THE IMPLEMENTATION PROCESS

Strategic management process involves strategic planning, strategy implementation and strategic
control. Strategic planning involves thorough study of internal and external environment factors
relevant for the organization. It results in mission, purpose, objectives, policies and programs

The Nature of Strategy Implementation

• Strategy implementation is managing forces during the action

• Strategy implementation focuses on efficiency
• Strategy implementation is primarily an operational process
• Strategy implementation requires special motivation and leadership skills
• Strategy implementation requires coordination among many individuals

Management Perspectives

Management issues central to strategy implementation include establishing :

ANNUAL OBJECTIVE
Annual objectives serve as guidelines for action, directing and channeling efforts and activities
of organization members.
Annual objective are essential for strategy implementation because:
1) Represent the basis for allocating resources
2) Primary mechanism for evaluating managers
3) The major instrument for monitoring progress forward achieving long-term objective
4) Establish organizational, divisional and departmental priorities.
POLICIES
Policy refers to specific guidelines, methods, procedures, rules, forms, and administrative
practices established to support and encourage work toward stated goals.
Policies clarify what can and cannot be done in pursuit of an organization’s objectives

National Science and Technology Policy (STP)

1. Strengthening research and technological capacity and capability.

1. 2. Promoting commercialization of research outputs.
2. 3. Developing human resource capacity and capability.
3. 4. Promoting a culture for science, innovation and techno entrepreneurship.
4. 5. Build competence for specialization in key emerging technologies

RESOURCES ALLOCATION

All organizations have at least four types of resources that can be used to achieve desired
objectives:

1. Financial resources
2. Physical resources
3. Human resources
4. Technological resources.

Factors Prohibiting Effecting Resources Allocation:

• Overproduction of resources
• Organizational politics
• Vague strategy targets

Effective resource allocation does not guarantee successful strategy implementation

because programs, personnel, controls, and commitment must breathe life into the
resources provided.

MANAGING CONFLICT

Conflict can be defined as a 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 between line managers and staff managers occur.

Various approaches for managing and resolving conflict can be classified into three categories:
avoidance, defusion and confrontation.

Matching Structure with Strategy:

Change in strategy lead to changes in organizational structure.
Reasons for Changing Structure:
1. Structure dilates how policies & objectives will be established.
2. Structure dilates how resources will be allocated

Example: Customer Groups

• The structure might be suitable only 91 firm.
• Growth of organization leads to changes in structure
• Structure can shape choices of strategies.

Matching Structure with Strategy

Types of structural changes needed to implement new strategies

• Functional
• Divisional by geographic area
• Divisional by product
• Divisional by customer
• Divisional process
• Strategic business unit (SBU) structure
• Matrix
Functional or centralized structure
• Functional structure groups tasks & activities by business function, such as
production/operations, accounting/finance, R&D, MIS.
• A university may structure its activities by major functions that include academic affairs,
student service, maintenance, athletics & accounting

Merits of functional structure

• Simple & inexpensive.
• Allows rapid decision making.
• Efficient use of managerial & technical talent.
• Promotes specialization of labor.
• Widely use of resources.
• Minimizes need for elaborate control.

Demerits of functional structure

• Delegation of authority is not encouraged.
• Minimize career development.
• Leads to communication problem.
• Leads to narrow thinking.
• Accountability is forced to the top.
• Inadequate planning for products & markets.

Divisional or decentralized structure

• As a small organization grows, it has more difficulty managing different products or services
in different markets.
• The divisional structure can be organized into four ways

Divisional structure by geographic area

• This divisional structure is appropriate for organizations whose strategies to be fit for the
particular needs & characteristics of customers in different geographic area.
• This type of structure can be most appropriate for organizations that have similar branched
facilities located in widely dispersed areas
• Example: Mcdonald’s

Divisional structure by product or service

• This type of structure is most appropriate for implementing strategies when specific
products or services need special emphasis.
• This structure is widely used when an organization offers few products or services.
• Microsoft recently reorganized the whole corporation into three large divisions by product.
Headed by president. New divisions are
• Platform products & services
• Business
• Entertainment & devices
Divisional structure by customers
• This type of structure is appropriate for organizations to cater the requirements of clearly
defined customer groups.
Example : Book publishing companies often organize their activities around customer groups
such as
• Universities
• Colleges
• Secondary schools
Divisional structure by process
• This type of structure is appropriate when activities are organized according to the way work
is actually performed. This structure is similar to a functional structure.
• Example : In Textile Mills activities are divided according to their process. cutting, dying,
printing.
• each process (division) would be responsible for generating profits.
Merits of divisional structure
• Creates career development chances.
• Leads to competitive environment internally.
• Allows strict control or attention to regions, product, customer, process.
• Promotes delegation of authorities.
• Accountability is clear.
• Allows easy adding of new products or regions.

Demerits of divisional structure

• Costly.
• Lead to limited sharing of resources & ideas.
• Requires skilled management.
• Some regions , products, customers, process may special attention.
• Each division requires functional specialist who must be paid.
• Elaborate control system.

The Strategic Business Unit Structure:

Use: In large firms
Introduction:
A separate operating division of a company with some degree of autonomy referred to as a
(Strategic Business Unit) structure.
Need of Business:
When the number, size and diversity of divisions in an organization increase, controlling and
evaluating divisional operations becomes difficult for strategists.
Solution:
The solution of this problem is the “SUB” structure
Advantages of SBU Structure Matching with Strategy
1. Improving coordination
2. Channeling accountability
3. Manageable task
4. Minimum problems
5. Response
6. Focus
Disadvantages of SBU Structure
1. Increase expenses
2. Inter functional rivalry
3. Slow response time
4. Responsibility
5. Critical process
Despite its disadvantages many organizations use this structure.

The Matrix Unit Structure:

Use: In large firms
Introduction:
An organizational structure that facilitate the horizontal flow of skills and information as well as
vertical flow of authority and communication.
Need for Matrix Structure:
1. Management of large projects.
2. Product development process.
Working of Matrix Structure:
Employee report on day to day performance to the project manager and also report to HOD.
Manager’s authority flows horizontally. HOD authority flows vertically.
Advantages
1. Project objectives clear
2. Employees can see result
3. Shifting down project is Easy
4. Facilitates uses of special equipments
5. Resources are shared
Disadvantages
1. Require excellent communication
2. Costly
3. Violates unity of communication
4. Dual budget authority
5. Dual sources of reward and punishment
6. Shared authority and reporting
7. Require mutual trust.
Restructuring
• Reducing the size of the firm in terms of number of employees, division or units and the
number of hierarchical levels in the firm`s organizational structures.
• Primary benefit of restructuring is cost reduction
• Primarily concerned with the shareholders well being.

Restructuring
Also called
• Downsizing
• Rightsizing
• De-layering

Reengineering
 Reconfiguring or redesigning work jobs and processes to improve cost, quality, service
and speed.
 It is primarily concern with the employees and customers well being than shareholders
wellbeing.

DESIGNING ORGANIZATIONAL STRUCTURE

Managing the Organization:

The basic principles for organization change are as follows:

a) Unfreezing
b) Movement
c) Refreezing

The following basic aspects which require a strategist’s attention while designing structure
• Differentiation
• Integration
• Bureaucratic cost
• Allocating Authority and Responsibility

Span of Control: Span of control means the number of subordinate s manager controls
effectively. The term span of control refers to the number of subordinates who report directly to
a manager.

• Grouping Tasks, functions and Divisions

• Tall and Flat organizations
• Centralization
• Decentralization

Integration and Integrating Mechanisms:

Much coordination takes place among people, functions and divisions through the hierarchy of
authority, often however as a structure becomes complex, this is not enough and top managers
need to use various integrating mechanisms to increase communication and coordination among
functions and divisions.
Greater the complexity of an organizations structure the greater is the need for coordination
among people, functions and divisions to make the organizational structure work efficiently.

Three kinds of integrating mechanisms:

1. Direct contact
2. Liaison Role
3. Teams

DESIGNING STRATEGIC CONTROL SYSTEMS

Top executives, who formulate strategy, draw information from several publications in order to
keep abreast of current developments in their industry and business. Some of the online sources
of business strategy news are as follows:

1. Business line – www.indiaserver.com/bline/

2. Financial Express – www.financialexpress.com
3. The Economic Times – www.economictimes.com
4. Times Syndication – www.timesofindia.com
5. Fortune – www.fortune.com
6. Forbes – www.forbes.com
7. Wallstreet – www.wsj.com

Strategic management tends to develop a generalist approach to managerial problems and it

enables one to view organizational issues in its totality. Hence business is viewed as a system
consisting of number of subsystems and the narrow outlook of a specialist is not recommended
for solving business problems. For instance, employee turnover apparently looks like a personnel
problem. If one probes deeply into the problem, it genesis may be deeper.

Strategic control systems provide managers with required information to find out whether
strategy and structure move in the same direction. It includes target setting, monitoring,
evaluation and feedback system

Steps in Strategic Control process:

1) Establish standards and Targets
2) Create Measuring and monitoring systems
3) Compare Actual with targets
4) Evaluate and take corrective actions

Levels of Control:
a) Corporate level managers
b) Divisional level managers
c) Functional level managers
d) First level managers
Types of Control System:
• Personal control
• Output control
• Behavior control

IMPLEMENTING STRATEGIC CHANGE – POLITICS, POWER AND CONFLICT

The organizational politics plays a key role in strategy implementation. The power and conflict
will cause organizational inertia and prevent organizational change. Power, politics, conflict and
inertia should be analyzed and managed effectively so that mission could be fulfilled and change
could be introduced smoothly. Conflict is common in organizations. The reasons for conflicts are
resource sharing and different agendas of different subgroups within organizations. Power
struggles and coalition building are consequences of such conflicts.

Strategy Implementation
Strategy implementation consists of four steps namely:
• Designing appropriate organizational structure
• Designing control systems
• Matching strategy, structure and controls and
• Managing conflicts, politics and change

Organizational Power: The organizational power is the ability to influence people or things
usually obtained through the control of important resources.

Sources of Power
• Ability to cope with uncertainty
• Centrality
• Control over information
• Non-substitutability
• Control over contingencies
• Control over resources

Organizational Politics: The organizational politics may be viewed as the tactics by which self
interested individuals and groups try to power to influence the goals and objectives of the
organization to further their own interest.

Organizational Conflict:
Conflict may be defined as a situation when the goal directed behavior of one group blocks the
goal directed behavior of another.

Organizational Conflict Process:

 Latent conflict
 Perceived conflict
 Felt conflict
  Manifest conflict
 Conflict aftermath

Conflict Resolution Strategies:

 Changing task Relationship
 Changing controls
 Implementing strategic change
 Changing Leadership
 Changing the strategy

Feedback

Strategic management is an ongoing process. Periodic feedback reveals whether objectives are
attainable or implementation is poor or not. The feedback is fed into next round of strategic
formulation and implementation. It may reaffirm objectives or suggest changes in goals and
objectives.

TECHNIQUES OF STRATEGIC EVALUATION & CONTROL

Strategic Types By strategic type, we mean that a strategic orientation which is a combination
of structure, culture and process consistent with that strategy. The different strategic orientation
is the reason behind the varying behavior of firms facing similar environment. The difference in
their behavior to similar situation is attributable to their different strategic orientation. In order to
examine the intensity of competition and to predict the moves of firms within strategic groups
one has to familiarizes with different strategic types.

Strategic Control: Strategy formulation is based on assumptions about environmental and

organizational factors which are nebulous and dynamic in nature. The time gap between strategy
formulation and implementation is the major reason for these assumptions turned out to be
invalid.

Types of Strategic Controls:

Premise control
Implementation control
Strategic Surveillance
Special Alert control

Methods in Strategic Evaluation and Control:

• Strategic momentum control
• Strategic leap control
• Strategic Issue Management
• Strategic field Analysis
• Systems Modeling
• Scenarios
Techniques for Improving Strategic Decision-making
To enhance the effectiveness of strategic decision-making, techniques like devils’ advocacy and
dialectic inquiry are recommended.

In Devils’ Advocacy, a plan is evolved and is critically analyzed. One member highlights the
reason why the plan is unacceptable and acts like the devil’s advocate. The main advantage of
this method is to highlight all possible dangers involved in the course of action.

In Dialectic Inquiry, a plan and a counter plan are evolved in order to reflect plausible and
conflicting courses of action. The debate between advocates of plan and counter plan reveals
problem areas with definitions, suggested courses of actions and assumptions. Based on the
identification of problem areas, final plan is evolved which is comprehensive

Part ‘A’ Questions

1) What is organizational structure?

2) What are the steps involved in strategic management process?
3) Define strategy implementation?
4) What is resource allocation?
5) Define strategic control system.
6) What are the types of strategic controls?
7) What are the methods involved in strategic evaluation and control?
8) Define politics in strategic change.
9) What do you mean by power and conflict?
10) What are the sources of power?

Part ‘B’ Questions

1) Explain organizational design with simple sketch.

2) Elucidate strategic control systems.
3) Discuss about the implementation of strategic change.
4) Explain matching structure and control to strategy.
5) Discuss the techniques of strategic evaluation and control.