Strategy Implementati
on
Dr. R. S. AuroraChair Professor and Director
Guru Nanak Institute of Management Studies
What is Strategy Implementation?
• Involves a broad range of efforts aimed at transforming strategic intentions into actions.
• Constitutes firm’s realized strategy
• Ability to implement strategies is one of the most valuable managerial skills
Why Strategy Implementation is Difficult? Organizational Immune System –
Resist change Difficult Paradoxes – Participative management
and motivating subordinates to accept change
Number of variables involved
Interlink between factors affecting change
Need to change everything at once
Activity Centered Change Programs
• Analyses common pattern of failure in introducing change
• Focus is on change centered on an activity that is suppose to bring change rather than on desired results
• Individual elements reflect rationality yet fail collectively
Elements of Activity Centered Change Program:
Senior management, dissatisfied with past performance, develops new strategic ideas requiring organizational change Example: Declining sales leading to shift in strategy of improving customer satisfaction
Initiating a program for producing desired
changeExample: Initiating program “Customer is King”
Management of program is delegated to those in staff positionsExample: King Customer Program handed over to Director of Quality
Senior Management is “handled” by staff personnel in charge of the programExample: CEO’s speech prepared by Director of Quality
Staff in charge of the program focus on range of issues under their direct controlExample: Director of Quality develops new training program
Performance measured by success of the
programExample: Number of people graduating from the new training and development program
A small change is accepted as success of the programExample: Success of the training program
To continue the change initiative new programs introducedExample: New program to reduce cost initiated
Confusion with regards to old and new program as the same can conflictExample: Cost reduction by eliminating quality programs
Cynicism creeps in and status quo supportedExample: Every new program looked upon as a bother
Strategic Programming
Strategy formulated on the basis of pre-established missions and objectives
Short range programs evolved to implement strategy
Budgets evolved to provide monetary resources
Results evaluated and put in feedback loop Used first by Robert McNamara, Secretary
of Defence Also known as Planning, Programming and
Budgeting System
Generic Model of Strategic Programming
Introduction of Mission
Derivation of Objectives
Identification of Alternative Strategies
Evaluation of Alternatives
Selection of Preferred Alternatives
Creation of Master Plan / Program
Creation of Medium run Plan / Program
Creation of Short run Plan / Program
Evaluation of Results
Fee
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Establish Master Budget
Establish Medium Run Operating Budget
Establish sort run tactical BudgetSt
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Limitations of Strategic Programming
Required Conditions:
* Stability* Simplicity* Industry Maturity* Capital Intensity* Tightly Coupled Operations* External Control
Organizational Learning Result of knowledge based competition
Is combination of discovering new things and acting in ways that allow the organization to adapt to changes and sustain and improve competitiveness
Called for since business units face uncertain conditions and survival depends on learning and adapting to new ways
Stephen Covey States
One level of learning well suited to management
is like climbing a ladder; but higher level of Learning, one that requires leadership,
involves questioning whether or not
the ladder is leaning against the right wall
The Model of Organizational Learning
Learning from History
and Experience
Systematic Problem
Solving
Experimentation with
New Approaches
Learning from the Best Practices of
Others
DISCOVERY
ACTION
Incremental Adaptive Changes
Quantum Generative
Changes
EvolutionaryActs
RevolutionaryActs
Strategic Leadership Strategic leadership involves:Strategic leadership involves:
the ability to anticipate, envision, the ability to anticipate, envision, maintain flexibility and empower maintain flexibility and empower others to create strategic changeothers to create strategic change
multi-functional work that involves multi-functional work that involves working through othersworking through others
consideration of the entire enterprise consideration of the entire enterprise rather than just a sub-unitrather than just a sub-unit
a managerial frame of referencea managerial frame of reference
SuccessfulStrategic Actions
Strategic Leadership and the Strategic
Management ProcessEffective Strategic
Leadership
Strategic Intent Strategic Mission
shapes the formulation of
andinfluence
Strategic Leadership and the Strategic Management Process
StrategicCompetitiveness
Above-Average Returns
Formulationof Strategies
Implementationof Strategies
SuccessfulStrategic Actions
yields
Factors Affecting Managerial Discretion
External Environment
•Industry structure•Rate of market growth
•Number and type of competitors
•Nature and degree of political/legal constraints
•Degree to which products can be differentiated
External Environment
Factors Affecting Managerial Discretion
Characteristics of the Organization
Characteristics of the Organization
•Size•Age•Culture•Availability of resources
•Patterns of interaction among employees
External Environment
Factors Affecting Managerial Discretion
External Environment
Characteristics of The Organization
Characteristics of The Manager
ManagerialDiscretion
Characteristics of the Manager
•Tolerance for ambiguity
•Commitment to the firm and its desired strategic outcomes
•Interpersonal skills•Aspiration level•Degree of self-confidence
Exercise of Effective Strategic Leadership
Establishingbalanced
organizationalcontrols
Emphasizingethical
practice
Developinghumancapital
Exploiting andmaintaining
corecompetencies
Sustainingan effective
organizationalculture
Determiningstrategicdirection
Effective StrategicLeadership
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