These latter industries relate to security, defence or ronmental and ecith ecreemns or those that require setting up of production units in restricted urban ‘ or manufacturing of items reserved for the ‘small scale sector. All other projects not requiring a aa have to submit an Industrial Entrepreneur Memoranda. : © viewpoint of procedural implementation, the strategic tasks required for licensing are few and Moet not take a strategic direction that may involve getting ‘then the organisation should have a contingency plan for mnned development) rests on three policy docu- the Industries (Development and Regulation ) ‘The Industries (Development and Regulation) int ft ‘ature of seeing that the organisation ofllicensing. If that becomes necessary, delays in proj lays in project implementation.330 Strategic Management and Business Policy adapting its laws related to patents and trade my with the international requirements. The Indian Patents Act, 1970 governs patenting in India ang gh "te amended in the form of the Indian Patents (Amendment) Act, 2005. The Patent Rules are nog: government from time to time to facilitate the process of filing patents. The Copyrights Ac, ra) amendments to the Act in 1994, relates to copyrights. These Acts define the terms, prescribe the pr, a) for registration and mention the rights and duties of the entities holding the patents, trade marks mt rights. The Trade Marks Act, 1999, enforced in 2003, for bringing Indian law on par with nen standards, replaced the Trade and Merchandise Marks Act, 1958 that provided for the registration ay protection of trade marks and for the prevention of the use of fraudulent marks on merchandise, Th marks laws are typically not concerned with inventions or creations but aim to protect the goog reputation of corporate or business entities, especially their brands. ‘The increasing competitiveness in the business environment has meant that it has become nevesay, know the rights and privileges in relation to and the legal procedures for protecting products and ify Familiarity with the law relating to these issues has, therefore, become essential for strategy implemenig ‘These laws are of special significance to industries such as chemicals, computer software, entersitms, food and pharmaceuticals where patents may often be a major competitive tool. Within organisation ty can havea significant impact on the formulation and implementation of functional policies related torewat and development and innovation. India has been in the long-drawn process of Labour Legislation Requirements An essential part of procedural implementation in any pice well as ina going concern is that of labour legislation. On the part of companies, labour constiutesasiit cant resource as well as cost for the purposes of strategy implementation. For the government, the pot of labour interest has long been held to be a major responsibility of the State. Labour legislation consists of over 150 laws related to different aspects. A classification of these las below: 1. Labour laws related to the weaker sections such as women and children 2. Labour laws related to specific industries such as mines and minerals, plantation, transport, com? contract labour, etc. 3. Labour laws related to specific matters such as wages, social security, bonus, etc. 4, Labour laws related to trade unions, industrial relations and workers’ participation in me According to the Indian Constitution, labour is a common subject among the central and the sa ments. While the central government enacts, amends and repeals most of the legislation, the mai" trative authority to adopt and implement the laws rests with the state governments. Besides the 2” state ministries of labour, there are a host of commissions, standing committees, statutory age" courts and tribunals, boards, ec. to implement the labour legislation, vel ‘The current scenario is characterised by several significant developments. Among them "2 oy framing of legislation for the employment and social welfare of unor; anised labour that consti so ity of workers, emergence of a progressive human resource developement environment and a 70°04 and educated working class, waning influence of trade unionism, hesitant attempts at form of policy for workers, implementation of voluntary retirement or polden handshake cchemes se gradual introduction of part-time employment, outsourvine stone ro al introduction of perf 1 1g of parts of operations to extem’ a performance-related compensation and such other devel ts, Strategy i needs to take all these developments into account. The matter cfrenccnecrrnetementation ey legislation has significant bearing on the implementeren no Procedural implemen ctive plementation of strategies in the areas of object net gic choice, social responsibility, formulation : + and implement ana and various operational strategies, implementation of human resource ™ nagecies ation in uct ri is verti BP atone! iss NN Activating Strategies 331 ourees such soil and natural gos are ora ; Mls are cited as major fy dation. The Indian public awarene, ened ain to envin at 1 M1 Gan Tats 80 heightoned considers pan die centoe eee - Partly due to controversies regarding disnsters such as the Bhopal Gas Trage ; las Tragedy of 1984 a dm projects and the relocation of potting in at ‘ore recently, the Sardar Sarovar and Narmade Sagar : al units outside th ikea . we le urban periph as cific ev ; el ca degradation works like a silent killer in so many anja ne aang pollution, desertification, droughts, earthquakes floods, forest fires, gas leaky. if soils iad Suiiaienes ; ’ vater voluntary action, ‘There are a host of Central and State laws deatine ws i : neal pein Sa athe a a ene lon os {Prevention and Control of Pollution) Act, 1974 amended 1986; no ‘Ai Qreveatiou and Comtaine bee tion) Act, 1981 amended 1987; the Wild Life (Protection) Amendment Act, 200: Act, 1980 amended 1988 and the Biological Dive down under rules such as the Hazardous Wastes (Management and Handling) Rules, 2003, The Manufacture, Storage and Import of Hazardous Chemicals Rules, 2000, The Ozone Depleting Substances (Regulation and Control) Rules, 2000 and the Noise Pollution (Regulation and Control) Rules, 2000.!° The apex-level body for matters related to environment is the Ministry of Environment and Forests that deals with the implementation of policies and programmes relating o the conservation ofthe country’s natu- tal resources. The major responsibilty to deal with environmental issues lies with the State Pollution Conca] Boards. The boards implement the pollution control laws. Any new project has to seek ano-objection ceria, cate from the board, which then regulates and monitors the emission and discharge of hazardous wastes, Such monitoring takes place on the basis of standards including ambient air quality standards for discharge of effluents and emission of smoke and vapour and noise. : Several issues of importance in strategic management are concerned with environmental Protection and Pollution control. Some of the major ones are the designing of vision and mission statements, objective- Setting and constraints of objective achievement, environmental appraisal, corporate satgis of expansion and corporate governance and social eee palices # Prehes aoleea ee pleat ; ie Significant i i tection as their . : : ; 1 dures laid down for environmental protection and pollution contro i as: f strategy implementation, companies are incres Consumer Prot Requirements \nthe course o fact that “consumer ina rq conor lave ens prot crime. The eft it ‘ene Bottini an aoepted tenn, denotes that her is ppetesin ta consumer. ny Be es el is ies and they need to be protect erative that companies ethical and unfair ats of companies ed with growing competion, makes it imperative thet omnis confer consent Sista the law regarding consumer protection. Besides ; form to the procedures laid down i friendly organisatior : socal requirement of being perceived 85 8 ee Peper of Conse: Ai uni eat on ; ies for cons the ng aPEX level institution for overseas rie forthe formulation of polices fr consumer * Ministry of Food and Consume ATES. ie a ease erent in tec Tatives, monitoring prices and availability dian Standards (BIS) and Weights and Measures - wu of Inc "Yand controlling of statutory bodies like the Burem332. Strategic Management and Business Policy a of legislation. Some of these are: the ff Goods Act 1930, the Standard Wei, Act 1999, Sale of strictive Trade Practices Act 1969 and the Industrial py. the central legislation is the Consumer Protection gy \"> n of consumer rights, right to information to Cons : ; lethor In India, consumer protection is ensured through P| a Commodities Act 1955, the Trade Marks Measures Act 1976, the Monopolies and Re: ment and Regulation Act 1951. However, amended in 2002. This Act provides for the protectio | of consumer disputes. ~ Se Comins Perio ‘Act provides for the establishment ofa Central ee Protection Co and State Consumer Protection Council in each state. The Act also provides fora three-tier Consumer gi. putes redressal system at the district, state and the central levels. At the district level, there is Distig, Forum, State Commission at the state level and a National Commission at the central level. These fr gy primarily for the purpose of consumer disputes redressal and remedial action by the companies Consumers or customers constitute a significant aspect in various issues in strategic management, Thy are the subject of the organisation’s vision and mission, objectives are set to satisfy customers and the bus. ness definition is in terms of customer needs and customer groups. Environmental and organisational a praisals give due regard to the customers. Corporate and business strategies are formulated keeping in vey the customers. In this context, creation of customer satisfaction and delight are increasingly being seenasihe central purpose of an organisation. Protecting the rights of customers is in the long-term interest ofthe organisations. The issue of consumer protection is also highlighted in the procedural implementation aie evel of business and operational strategies and in the implementation of functional policies related to oper tions, quality and marketing. Procedures for Availing Benefits from Incentives and Facilities The primary instrument for achiev ing national plan objectives is through regulation. In providing incentives, etc. the government does not ply a regulatory but a promotional role. This role is manifested in various forms. In line with the objectives lié out in the Industrial Policy resolution, the government attempts to achieve employment generation, com tion of regional imbalances, promotion of export-oriented industries and utilisation of installed capaci through higher production levels and productivity. The fiscal, monetary and budgetary policies of the go" ernment are aimed at the stimulation of activity in the priority industrial sectors. Discretionary control oe" ‘money supply and banks and financial institutions’ lending rates are used to affect industrial activity. Bule* pronouncements may result in a reduction of excise duties, corporate and personal taxation rates, etc. Whitt increase the availability of finance for expansion activities, : The policies and schemes for incentives and facilities are dynamic and are introduced, revised and oe regularly to respond to the changing needs and emphases. Some of the major policies and sitet Loans at concessional rate of interest Subsidies in various forms Establishment of special economic zones Tax holidays and tax concessions Single-window clearances for industrial projects The government also plays a promotional role in term: yal s of purchasing, pricing, distribution, availabl? Je . A number of industries are critically deP°""* 9 ‘Supplies and Di: ing age a isposal: urchasing . in the country. In many industries, the critical success factors inclede wn ee tity of vial clude the regular availability of Ws materials in sufficient quantities. Through the provi . \e pro’ skilled manpower, banking and financial seulces Het schtestructural facilis such 8 Pv , Services, public utilities like transPot"" industrial sites and sheds, the government seek: di 7 S to ens| 5 yh dis? aa ‘ure balanced regional development throu!Activating Strategies 333 cial incentives and facilities From the point of view of strategic mana, highly relevant for business organisations. St objective-setting, strategic choice and strate into action, requires a consideration of vari ious incentives, subsidi preneurs to be aware of these so that due a \dvantage can be taken thereof. Procedural Implementation in Action Inthe preceding sub-sections, we have attempted to provide information related to abroad range of elements in the regulatory framework within which Indian organisations have to operate. It is to be observed that the tole of the government is quite comprehensive and affects practically each and every aspect of an organisa. tion's management, especially activities related to strategic management. An important question is how the strategists should react to regulation. Strategists may adopt a submis- sive, confrontational or collaborative stance. They can try to conform to the regulations, confront the regula- ‘ions by informed criticism and lobbying and public relations or work with the government to improve the regulatory framework. At the same time, they can adopt an ‘existentialist’ view and continually look for ‘pportunities within the business environment as such an environment is substantially affected by govern- ment plans, priorities, policies and actions. Regulatory environment, just like other environmental sectors, is dynamic. Governments respond to the developments within and outside the country, to adapt the regulatory framework, to the changing times. This places an additional burden on strategists to not only follow the ‘visting framework but also anticipate the likely future changes and be prepared to deal with them. Several organisations —usually large ones and ironically, even public enterprises—maintain a close as Sn with various governmental agencies in order to get apsrovs at panies aaa fis. This liaison is exercised through formal as well as informal means. 1, a tof New Del andthe Saco npn ares onl ta ts Ee a - sc . vente earn procedura) mates Cov eanslats who can advise them onal the asec of | usually look for industry exp Stablshment of the project and guide them through the maze of govemmental regulations, Most companies 1s nt or contract out the services to chartered accountants, company secretaries, legal experts and lawyer ; ut lisation strategies, they should be ready to operate in, Legal systems, government wuntries. Procedural implementation international : a itries they choose to Plies gy a #°Bulatoryenvironmentin the coun ; oo f Procedures and institutional mechanisms ve across ; ve °°tingy differ according othe national conten spets tat have tobe considered by strategists. Magy°?¥8indicated the major regulatory and promotion iret taxation dealt with by the relevant laws and " Temain, for instance, the matter of direct an i