Implementing

Strategies:
Management
Managemen
and Operatio
Operati ns
Issue
Issu s

Chapter Seven

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► Strategy formulation is positioning forces
before the action.
► Strategy implementation is managing forces
during the action.
► Strategy formulation focuses on
effectiveness.
► Strategy implementation focuses on
efficiency.

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► Strategy formulation is primarily an
intellectual process.
► Strategy implementation is primarily an
operational process.
► Strategy formulation requires good intuitive
and analytical skills.
► Strategy implementation requires special
motivation and leadership skills.

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► Strategy formulation concepts & tools do not
differ greatly for small, large, for profit- & not-
for-profit organization
► Strategy implementation varies substantially:
 Among different types & sizes of organizations

► Implementing strategies requires such actions as

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► Requires shift in responsibility from strategists
to divisional & functional managers:
 Comes as surprise to middle- and lower- level
managers
 Motivated more by self-interests than by
organizational interests, unless the two coincide
 Hence need for early participation

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Annual objectives:

1. Represent the basis for allocating resources.

2. Are a primary mechanism for evaluating
managers.
3. Are the major instrument for monitoring progress
toward achieving long-term objectives.
4. Establish organizational, divisional, and
departmental priorities.

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► Policy
► Specific
guidelines, methods, procedures, rules,
forms, and administrative practices established
to support and encourage work toward stated
goals

► Instruments for strategy implementation

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► Policies
► Set boundaries, constraints, and limits on the
kinds of administrative actions that can be taken
to reward and sanction behavior
► Clarify what can and cannot be done in pursuit of
an organization’s objectives

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► Policies let both employees & managers know what
is expected of them, thereby increasing the
likelihood that strategies will be implemented
successfully
► They provide a basis for:
► Management control
► Allow coordination across organizational units

► Reduce managers’ decision making time

► Clarify what work has to be done & by whom

Many organizations have a policy manual, for

example Wal-Mart's ‘10 Foot” Rule
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► Table 7-3: an example of policies that support a
company strategy, a divisional objective, and a
departmental objective
► Some example issues that may require a
management policy are provided in Table 7- 4

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 7-14
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► Resource allocation
► centralmanagement activity that allows for
strategy execution
► often based on political or personal factors

► Strategicmanagement enables resources to

be allocated according to priorities
established by annual objectives

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► Over protection of resources
► Too great an emphasis on short-run financial
criteria
► Organizational politics

► Vague strategy targets

► Reluctance to take risks

► Lack of sufficient knowledge

► Lack of systematic thinking about resource

allocation, below corporate level

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► Yavitz & Newman explain why:
► Managers normally have more tasks than they can do
► Managers must allocate time & resources among these
tasks
► Pressure builds up

► Expenses are too high

► CEO wants a good financial report for 3rd quarter

► Strategic formulation & implementation activities often

get deferred
► Today’s problems soak up available energies &
resources
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► Conflict
► disagreement between two or more parties on
one or more issues
► Establishing annual objectives can lead to
conflict because individuals have different
expectations and perceptions, schedules create
pressure, personalities are incompatible, and
misunderstandings occur between line
managers and staff managers

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► Avoidance
► includessuch actions as ignoring the problem in
hopes that the conflict will resolve itself or
physically separating the conflicting individuals
► Diffusion
► includes playing down differences between
conflicting parties while accentuating similarities
and common interests

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► Confrontation
► exemplified by exchanging members of
conflicting parties so that each can gain an
appreciation of the other’s point of view or
holding a meeting at which conflicting parties
present their views and work through their
differences

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► Involve
reducing the size of the firm inn terms of
number of:
► Employees

► Divisionsor units
► Hierarchy levels

► Also called:
► Downsizing

► Rightsizing
► Delayering

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► Involves reconfiguring or redesigning:
► Work, job, processes

► To improve cost, quality, service, speed

► Alsocalled process management, process

innovation, or process redesign

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