Jul 15, 2023 - Business Environment

Concept, Process and Design Structure of Strategy

Implementation

Strategy implementation is the sum total of the activities and the choices required for
the execution of a strategic plan. It is a process by which objectives, strategies and
policies are put into action through the development of programs, budgets and
procedures. (Wheelen and Hunger)

Process of Strategy Implementation:

i. Identifying short term objectives.
ii. Initiating specific functional tactics.
iii. Empowering people in the organizational by communicating  policies.
iv. Matching the organization structure to strategy 
v. Linking reward system with strategic goals.
vi. Measurement feedback and corrective mechanism.

Designing Structure for Strategy

Implementation
Change in strategy often requires changes in the way an organization is structured for
two major reasons: First, Structure largely dictates how objectives and policies will be
established. Second, Structure dictates how resources will be allocated.

          
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Role of sound organizational structure for effective

implementation of Strategy

Organizational structure largely dictates how objectives and policies will be

established. If an organization's structure is based on customer groups, then resources
will be allocated in that manner. Similarly, if an organization's structure is setup along
functional business lines, then resources are allocated by functional areas. We need to
be aware of situation that changes in strategy lead to changes in organizational
structure. Structure should be designed to facilitate the strategic pursuit of a firm and,
therefore, follows strategy. Structure does influence the strategy. Structure can also
shape the choice of strategies. However, a more important concern is determining
what types of structural changes are needed to implement new strategies and how
these changes can best be accomplished. There are many types of organizational
structure and each of them influences the strategic decisions and implementation.
Organization structure for implementation of strategy is discussed below:

Simple Structure: A simple structure is a form in which the owner manager

makes all major decisions directly and monitors all activities. This structure
involves little specialization of tasks, few rules and limited formalization. This
structure is designed in a small business where there is a single product line with
limited geographic market. The owner/ manager undertake almost all
responsibilities of management along with assistants.
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Functional Structure: It is build around business functions. It is based on

functions of an organization. This structure consists of CEO and a limitedcorporate
staffs with functional line managers such as production, accounting, marketing, R
and D, human resources etc. This structure facilitates career paths and
professional development in specialized functional areas. However, it is generally
adopted by smaller companies which have narrow product range.
Multidivisional Structure/ SBU Structure: The multidivisional structure is
composed of operating divisions, each representing a separate business or profit 
center. The top corporate officer delegates responsibilities for day-to-day
operations. It is highly decentralized structure. Each strategic business units are
divided on the base of products, services, geographical areas. When a firm
diversifies its operations, a functional strategy becomes inadequate. Therefore,
divisional structure is necessary to meet the coordination and decision making
requirements resulting from increased diversity and size.
Holding Company Structure: It is an investment company having shareholding
in a variety of separate companies in which parent company exercises
control.The ownership holds by parent company to subsidiary company may be
fully or partially. The main advantage behind this holding company structure is

that the parent company can offer the best ideas to the subsidiary company to
prepare and operate the strategy to the best potential.

Matrix Structure: It is a combination of structures. It super imposes project

structure on functional structure. It integrates knowledge and skills. It temporarily
assigns people from functional departments to It provides skills and resources
where and when they are must needed. It depends on both vertical and horizontal
flows of authority and communication. In it the quality decision are possible. It
fosters creativity. There is increased motivation, commitment and
communication.
Team based Structure: A team is a group whose individual efforts results in
positive synergy through coordinated efforts. It combines both horizontal and
vertical coordination. In this the team members work collectively to achieve their
objectives. There is no rigid hierarchy. The performance evaluation is done by the
member themselves. The productivity and satisfaction is high. Employee’s talent
and skills are better utilized in this structure.

Definition and Process of Resource Planning

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Whenever organization selects new strategy to implement, it immediately requires

effective manpower to deploy, financial measures, new plant or equipments, R&D etc.
Therefore, there should be the sound resource planning for effective implementation of
strategy.

An effective resource plan helps answer the following questions:

Do organizations have resources enabling their strategies to be executed

successfully?
Are the strategies of the organization being shaped to capitalize on the expertise
in the resource area?
What are the processes for allocating resources at corporate and business level?

Process of Resource Planning

Define the missions/goals
Assess the current inventory of resources
Assess and acquire the required resource
Allocate the  resources,

Management System for Strategy Implementation

Strategy implementation requires establishment of management system. Management

gets the jobs done by working with & through people to implement strategy. It
performs the functions of planning, organizing, staffing, leading & controlling. It
manages change & conflicts. The essential of management system for strategy
implementation consists of:

1. Human Resource Management: People are the heart of strategy

implementation. The unique competencies of people are the key strategic factors
enabling the success of strategies. The components of human resource
management consists of (a) putting together a strong management team (b)
acquiring competent employees (c) development of employees (d) utilization of
employees & (e) Retention of employees.
2. Information Management: Strategy implementation requires establishment &
use of information, communication, & ecommerce systems. They enable people
to carry out their roles successfully & Information management enables success
of strategy. Information technology
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organizations to access & process information is crucial to strategy

implementation. E-commerce is a vital tool for strategy implementation.
3. Leadership: Leadership is guiding & influencing It establishes direction, manages
change & builds a team. It makes decisions. It is essential to drive strategy
implementation forward. Effective leaders carry out the following tasks to
strategy into actions. (a) Benchmarking (b) performance based records (c)
supportive environment (d) open communication (e) environmental adaptation (f)
team building (g) conflict management & (h) leading.
4. Shaping Organization Culture: Management shapes supportive organization
culture for strategy implementation. Organization culture refers to a set of beliefs,
values, symbols & assumptions shared in common throughout the organizations.
Strategy supportive culture is developed.
5. Reward System: Effective reward system encourage the employees to do better
which helps sound implementation of strategy.

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