Business Policy and Strategy

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Strategy Implementation

Module 005
Strategy Implementation

A strategy can be defined in many perspectives but in its simplest form, a

strategy is method of facing competition and these strategies in order to
formalized, must be implemented.

At the end of this module, you will be able to:

1. Understand the meaning of the important terminologies;
2. Identify the strategies of the different functions in the organization;
3. Know the process of strategy implementation.

Strategy Implementation
Strategy implementation is a term used to illustrate the activities within a place of work or
a business organization to manage the activities connected with the implementation of a
strategic plan. This simply means steps in implementing a Strategy.
Strategy implementation is the transformation of chosen strategy that was discussed and
approved by the organization sphere heads and putting it into an actual action so as to
achieve the businesses' strategic goals and objectives.
Strategy implementation is also defined as the manner in which an organization should
develop, utilize, and combine organizational structure, control systems, and culture to
follow strategies that lead to competitive advantage and a internal and external better
performance.
Organizational structure allocates special value developing tasks and roles to the
employees and states how these tasks and roles can be related to maximize efficiency,
quality, and customer satisfaction.
Other than the organizational structure, organizational control system is also necessary.
This control system equips managers with motivational incentives for employees as well as
feedback on employees and organizational performance. Organizational culture refers to
the specialized collection of values, attitudes, norms and beliefs shared by organizational
members and groups.
Excellently formulated strategies will not succeed if they are not properly implemented.
The implementation process is crucial. Strategy implementation may even create threat to
many managers and employees in an organization. New groups of employees or a
department are formed whose values, attitudes, beliefs and concerns may be different.
With the change in power and status roles, the managers and employees may cause
confrontation behavior.

Course Module
Process of Strategy Implementation

Strategy implementation involves the following:

I. Strategy articulation - Building agreement
within the team responsible for delivery of the
strategy about the outcomes to be achieved.
II. Strategy validation - Engaging with
stakeholders and others to confirm strategic
outcomes being pursued are acceptable.
III. Strategy communication - Convert strategic
objectives into clear short-term operating
objectives that can be assigned to groups for
delivery.
IV. Strategy monitoring - Monitor the development
and progress of the organization in delivering
the strategic objectives.
V. Strategy engagement - Managerial interventions
designed to make sure organization successfully
achieves planned and chosen strategic
outcomes.

I. Strategy articulation
The purpose of articulating the strategy is to translate the strategy into a structure
where managers and stakeholders have agreed to achieve.
The strategy articulation describes strategic outcomes to be achieved, preferably
expressed in the form of quantitative or qualitative goals.

II. Strategy validation

Validating the strategy is an important part of the implementation. This validation
can be external or internal validation. When implementing a strategy, the human
aspect also needs to be considered. And an implementation can be done only if every
organizational members are involved.
What is an Internal validation?
Validation of the strategy is needed from within the involving the members
of the organization with coinciding responsibilities. Organizational members
must be aware and will support any goal. The members have key roles in the
implementation and assessment process in the end.
One way the communication can be done, is by cascading down the strategy
into the organization, where the strategic activities and outcomes are broken
down into smaller set of change programs and operational goals specific for
each management teams, with the focus to achieve them in the near term -
combining critical operational outcomes with the most urgently required
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Strategy Implementation

change initiatives. This kind of validation overlaps with strategy

communication activities.

What is an External validation?

It is sometimes necessary to confirm strategic goals with external
stakeholders. In commercial organizations it is common for the achievement
of financial outcomes to be used to guide strategic choices, but this does not
reduce the need for validation with other key stakeholders.

III. Strategy communication

For strategy to be functional, a set of actionable operational steps must be done. The
concrete and clear strategic objectives should be translated into operational
implementation sub-objectives linked to departmental and individual goals and must
be measurable.
The business strategy must be translated into a set of clear short-term operating
objectives, activities and possible outcomes in order to execute the strategy. Key
issues, elements, and needs of strategy must be transform3e into objectives, action
plans.
Developing this set of clear objectives, that relates logically to the strategy and how
the organization plans to compete, is an important aspect of an effective
implementation process. Having a concrete, detailed and comprehensive
implementation plan can have a positive influence on the level of success of an
implementation effort. In addition it helps identify what will be required in terms of
resources, capabilities and time.
Part of this strategy translation is to assign responsibilities in the organization.
• To achieve strategic objectives, the short-term operating objectives need to
be measurable. Performance appraisal and measurement of strategic
progress simply found that strongly committed decision teams lead to more
effective implementation but slows down strategy implementation.
• Implementation should occur incrementally so that organizations are not
overwhelmed by trying to implement too many changes.
• A radical implementation in which large changes are quickly made may not
allow organizations the time to carefully plan and execute successful
reorganizations or to engage organizational member participation and
commitment.
• The pace of the implementation: a slow implementation with small steps
usually has a positive influence on implementation performance. The pace of
the strategy implementation can affect its success.

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 IV. Strategy monitoring
Monitoring or evaluation should begin early on in order to cut an unprofitable
strategy before there will be negative outcome and may cause losses in your
business.
It is important to have a measurement whether it is a small level business.
Monitoring these measures will help the organization members in controlling the
strategy being implemented if successfully or not. Strategy control, in turn, provides
timely and valid feedback about organizational performance so that change and
adjustment become a routine part of the implementation effort. Controls allow for
the revision of execution-related factors if desired goals are not met.

V. Strategy engagement
In order to achieve the goal, there is a need have an agreed mechanism of
intervention to enable the management to efficiently and effectively engage with
their organization to ensure the required actions are being carried out, and where
these actions are not working as expected, to be able to adjust the actions as required
by the situation.
Slow implementation with small steps usually has a positive influence on engaging
the management resulting in a better implementation performance.
Implementation evaluation can have a positive influence on future implementation
performance, increasing engagement using past successes or based on lessons
learned.

Developing Functional Strategies

Functional strategy is the set of strategic initiatives taken in one part or a specific part of a
business. A functional strategy is the short-term game plan for a key functional area within
a company, some others prefer to regard them "as plans, or tactics, for carrying out the
business strategy".
A company needs a functional strategy for every major functional activity. The primary role
of a functional strategy is to support the company's overall business strategy. Functional
strategies help in implementation of grand strategy by organizing and activating specific
sub-units of the company to practice the business strategy in daily business activities.

Functional strategies must be developed in the following areas:

A. Functional Strategies in Marketing
Marketing Strategies
Marketing is described as the process of creating a satisfying consumer needs
and wants through products and services offered.
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Strategy Implementation

The basic function of marketing is provide customer satisfaction;

1. Customer Analysis - For a business to define its target market, it is vital to
analyze the people, economic status, gender and other demographics aspects
to come up with strategies essential in setting up overall company goals,
objectives as well as the mission and vision statement of the business. This
may seem tedious and time consuming but a successful business always
monitors its target market and studies the pattern of its customers.
The functional strategy for the place component identifies where, when, and
by whom the product/services are to be offered for sale. This component of
marketing strategy guides decisions regarding channels to ensure
consistency with the total marketing effort.

2. Selling the products and services - Advertising and promotion are

crucial especially if there are new products. Promotion refers to the methods
which are used to put products and services in the public eye. Functional
strategy for the promotion component should provide marketing managers
with basic guides for the use and mix of advertising, personal selling, sales
promotion, and media selection.
Using the media may be through print ads, television, radio, billboards, flyers,
brochures and others. Nowadays, the internet is a more easy way to do the
advertisements as people are more attuned to social media.
But selling the product does not actually end in the actual purchase of the
product or the availment of services. After the actual purchase, feedback is
very important so as to retail a loyal customer or to attend to complaints and
feedback.
The marketing strategy selected by an organization is also dependent on
whether the organization is attempting to reach new or existing customers
and whether its products or services are new or already exist.
With a marketing penetration strategy, the firm attempts to gain greater
control in a market in which it already has a product or services.

3. Product or service planning - The most common is test marking. This

will help predict future sales of new products and services. Marketer’s role is
to find a location that would best test the product. This will help eliminate
possible losses and product failure.

4. Pricing - There are a lot to consider in pricing. The first and most
important is the capability of the consumers or the target market to buy or
avail the services. However, one of the government's role is to control certain
prices such as common commodities, gas and oil. Another consideration are

Course Module
 raw material used for the production. And price must be competitive with all
other brands in the market.

5. Distribution - This concerns the allocation to retailers, sales territories,

transportation carrier, wholesaling and retailing.

B. Functional Strategy in Finance

There are three important decisions in the finance department:
a. Investment Decision - It is also called capital budgeting. It involves the
allocation of resources which includes the capital investment to projects,
products and services and all the assets. Vital in analysing means to acquire
funds to meet the organization's current and future needs.
b. Financial Decision - It examines the best capital structure for the
organization. It analyses ways in which the business may find and raise
capital, such as selling assets, issuing stock, or obtaining a loans. The process
of which is important includes recording, monitoring, and controlling the
financial results of an organization's operations.

c. Dividend Decision - It focuses on the right timing as to when the business

organization will issue a percentage of income to stockholders through a
dividend.

Financial strategies concern objectives, profitability, liquidity and cash

management, leverage and capital management, asset management,
investment ratios, and financial planning and control. It highlights some key
questions financial strategies must answer for successful implementation.

C. Research and Development Strategies

The need to develop or improve products and production processes is met by
the research and development (R&D) functions. The most important
research and development strategy issue concerns the relationship of R&D to
business strategy. The more important innovation is to the strategy of the
organization, the more implementation will require consideration of
strategic issues in R&D.
Moreover, if R&D is part of an aggressive new product development strategy,
a series of decisions logically follow from such a link, including funding
levels, project selection decisions, and the structure for R&D. If R&D is used
primarily for process improvement, the decisions are more conservative.
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Strategy Implementation

C. Functional Strategy in Production and Operations

The purpose of this is to transform inputs into products or services.
Production and operations management (POM) is the core function of a
business firm. Somehow, someplace, the goods and services that a company
sells must be obtained. Basically, this involves a process of converting labor,
materials, into the particular combination of qualities that a selected group of
customers wants.
The major decisions in the production and operations strategy concern the
technical core, quality, facilities, technology, and production planning and
control. POM operating strategies must be coordinated with marketing
strategies if the firm is to succeed. Careful integration with financial strategy
components and the personnel function is also necessary.

D. Functional Strategy in Human Resource and Research Development

Human Resource / Personnel Strategies

Human Resource Management is the management of human resources. It is
designed by the HR Department to maximize employee performance in
service of an employer's strategic objectives. HR is primarily concerned with
the management of people within organizations, focusing
on policies and systems.
Every activity a company undertakes requires human resources - people who
are qualified and motivated to perform specific tasks. Human resource
strategies concern human resource planning, recruitment and selection,
training and development, compensation and rewards, employment security,
and labor relations. The types of human resource activities that are
undertaken in any organization are influenced by the environment, strategy,
and organizational design.
Arranging the supply of human resources is a never-ending and sensitive
task for several reasons:
1. The company needs human resources change.
2. The supply of human resources changes.
3. In spite of these demand and supply changes, people seek stability and
dependability in their jobs.
4. Expectations overlap. The way an employee is treated create hopes or
fears in many other people.

Course Module
 Role of Accounting in Setting and Implementing Management Strategy
The purpose of management accounting in an organization is to support competitive
decision making by collecting, processing, and communicating information that
helps management plan, control, and evaluate business processes and company
strategy. Often, many individuals function as accountants within the organization,
but these individuals typically operate as financial accountants, cost accountants,
tax accountants, or internal auditors.

Glossary
Articulation: clarity in the production of successive notes.
Analysis: detailed examination of the elements or structure of something, typically as a
basis for discussion or interpretation.
Advertisement: a notice or announcement in a public medium promoting a product,
service, or event
Implementation: the process of putting a decision or plan into effect
Validation: the action of making or declaring something legally or officially acceptable.
References and Supplementary Materials

Books and Journals

Cynthia A. Zarate; 2011; Business Policy and Strategy; Philippines; Rex Bookstore

Online Supplementary Reading Materials

Human Resource Management; https://en.wikipedia.org/wiki/Human_resource_
management; September 3, 2017
Online Instructional Videos