MBA

CORPORATE Strategic Implementation

STRATEGY
© DR ADRIAN KUAH 2010
STRATEGIC ANALYSIS
MODEL
External Internal
appraisal appraisal
BASIC DESIGN SCHOOL MODEL
Threats & Strengths &
opportunities weaknesses
in environment of organization
Key success Distinctive
factors competences
Creation
of
Soc strategy
i erial
resp al Manag
ons
ibili values
ty

Evaluation
and choice
of strategy

Implementation
of strategy
IMPLEMENTATION
Three important questions

WHO will carry out the plan

WHAT must be done

HOW are they going to do (what is needed)

Bad answers to the above may mean don’t do it

 PLANNING AND
CONTROL
Planning - Anticipatory decision making

Control - Alignment of individual and group goals

with those of the organisation

Coordination - information and procedures which allow

for adjustment of behaviour
 COMMON ISSUES WITH
IMPLEMENTATION
Time Unanticipated Poor coordination problems

Crises Staff not good Environmental

enough change

Poor Poor training Poor task

leadership of staff definition

Poor MIS Lack of understanding Balance

of what planning is between intuition and
planning

Short term thinking Text book solutions Failure to adapt

don’t fit organisation

Too complicated No relationship between

formulation and implementation
IMPLEMENTATION
WHAT must be done

Strategies - broken down into

Programmes - single use action plans

Budgets - programmes costed

Procedures - steps in a task

IMPLEMENTATION
HOW is strategy to be implemented

Organisation

Staff

Leadership

Control

(slide 7)
 MBA
CORPORATE Strategic Planning

STRATEGY
STRATEGIC PLANNING
Planning is analysing a situation determining the goals
that will be pursued in the future and deciding in advance
what actions will be taken to achieve these goals

SPECIFICALLY STRATEGIC PLANNING:

1 Integrates objectives, policies and programmes
2 Allocates scarce resources
3 Anticipates the reactions of intelligent opposition
STRATEGIC PLANNING
Essential for coordination by ensuring consistency
of decision making throughout the organization

A mechanism is needed for driving performance

by establishing consensus about objectives and strategies.
Hence it has a role in ensuring cooperation
STRATEGIC PLANNING
ISSUES
Corporate Culture:

1. Control and coordination through what the organization

believes about itself

2. Difficult to facilitate communication across national

boundaries

3. Often too internally focused (e.g. BBC)

4. Sometime strategy become redundant due to

environmental change
 MBA
CORPORATE Strategic Control:
Balance ScoreCard
STRATEGY
THE BALANCED SCORECARD PROVIDES A FRAMEWORK TO
TRANSLATE A STRATEGY INTO OPERATIONAL TERMS
Financial
“To succeed

Me i v e s

s
Tar res

ive
financially, how

Ini s
as u
t

g et
ti at
jec
should we

Ob
appear to our
shareholders?”

Customer Internal Business Process

“To achieve our “To satisfy our

Me i v e s
Me ives

Vision

s
s

Tar res
Tar res

ive
ive

vision, how shareholders and

Ini s
Ini s

as u
t
t
asu

get
g et

tiat
jec
t i at
j ec

should we and customers, what

Ob
Ob

appear to our business

customers?” Strategy processes must
we excel at?”

Learning and Growth

“To achieve our
Me ives

s
Tar res

ive
vision, how
Ini s
as u
t

g et
t i at
jec

will we sustain
Ob

our ability to
change and
improve?”

Source: Robert S. Kaplan and David P. Norton, “Using the Balanced Scorecard as a Strategic Management System,” Harvard Business
Review (January-February 1996): 76. Reprinted with permission. © DR ADRIAN KUAH 2008
 BALANCED SCORECARD
•Financial perspective - The effect of strategy on the bottom
line (eps, ROCE, value added)

•Customer perspective - Performance in chosen segments

Customer satisfaction, profitability,
retention, New customers, Market and
account share
 BALANCED SCORECARD
• Internal Business process perspective
• Satisfy Shareholder expectations
• See Internal value chain
• Delivery of value to customers
Monitors what the organization needs to be good at.

• Learning and Growth perspective

Building infrastructures for growth and improvement,
people, systems and procedures
Employee satisfaction, retention, training, skills

© DR ADRIAN KUAH 2008

 LINKING MULTIPLE
SCORECARD MEASURES
• Each of the perspectives has between 4 to 7 measures

• Can an organization concentrate on 25 measures ?

• Best used for a single strategy

• Cause and effect fundamental to the use of BSC

• e.g. Improved ROCE from increased turnover of stock

from on-time-delivery from increased loyalty of existing
customers
PERFORMANCE DRIVERS
A good scorecard will have a mixture of outcome measures
and performance drivers. (Key Performance Indicators: KPI)

Outcome measures without performance drivers do not

communicate the how of strategy, also hard to see if the
strategy is being implemented.

Performance drivers without performance measures will result

in short-term improvements but will not reveal if they have
been translated into other parts of the model. (customer
satisfaction, financial performance)
ISSUES ON BSC
Time lags

Are four perspectives enough what about employees,

suppliers etc.

Manager’s perceptions and attitudes

Too much emphasis on control

Measurement.

Symptoms and causes

STRATEGIC
IMPLEMENTATION
FOOD FOR THOUGHTS
• Structure a function of strategy
• Influence of firm size and firm age
• Division of labour within organisation
• The need to specialise, to localise
• Efficiency and effectiveness
• Strategic relatedness and importance
 ORGANISATIONAL DESIGN DECISION
TREE
Static low uncertainty less information needed
 functional organisation
Simple
Dynamic high uncertainty more information needed
 mixed functional organisation (lateral relations)

Nature of
Goals and Static low uncertainty less information
Environment  decentralised organisation
Yes
Dynamic high uncertainty more information
Complex
 mixed decentralised (lateral relations
(can we segment
the environment?)
Static low uncertainty less information
 functional organisation
No
Dynamic high uncertainty more information
 mixed functional (lateral relations)
 THE FIVE PHASES OF GROWTH

PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5

Large
5: Crisis of ?

Evolution stages
Revolution stages 4: Crisis of
RED TAPE

3: Crisis of
CONTROL 5: Growth through
Size of COLLABORATION
organization 2: Crisis of 4: Growth through
AUTONOMY COORDINATION

3: Growth through
1: Crisis of DELEGATION
LEADERSHIP
2: Growth through
DIRECTION

1: Growth through
Small CREATIVITY

Young Mature
Age of organization