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

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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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