4.

Continuous Process
Unit4 and 5 Strategic Implementation – • Needs regular monitoring, evaluation, and feedback.
1. Meaning of Strategic Implementation 5. People-Centric
Definition:
Strategic Implementation is the process of putting chosen strategies into action to achieve • Employees and managers play a central role in execution.
organizational goals. It involves converting strategic plans into policies, procedures, and actions. 6. Involves Resource Alignment
In simple terms: • Requires effective use of physical, financial, and human resources.
Planning is about "what to do", while implementation is about "doing it."
7. Time-Bound
2. Importance of Strategic Implementation
• Follows a timeline with milestones and performance goals.
• Turns ideas and strategies into actual results
Types of Resources Allocated:
• Ensures alignment of people, processes, and resources
1. Financial Resources
• Bridges the gap between planning and performance
• Budgeting for departments, projects, and strategic initiatives
• Enhances organizational effectiveness
• Investment in technology, marketing, R&D, etc.
• Builds competitive advantage through effective execution
2. Human Resources
3.Steps in Strategic Implementation Process • Right people in right roles
1. Set implementation objectives
• Training, development, and deployment of skilled personnel
2. Design supportive organizational structure
3. Technological Resources
3. Develop supportive policies and procedures
• IT systems, software, tools, innovation platforms
4. Allocate necessary resources
4. Physical Resources
5. Manage change and overcome resistance
• Equipment, machinery, infrastructure, raw materials
6. Train and develop employees
7. Monitor and evaluate performance Strategy and Structure in Strategic Implementation
Nature of Strategic Implementation Meaning:
Strategic implementation is action-oriented and focuses on translating strategic plans into “Structure follows strategy” – Alfred Chandler
operational reality. It involves aligning all organizational elements (people, processes, structure,
systems, and resources) to the strategy. This principle means that an organization must design its internal structure to support and
implement its chosen strategy. If the strategy changes, the structure may need to be realigned
Key Characteristics (Nature): accordingly.
1. Action-Oriented Process
• Moves the strategy from paper to practice.
Key Elements of Structure that Impact Strategy
2. Requires Organizational Change
Implementation
1. Division of Work
• May involve changing structure, culture, or systems.
• Tasks should be clearly divided and assigned according to strategic goals.
3. Cross-Functional Involvement
2. Hierarchy of Authority
• Involves all departments like HR, Finance, Marketing, Operations, etc.
• Clear reporting lines and accountability help streamline decisions.
3. Span of Control Financial Elements Implementation Focus Areas
• Number of subordinates a manager supervises should be optimal for communication. Budgeting Allocate funds to departments based on strategic priorities
Investment Decisions CapEx, R&D, infrastructure upgrades
4. Coordination Mechanisms Working Capital Management Managing cash flow, receivables, inventory
• Integrating activities between departments is crucial for strategic alignment. Cost Control Identify cost-saving opportunities
Risk Management Hedging, insurance, financial forecasting
5. Flexibility Example: A cost leadership strategy would require strict budget control and expense
• Structure should allow for innovation, responsiveness, and change minimization.

How to Align Structure with Strategy? 3. HR Strategy Implementation

1. Analyze the chosen strategy (cost focus, expansion, differentiation, etc.) Objective: To manage people as strategic assets aligned with organizational goals.
2. Redesign structure to suit the strategy HR Elements Implementation Focus Areas
Recruitment & Selection Hiring based on skills aligned with strategy
3. Assign roles and departments based on strategic priorities
Training & Development Skill-building for innovation or efficiency
4. Establish reporting and coordination systems Performance Appraisal Linking performance to strategic outcomes
5. Train and empower employees in the new structure Rewards & Compensation Incentives based on strategic targets
Change Management Supporting employees during strategic transitions
6. Review regularly and modify structure if strategy evolves
Example: For a strategy focusing on innovation, HR must build a creative and
Here are detailed notes on Implementation of Strategies in Functional Areas, an essential part of learning-driven workforce.
Strategic Implementation under Strategic Management:
4. Operations Strategy Implementation
Implementation Strategies in Functional Areas Objective: To ensure efficient production, delivery, and quality management.
Definition: Operations Elements Implementation Focus Areas
Functional strategies are action plans developed by departments like Marketing, Finance, HR, Production Planning Forecasting, scheduling, resource planning
Operations, and R&D to support the overall business strategy. Strategic implementation at this Process Improvement Lean manufacturing, Six Sigma, TQM
level ensures alignment between the corporate strategy and day-to-day activities. Quality Assurance ISO certifications, quality audits
1. Marketing Strategy Implementation Supply Chain Management Vendor selection, inventory control, logistics
Technology Integration Automation, ERP systems, robotics
Objective: To ensure the product reaches the right customer with the right message at the right Example: In a low-cost strategy, operations should focus on efficiency, minimal waste,
time. and cost-cutting.
Marketing Elements Implementation Focus Areas
Product Design, features, branding, packaging 5. Research & Development (R&D) Strategy Implementation
Price Cost leadership, premium pricing, penetration pricing Objective: To drive innovation and technological advancement.
Place (Distribution) Retail channels, online platforms, logistics coordination
R&D Elements Implementation Focus Areas
Promotion Advertising, public relations, digital marketing
Innovation Strategy New product development aligned with market needs
Segmentation & Targeting Identifying key customer segments and focusing marketing
Technology Acquisition Collaboration, licensing, partnerships
Example: If the business strategy is differentiation, marketing must focus on branding,
innovation, and customer experience. Idea Management Encouraging internal innovation culture
Prototyping & Testing Ensuring feasibility before full-scale production
2. Financial Strategy Implementation Time-to-Market Speeding up innovation cycle
Example: For a differentiation strategy, R&D plays a key role in unique product
Objective: To allocate resources efficiently and ensure financial sustainability. creation
Here’s a detailed explanation of “The Nature of Strategy Evaluation” — a key part of Strategic • Reallocate resources, change structure, retrain staff, etc.
Management:
NATURE OF STRATEGIC EVALUATION
1. Ongoing Process: Strategy evaluation is not a one-time thing. It’s a continuous process that
unit 5 Strategy Evaluation: The Nature of Strategy Evaluation happens throughout the life of the strategy. This helps to identify if things are going off track
early on.
Definition: 2. Assessing Effectiveness: It involves comparing the actual outcomes with the expected
Strategy Evaluation is the final stage in the strategic management process. It involves the results. If the strategy is leading to the desired results, it’s considered effective. If not,
assessment of the strategy’s performance, identifying deviations, and making necessary adjustments are needed.
adjustments to ensure the organization stays on track to meet its goals.
3. Feedback-Based: Evaluation is driven by feedback from various sources like performance
According to David (Strategic Management: Concepts and Cases): metrics, customer feedback, and market analysis. This feedback is used to make informed
“Strategy evaluation involves reviewing external and internal factors, measuring decisions about the strategy’s future direction.
performance, and taking corrective actions.”
4. Flexible and Adaptive: Since businesses are constantly changing, strategy evaluation
Purpose of Strategy Evaluation allows for flexibility. It helps businesses adapt to new challenges, competitors, and
opportunities by adjusting their strategy when necessary.
• To ensure that the strategy is effective and relevant
5. Focus on Key Metrics: Evaluation relies on specific performance indicators (KPIs), such as
• To identify problems or failures in implementation
sales growth, market share, profitability, and customer satisfaction, to measure how
• To determine whether the strategic goals are being met successful the strategy is.

• To provide feedback for future strategy formulation 6. Decision-Making: The results of the evaluation help leadership make decisions—whether to
continue with the current strategy, make improvements, or switch to a different approach.
• To adapt to changes in the external and internal environment

Key Characteristics of Strategy Evaluation

Tools & Techniques Used in Strategy Evaluation
Feature Description
Continuous Process Evaluation should occur regularly, not just once. Tool/Technique Purpose
Adapts to environmental changes, market trends, and organizational SWOT Analysis Reassess strengths, weaknesses, opportunities
Dynamic Nature Balanced Scorecard Evaluate performance from multiple perspectives
shifts.
Objective and Benchmarking Compare with industry standards
Relies on measurable performance indicators.
Quantitative Gap Analysis Identify gap between actual and desired performance
Comprehensive Covers all levels of strategy – corporate, business, and functional. Financial Ratio Analysis Measure profitability, liquidity, efficiency
Future-Oriented Not just about past results; helps guide future actions.
Strategic Evaluation Process (Three Main Steps) Review and Control in Strategy Evaluation
1. Reviewing the Underlying Strategy
Definition:
• Are the assumptions behind the strategy still valid? Strategic Review and Control is the ongoing process of monitoring, evaluating, and adjusting
• Has the external or internal environment changed? strategies and their implementation to ensure that an organization remains on track to achieve its
goals.
2. Measuring Organizational Performance
As per Pearce & Robinson:
• Compare actual results with expected results. “Control in strategic management is a process of guiding organizational activities to
• Use KPIs such as ROI, market share, profitability, etc. align performance with strategic goals.”

3. Taking Corrective Actions

• Modify or update the strategy.
1. Strategic Review • Use variance analysis to find gaps or deviations
4. Analyze Deviations
What is Strategic Review?
Strategic review is the systematic re-assessment of the strategy in light of: • Find reasons behind underperformance or overperformance

• Internal performance 5. Take Corrective Action

• Market changes • Revise strategy, reallocate resources, modify structure

• Emerging threats/opportunities Examples of Strategic Control Tools

• Stakeholder expectations Tool Purpose
Balanced Scorecard Evaluates financial, customer, process, learning
Key Aspects of Strategic Review:
Benchmarking Compare with best industry practices
Aspect Description KPI Dashboards Real-time performance tracking
Performance Analysis Evaluate how the strategy has performed (sales, market share, etc.) ERP Systems Integrated control across functions
Environmental Scanning Monitor external (PESTLE) and internal changes Budgeting & Cost Analysis Financial control and accountability
Strategy Audit Full-scale review of all strategy components
Revalidation of Assumptions Check whether original assumptions are still valid Importance of Review & Control
Review customer feedback, employee satisfaction, investor • Ensures alignment with strategic goals
Stakeholder Review
relations
• Promotes agility and adaptability
2. Strategic Control • Helps in early detection of issues
What is Strategic Control? • Improves resource utilization
Strategic control is the process of setting standards, measuring performance, and taking
• Supports evidence-based decision making
corrective action if performance deviates from strategic plans.

Types of Strategic Control Characteristics of an Effective Strategy Evaluation System

Type of Control Description Example An effective evaluation system helps an organization track the success or failure of its
Tests whether key assumptions made during Change in raw material strategies, make improvements, and stay aligned with its long-term goals.
Premise Control
strategy formulation remain valid prices
As per David (Strategic Management: Concepts and Cases):
Implementation
Monitors progress in implementing strategies Timelines, budget usage “An effective evaluation system should be simple, practical, flexible, and linked directly
Control to strategic objectives.”
Strategic Broad, general monitoring of external and Tracking competitor
Surveillance internal events actions, trends 1. Accuracy
Special Alert Crisis management (e.g.,
Control
Triggered by sudden, unexpected events
cyberattack) • The system must provide reliable and correct information.
• Inaccurate data can lead to wrong conclusions and poor strategic decisions.
Control Process in Strategic Evaluation Example: Financial reports, market share, and ROI should be recorded with
precision.
1. Establish Performance Standards
• Set clear, measurable goals (sales target, ROI, market share) 2. Consistency
2. Measure Actual Performance • Evaluation should be regular and standardized.

• Collect real-time data and reports (financial, operational, HR metrics) • Ensures that performance is measured consistently over time for meaningful comparison.

3. Compare Actual with Expected Performance Example: Monthly or quarterly evaluations using the same KPIs.
3. Objectivity Example: Low customer satisfaction score should trigger a service improvement
plan.
• Evaluation should be free from bias or subjectivity.
• It must be based on quantitative and qualitative facts, not personal opinions. 10. Cost-Effective
Example: Performance measured using set criteria like sales targets, customer • The system should not be too expensive or time-consuming relative to the benefits it
retention rates. provides.
• Efficiency matters in terms of tools, resources, and manpower used.
4. Relevance
• The metrics and methods used must be closely aligned with strategic goals. Example: Using in-house software tools instead of costly external systems if
feasible.
• Irrelevant indicators can mislead or distract the organization.
The criteria for strategy control can be broken down into a few key aspects when explaining
Example: For a differentiation strategy, focus on innovation and customer
in simple, oral terms:
satisfaction KPIs.
1. Clear Objectives: First, it's crucial to ensure that the strategies set are clearly defined and
5. Flexibility understood. You need to know what success looks like for your strategy.

• The system should adapt to changing environments and allow for updates in metrics or 2. Monitoring Progress: Regularly tracking and evaluating how well the strategy is being
methods. implemented helps identify whether things are going according to plan.

• Organizations often operate in dynamic conditions, so rigidity can be harmful. 3. Adjustments and Flexibility: Strategy control is about being able to adjust your approach if
things aren’t working as expected. It's about staying flexible.
Example: Introducing digital marketing performance metrics as online presence
grows. 4. Alignment with Goals: The strategy should align with the organization's overall objectives.
If it doesn't, you need to correct the course.
6. Timeliness 5. Feedback and Communication: Constant feedback loops allow for better control. It's
• Evaluation must be done at the right time to take corrective action quickly. important for team members to communicate openly and share insights, so improvements
can be made.
• Delayed evaluation may result in missed opportunities or prolonged losses.
6. Resource Allocation: Ensuring that the right resources—time, money, and people—are
Example: Monitoring campaign effectiveness weekly during a product launch.
being effectively used to implement the strategy.
7. Understandability
• The system should be easy to understand and interpret for all stakeholders involved. Strategic control is a critical part of the strategic management process, ensuring that an
organization's strategy is being executed properly and is achieving its intended goals. It helps
• Complex models may hinder effective decision-making.
organizations assess if they are on track to meet their strategic objectives and make necessary
Example: Using simple dashboards with visual reports for top management. adjustments when needed. Here's a detailed explanation of the mechanism for strategic control:

8. Participation-Oriented 1. Establishing Performance Standards

The first step in strategic control is setting clear, measurable performance standards or goals. These
• All departments and employees involved in strategy should participate in the evaluation.
standards represent the targets that the company aims to achieve through the implementation of its
• Encourages ownership, feedback, and better compliance. strategy. Performance standards are typically derived from the organization’s strategic objectives
and can include:
Example: Involving HR, finance, marketing teams in annual strategic reviews.
• Financial targets (e.g., profitability, revenue growth)
9. Action-Oriented
• Market share goals
• Evaluation must lead to actionable insights and decisions.
• Customer satisfaction levels
• It's not just about measuring, but about improving performance.
 • Innovation metrics (e.g., number of new products launched) This diagnostic phase is crucial in determining if the strategy itself is flawed or if execution issues
need to be addressed.
• Operational efficiency goals
5. Corrective Actions and Adjustments
These standards serve as benchmarks against which actual performance will be compared.
Based on the analysis of deviations, corrective actions are taken to get the strategy back on track.
2. Continuous Monitoring and Measurement These adjustments could be made in several areas:
After the performance standards are set, ongoing monitoring and measurement are crucial to
• Strategic Adjustments: This could involve revising the overall strategy if it is found to be
understand how well the strategy is being executed. This monitoring can be done through:
outdated or ineffective. For instance, entering a new market or revising a product offering.
• Key Performance Indicators (KPIs): These are quantifiable metrics that reflect the
• Resource Reallocation: Adjusting resources such as budget, manpower, or technology to
effectiveness of strategic actions.
areas where they are most needed. For example, allocating more resources to
• Examples of KPIs include sales growth, customer retention rate, cost reduction underperforming product lines or marketing campaigns.
percentages, and productivity rates.
• Operational Changes: Fine-tuning day-to-day operations to ensure they better support the
• Performance Dashboards: These are visual tools used to track key data in real-time, strategic goals. This may involve optimizing supply chain processes, improving customer
helping managers stay updated on the status of the strategy. service, or investing in employee training.
• Reports: Regular internal reports that track financial performance, customer feedback, • Tactical Modifications: Altering the specific actions or tactics within the strategy. For
employee productivity, etc. example, changing the advertising campaign approach or tweaking pricing strategies.
• Surveys and Feedback: Collecting feedback from employees, customers, and other The goal of corrective actions is to realign the strategy with the organization’s objectives and ensure
stakeholders to understand their perspectives on the strategy’s execution. better outcomes in the future.
This step helps to detect early signs of trouble or areas where the strategy may need adjustments. 6. Feedback Loop for Continuous Improvement
3. Comparing Actual Performance to Standards A feedback loop is crucial in strategic control. It ensures that the organization continuously gathers
information on its performance and uses it to refine strategies. Feedback comes from multiple
In this stage, the actual results (the performance data) are compared against the predefined
sources, including:
performance standards or goals. This step helps to identify:
• Employees: Their insights on how the strategy is affecting their work and morale.
• Positive deviations: When actual performance exceeds the expected standards.
• Customers: Their satisfaction, loyalty, and feedback on products and services.
• Negative deviations: When actual performance falls short of the expected standards.
• Shareholders and Investors: Their perspectives on the company’s financial health and
The comparison is typically made at regular intervals (e.g., quarterly, annually), and the evaluation
strategic direction.
is usually based on both quantitative (financial performance, market share, etc.) and qualitative
(customer satisfaction, employee morale) factors. • Competitors: Monitoring competitive actions can provide feedback on how well your
strategy is performing in the marketplace.
4. Analyzing Variances and Identifying Root Causes
Once performance deviations are detected, it’s important to conduct a thorough analysis to This feedback helps leaders to constantly adjust the strategy to the ever-changing business
understand why these deviations occurred. This includes: environment.

• Root cause analysis: Identifying the underlying factors that caused performance issues. For 7. Strategic Review Meetings
example, low sales may be due to poor marketing efforts, a flawed product, or increased These are regular meetings, typically involving senior management, to assess the overall progress of
competition. the strategy. In these meetings, the performance is reviewed, and decisions are made about:
• SWOT Analysis: A re-evaluation of the organization’s internal strengths, weaknesses, and • Whether the strategy should continue as is, or require major changes.
external opportunities and threats may be needed to understand why performance is
• How resources can be better allocated.
deviating from expectations.
• Whether external factors (e.g., market trends, technological advancements) require a shift in
• Market conditions: Sometimes external factors such as changes in the economy, new
the strategy.
competitors, or technological disruptions may impact strategy execution.
Strategic review meetings help leadership stay aligned on the direction of the organization and
ensure that all team members are on the same page.

8. Flexibility and Adaptation

One of the most important aspects of strategic control is its flexibility. The business environment is
constantly changing, and a strategy that was effective yesterday may not work tomorrow. Strategic
control mechanisms must be adaptable, allowing the organization to make adjustments quickly in
response to changes such as:
• New market trends
• Competitive dynamics
• Technological advancements
• Economic shifts
• Changes in customer behavior
Flexibility allows organizations to remain competitive, minimize risks, and capitalize on new
opportunities.

9. Long-Term and Short-Term Control Mechanisms

Strategic control can be categorized into short-term and long-term mechanisms:
• Short-term control focuses on monitoring and adjusting strategies in the short term (e.g.,
weekly sales reviews or monthly financial performance).

• Long-term control focuses on evaluating strategies that have longer implementation

periods (e.g., annual strategic reviews or quarterly market share analysis).
Both types of control mechanisms are important to ensure that strategies remain relevant and
effective over time.