Strategy Implementation

17 and Evaluation
CHAPTER

Introduction
‰ Strategy implementation and evaluation are critical phases of the process
of strategic management in an organization.
‰ Implementation involves putting the plans and initiatives developed as
part of the strategy into action, while evaluation refers to the process of
measuring and assessing the effectiveness of these actions.
Strategic Management Process
‰ The process of developing an organisation’s strategy is quite methodical.
The organisation first develops a clear vision, mission, values and goals.
‰ All these aspects come together in a strategic plan that details the
organisation’s vision, mission, values, goals, strategic themes, a high level
implementation plan and key performance measures.
‰ The key performance measures are included in the strategic plan and are
used to link the themes back to the organisation’s goals and to measure the
success of the strategy after it is implemented.
‰ The strategic management process is dynamic and continuous.
‰ For instance, a shift in the economy could represent a major opportunity and require a change in
long-term objectives and strategies; a failure to accomplish annual objectives could require a change
in policy or a ma or competitor’s change in strategy could require a change in the firm’s mission.
‰ Therefore, strategy formulation, implementation, and evaluation activities should be performed
on a continual basis, not just at the end of the year or semi-annually. The strategic management
process never really ends.

Environmental
Analysis

Develop Vision, Generate, Implement Strategic

Mission and Analyse and Select Evaluation
Objectives Strategies
Strategies and Control

Organisation
Appraisal

Formulation Implementation Evaluation

‰ Strategic Management Model (Fred R David) is a widely accepted, comprehensive.
‰ This model like any other model of management does not guarantee sure-shot success, but it
does represent a clear and practical approach for formulating, implementing, and evaluating
strategies.
‰ Relationships among major components of the strategic management process are shown in the
model.
‰ In practice, strategists do not go through the process in lockstep fashion.
‰ Generally, there is give-and-take among hierarchical levels of an organisation. »›The process
essentially is iterative and involves a lot of back-and-forth considerations across different stages
in the strategic management process.
‰ Many organisations conduct formal meetings semi-annually to discuss and update the firm’s
vision/mission, opportunities/threats, strengths/ weaknesses, strategies, objectives, policies,
and performance.
‰ Creativity from participants is encouraged in meeting.
‰ Good communication and feedback are needed throughout the strategic management process.
Stages in Strategic Management
‰ Crafting and executing strategy are the heart and soul of managing a business enterprise.
‰ But exactly what is involved in developing a strategy and executing it proficiently
‰ And who besides top management has strategy - formulation - executing responsibility
Strategic management involves the following stages:

Developing a strategic vision and formulation of statement of mission, goals and

objectives.

Environmental and organisational analysis.

Formulation of strategy.

Implementation of strategy.

Strategic evaluation and control.

Stage 1: Strategic Vision, Mission and Objectives

‰ First, Co. should develop a Vision i.e., future blueprint.
‰ It answers the question ‘where it wants to land’.

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‰ Top management’s views and conclusions about company’s direction and product, customer,
market, technology focus constitute strategic vision of company.
‰ Mission statements define what we are and what we do. Hence, the focus is on the role played by
organizational in society and overall direction and not any SBU specific direction.
‰ Ob ectives & goals of an Org flows from V & M.
‰ They provide a means of performance measurement at each level of management.
Stage 2: Environmental and Organisational Analysis
This stage is the diagnostic phase of strategic analysis. It entails two types of analysis:
1. Environmental scanning
2. Organisational analysis
1. Environmental Analysis – It consists of economic, social, technical& market analysis. It is
dynamic and uncertain & helps in determining opportunities and threats.
2. Organizational Analysis – It consists of analysis of Co. resources, tech resources, Productive
capacity, distribution channel, R&D, HR, etc. It reveals strength and weakness of Organisation.
This stage helps in SWOT analysis.
Stage 3: Formulating Strategy
‰ First stage in strategy formulation is developing strategic alternatives in line with SWOT of
organization.
‰ Second stage involves choosing appropriate alternative which will serve as strategy of Firm.
Examples of strategic alternatives:
(a) Should company continue in same business on same level of operation
(b) If it should continue in same business, should it grow by expanding same unit; establishing new
units or acquiring other units in same Industry
(c) If it should diversify, should it diversify into related or unrelated areas
(d) Should it get out of existing business fully or partially
(e) Combination of any of the above strategies
Stage 4: Implementation of Strategy
‰ It is operation- oriented activity.
‰ Most demanding & time-consuming stage.
Strategy execution process includes following aspects:
(a) Developing budget to allocate ample resource for strategy implementation.
(b) Staffing Org. with needed skills & expertise.
(c) Motivating people to pursue target energetically.
(d) Creating a Co. culture & work climate that support successful strategy execution.
(e) Ensuring policies, procedures and internal operations facilitate effective execution.
(f) Exerting Leadership needed for strategic execution & continuous improvement.
Good strategy execution creates strong fits between
(a) Strategy & Org’s capability
(b) Strategy & reward structure
(c) Strategy & Org work culture
(d) Strategy & internal system
Strategy Implementation and Evaluation 443
Stage 5: Strategic Evaluation and Control
Final stage of SM process involves
‰ Evaluating Co.’s strategy implementation &
‰ Assessing impact of new external Developments and make corrective adjustments to V, M,
Objectives & strategy.
Successful strategy execution requires searching for:
(a) Ways to continuously improve and
(b) Corrective adjustments whenever external & and internal environment demands.
It may be in form of –
‰ Simple fine-tuning strategy if strategy is working well or
‰ Modifying strategy when strategy is not yielding desired result or there is changes in environment.
Strategy Formulation Corporate Strategy
‰ Planning entails choosing what has to be done in the future (today, next
week, next month, next year, over the next couple of years, etc.) and creating
action plans. An essential element of effective management is adequate
planning.
‰ Choosing a path of action to achieve defined goals is a part of planning.
‰ The game plan that really directs the company towards success is called
“corporate strategy”. Planning may be operational or strategic.
‰ Senior management develops strategic plans for the entire organisation after evaluating the
organization’s strengths and weaknesses in light of potential possibilities and dangers in the
outside world.

Corporate Strategy

Strategic planning Operational planning

Characteristics of Strategic planning Characteristics of Operational planning

Shapes the organisation and its resources. Deals with current deployment of
Assesses the impact of environmental resources. Develops tactics rather than
variables. Takes a holistic view of the strategy. Projects current operations into
organisation. Develops overall objectives the future. Makes modifications to the
and strategies. Is concerned with the business functions but not fundamental
long-term success of the organisation. Is a changes. Is the responsibility of functional
senior management responsibility. managers.

Strategic Planning: The game plan that really directs the company towards success is called
“corporate strategy”. The success of the company depends on how well this game plan works.
Because of this, the core of the process of strategic planning is the formation of corporate strategy.
The formation of corporate strategy is the result of a process known as strategic planning.
‰ Strategic planning is the process of determining the ob ectives of the firm, resources required to
attain these objectives and formulation of policies to govern the acquisition, use and disposition
of resources.
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‰ Strategic planning involves a fact of interactive and overlapping decisions leading to the
development of an effective strategy for the firm.
‰ Strategic planning determines where an organisation is going over the next year or more and the
ways for going there.
‰ The process is organisation-wide or focused on a major function such as a division or other
major function.

Strategic uncertainty and how to deal with it?

‰ Strategic uncertainty refers to the unpredictability and unpredictability of future events and
circumstances that can impact an organization’s strategy and goals.
‰ It can be driven by factors such as changes in the market, technology,
competition, regulation, and other external factors.
‰ Dealing with strategic uncertainty can be challenging and organizations
need to have the flexibility, resilience, and agility to quickly respond to changes in the environment
and minimize its impact.
‰ To be manageable, they need to be grouped into logical clusters or themes.
‰ It is then useful to assess the importance of each cluster in order to set priorities with respect to
Information gathering and analysis.

Organizations can build flexibility into their strategies to quickly adapt to

Flexibility
changes in the environment.
Diversifying the organization’s product portfolio, markets, and customer base
can reduce the impact of strategic uncertainty.
Organizations can regularly monitor key indicators of change and conduct
Monitoring and
scenario planning to understand how different future scenarios might impact
Scenario Planning
their strategies.
Organizations can invest in building internal resilience, such as strengthening
Building
their operational processes, increasing their financial flexibility, and improving
Resilience
their risk management capabilities.
Collaborating with other organizations, suppliers, customers, and partners
Collaboration and
can help organizations pool resources, share risk, and gain access to new
Partnerships
markets and technologies.
Each element of strategic uncertainty involves potential trends or events that
could have an impact on present, proposed, and even potential businesses.,
a trend toward natural foods may present opportunities for uices for a firm
producing aerated drinks on the basis of a strategic uncertainty. The impact
Impact of
of a strategic uncertainty will depend on the importance of the impacted
uncertainty
SBU to a firm. The importance of established SBUs may be indicated by their
associated sales, profits, or costs. However, such measures might need to be
supplemented for potential growth as present sales, profits, or costs may not
reflect the true value.

Strategy Implementation and Evaluation 445

Strategy Implementation
‰ Strategy implementation concerns the managerial exercise of putting a freshly
chosen strategy into action.
Deals with the managerial exercise of supervising the ongoing pursuit of
strategy, making it works, improving the competence with which it is executed
and showing measurable progress in achieving the targeted results.
‰ Strategic implementation is concerned with translating a strategic
decision into action, which presupposes that the decision itself (i.e., the
strategic choice) was made with some thought being given to feasibility and acceptability.
Relationship with strategy formulation
A B
Square A represents a situation where Square B represents a situation
strategy formulation is sound and where strategy formulation is
strategy implementation is weak. sound and strategy excellent.
Sound

It may be due to lack of resources, Ideal situation which every Firm

experience, leadership etc. wants to achieve.
Strategy Formulation

Company should try to move from

square A to B.

C D
Square C represents a situation where Square D represents a situation where
strategy formulation is flawed and strategy formulation is flawed and
Flawed

strategy implementation is weak. strategy implementation is excellent.

In this case, company needs to In this case, company needs to redesign
redesign their strategy and read just their strategy before readjusting them
their implementation skills. implementation skills.
Weak Excellent
Strategic Formulation Ineffective
Effective
Effective Thrive/ Grow Die slowly

A situation where strategy formulation is A situation where strategy formulation is

effective and operational management is ineffective and operational management
Operational Management

efficient. Such company is well placed and is efficient. Such company is doomed to
thrives as it is achieving what it wants to fail unless there is change in strategic
achieve with efficient input-output ratio. direction.

Ineffective Survive Die quickly

A situation where strategy formulation is

A situation where strategy formulation is
effective and operational management is
ineffective and operational management
inefficient. Such company will survive as
is inefficient. Such company is doomed
strategic direction to ensure effectiveness
to fail unless there is change in strategic
is there even if too much input is used to
direction.
generate output.

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Difference between Strategy Formulation and Implementation
Summarized are the key distinctions between strategy formulation and strategy implementation:
Strategy Formulation Strategy Implementation
Strategy Formulation includes planning and Strategy Implementation involves all those
decision-making involved in developing means related to executing the strategic plans.
organization’s strategic goals and plans.
In short, Strategy Formulation is placing the In short, Strategy Implementation is managing
Forces before the action. forces during the action.
An Entrepreneurial Activity based on strategic An Administrative Task based on strategic and
decision-making. operational decisions.
Emphasizes on effectiveness. Emphasizes on efficiency.
Primarily an intellectual and rational process. Primarily an operational process.
Requires co-ordination among few individuals at Requires co-ordination among many individuals
the top level. at the middle and lower levels.
Requires a great deal of initiative, logical skills, Requires specific motivational and leadership
conceptual intuitive and analytical skills. traits.
Strategic Formulation precedes Strategy Strategy Implementation follows Strategy
Implementation. Formulation.
‰ Strategy formulation concepts and tools do not differ greatly for small, large, for - profit, or non-
profit organizations. However, strategy implementation varies substantially among different
types and sizes of organizations.
‰ These types of activities obviously differ greatly among manufacturing, service, and governmental
organizations.
‰ Two types of linkages exist between these two phases of strategic management. The forward
linkages deal with the impact of strategy formulation on strategy implementation while the
backward linkages are concerned with the impact in the opposite direction.
Linkages and Issues in Strategy Implementation Linkages
Noteworthy is the fact that while strategy formulation is primarily
an entrepreneurial activity, based on strategic decision-making, the
implementation of strategy is mainly an administrative task based on
strategic as well as operational decision-making.
The different elements in strategy formulation starting with objective
setting through environmental and organizational appraisal, strategic
alternatives and choice to the strategic plan determine the course
that an organization adopts for itself.
With the formulation of new strategies, or reformulation of existing
Forward Linkages
strategies, many changes have to be affected within the organization.
The organizational structure has to undergo a change in the light of
the requirements of the modified or new strategy.
The style of leadership has to be adapted to the needs of the modified
or new strategies.

Strategy Implementation and Evaluation 447

 Just as implementation is determined by the formulation of
strategies, the formulation process is also affected by factors related
with implementation.
While dealing with strategic choice, remember that past strategic
actions also determine the choice of strategy.
Backward Linkages
Organizations tend to adopt those strategies which can be
implemented with the help of the present structure of resources
combined with some additional efforts. Such incremental changes,
over a period of time, take the organization from where it is to where
it wishes to be.

Issues in Strategy Implementation

A strategist, therefore, has to bring a wide range of knowledge, skills, attitudes, and
abilities. The implementation tasks put to test the strategists’ abilities to allocate
resources, design organisational structure, formulate functional policies, and to provide
strategic leadership.
The strategic plan devised by the organization proposes the manner in which the strategies could
be put into action. Strategies, by themselves, do not lead to action. They are, in a sense, a statement
of intent. Implementation tasks are meant to realise the intent. Strategies, therefore, have to be
activated through implementation.
Strategies should lead to formulation of different kinds of programmes. A programme is a broad
term, which includes goals, policies, procedures, rules, and steps to be taken in putting a plan into
action. Programmes are usually supported by funds allocated for plan implementation.
Programmes lead to the formulation of pro ects. A pro ect is a highly specific programme for which
the time schedule and costs are predetermined. It requires allocation of funds based on capital
budgeting by organizations. Thus, research and development programme may consist of several
pro ects, each of which is intended to achieve a specific and limited ob ective, requires separate
allocation of funds, and is to be completed within a set time schedule.
Implementation of strategies is not limited to formulation of plans, programmes, and projects. Projects
would also require resources. After resources have been provided, it would be essential to see that a
proper organizational structure is designed, systems are installed, functional policies are devised, and
various behavioural inputs are provided so that plans may work.
Given below in sequential manner the issues in strategy implementation which are to be
considered:

Project Procedural Resource

implementation implementation allocation

Behavioural Functional Structural

implementation implementation implementation

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‰ The above activities need not be performed one after other. They can be done simultaneously as well.
‰ Strategy implementation requires shift in responsibility from Strategist to divisional and
functional managers/ employees.
‰ This shift in responsibility may create implementation problem if new strategy comes as surprise
to them. Hence, divisional & functional managers should be involved as much as possible in
strategy formulation process.
‰ Similarly, strategists should also be involved in strategy implementation process.
‰ Strategist’s genuine personal commitment to implementation is necessary and powerful
motivation for managers and employees.
‰ Major competitors’ accomplishments, products, plans, actions, and performance should be
apparent to all organizational members. Major external opportunities and threats should be
clear, and managers and employees’ questions should be answered satisfactorily.
‰ Top-down flow of communication is essential for developing bottom-up support.
‰ Firms need to develop a competitor focus on all hierarchical levels by gathering and widely
distributing competitive intelligence; every employee should be able to benchmark her or his
efforts against best-in-class competitors so that the challenge becomes personal. This is a challenge
for strategists of the firm. Firms should provide training for both managers and employees to
ensure that they have and maintain the skills necessary to be world-class performers.
Strategic Change Through Digital Transformation
‰ Organizations are being pushed harder than ever to shift digitally in order to stay competitive.
‰ Digital transformation, however, may be a difficult and complicated process. To guarantee that
projects for digital transformation are effective, change management is crucial.
Strategic Change
The changes in the environmental forces often require businesses to make
modifications in their existing strategies and bring out new strategies. Strategic
change is a complex process that involves a corporate strategy focused on new
markets, products, services and new ways of doing business.
Steps to initiate strategic change: For initiating strategic change, three steps can
be identified as under
Recognize The first step is to diagnose which facets of the present corporate culture
the need for are strategy supportive and which are not.
change This basically means going for environmental scanning involving appraisal
of both internal and external capabilities may be through SWOT analysis
and then determining where the lacuna lies and scope for change exists.
Create a shared Objective of both organization and individual should coincide and there
vision to should not be any conflict.
manage change This needs creation of shared vision between organization and management
which needs to be communicated.
Institutionalise It is action stage that requires implementation of change strategy.
the change Change process should be monitored and in case of any deviation, corrective
action should be taken.
Kurt Lewin’s Model of Change: To make the change lasting, Kurt Lewin proposed three phases
of the change process for moving the organization from the present to the future. These stages are
unfreezing, changing and refreezing.

Strategy Implementation and Evaluation 449

 Lewin proposed that change should not come as surprise to organization
members as it lowers their morale.
Process of unfreezing makes individual aware of necessity for change &
Unfreezing the help prepare for such change.
situation It involves breaking down old attitude & behaviour, custom & tradition so
that they start clean slate and are willing to change.
This can be achieved by making announcements and holding meetings
throughout the organization.
Once the unfreezing process has been completed and the members of the
organization recognise the need for change and have been fully prepared
to accept such change, their behaviour patterns need to be redefined. H.C.
Kellman has proposed three methods for reassigning new patterns of
behaviour. These are compliance, identification and internalization.
Compliance: It is achieved by strictly enforcing the reward and punishment
strategy for good or bad behaviour. Fear of punishment, actual punishment
Changing to the
or actual reward seems to change behaviour for the better.
new situation
I : Identification occurs when members are psychologically
impressed upon to identify themselves with some given role models whose
behaviour they would like to adopt and try to become like them.
Internalization: Internalization involves some internal changing of the
individual’s thought processes in order to adjust to the changes introduced.
They have given freedom to learn and adopt new behaviour in order to
succeed in the new set of circumstances.
It occurs when new behavior pattern becomes way of life.
New behavior must replace former behavior completely & permanently.
Refreezing
Change process is not one time process but a continuous one due to
dynamism and ever- changing environment.

How does digital transformation work?

The use of digital technologies to develop fresh, improved, or entirely new company procedures,
goods, or services is known as “digital transformation.” It’s a fundamental adjustment that can be
challenging to identify and even more challenging to implement.
Change management in the digital transition consists of four essential elements:
1. Defining the goals and ob ectives of the transformation.
2. Assessing the current state of the organization and identifying gaps.
3. Creating a roadmap for change that outlines the steps needed to reach the desired state.
4. Implementing and managing the change at every level of the organization.

How does change management work?

The role of change management in digital transformation, Digital transformation is a process
of organizational change that enables an organization to use technology to create new value for
customers, employees, and other stakeholders. A good change management strategy is necessary for
a successful digital transformation.

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Change management is the process of planning, implementing, and monitoring changes in an
organization. It provides organizations in achieving their objectives while reducing risks and
disruptions. For any organisation undergoing a digital transition, change management is crucial.
A properly implemented change management strategy can help an organization to:
‰ Specify the parameters and goals of the digital transformation.
‰ Determine which procedures and tools need to be modified.
‰ Make a plan for implementing the improvements.
‰ Involve staff members and parties involved in the transformation process.
‰ Track progress and make required course corrections
A crucial component of any digital transition is changing management.

Change Management Strategies for Digital Transformation

One of the most important areas of focus for guaranteeing a successful
transformation is changing management. In essence, modern firms must be
able to manage change. They must modify their management techniques in
order to achieve this.
T
businesses are:
Begin at the top A focused, invested, united leadership that is on the same page about the
company’s future is reflected in change that begins at the top.
The culture that will motivate the rest of the organisation to accept change
can only be generated and promoted in this way.
Ensure that the The fact that decision-makers are unaware of how to properly handle a
change is both digital transformation and the effects it will have on their firm is one of the
necessary and main causes of this.
desired If a corporation doesn’t have a sound strategy in place introducing too much
too fast can frequently become a major issue down the road.
Reduce Employee perceptions of what is required or desirable change can differ by
disruption department, rank, or performance history.
It’s crucial to lessen how changes affect staff.
The introduction of new tactics or technologies intended to improve
management and corporate operations causes employee concern about
change.
It is possible to reduce workplace disruption by:
(a) Getting the word out early and preparing for some interruption.
(b) Giving staff members the knowledge and tools, they need to adjust to change.
(c) Creating an environment that encourages transformation or change.
(d) Empowering change agents to provide context and clarity for changes, such
as project managers or team leaders.
(e) Ensuring that IT department is informed of changes in technology or
infrastructure and is prepared to support them.

Strategy Implementation and Evaluation 451

Encourage Create channels so that workers may contact you with queries or complaints.
communication Encourage departmental collaboration to propagate ideas and innovations
as new procedures take root.
Communication promotes efficiency and has the power to influence culture,
just like your vision.
The people who will be affected the most by these changes are reassured
that they are not in danger through effective communication, which keeps
everyone on the same page.
Recognize that Change readiness may be defined as the ability to continuously initiate and
change is the respond to change in ways that create advantage, minimize risk, and sustain
norm, not the performance.”
exception In order to keep up with the customers, businesses must also adapt their
operations.
They must prepare for change in advance and expect them.
It may run into difficulties because change is not a pro ect but rather an
ongoing process.

How to manage change during transformation?

Any organisation may find the work of digital transformation challenging and overwhelming. To
ensure that a digital transition is effective, change management is essential. Here are some pointers
for navigating change during the digital transformation:

1. Specify the digital 2. Always,

3. Be ready for
transformation’s aims and always, always
resistance
objectives communicate

5. Offer assistance 4. Implement

and training changes gradually

Organizational Framework

The McKinsey 7S Model refers to a tool that analyses a company’s “organizational

design.”

‰ The McKinsey 7s Model focuses on how the “Soft Ss” and Hard Ss elements are
interrelated, suggesting that modifying one aspect might have a ripple effect on
the other elements in order to maintain an effective balance.

452 Strategic Management PW

 Hard elements are:
Shared Values
Strategy: What steps does the company
intend to take to address current and futures
challenges
Structure Structure: How is work divided, how do
Communication channels different departments work and collaborate
Systems: Which formal and informal
Systems processes is the company’s structure based
Procedures for information flow on
Skills Soft elements are:
Workforce engagement and diversity Shared Values: What is the idea the
organization subscribes to Is this idea
Style communicated credibly to others
Transformational leadership and open Staff: This element refers to employee’s
communication development and relevant processes,
Staff performances and feedback programs etc.
Recruitment and selection Skill: What is the company’s base of skills and
competencies
Strategy Style: This depicts the leadership style and
Conflict resolution through missions how it influences the strategic decisions of
the organization.

The Hard elements are directly controlled by the management. The following elements are the
hard elements in an organization.

The direction of the organization, a blueprint to build on a core competency and

Strategy
achieve competitive advantage to drive margins and lead the industry.
Depending on the availability of resources and the degree of centralisation or
Structure decentralization that the management desires, its choses from the available
alternatives of organizational structures.
The development of daily tasks, operations and teams to execute the goals and
ob ectives in the most efficient and effective manner.
The Soft elements are difficult to define as they are more governed by the culture.
Systems
But these soft elements are equally important in determining an organization’s
success as well as growth in the industry. The following are the soft elements in
this model;
The core values which get reflected within the organizational culture or influence
Shared Values
the code of ethics of the management.
This depicts the leadership style and how it influences the strategic decisions of
Style the organisation. It also revolves around people motivation and organizational
delivery of goals.
Staff The talent pool of the organisation.

Strategy Implementation and Evaluation 453

 The core competencies or the key skills of the employees play a vital role in
defining the organizational success.
But like any other strategic model, this model has its limitations as well;
It ignores the importance of the external environment and depicts only the
most crucial elements within the organization.
Skills The model does not clearly explain the concept of organizational effectiveness
or performance.
The model is considered to be more static and less flexible for decision
making.
It is generally criticized for missing out the real’s gaps in conceptualization
and execution of strategy.

Organization Structure
T
merit of ideas carries more weight than their source, and where participation and shared
objectives are valued more than executive order. E S
Changes in corporate strategy often require changes in the way an organization is structured for two
major reasons.
First Second
Structure largely dictates how operational Structure dictates how resources will be
objectives and policies will be established to allocated to achieve strategic objectives.
achieve the strategic objectives. If an organization’s structure is based on
Objectives and policies are stated largely in customer groups, then resources will be
terms of products in an organization whose allocated in that manner.
structure is based on product groups. Similarly, if an organization’s structure
The structural format for developing objectives is set up along functional business lines,
and policies can significantly impact all other then resources are allocated by functional
strategy-implementation activities. areas.
Chandler, changes in strategy lead to changes in organizational structure. Chandler found a particular
structure sequence to be often repeated
as organizations grow and change New strategy is
strategy over time. There is no one formed
optimal organizational design or
structure for a given strategy. New
Organizational
‰ Small firms tend to be functionally performance administrative
structured (centralized). improves problems emerge
‰ Medium-size firms tend to
be divisionally structured
(decentralized).
‰ Large firms tend to use an SBU
(strategic business unit) or matrix A new
Organizational
structure. organizational
performance
structure is
declines
established

454 Strategic Management PW

‰ Every firm is influenced by numerous external and internal forces. But no firm can change its
structure in response to each of these forces, because to do so would lead to chaos. However,
when a firm changes its strategy, the existing organizational structure may become ineffective.
‰ Structure can also influence strategy.
‰ The following basic types of organizational structure: functional, divisional by geographic area,
divisional by product, divisional by customer, divisional process, strategic business unit (SBU),
and matrix.
Types of Organization Structure
‰ Organizational structure is the company’s formal configuration of its intended roles, procedures,
governance mechanisms, authority, and decision-making processes.
‰ The most important issue is that the company’s structure must be congruent with or fit with the
company’s strategy.

Strategic Business
Simple Functional Divisional Multi Divisional
Unit (SBU)
Structure Structure Structure Structure
Structure

Matrix Network Hourglass

Structure Structure Structure

A. Simple structure
Simple organizational structure is most appropriate for companies that follow a single-business
strategy and offer a line of products in a single geographic market.
Appropriate for companies implementing focused cost leadership or focused differentiation strategies.
A simple organizational structure may result in competitive advantages for some small companies
relative to their larger counterparts. These potential competitive advantages include a broad-based
openness to innovation, greater structural flexibility, and an ability to respond more rapidly to
environmental changes. However, if they are successful, small companies grow larger.
Generally, there are significant increases in the amount of competitively relevant information that
requires processing. More extensive and complicated information-processing requirements place
significant pressures on owner-managers (often due to a lack of organizational skills or experience
or simply due to lack of time).
Thus, it is incumbent on the company’s managers to recognise the inadequacies or inefficiencies of
the simple structure and change it to one that is more consistent with company’s strategy.

B. Functional Structure
A widely used structure in business organisations is functional type because of its simplicity and low
cost.
A functional structure also promotes specialization of labour, encourages efficiency, minimizes the
need for an elaborate control system, and allows rapid decision making.

Strategy Implementation and Evaluation 455

 C E

Corporate Strategic Corporate Corporate

Corporate R&D
Finance Planning Marketing Human

Sales & Human

Finance Production Engineering Accounting
Marketing Resource

The functional structure consists of a chief executive officer or a managing director and supported
by corporate staff with functional line managers in dominant functions such as production, financial
accounting, marketing, R&D, engineering, and human resources.
The functional structure enables the company to overcome the growth-related constraints of the
simple structure, enabling or facilitating communication and coordination.
However, compared to the simple structure, there also are some potential problems. Differences in
functional specialization and orientation may impede communications and coordination.
Functional specialists often may develop a myopic (or narrow) perspective, losing sight of the company’s
strategic vision and mission. When this happens, this problem can be overcome by implementing the
multidivisional structure.
C. Divisional Structure
The divisional structure can be organized in one of the four ways: by geographic area, by product
or service, by customer, or by process.

Chief Executive

Corporate Finance Corporate Legal/PR

General Manager General Manager

Division A Division B

Marketing Marketing

Production Production

Personnel Personnel

456 Strategic Management PW

A divisional structure has some clear advantages.
Accountability is clear. That is, divisional managers can be held responsible for sales
First and profit levels. Employee morale is generally higher in a divisional structure than
it is in centralized structure.
The divisional design are that it creates career development opportunities for man-
Second agers, allows local control of local situations, leads to a competitive climate within
an organization, and allows new businesses and products in be added easily.
The divisional design is not without some limitations.
Perhaps the most important limitation is that a divisional structure is costly, for a number of reasons.

‰ Each division requires functional specialists who must be paid.

1.

‰ There exists some duplication of staff services, facilities, and personnel; for
instance, functional specialists are also needed centrally (at headquarters) to
coordinate divisional activities.
2.

‰ Managers must be well qualified because the divisional design forces delegation
of authority better-qualified individuals requires higher salaries.
‰ A divisional structure can also be costly because it requires an elaborate,
3. headquarters-driven control system.

‰ Certain regions, products, or customers may sometimes receive special

treatment, and it may be difficult to maintain consistent, companywide practices.
4.

A divisional structure by geographic area allows local participation in decision making and improved
coordination within a region.
The divisional structure by product (or services) is most effective for implementing strategies when
specific products or services need special emphasis. The divisional structure allows strict control over
and attention to product lines, but it may also require a more skilled management force and reduced
top management control.
Strategy Implementation and Evaluation 457
E.g:- General Motors, DuPont, and Procter & Gamble use a divisional structure by product to implement
strategies.
This structure allows an organization to cater effectively to the requirements of clearly defined
customer groups.
E.g.:- Book-publishing companies often organize their activities around customer groups such as
colleges, secondary schools, and private commercial schools. Some airline companies have two
major customer divisions: passengers and freight or cargo services. Bulks are often organised in
divisions such as personal banking corporate banking, etc.
A divisional structure by process is similar to a functional structure, because activities are
organized according to the way work is actually performed. However, a key difference between
these two designs is that functional departments are not accountable for profits or revenues,
whereas divisional process departments are evaluated on these criteria.
D. Multi Divisional Structure
M M is composed of operating divisions where each division
represents a separate business to which the top corporate officer delegates responsibility for day-to-
day operations and business unit strategy to division managers.
The corporate office is responsible for formulating and implementing overall corporate strategy and
manages divisions through strategic and financial controls.
M M was developed in the 1920s, in response to coordination and
control-related problems in large firms. Costs were not allocated to individual products, so it was not
possible to assess an individual product’s profit contribution.
Loss of control meant that optimal allocation of firm resources between products was difficult (if not
impossible). Top managers became over- involved in solving short-run problems (such as coordination,
communications, conflict resolution) and neglected long-term strategic issues.
Multidivisional structure calls for:
‰ Creating separate divisions, each representing a distinct business
‰ Each division would house its functional hierarchy,
‰ Division managers would be given responsibility for managing day-to-day operations;
‰ A small corporate office that would determine the long-term strategic direction of the firm and
exercise overall financial control over the semi- autonomous divisions.
Strategic control refers to the operational understanding by corporate officers of the strategies being
implemented within the firm’s separate business units.
An increase in diversification strains corporate officers’ abilities to understand the operations of all
of its business units and divisions are then managed by financial controls, which enable corporate
officers to manage the cash flow of the divisions through budgets and an emphasis on profits from
distinct businesses.
E. Strategic Business Unit (SBU) Structure
SBU concept is relevant for multiproduct, multi –business enterprise. It is a scientific grouping of
related businesses/ divisions which can be planned independently. A strategic business unit (SBU)
structure consists of at least three levels, with a
(a) corporate headquarters at the top,
(b) SBU groups at the second level, and
(c) divisions grouped by relatedness within each SBU at the third level.

458 Strategic Management PW

When number of products become huge, it is not practical to provide separate strategic treatment to
each product.
It is necessary to group product/businesses into manageable number of strategically related businesses.
The three most important characteristics of a SBU are:
‰ It is a single business or a collection of related businesses which offer scope for independent
planning and which might feasibly standalone from the rest of the organization.
‰ It has its own set of competitors.
‰ It has a manager who has responsibility for strategic planning and profit performance, and who
has control of profit-influencing factors.
When strategic planning was carried out treating territories as the units for planning, it gave
:
(i) Since a number of territorial units handled the same product, the same product was getting
varied strategic planning treatments; and
(ii) Since a given territorial planning unit carried different and unrelated products, products with
dissimilar characteristics were getting identical strategic planning treatment.
The SBU structure groups similar products into strategic business units and delegates authority and
responsibility for each unit to a senior executive who reports directly to the chief executive officer.
This change in structure can facilitate strategy implementation by improving coordination between
similar divisions and channelling accountability to distinct business units.

SBU Structure

Strategic Strategic Strategic Strategic

Business Business Business Business
Unit A Unit B Unit C Unit D

Division Division

Division Division

Division Division

A strategic business unit (SBU) structure consists of at least three levels, with a corporate headquarters
at the top, SBU groups at the second level, and divisions grouped by relatedness within each SBU
at the third level. Within each SBU, divisions are related to each other, as also that SBU groups are
unrelated to each other. Within each SBU, divisions producing similar products and/or using similar
technologies can be organised to achieve synergy.
E.g:- Sony has been restructuring to match the SBU structure with its ten internal companies as
organised into four strategic business units. Because it has been pushing the company to make
better use of software products and content (e.g., Sony’s music, films and games) in its televisions
and audio gear to increase Sony’s profitability. By its strategy, Sony is one of the few companies
that have the opportunity to integrate software and content across a broad range of consumer
electronics products.

Strategy Implementation and Evaluation 459

The principle underlying the grouping is that all related products-related from the standpoint of
“function”-should fall under one SBU. The concept provides the right direction to strategic planning
by removing the vagueness and confusion often experienced in such multi-business enterprises in the
matter of grouping of the businesses.
F. Matrix Structure
Matrix structure is an O.S. where functional and projects/ products are combined simultaneously. It
aims at combining advantages of vertical and horizontal flow of authority and communication.
In matrix structure, there are functional departments with permanent employees who are assigned
to work in different projects.
So, employees have two superiors i.e., a product/ project manager and functional manager. The “home”
department - that is, engineering, manufacturing, or marketing - is usually functional & is reasonably
permanent. People from these functional units are assigned temporarily to one or more product units
or projects.
Matrix structure is the most complex structure since there is both vertical & horizontal flow of
authority.
It is appropriate when management concludes that other forms of Organisation Structure is not right
for implementation of strategy.
It is often found in an organization or within an SBU when the following three conditions exist:
(i) ideas need to be cross fertilized across projects or products,
(ii) resources are scarce, and
(iii) abilities to process information and to make decision needs to be improved.
It is widely used in many industries, including construction, healthcare, research and defence.

Top Management

Manufacturing Sales Finance Personnel

Manufacturing Unit Sales Unit Finance Unit Personnel Unit

The matrix structure is often found in an organization or within an SBU when the following three
conditions exists:
(1) Ideas need to be cross-fertilised across projects or products,
(2) Resources are scarce and
(3) Abilities to process information and to make decisions need to be improved.
For development of matrix structure Davis and Lawrence, have proposed three distinct phases:
C : Temporary cross-functional task forces are initially used when a
new product line is being introduced. A project manager is in charge as the key horizontal link.
2. Product/brand management: If the cross-functional task forces become more permanent,
the project manager becomes a product or brand manager and a second phase begins. In
this arrangement, function is still the primary organizational structure, but product or brand
managers act as the integrators of semi-permanent products or brands.

460 Strategic Management PW

 3. Mature matrix: The third and final phase of matrix development involves a true dual-authority
structure. Both the functional and product structures are permanent. All employees are connected
to both a vertical functional superior and a horizontal product manager. Functional and product
managers have equal authority and must work well together to resolve disagreements over
resources and priorities.
However, the matrix structure is not very popular because of difficulties in implementation and
trouble in managing.
G. Network Structure

Accounting Suppliers
Designers

Corporate Head
Quarters (Broker)

Manufacturers Customer Support Distributors

‰ A corporation organized in this manner is often called a virtual organization because it is composed
of a series of project groups or collaborations linked by constantly changing non-hierarchical,
cobweblike networks.
‰ The network structure becomes most useful when the environment of a firm is unstable and is
expected to remain so.
‰ The organization is, in effect, only a shell, with a small headquarters acting as a “broker”,
electronically connected to some completely owned divisions, partially owned subsidiaries, and
other independent organisation. In its ultimate form, the network organization is a series of
independent firms or business units linked together by a common system that designs, produces,
and markets a product or service.
Advantages Disadvantages
Allows a company to concentrate on its Availability of numerous partners can be a
own competencies & outsourcing of other source of trouble.
functions to experts in their field. Outsourcing of functions may keep the Firm
It provides more flexibility and adaptability away from discovering any synergies.
to meet/face rapid change in technology, If a Firm overspecializes in only few functions,
taste and preferences. there is a risk of choosing the wrong function
Most useful when environment of a Firm is and thus becoming non- competitive.
unstable. Low employee morale.

H. Hourglass Structure
‰ The role played by middle management is diminishing as the tasks performed by them are
increasingly being replaced by the technological tools. Hourglass organization structure
consists of three layers with constricted middle layer. The structure has a short and narrow
middle-management level.

Strategy Implementation and Evaluation 461

‰ Information technology links the top and bottom levels in the organization taking away many tasks
that are performed by the middle level managers. A shrunken middle layer coordinates diverse lower-
level activities. Contrary to traditional middle level managers who are often specialist, the managers
in the hourglass structure are generalists and perform wide variety of tasks.

Wide at the top

Narrow at the middle

Wide at the bottom

Advantages Disadvantages
Reduced cost due to reduction of middle (a) Since size of middle management is reduced,
level management posts. promotion opportunity for lower-level
Enhanced responsiveness by simplifying managers is also reduced.
decision making. (b) Lower employee morale at lower level due
Decision making authority is close to source to monotony.
of information, so it’s faster.

Organization Culture
Every organisation has a unique organizational culture. It has its own philosophy
and principles, its own history, values, and rituals, its own ways of approaching
problems and making decisions, its own work climate.
Corporate culture refers to a company’s values, beliefs, business principles, traditions,
ways of operating, and internal work environment.
Where Does Corporate Culture Come From?
It is reflected or manifested comes from

Official policies and practices

Ethical standards

Management practices
Dealing with stakeholders i.e, relationship with employees,
shareholders, vendors, trade union, Government etc.

Employee’s attitude and behaviour

Legends people repeat about in organization

Peer pressure that exists in organization.

462 Strategic Management PW

All the above sociological factors combine to form corporate culture.
Culture: ally or obstacle to strategy execution?
An organization’s culture is either an important contributor or an obstacle to successful strategy
execution. The beliefs, vision, objectives, and business approaches and practices underpinning a
company’s strategy may or may not be compatible with its culture.

Role of culture in strategy execution

‰ Strong culture promotes good strategy execution when there’s fit and impedes execution when
there’s negligible fit.
‰ Every company has a culture that has powerful influence on behaviour of managers. Culture
dictates not only the way managers behave within the organization but also decisions they take.
E.g:- A culture where frugality and thrift are values strongly shared by organizational members is very
conducive to successful execution of a low-cost leadership strategy.
A culture built around such business principles as
listening to customers,
encouraging employees to take pride in their work, and
giving employees a high degree of decision-making authority is very conducive
to successful execution of a strategy of delivering superior customer value.
‰ A strong strategy-supportive culture nurtures and motivates people to do their jobs in ways
conducive to effective strategy execution; it provides structure, standards, and a value system
in which to operate and it promotes strong employee identification with the company’s vision,
performance targets, and strategy.
‰ Employees are motivated to take challenging work to realize company’s vision & do their work
competently.
P S C C C
culture
The culture has to be changed as rapidly as can The strategy maker’s responsibility to select
be managed this, of course, presumes that it is a strategy compatible with the “sacred” or
one or more aspects of the culture that are out of unchangeable parts of prevailing corporate
whack rather than the strategy. culture.
Correcting a strategy- culture conflict can Strategy implementer’s task, once strategy
occasionally mean revamping strategy to produce is chosen, to change whatever facets of the
cultural fit, more usually it means revamping the corporate culture hinder effective execution.
mismatched cultural features to produce strategy
fit.
A sizable and prolonged strategy-culture conflict
weakens and may even defeat managerial efforts
to make the strategy work.
Changing a problem culture:
Changing a problem culture is because of the heavy anchor of deeply held values and
habits-people cling emotionally to the old and familiar.
It takes combined management efforts over a point of time to replace unhealthy culture with healthy
culture or remove unwanted aspects of problem culture and in still those which are more supportive.

Strategy Implementation and Evaluation 463

 Managers have to talk
The talk has to be followed

Second Step
Diagnose which facets of openly and forthrightly to

Third Step
First Step

all concerned about those swiftly by visible aggressive

the present culture are
aspects of the culture that action to identify and
strategy supportive and
have to be changed. modify the culture to create
which are not.
right strategy-culture fit.

‰ The culture-changing actions includes

Revising policies and procedures;
Altering incentive compensation (to reward the desired cultural behaviour);
Visibly praising and recognizing people who display the new cultural traits, Recruiting and
hiring new managers and employees;
Replacing key executives who are strongly associated with the old culture, &
Communicate the need and benefits to employees.
Strategic Leadership
A
: L T
Strategic leadership sets the by
‰ Developing and communicating vision of future,
‰ Formulate strategies in the light of internal and external environment,
‰ Brings about changes required to implement strategies and
‰ Inspire the staff to contribute to strategy execution.
Leadership roles to play:

chief entrepreneur Chief culture resource

Visionary acquirer
and strategist administrator builder and allocator

capabilities process
crisis manager spokesperson negotiator
builder integrator

motivator Arbitrator, policy maker policy enforcer head cheerleader

A strategic leader is a change agent to initiates strategic changes in the organisations and ensure that
the changes successfully implemented.
Five leadership roles to play in pushing for good strategy execution:
Strategic leader is a change agent who ensure that the changes are successfully implemented.

464 Strategic Management PW

 Staying on top of what is happening, closely monitoring progress, solving out issues,
and learning what obstacles lie in the path of good execution.

Promoting a culture of esprit de corps that mobilizes and energizes organizational

members to execute strategy in a competent fashion and perform at a high level.

Keeping the Organization responsive to changing situation.

Exercising ethical leadership and insisting that the company conduct its affairs like
a model corporate citizen.

Pushing corrective actions to improve strategy execution and performance.

E.g:- 1. N. R. Narayan Murthy, is known as a celebrated business leader because of the values he had
institutionalised over his tenure as CEO of Infosys. One of the great legacies he left with Infosys
is a strong management development program that builds management talent and strategic
leader with ethical values.
2. Dhirubhai Ambani, pioneer of Reliance Group, was an icon in himself because of his ability
to conceptualize and create sweeping strategies, to reach corporate goals, and proficiency in
implementing his strategic vision.
Leadership role in implementation: The strategic leaders must be able to use the strategic
management process effectively by guiding the company in ways that result in the formation of
strategic intent and strategic mission, facilitating the development and implementation of appropriate
strategic plans and providing guidance to the employees for achieving strategic goals.

Environmental
Scanning
Organization
Strategic
Planning
Information
Design Systems
Policy Leadership
Formulation
Implementation
Management
Control
Feedback
Reward
Management System
Development

Strategy Implementation and Evaluation 465

Strategic leadership entails the ability to anticipate, envision, maintain flexibility, and empower others
to create strategic change as necessitated by external environment.
Shapes the formulation of ______________________
Competitive landscape, strategic leaders are challenged to adapt their frames of reference so that they
can deal with rapid, complex changes.
A manager’s frame of reference is the foundation on which a manager’s mindset is built. The importance
of a manager’s frame of reference can be seen if we perceive those competitive battles are not between
companies or products but between mindsets or managerial frames.
Effective strategic leaders must be able to deal with the diverse and cognitively complex competitive
situations that are characteristic of today’s competitive landscape.
A Strategic leader has several responsibilities, including the following:
Making strategic decisions. Formulating policies and action plans to
implement strategic decision.
Ensuring effective communication in the Managing human capital (perhaps the most
organisation. critical of the strategic leader’s skills).
Managing change in the organisation. Creating and sustaining strong corporate culture,
Sustaining high performance over time.
The strategic leadership skills of a company’s managers represent resources that affect company
performance.
Strategic leadership sets the firm’s direction by developing and communicating a vision of future and
inspire organization members to move in that direction.
Two basic approaches to leadership
Transformational leadership style Transactional leadership style
It uses charisma and enthusiasm to inspire It uses the authority of its office to exchange
people to work for good of Organization. rewards such as pay, status symbols etc.
It is appropriate It is more appropriate
In turbulent/ unsafe environment or In static environment, or
In industries at start or end of PLC or In mature industry; or
In poorly performing organization. In organizations that are performing well.
These leaders inspire employees by offering They prefer a more formalized approach to
excitement, vision, intellectual stimulation and motivation, setting clear goals with explicit
personal satisfaction. rewards or penalties for achievement and non-
They involve followers in mission and give achievement.
them vision of higher purpose so as to get more These leaders try to build on existing culture and
dramatic changes in organization. enhance current practices.

Strategic Control
Controlling is one of the important functions of management and is often regarded as the core of the
management process.
It involves monitoring the activity, measuring results against predefined standards, analysing &
correcting deviation as necessary & adapting the system.
It is a function intended to regulate & check and ensure that performance of planned activities achieve
pre-determined goals.
466 Strategic Management PW
The process of control has the following elements:
(a) Objectives of the business system which could be operationalized into measurable and
controllable standards.
(b) A mechanism for monitoring and measuring the performance of the system.
(c) A mechanism,
(i) for comparing the actual results with reference to the standards
(ii) for detecting deviations from standards and
(iii) for learning new insights on standards, themselves.
(d) A mechanism for feeding back information for taking corrective actions in order to ensure the
strategy is relevant & goals are achieved.
Primarily there are three types of organizational control, viz., operational control, management
control and strategic control.

Operational Control Management Control Strategic Control

It is concerned with individual task or transaction as against total

management functions.
One of the ways to identify operational control area is there should be clear
cut & measurable relationship between input & output.
It ensures that processes are regulated within certain ‘tolerances’ limit.
Operational Control
E.g:- Stock control (maintaining stocks between set limits), Production
control (manufacturing to set programmes), Quality control (keeping
product quality between agreed limits), Cost control (maintaining
expenditure as per standards), Budgetary control (keeping
performance to budget).
It is concerned with integrated activities of a complete department, division
or even organization. It is more aggregative & inclusive than operational
control.
Management Control It is a process by which management ensure that resources obtained are
used effectively and efficiently to achieve ob ectives.
E.g:- Inventory management
According to Schendel and Hofer “Strategic control focuses on the dual
questions of whether:
(1) the strategy is being implemented as planned; and
Strategic Control
(2) the results produced by the strategy are those intended.”
It is directed towards identifying problems and changes in premises and
making necessary adjustments.

Types of Strategic Control:

Strategic Special Alert Implementation

Premise Control
Surveillance Control Control

Strategy Implementation and Evaluation 467

 Strategies are based on certain assumptions & premises with related to
environment in which they operate. Such premises may not remain valid
over a period of time.
Premise control is a tool for systematic and continuous monitoring of the
environment to verify the validity and accuracy of the premises on which
the strategy has been built.
Premise Control It primarily involves monitoring two types of factors:
(i) Environmental factors such as economic (inflation, liquidity, interest
rates), technology, social and legal-regulatory.
(ii) Industry factors such as competitors, suppliers, substitutes.
verify the validity & accuracy of the premise based on which strategy was
formed. It is neither feasible nor desirable to control all types of premises
in same manner.
It is unfocussed and involves general monitoring of environment & various
sources of information like financial newspaper business magazines etc. to
uncover unanticipated information which may affect the strategy. Known
Strategic Surveillance
as loose form of strategic control.
Strategic surveillance may be loose form of strategic control but is capable
of uncovering information relevant to the strategy.
Unexpected events like natural calamity, terrorist attack, change in
government & other such events may force an organization to review &
Special Alert Control
reconsider their strategy.
To cope up with such crisis, organizations form a crisis team to handle the situation.
It assesses need for change in overall strategy as per unfolding events &
results of strategy It is not replacement of operational controls.
Strategic implementation control is not a replacement to operational
control. Unlike operational control, it continuously monitors the basic
direction of the strategy.
The two basic forms of implementation control are:
Implementation
(i) Monitoring strategic thrusts: Monitoring strategic thrusts helps
Control
managers to determine whether the overall strategy is progressing
as desired or whether there is need for readjustments.
(ii) Milestone Reviews: All key activities necessary to implement strategy
are segregated in terms of time, events or major resource allocation.
It normally involves a complete reassessment of the strategy. It also
assesses the need to continue or refocus the direction of an organization.

468 Strategic Management PW

 Strategic Surveillance

Premise Control

Special Alert Control

Strategy Formulation
Implementation
Control

Time 1 Strategy
Time 2 Implementation Time 3

These four strategic controls steer the organisation and its different sub-systems to the right track.
They help the organisation to negotiate through the turbulent and complex environment.
Strategic Performance Measures
SPM is a method that increases line executives’ understanding of an organization’s strategic goals and
offers a continuous system for tracking progress towards these objectives using clear-cut performance
measurements.
SPM helps to eliminate silos by establishing a common language among all divisions of the organisation
so they may communicate openly and productively.
Strategic performance measures are key indicators that organizations use to track the effectiveness
of their strategies and make informed decisions about resource allocation.
Key performance measures and indicators must be created, selected, combined into reports and acted
upon so that strategy implementation can have tangible outcomes.

Firstly Secondly
There needs to be a clear KPIs need to be carefully
cause and effect relationship chosen because they will
between the indicators and influence the behaviour of
strategic outcomes. people within the organisation.

However, managers should be aware of paralysis by over analysis.

Managing the political aspects of implementing a strategy
People involved in the planning process for the implementation of a strategy may be affected by two
sets of forces.

Other hand, there could be political

The “rational” forces of openness, forces concerned with preserving
communication, and self-analysis empires and fostering internal rivalry
can exist on the one hand. that urge knowledge retention,
selective communication, and caution.

Strategy Implementation and Evaluation 469

When these two techniques conflict, the politically acceptable aspects may end up in the explicit
strategy while the sensitive elements may form an unspoken plan that contains the implicit strategy.
Types of Strategic Performance Measures
There are various types of strategic performance measures, including:
Financial measures, such as revenue growth, return on investment (ROI),
Financial Measures and profit margins, provide an understanding of the organization’s
financial performance and its ability to generate profit.
Customer measures, such as customer satisfaction, customer retention,
Customer Satisfaction
and customer loyalty, provide insight into the organization’s ability to
Measures
meet customer needs and provide high-quality products and services.
Market measures, such as market share, customer acquisition, and customer
Market Measures referrals, provide information about the organization’s competitiveness in
the marketplace and its ability to attract and retain customers.
Employee measures, such as employee satisfaction, turnover rate, and
employee engagement, provide insight into the organization’s ability
Employee Measures
to attract and retain talented employees and create a positive work
environment.
Innovation measures, such as research and development (R&D) spending,
patent applications, and new product launches, provide insight into the
Innovation Measures
organization’s ability to innovate and create new products and services
that meet customer needs.
Environmental measures, such as energy consumption, waste reduction,
Environmental
and carbon emissions, provide insight into the organization’s impact on
Measures
the environment and its efforts to operate in a sustainable manner.
Toward More Holistic Measures of Strategic Performance
Development of management thought and practice has persistently pushed the frontier of strategic
performance beyond financial metrics. Thus, the Triple Bottom Line framework (TBL) emphasises
People and Planetary Concerns besides profitability or Economic Prosperity alone. The Quadruple
Bottomline adds the 4th P to add a spiritual dimension named ‘Purpose’.

People People

Purpose
Planet Profits
Planet Profits

The Importance of Strategic Performance Measures Strategic performance measures are essential for
organizations for several reasons:

470 Strategic Management PW

 Strategic performance measures help organizations align their strategies
Goal Alignment with their goals and objectives, ensuring that they are on track to achieve
their desired outcomes.
Strategic performance measures provide organizations with the information
they need to make informed decisions about resource allocation, enabling
Resource Allocation
them to prioritize their efforts and allocate resources to the areas that will
have the greatest impact on their performance.
Strategic performance measures provide organizations with a framework
Continuous
for continuous improvement, enabling them to track their progress and
Improvement
make adjustments to improve their performance over time.
Strategic performance measures help organizations demonstrate
External accountability to stakeholders, including shareholders, customers, and
Accountability regulatory bodies, by providing a clear and transparent picture of their
performance.
Choosing the Right Strategic Performance Measures
Organizations should choose strategic performance measures that are aligned with their goals and
objectives and that provide relevant and actionable information. In selecting the right measures,
organizations should consider the following factors:

The measure should be relevant to the organization’s goals and objectives

Relevance
and provide information that is actionable and meaningful.
The measure should be based on data that is readily available and can be
Data Availability
collected and analysed in a timely manner.
The measure should be based on high-quality data that is accurate and
Data Quality
reliable.
The measure should be based on data that is current and up-to-date,
enabling organizations to make informed decisions in a timely manner.
These measures provide a way for organizations to assess the success
Data Timeliness
of their strategies, identify areas for improvement, and make informed
decisions about how to allocate resources and adjust their strategies to
achieve their desired outcomes.

TEST YOUR KNOWLEDGE – MCQS

1. ________ leadership style may be appropriate in turbulent environment.
(a) Transactional (b) Transformational
(c) Autocratic (d) None of the these
2. An organizational structure with constricted middle level is:
(a) Divisional structure
(b) Network structure
(c) Hour Glass structure
(d) Matrix structure

Strategy Implementation and Evaluation 471

 3. You are the head of operations of a company. When you focus on total or aggregate
management functions in the sense of embracing the integrated activities of a complete
:
(a) Strategic Control (b) Management Control
(c) Administrative Control (d) Operations Control
:
(a) Premise control (b) Special Alert control
(c) Implementation control (d) Budgetary control
5. Compliance, Identification and Internalization are the three processes involved in:
(a) Refreezing (b) Defreezing
(c) Changing behaviour patterns (d) Breaking down old attitudes
6. Which one is NOT a type of strategic control?
(a) Operational control (b) Strategic surveillance
(c) Special alert control (d) Premise control

ANSWER KEY
1. (b) 2. (c) 3. (b) 4. (d) 5. (c) 6. (a)

TEST YOUR KNOWLEDGE – CASE STUDIES

1. Ramesh, is owner of a popular brand of Breads. Yashpal, his son after completing Chartered
Accountancy started assisting his father in running of business. The approaches followed by
father and son in management were very different. While Ramesh preferred to use authority
and having a formal system of defining goals and motivation with explicitly rewards and
punishments, Yashpal believed in involving employees and generating enthusiasm to inspire
people to deliver in the organization. Discuss the difference in leadership style of father and
son. (SM)
Ans. Ramesh is a follower of transactional leadership style that focuses on designing systems and
controlling the organization’s activities. Such a leader believes in using authority of its office to
exchange rewards, such as pay and status. They prefer a more formalized approach to motivation,
setting clear goals with explicit rewards or penalties for achievement or non-achievement.
Transactional leaders try to build on the existing culture and enhance current practices. The style
is better suited in persuading people to work efficiently and run operations smoothly.
On the other hand, Yashpal is follower of transformational leadership style. The style uses charisma
and enthusiasm to inspire people to exert them from the good of the organization. Transformational
leaders offer excitement, vision, intellectual stimulation and personal satisfaction. They inspire
involvement in a mission, giving followers a ‘dream’ or ‘vision’ of a higher calling so as to elicit
more dramatic changes in organizational performance. Such a leadership motivates followers
to do more than originally affected to do by stretching their abilities and increasing their self-
confidence, and also promote innovation throughout the organization.
472 Strategic Management PW
 2. Suresh Sinha has been recently appointed as the head o fa strategic business unit of a large
multiproduct company. Advise Mr. Sinha about the leadership role to be played by him in
execution of strategy. (SM)
Ans. Leading change has to start with diagnosing the situation and then deciding which of several ways
to handle it. Managers have five leadership roles to play in pushing for good strategy execution:
(a) Staying on top of what is happening, closely monitoring progress, solving out issues, and
learning what obstacles lie in the path of good execution.
(b) Promoting a culture of esprit de corps that mobilized and energizes organizational members
to execute strategy in a competent fashion and perform at a high level.
(c) Keeping the organization responsive to changing conditions, alert for new opportunities,
bubbling with innovative ideas, and ahead of rivals in developing competitively valuable
competencies and capabilities.
(d) Exercising ethical leadership and insisting that the company conduct its affairs like a model
corporate citizen.
(e) Pushing corrective actions to improve strategy execution and overall strategic performance.
3. KaAthens Ltd., a diversified business entity having business operations across the globe.
The company leadership has just changed as Mr. D Bandopadhyay handed over the pedals
to his son Aditya Bandhopadhyay, due to his poor health. Aditya is a highly educated with
an engineering degree from IIT, Delhi. However, being very young he is not clear about his
role and responsibilities. In your view, what are the responsibilities of Aditya Bandopadhyay
as CEO of the company.
Ans. Aditya Bandopadhyay, an effective strategic leader of KaAthens Ltd. must be able to deal with
the diverse and cognitively complex competitive situations that are characterisitic of today’s
competitive landscape.
A strategic leader has several responsibilities, including the following:
Making strategic decisions.
Formulating policies and action plans to implement strategic decision.
Ensuring effective communication in the organization.
Managing human capital (perhaps the most critical of the strategic leader’s skills).
Managing change in the organization.
Creating and sustaining strong corporate culture.
Sustaining high performance over time.
4. Manoj started his telecom business in 2010. Over next five years, he gradually hired fifty
people for various activities such as to keep his accounts, administration, sell his products
in the market, create more customers, provide after sales service, coordinate with vendors.
Draw the organization structure Manoj implement in his organization and name it.
Ans. Manoj has started a telecom business. Accounts, Administration, Marketing (customer creation,
after sales service, vendor coordination) are the functional areas that are desired in the
organisational structure. Further there is inherent need to have a department for the management
of telecom services/ operations.
Thus, the functional structure in the telecom business of Manoj can be as follows:
Strategy Implementation and Evaluation 473
 Chief Executive

Administration,
Telecom Accounts and
Marketing Human Resource
Operations Finance
etc.

Sales (Customer After Sales Vendor

Creation) Service Coordination

M P L I
of competitors. It seems impractical for the company to provide separate strategic planning
treatment to each one of its product or businesses. As a strategic manager, suggest the type
of structure best suitable for Moonlight Private Limited and state its benefits.
Ans. It is advisable for Moonlight Private Limited to follow the strategic business unit (SBU) structure.
Moonlight Private Limited has a multi-product and multi-business structure where, each of these
businesses has its own set of competitors. In the given case, Strategic Business Unit (SBU) structure
would best suit the interest of the company.
SBU is a part of a large business organization that is treated separately for strategic management
purposes. It is separate part of large business serving product markets with readily identifiable
competitors. It is created by adding another level of management in a divisional structure after the
divisions have been grouped under a divisional top management authority based on the common
strategic interest.
Very large organizations, particularly those running into several products, or operating at distant
geographical locations that are extremely diverse in terms of environmental factors, can be better
managed by creating strategic business units, just as is the case for Moonlight Private Limited.
SBU structure becomes imperative in an organization with increase in number, size and diversify.
Benefits of SBUs:
(a) Establishing coordination between divisions having common strategic interest.
(b) Facilitate strategic management and control.
(c) Determine accountability at the level of distinct business units.
(d) Allow strategic planning to be done at the most relevant level within the total enterprise.
(e) Make the task of strategic review by top executives more objective and more effective.
(f) Help to allocate resources to areas with better opportunities.
474 Strategic Management PW
 Thus, an SBU structure with tis set of advantages would be most suitable for the company with
the given diverse business having separate identifiable competitors, but a common organizational
goal.
6. Sanya Private Limited is an automobile company. For the past few years, it has been
observed that the progress of the company has become stagnant. When scrutinized, it was
found that the planning department was performing fairly well but the plans could not be
implemented due to improper use of resources, undesirable tendencies of workers and
S M S
the elements of process of control to overcome the problem.
Ans. Sanya Private Limited deteriorating performance due to poor implementation of plans that is
improper use of resources, undesirable tendencies of the workers, and non-conformance to norms
and standards, all point towards weak controls in the organization. Implementation of plans
cannot assure results unless strong and sufficient controls are put in place. The management of
the company should focus diligently on developing controls especially in the identified problem
areas.
The process of control has the following elements:
(a) Objective of the business system which could be operationalized into measurable and
controllable standards.
(b) A mechanism for monitoring and measuring the performance of the system.
(c) A mechanism (i) for comparing the actual results with reference to the standards (ii)
for detecting deviations from standards and (iii) for learning new insights on standards
themselves.
(d) A mechanism for feeding back corrective and adaptive information and instructions to the
system, for effecting the desired changes to set right the system to keep it on course.
Above elements of control would ensure a proper check on improper use of resources, undesirable
tendencies of the workers, and non-conformance to norms and standard and ensure a result
oriented implementation of plans.
7. A Chennai based fast moving consumer goods (FMCG) major CDE Ltd. recently announced
restructuring its business. The company indicated that the business would be split into
FMCG E R R
The company management has decided that these four units will operate as separate
T
and business unit strategy to the concerned managers. Identify the organization structure
that CDE Ltd. has planned to implement. Discuss any four attributes and the benefits the
firm may derive by using this organization structure. (Dec 2021)
Ans. CDE Ltd. has planned to implement a Strategic Business Unit (SBU) structure. Very large
organizations, particularly those running into several products, or operating at distant geographical
locations that are extremely diverse in terms of environmental factors, can be better managed
by creating strategic business units. SBU structure becomes imperative in an organization with
increase in number, size and
The attributes of an SBU and the benefits a firm may derive by using the SBU Structure are
as follows:
A scientific method of grouping the businesses of a multi – business corporation which
helps the firm in strategic planning.

Strategy Implementation and Evaluation 475

 An improvement over the territorial grouping of businesses and strategic planning based
on territorial units.
Strategic planning for SBU is distinct from the rest of businesses. Products/ businesses
within an SBU receive the same strategic planning treatment and priorities.
Each SBU will have its own distinct set of competitors and its own distinct strategy.
The CEO of SBU will be responsible for strategic planning for SBU and its profit performance.
Products/businesses that are related from the standpoint of function are assembled together
as a distinct SBU.
Unrelated products/ businesses in any group are separated into separate SBUs.
Grouping the businesses on SBU lines helps in strategic planning by removing the vagueness
and confusion.
8. XYZ Ltd. is an automobile company that offers diversified products for all customer segments.
C I
strategy. Being the CEO of the company, what stages will you follow for developing and executing
the new strategy? (May 2022)
OR
Changes in environmental forces often require businesses to make modifications in their
existing strategies. In view of the same explain the areas to be focused while considering concept
of strategic change. Also explain the steps to initiate strategic change process. (May 2023)
Ans. Today, India has become the outsourcing hub for many of the global automobile manufacturers.
The auto industry comprises four segments which are passenger vehicles, commercial vehicles,
three wheelers and two wheelers. XYZ Ltd. is an automobile company that offers diversified
products for all customer segments. The company is already in existence, so it has its own vision,
mission and a strategy to execute for achieving its vision.
While developing and executing the strategy, XYZ Ltd. might have followed the five-stage
managerial process as given below:
1. Developing a strategic vision.
2. Environmental and organizational analysis.
3. Formulation of strategy.
4. Implementing and executing the strategy.
5. Strategic evaluation and control.
But due to COVID-19, the automobile industry has faced the lockdown situation. Changes in the
economy forced the XYZ Ltd. to change its existing strategy and prepare the new strategy. The
changes in the environmental forces due to COVID-19 requires XYZ Ltd. to make modifications
in their existing strategies and bring out new strategies.
For initiating strategic change, three steps can be followed by the CEO of the company which
are as under:
(i) Recognize the need for change: This is the first step to diagnose facets of the corporate
culture that are strategy supportive or not. This has already been identified by Ltd.
(ii) Create a shared vision to manage change: Objectives and vision of both individuals and
organization should coincide. The CEO of XYZ Ltd. needs to constantly and consistently
communicate the vision not only to inform but also to overcome resistance.

476 Strategic Management PW

 (iii) Institutionalize the change: Creating and sustaining a different attitude towards change
is essential to ensure that the XYZ Ltd. does not slip back into old ways of thinking or doing
things. All these changes should be set up as a practice to be followed by the company and
be able to transfer from one level to another as a well settled practice.
9. Due to recurrence of various variants of Coronavirus, LMN Ltd. is facing an unstable environment
and it has started unbundling and disintegrating its activities. It also started relying on outside
vendors for performing these activities. Identify the organization structure LMN Ltd. is shifting
to. Under what circumstances this structure becomes useful? (May 2022)
Ans. LMN Ltd. is shifting into network structure. It is a newer and somewhat more radical organizational
design. The network structure could be termed a “non-structure” as it virtually eliminates in-house
business functions and outsources many of them. An organization organized in this manner is often
called a virtual organization because it is composed of a series of project groups or collaborations
linked by constantly changing non-hierarchical, cobweb-like networks. The network structure
becomes most useful when the environment of a firm is unstable and is expected to remain so.
Under such conditions, there is usually a strong need for innovation and quick response.
Instead of having salaried employees, it may contract with people for a specific project or length
of time. Long-term contracts with suppliers and distributors replace services that the company
could provide for itself through vertical integration. The network structure provides organizations
with increased flexibility and adaptability to cope with rapid technological change and shifting
patterns of international trade and competition.

TEST YOUR KNOWLEDGE – DESCRIPTIVE QUESTIONS

1. Define strategic management. Also discuss the limitations of strategic management?
(May 2018) (Nov 2022)
Ans. The term ‘strategic management’ refers to the managerial process of developing a strategic vision,
setting objectives, crafting a strategy, implementing and evaluating the strategy, and initiating
corrective adjustments where deemed appropriate. The presence of strategic management cannot
counter all hindrances and always achieve success as there are limitations attached to strategic
management.
These can be explained in the following lines:
Environment is highly complex and turbulent. It is difficult to understand the complex
environment and exactly pinpoint how it will shape-up in future. The organizational
estimate about its future shape may awfully go wrong and jeopardize all strategic plans. The
environment affects as the organization has to deal with suppliers, customers, governments
and other external factors.
S Organizations spend a lot of time in
preparing, communicating the strategies that may impede daily operations and negatively
impact the routine business.
Strategic management is a costly process. Strategic management adds a lot of expenses to
an organization. Expert strategic planners need to be engaged, efforts are made for analysis
of external and internal environments, devise strategies and properly implement. These
can be really costly for organizations with limited resources particularly when small and
medium organizations create strategies to compete.

Strategy Implementation and Evaluation 477

 Competition is unpredictable. In a competitive scenario, where all organizations are
trying to move strategically, it is difficult to clearly estimate the competitive responses to
the strategies.
2. Explain different types of strategic control in brief. (May 2018)
OR
“Strategic control focuses on implementation and results produced by the strategy”. Explain
strategic control along with its different types. (May 2023)
Ans. Strategic Control focuses on the dual questions of whether:
(1) the strategy is being implemented as planned; and
(2) the results produced by the strategy are those intended.
There are four types of strategic control:
(a) Premise control: A strategy is formed on the basis of certain assumptions or premises
about the environment. Premise control is a tool for systematic and continuous monitoring
of the environment to verify the validity and accuracy of the premises on which the strategy
has been built.
(b) Strategic surveillance: Strategic surveillance is unfocussed. It involves general monitoring
of various sources of information to uncover unanticipated information having a bearing on
the organizational strategy.
(c) Special alert control: At times, unexpected events may force organizations to reconsider
their strategy. Sudden changes in government, natural calamities, unexpected merger/
acquisition by competitors, industrial disasters and other such events may trigger an
immediate and intense review of strategy.
(d) Implementation control: Managers implement strategy by converting major plans into
concrete, sequential actions that form incremental steps. Implementation control is directed
towards assessing the need for changes in the overall strategy in light of unfolding events
and results.
3. Write a short note on strategic change and explain the process of strategic change. (Nov 2018)
Ans. The changes in the environmental forces often require businesses to make modifications in
their existing strategies and bring out new strategies. Strategic change is a complex process that
involves a corporate strategy focused on new markets, products, services and new ways of doing
business.
Three steps for initiating strategic change are:
(i) Recognise the need for change – The first step is to diagnose which facets of the present
corporate culture are strategy supportive and which are not.
(ii) Create a shared vision to manage change – Objectives of both individuals and organizations
should coincide. There should be no conflict between them. This is possible only if the
management and the organization members follow a shared vision.
(iii) Institutionalize the change – This is an action stage which requires the implementation
of the changed strategy. Creating and sustaining a different attitude towards change is
essential to ensure that the firm does not slip back into old ways of doing things.
Kurt Lewin proposed three stages of the change process for moving the organization from
the present to the future.

478 Strategic Management PW

 (i) Unfreezing the situation – The process of unfreezing makes the individuals or organizations
aware of the necessity for change and prepares them for it. The change should not come as
a surprise to the members of the organization. Sudden and unannounced change would be
socially destructive and morale lowering,
(ii) Changing to a new situation – Once unfreezing is complete and members of the organization
recognize the need for change, then their behaviour patterns need to be redefined as
(a) Compliance – Enforcing reward and punishment strategy for good or bad behaviour
I Members are psychologically impressed to identify themselves with
some given role models whose behaviour they would like to adopt.
(c) Internalization – Involves some internal changing of the individual’s thought process.
They are given the freedom to learn and adopt new behaviour.
(iii) Refreezing – Occurs when the new behaviour becomes a normal way of life. The new
behaviour must replace the former behaviour completely for successful and permanent
change. This can be achieved by continuously reinforcing the newly acquired behaviour.
Change process is not a one-time application but a continuous process due to dynamism
and an ever-changing environment.
4. What is an ‘hourglass structure’? How can this structure benefit an organization? (May 2019)
Ans. In recent years information technology and communications have significantly altered the
functioning of organizations. The role played by middle management is diminishing as the tasks
performed by them are increasingly being replaced by technological tools. Hourglass organization
structure consists of three layers in an organization structure with a constricted middle layer.
The structure has a short and narrow middle management level.
Information technology links the top and bottom levels in the organization taking away many tasks
that are performed by the middle level managers. A shrunken middle layer coordinates diverse
lower-level activities. Hourglass Organization Structure Hourglass structure has obvious benefits
of reduced costs. It also helps in enhancing responsiveness by simplifying decision making.
Decision making authority is shifted close to the source of information so that it is faster. However,
with the reduced size of middle management, the promotion opportunities for the lower levels
diminish significantly.

Wide at the top

Narrow at the middle

Wide at the bottom

5. Discuss the leadership role played by the managers in pushing for good strategy
execution. (May 2019)

Strategy Implementation and Evaluation 479

Ans. A strategy manager has many different leadership roles to play: visionary, chief entrepreneur
and strategist, chief administrator, culture builder, resource acquirer and allocator, capabilities
builder, process integrator, crisis solver, spokesperson, negotiator, motivator, arbitrator, policy
maker, policy enforcer, and head cheerleader.
Managers have five leadership roles to play in pushing for good strategy execution:
1. Staying on top of what is happening, closely monitoring progress, working through issues
and obstacles.
2. Promoting a culture that mobilizes and energizes organizational members to execute
strategy and perform at a high level.
3. Keeping the organization responsive to changing conditions, alert for new opportunities and
remain ahead of rivals in developing competitively valuable competencies and capabilities.
4. Ethical leadership and insisting that the organization conduct its affairs like a model
corporate citizen.
5. Pushing corrective actions to improve strategy execution and overall strategic performance.
6. What is strategic control? Kindly explain the statement that “premise control is a tool for
systematic and continuous monitoring of the environment”. (Nov 2020)
Ans. Strategic Control
Strategic control is the process of evaluating formulated and implemented strategy. It is directed
towards identifying changes in the internal and external environments of the organization and
making necessary adjustments accordingly.
Strategic Control focuses on the dual questions of whether:
(1) the strategy is being implemented as planned; and
(2) the results produced by the strategy are those intended.
Yes, Premise control is a tool for systematic and continuous monitoring of the environment to
verify the validity and accuracy of the premises on which the strategy has been built.
It primarily involves monitoring two types of factors:
(i) Environmental factors such as economic (inflation, liquidity, interest rates), technology,
social and legal-regulatory.
(ii) Industry factors such as competitors, suppliers, substitutes. It is neither feasible nor
desirable to control all types of premises in the same manner. Different premises may
require different amounts of control.
Thus, managers are required to select those premises that are likely to change and would severely
impact the functioning of the organization and its strategy.
7. Draw ‘Divisional Structure’ with the help of a diagram. Also, give advantages and
disadvantages of this structure in brief. (Nov 2020)
Ans. Divisional structure is that organizational structure which is based on extensive delegation of
authority and built on a division basis. The divisional structure can be organized in one of the
four ways: by geographic area, by product or service, by customer, or by process. With a divisional
structure, functional activities are performed both centrally and, in each division, separately.

480 Strategic Management PW

 Chief Executive

Corporate Finance Corporate Legal/PR

General Manager General Manager

Division A Division B

Marketing Marketing

Production Production

Personnel Personnel

Advantages of Divisional Structure

Accountability is clear: Divisional managers can be held responsible for sales and profit
levels. Because a divisional structure is based on extensive delegation of authority, managers
and employees can easily see the results of their good or bad performances and thus their
morale is high.
Other advantages: It creates career development opportunities for managers, allows local
control of local situations, leads to a competitive climate within an organization, and allows
new businesses and products to be added easily.
Disadvantages of Divisional Structure
Higher cost: Owing to following reasons: (i). requires qualified functional specialists at
different divisions and needed centrally (at headquarters); (ii). It requires an elaborate,
headquarters –driven control system.
C : Certain regions, products, or customers may
sometimes receive special treatment, and it may be difficult to maintain consistent, company-
wide practices.
S
and organisational capabilities, structure, climate & culture. Enumerate the principal aspects
of the strategy execution process which are used in most of the situations. (Jan 2021)
Ans. Implementation and execution are an operations-oriented activity aimed at shaping the
performance of core business activities in a strategy-supportive manner. To convert strategic
plans into actions and results, a manager must be able to direct organisational change, motivate
people, build and strengthen company’s competencies and competitive capabilities, create a
strategy -supportive work culture, and meet or beat performance targets. Good strategy execution
involves creating strong “fits” between strategy and organisational capabilities, structure, climate
& culture.
I :
1. Developing budgets that steer ample resources into those activities critical to strategic
success.

Strategy Implementation and Evaluation 481

 2. Staffing the organisation with the needed skills and expertise, consciously building
and strengthening strategy-supportive competencies and competitive capabilities and
organising the work effort.
3. Ensuring that policies and operating procedures facilitate rather than impede effective
execution.
4. Using the best-known practices to perform core business activities and pushing for
continuous improvement.
5. Installing information and operating systems that enable company personnel to better
carry out their strategic roles day in and day out.
6. Motivating people to pursue the target objectives energetically.
7. Creating a company culture and work climate conducive to successful strategy implementation
and execution.
8. Exerting the internal leadership needed to drive implementation forward and keep
improving strategy execution.
When the organisation encounters stumbling blocks or weaknesses, management has to see that
they are addressed and rectified quickly.
9. “Strategic decisions are different in nature than all other decisions.” In the light of this
statement explain major dimensions of strategic decisions. (July 2021)
Ans. Strategic decisions are different in nature than all other operational decisions. The dimensions
of strategic decisions are not similar to that of other decisions which are taken at various levels
of the organisation during day-to-day working.
The following major dimensions of strategic decisions make them different from operational
decisions:
1. Strategic decisions require top-management decisions. Strategic decisions involve thinking
in totality of the organisations and there is also a lot of risk involved in that.
2. Strategic decisions involve the allocation of large amounts of company resources-financial,
technical, human etc.
3. Strategic decisions are likely to have a significant impact on the long-term prosperity of the
firm.
4. Strategic decisions are future oriented.
5. Strategic decisions usually have major multifunctional or multi-business consequences.
6. Strategic decisions necessitate consideration of factors in the firm’s external environment.
10. What are the important aspects of the process of implementation of strategy? (Dec 2021)
Ans. Implementation and execution are an operations-oriented activity aimed at shaping the
performance of core business activities in a strategy-supportive manner.
To convert strategic plans into actions and results, a manager must be able to direct organisational
change, motivate people, build and strengthen company’s competencies and competitive
capabilities, create a strategy-supportive work culture, and meet or beat performance targets.
Good strategy execution involves creating strong “fits” between strategy and organisational
capabilities, structure, climate & culture.

482 Strategic Management PW

 I :
1. Developing budgets that steer ample resources into those activities critical to strategic
success.
2. Staffing the organisation with the needed skills and expertise, consciously building
and strengthening strategy-supportive competencies and competitive capabilities and
organising the work effort.
3. Ensuring that policies and operating procedures facilitate rather than impede effective
execution.
4. Using the best-known practices to perform core business activities and pushing for
continuous improvement.
5. Installing information and operating systems that enable company personnel to better
carry out their strategic roles day in and day out.
6. Motivating people to pursue the target objectives energetically.
7. Creating a company culture and work climate conducive to successful strategy implementation
and execution.
Exerting the internal leadership needed to drive implementation forward and keep improving
strategy execution. When the organisation encounters stumbling blocks or weaknesses,
management has to see that they are addressed and rectified quickly.
11. Strategy formulation and strategy implementation are intertwined and linked with each
other.” Elucidate this statement with suitable arguments. (May 2022)
Ans. The strategy formulation and strategy implementation are intertwined and linked with each other.
Two types of linkages exist between these two phases of strategic management. The forward
linkages deal with the impact of strategy formulation on strategy implementation while the
backward linkages are concerned with the impact in the opposite direction.
Forward Linkages: The different elements in strategy formulation starting with objective setting
through environmental and organisational appraisal, strategic alternatives and choice to the
strategic plan determine the course that an organisation adopts for itself. With the formulation
of new strategies, or reformulation of existing strategies, many changes have to be affected within
the organisation. For instance, the organisational structure has to undergo a change in the light
of the requirements of the modified or new strategy. The style of leadership has to be adapted to
the needs of the modified or new strategies. In this way, the formulation of strategies has forward
linkages with their implementation.
Backward Linkages: Just as implementation is determined by the formulation of strategies,
the formulation process is also affected by factors related with implementation. While dealing
with strategic choice, remember that past strategic actions also determine the choice of strategy.
Organisations tend to adopt those strategies which can be implemented with the help of the
present structure of resources combined with some additional efforts. Such incremental changes,
over a period of time, take the organisation from where it is to where it wishes to be. It is to be
noted that while strategy formulation is primarily an entrepreneurial activity, based on strategic
decision- making, the implementation of strategy is mainly an administrative task based on
strategic as well as operational decision-making.
Strategy Implementation and Evaluation 483
12. What do you understand by diversification? Distinguish between concentric and
conglomerate diversification. (May 2022)
Ans. Diversification is defined as entry into new products or product lines, new services or new markets,
involving substantially different skills, technology and knowledge. Diversification endeavours can
be related or unrelated to existing businesses of the firm.
Following are the differences between the concentric diversification and conglomerate
diversifications:
C C
Meaning: It occurs when a firm adds Meaning: It occurs when a firm diversifies into areas
related products or markets. that are unrelated to its current line of business.
Linkage: The new business is linked to Linkage: Here no such linkages exist the new
the existing businesses through process, business/product is disjointed from the existing
technology or marketing. businesses/products.
Reasons for pursuing: The most Reasons for pursuing: The common reason for
common reason for pursuing a concentric pursuing a conglomerate growth strategy is that
diversification is that opportunities in a opportunities in a firm’s current line of business are
firm’s existing line of business are available. limited or opportunities outside are highly lucrative.
13. Write short note on Strategic Business Unit (SBU). (Nov 2022)
Ans. SBU is a part of a large business organization that is treated separately for strategic management
purposes. It is separate part of large business serving product markets with readily identifiable
competitors. It is created by adding another level of management in a divisional structure after the
divisions have been grouped under a divisional top management authority based on the common
strategic interests.
Very large organizations, particularly those running into several products, or operating at distant
geographical locations that are extremely diverse in terms of environmental factors, can be better
managed by creating strategic business units. SBU structure becomes imperative in an organization
with increase in number, size and diversity.
The three most important characteristics of a SBU are:
It is a single business or a collection of related businesses which offer scope for independent
planning and which might feasibly standalone from the rest of the organization.
It has its own set of competitors.
It has a manager who has responsibility for strategic planning and profit performance, and
who has control of profit-influencing factors.
Benefits of SBUs:
1. Establishing coordination between divisions having common strategic interest.
2. Facilitate strategic management and control.
3. Determine accountability at the level of distinct business units.
4. Allow strategic planning to be done at the most relevant level within the total enterprise.
5. Make the task of strategic review by top executives more objective and more effective.
6. Help to allocate resources to areas with better opportunities.
Thus, an SBU structure with its set of advantages would be most suitable for the company with the
given diverse businesses having separate identifiable competitors, but a common organizational
goal.
484 Strategic Management PW
14. “The TOWS Matrix is a tool for generating strategic options/choices.” Do you agree with
this statement? How it can help a strategist in decision making? (Nov 2022)
Ans. Yes, TOWS Matrix is a relatively simple tool for generating strategic options. Through TOWS matrix
four distinct alternative kinds of strategic choices can be identified.
S M M : Aggressive strategy - SO is a position that any firm would like to achieve. The
strengths can be used to capitalize or build upon existing or emerging opportunities.
ST M M : Conservative strategy - ST is a position in which a firm strives to minimize
existing or emerging threats through its strengths.
M M : Competitive strategy - The strategies developed need to overcome organizational
weaknesses if existing or emerging opportunities are to be exploited to maximum.
T M M : Defensive strategy - WT is a position that any firm will try to avoid. An
organization facing external threats and internal weaknesses may have to struggle for its survival.
The matrix is outlined below:
Strengths – S Weaknesses – W
Internal External
List Strengths List Weaknesses
Opportunities – O So, Strategies Use strengths to WO Strategies Overcoming
List Opportunities take advantage of opportunities weaknesses by taking advantage
of opportunities
Threats – T ST Strategies WT Strategies
List Threats Use strengths to avoid Minimize weaknesses and
threats avoid threats
By using TOWS Matrix, a strategist can look intelligently at how he can best take advantage of the
opportunities opens to him, at the same time that he can minimize the impact of weaknesses and
protect himself against threats. Used after detailed analysis of threats, opportunities, strength
and weaknesses, it helps the strategist to consider how to use the external environment to his
strategic advantage, and so he can identify some of the strategic options available to him.
15. You have been appointed as head of the Strategic Business Unit (SBU) of a large multiproduct
company. Explain the leadership roles, you have to play as a manager in pushing for good
strategy execution. (May 2023)
Ans. A head of the strategic business unit (SBU) has many different leadership roles to play: visionary,
chief entrepreneur and strategist, chief administrator, culture builder, resource acquirer and
allocator, capabilities builder, process integrator, crisis solver, spokesperson, negotiator, motivator,
arbitrator, policy maker, policy enforcer, and head cheerleader. Managers have five leadership
roles to play in pushing for good strategy execution:
1. Staying on top of what is happening, closely monitoring progress, working through issues
and obstacles.
2. Promoting a culture that mobilizes and energizes organizational members to execute
strategy and perform at a high level.
3. Keeping the organization responsive to changing conditions, alert for new opportunities and
remain ahead of rivals in developing competitively valuable competencies and capabilities.
4. Ethical leadership and insisting that the organization conduct its affairs like a model
corporate citizen.
5. Pushing corrective actions to improve strategy execution and overall strategic performance.
Strategy Implementation and Evaluation 485
16. How can you differentiate between transformational and transactional leaders? (SM)
Ans. Refer to notes above.
17. What is strategic change? Explain the change process proposed by Kurt Lewin that can be
useful in implementing strategies? (SM)
Ans. Refer to notes above.
18. What are differences between operational control and management control? (SM)
Ans. Refer to notes above.
19. What is implementation control? Discuss its basic forms. (SM)
Ans. Refer to notes above.

486 Strategic Management PW