A.N.S- nsserwanga@yahoo.com

STR.MGT BSC ACC 1

Strategy implementation How do we ensure arrival?

ABAHO ERNEST STR.MGT BSC ACC 2

Strategy implementation is the sum total of activities and choices required to implement a strategic plan. This requires the development of programs, budgets and procedures

ABAHO ERNEST STR.MGT BSC ACC 3

Basic issues to be addressed in implementing strategy Who are the staff who will undertake the

tasks? What must be done to ensure congruence

between current operations and the new strategic direction?

How is every one going to do what is required?

ABAHO ERNEST STR.MGT BSC ACC 4

Common problems encountered in strategy implementation Time taken is more than that originally planned Un foreseen problems set in Ineffective coordination of activities Other company activities overshadowed implementation of

strategy Respective staff lacked required skills Lack of training to create required skills Unforeseen external factors Inadequate leadership from top management Poorly defined activities to be implemented Insufficient back up by ICT

ABAHO ERNEST STR.MGT BSC ACC 5

The strategy implementer’s task is to convert the plan into action and undertake what is called for by the plan. Managing strategy implementation is therefore more art than science.

ABAHO ERNEST STR.MGT BSC ACC 6

The eight managerial components of implementing strategy1. Building a capable organization2. Developing budgets and allocating ample resources to the

strategic effort3. Establishing strategy friendly and enabling policies4. Instituting best practices and continuous improvement5. Providing support systems that enable staff to perform6. Linking rewards/ incentives with achievement of strategic

targets7. Creating corporate culture which ensures/ enhances strategy

achievement8. Exercising strategic leadership to drive implementation

ABAHO ERNEST STR.MGT BSC ACC 7

Building a capable organization

Selecting people for key positions – creating a strong management team

Building core competences and capabilities which are un matched: competitive advantage.

Employee training and retraining Match orgn structure to strategy: identify and build

structure around critical activities then consider outsourcing non core activities.

Resolving which decisions to centralize and which to decentralize

ABAHO ERNEST STR.MGT BSC ACC 8

Strategic advantages and disadvantages of various organization structures

Functional specialization Geographic organization Decentralized biz divisions Strategic biz units Matrix structures

( students to fill in )

ABAHO ERNEST STR.MGT BSC ACC 9

Strategy and stage of corporate developmentStage one1. Major problem- survival and growth, dealing with

short term operational probs2. Objectives- personal, subjective3. Strategy- implicit, entrepreneur owner4. Structure- one man show5. Control – personal criteria, daily observation6. Reward punishment- informal, incentives limited

and used for control/ creating allegiances.

ABAHO ERNEST STR.MGT BSC ACC 10

Strategy and stage of corporate development ctndStage two1. Major problems- growth, expansion of resources2. Objectives – SMART meeting functional

performance targets3. Strategy – limited to exploitation of one product4. Organization- one unit functionally specialized5. Control – many persons and systems involved6. Reward punishment – based on agreed policies

ABAHO ERNEST STR.MGT BSC ACC 11

Strategy and stage of corporate development ctndStage three

1. Major problems- agency/ trusteeship and control of diversified resources.

2. Objectives – SMART but expanded scope to include society and environment

3. Strategy – growth and product diversification

4. Organization- decentralized operations

5. Control – complex formal systems with divisional managers.

6. Reward punishment – based on agreed policies

ABAHO ERNEST STR.MGT BSC ACC 12

Functional organization structure

Advantages:• Centralizes control• Good for single biz unit• Develops functional skillsDisadvantages:• Interfunctional rivalry• Tall structure enters bureaucracy/ delay• Functional myopia/ conflicts• Limits development of staff with cross

functional skills.

ABAHO ERNEST STR.MGT BSC ACC 13

GEOGRAPHIC ORGN STRUCTURE

Advantages:

1. Strategy made specific to region

2. Reaps advantages of local operations/ scales

3. Improves functional coordination

Disadvantages:• Difficult to attain uniformity across regions• Duplication of staff to run geographic units• Adds another layer of staff to run the geo. areas

ABAHO ERNEST STR.MGT BSC ACC 14

Strategic business unit orgn structure

Advantages:• Enables decentralization/ delegation of authority• Responsibility for each biz unit lies with it• Profit responsibility rests on SBUs

Disadvantages:• HQ managers may lose touch with sbu operations• Excessive rivalry among SBUs• HQ managemnt becomes heavily dependent on

SBUs

ABAHO ERNEST STR.MGT BSC ACC 15

A MATRIX ORGN STRUCTURE HAS TWO OR MORE CHAINS OF COMMAND, TWO LINES OF BUDGET AUTHORITY AND TWO SOURCES OF PERFORMANCE AND REWARD

ABAHO ERNEST STR.MGT BSC ACC 16

MATRIX STRUCTURE CTND

Advantages Gives formal attention to each dimension of strategic

priority Creates chks and balances among competing view

points Encourages cooperation

Disadvantages Very complex to manage Many people involved in decision Promotes organization bureaucracy

ABAHO ERNEST STR.MGT BSC ACC 17

Supplementing the basic orgn structure

1. Special project teams2. Cross functional task forces3. Venture teams- manage launch of new

product4. Self contained work teams- work on semi

permanent basis on continuous improvement of the company

5. Process teams- functional specialists6. Contact persons – single point/ one stop

port for all services.

ABAHO ERNEST STR.MGT BSC ACC 18

IMPLEMENTING STRATEGY – BEST PRACTICES TQM- ENTAILS CREATING A TOTAL

QUALITY CULTURE KEEN ON CONTINUOUS IMPROVEMENT OF EVERY ASPECT OF PERFORMANCE. STEP BY STEP IMPROVEMENTS.

REENGINEERING SEEKS ONE TIME QUANTUM IMPROVEMENT – BIG / RADICAL DEPATURES

ABAHO ERNEST STR.MGT BSC ACC 19

BUILDING TOTAL QUALITY MANAGEMENT CULTURE PASSION FOR TOTAL QUALITY

INCLUDING QUALITY VISION, SPECIFIC MEASURABLE GOALS

ENCOURAGING TQM SUPPORTIVE BEHAVIOURS: REWARDING, Q TRAINING USING QUALITY TEAMS

EMPOWERING EMPLOYEES ICT SUPPORT PREACH TQM, EAT TQM

ABAHO ERNEST STR.MGT BSC ACC 20

STRATEGY SUPPORTIVE REWARD SYSTEMS

CREATING EMPLOYEE COMITMENT AND WINNING ATTITUDES IS

IMPERATIVE.

ABAHO ERNEST STR.MGT BSC ACC 21

WHAT IS COMMITMENT?

COMMITMENT DETERMINES THE RELATIONSHIP BTN EMPLOYER AND EMPLOYEE

BINDS EMPLOYEE TO THE ORGANIZATION

RESULTS IN EXTRA ROLE CONTRIBUTIONS BY EMPLOYEES.

ABAHO ERNEST STR.MGT BSC ACC 22

HOW EMPLOYEES VIEW COMMITMENT PERFORMANCE ON THE JOB/ OUT PUT VOLUNTARISM “ GOING AN EXTRA MILE” INVOLVEMENT QUALITY OF WORK NUMBER OF HOURS PUT IN THE JOB.

ABAHO ERNEST STR.MGT BSC ACC 23

NATURE OF EMPLOYEE COMMITMENT COMMITMENT TO THE BOSS COMMITMENT TO WORKMATES COMITMENT TO THE ORGANIZATION COMMITMENT TO THE JOB COMMITMENT TO THE ORGANIZATION’S

POLICIES

ABAHO ERNEST STR.MGT BSC ACC 24

FACTORS CAUSING LOW COMMITMENT LOW PAY DELAYS IN PAYING STAFF CLAIMS NATURE OF EMPLOYMENT TERMS (PART-TIME) LACK OF JOB SECURITY PREVIOUS EXPERIENCES WITH FORMER EMPLOYERS FAILURE TO RECOGNIZE AND REWARD EFFORT LACK OF EMPATHY LACK OF INCENTIVES UNFULFILLED PROMISES LAZINESS / WORK ETHIC

ABAHO ERNEST STR.MGT BSC ACC 25

Indicators of commitment

Attendance and punctuality Daily performance on the job Ability to meet deadlines Willingness to market the organization /

ambassadors Time spent/helping developing skills of other

employees Willingness to voluntarily assist colleagues

and administration (without pay)

ABAHO ERNEST STR.MGT BSC ACC 26

Incentives for commitment

Pay for extra work Housing and Transport Advances and loans Financial bonuses Recognition for good performance Medical attention for self and family Education subsidy for children Financial assistance extended to staff in problems

ABAHO ERNEST STR.MGT BSC ACC 27

BEST PRACTICE IN REWARDS

LINK WORK ASSIGNMENT TO PERFORMANCE TARGETS

REWARD ACHIEVEMENT OF PERFORMANCE TARGETS

INCENTIVES SHOUL BE MORE THAN 20% OF SALARY

FAIRNESS IN REWARDS INDIVIDUALS SHD BE ABLE TO AFFECT

OUTCOME ( AVOIDS UNCONTROLLABLES)