Strategy Implementation

Presented By
RUCHIT KIYADA
PRINCE KANTARIA
Strategy Implementation
 The basically administrative task needed to put strategy into
practice.

 Successful strategy implementation depends in part on the

organization’s structure.

 Structure mainly depends upon complexity (amount, the

tasks is broken or differentiated), formalization ( degree to
which rules & procedures are used ) and centralization
( where the decision making authority is found )
Chandler’s Thesis
 Alfred chandler examined the growth & development of the largest
business in the united states, including Du pont, general motors,
standard oil and Sears Roebuck.

 His work on the relationship between strategy and structure

remains pivotal to modern strategic thinking.

 According to him, organizations passes through three stages :-

1) unit structure (field unit, geographical expansion, unit firm)
2) functional structure
3) multidivisional structure
 Diagram of Strategies and structure

MULTIDIVISIONAL
STAGE III GENERAL OFFICE FIRM

DIVERSIFICATION

PRODUCT DIVISION FUNCTIONAL

ORGANIZATION
STAGE II

VERITCAL
INTEGRATION

FUNTIONAL DEPARTMENT UNIT FIRM

STAGE I
GEOGRAPICAL
EXPANSION

FIELD UNIT FIELD UNIT

Conti….
 Chandler observed that transition from one structure to another is
often delayed and painful.

 Organizations are not readily accept change.

 Structure follows strategy

 SEVEN-S Framework
Developed by All elements
McKinsey interlink
Strategy

Structure Systems

Superordinate
Goals/ Values
Skills Style

Staff Must have good fit

the best
companies have between all seven
superordinate goals elements
Conti…
 Structure :- Structure is the organizational chart and associated
information that shows who reports to whom and how tasks are both
divided up and integrated .

 Strategy :- Strategy is an action plan to achieve an organizational

objective. Proper implementation is much more important than its
implementation.

 Systems :- Systems define the flow of  activities involved in the daily
operation of business, including its core processes and its support
systems. They refer to the procedures, processes and routines that are
used to manage the organization and characterize how important work
is to be done
Conti….
 Style :- "style" refers to the cultural style of the organization, how
key managers behave in achieving the organization's goals, how
managers collectively spend their time and attention, and how they
use symbolic behavior. How management acts is more important
that what management says.

 Staff :- "staff" refers to the number and types of personnel within

the organization and how companies develop employees and shape
basic values.

 Skills :- "skills" refer to the dominant distinctive capabilities and

competencies of the personnel or of the organization as a whole.
Strategy implementation
FOR IMPLEMENTATION

1. STRATEGY MUST BE INSTITUTIONALIZED

2. STRATEGY MUST BE OPERATIONALIZED
Institutionalizing Strategy
 To institutionalize a business strategy, business leaders must
also develop a system of values, norms, roles and groups that
will support the accomplishment of strategic goals.

 Culture is also crucial for institutionalizing the strategy

Operationalizing Strategy
 Plan that provides the details needed to incorporate strategy
in to day to day operation.
The Hierarchy of organizational
plans

OPERATIONAL PLAN
Single Use Plan
A detailed course of action used once or only occasionally to solve a
problem that does non occur repeatedly.

Program :- a single use plan that covers a relatively large set of

organizational activities and specifies major steps, their order and
timing, and the unit responsible for each step.

Project :- the smaller and separate portions of the programs.

Budgets :- formal quantitative statement of the resources allocated to

specify programs or projects for a given period.
Standing Plans
An established set of decision used by managers to deal with
recurring or organizational activities; major types are policies,
procedures, and rules.

Policy :- a standing plan that establishes general guidelines for

decision making.

Rules :- standing plans that details specific actions to be taken in a

given situation.

Procedure :- a standing plan that contains detailed guidelines for

handling organizational actions that occur regularly.
Annual objectives
 Annual objectives :- identify precisely what must be accomplished
each year in order to achieve an organization’s strategic goal.

 Annual objectives should quantify performance to decrease dispute

Management by objective
 The approach was first proposed by Peter Drucker.
 A formal set of procedures that establishes and reviews progress
toward common goals for managers and sub-ordinates.
 Management by objectives (mbo) is a process in which a manager and
an employee agree upon a set of specific performance goals, or
objectives, and jointly develop a plan for reaching them.
 Mbo managers focus on the result, not the activity
 The objectives must be clear and achievable, and the plan must include
a time frame and evaluation criteria.
Elements of the MBO system
 Commitment to the program
 Top-level goal setting
 Individual goals
 Participations
 Autonomy in implementation
 Performance review.
 SMART (specific, measurable, achievable, realistic, and
time-specific)
Reward System
 Rewards and incentive contribute to strategy implementation
by shaping individual and group behavior.

 It motivates employees towards performance.