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Lecture-06

The document outlines the significance and functions of strategy implementation, emphasizing its role in achieving organizational goals and enhancing competitive advantage. It details the process of implementation, including resource allocation, organizational structuring, and performance monitoring, while also discussing the importance of support systems like budgets, policies, and information systems. Additionally, it highlights the need for effective reward and compensation systems to motivate employees in alignment with strategic objectives.

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tanjidaakhter4
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2 views

Lecture-06

The document outlines the significance and functions of strategy implementation, emphasizing its role in achieving organizational goals and enhancing competitive advantage. It details the process of implementation, including resource allocation, organizational structuring, and performance monitoring, while also discussing the importance of support systems like budgets, policies, and information systems. Additionally, it highlights the need for effective reward and compensation systems to motivate employees in alignment with strategic objectives.

Uploaded by

tanjidaakhter4
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Strategy Implementation

1. Importance of Strategy Implementation

• Brings Plans into Action: It turns formulated strategies into actual practices.
• Achieves Strategic Goals: Ensures the organization meets its long-term objectives.
• Ensures Organizational Alignment: Aligns resources, structure, and processes with
strategic goals.
• Enhances Competitive Advantage: Helps organizations maintain or gain a competitive
edge.
• Improves Resource Utilization: Ensures optimal use of people, technology, and capital.

2. Function of Strategy Implementation

• Resource Allocation: Distributing resources (capital, personnel, etc.) to support strategy.


• Organizational Structuring: Designing the hierarchy and job roles to fit the strategy.
• Change Management: Managing transitions in processes, systems, or culture.
• Performance Monitoring: Evaluating performance to ensure strategy is on track.
• Policy Formulation: Developing guidelines and SOPs to support strategic activities.

3. Process of Strategy Implementation

1. Establish Objectives: Break down strategic goals into departmental or functional


objectives.
2. Develop Action Plans: Prepare specific, measurable activities with timelines.
3. Allocate Resources: Provide necessary financial, human, and technological resources.
4. Design Structure: Create an appropriate organizational structure to support strategy.
5. Assign Responsibilities: Define who is responsible for what.
6. Manage Change: Address resistance and ensure smooth transition.
7. Monitor and Evaluate: Use KPIs and performance metrics to track progress.
8. Feedback and Control: Adjust the strategy based on performance feedback.

4. Building a Capable Organization

• Skills Development: Training employees to meet strategic demands.


• Technological Capabilities: Adopting technology to support strategy.
• Leadership: Developing visionary leaders to guide strategic execution.
• Culture Alignment: Creating a culture that supports innovation, risk-taking, or efficiency
based on strategy.
5. Staffing the Organizational Structure

• Recruitment and Selection: Hiring talent aligned with strategic needs.


• Training and Development: Skill enhancement to match job requirements.
• Performance Management: Aligning incentives and appraisals with strategic objectives.
• Succession Planning: Ensuring future leadership capability.

6. Types of Organizational Structure

Structure
Description Advantages Disadvantages
Type
- Poor inter-departmental
Groups jobs by functions - Clear specialization- Efficient
Functional communication- Lack of
(e.g., marketing, finance) use of resources
flexibility
- Focus on specific
Based on products, - Duplication of resources-
Divisional markets/products- Better
services, or geography Competition between divisions
accountability

Combines functional and - Flexible and dynamic- - Role confusion- Power


Matrix
project-based structures Promotes collaboration struggles between managers

- Time-consuming decision-
Organizes people into - Improved coordination-
Team-based making- Possible lack of
teams Employee empowerment
authority

Relies on a central core - Dependence on external parties-


Network - Highly flexible- Cost-efficient
and outsources functions Reduced control

Project- Temporary structure for - Strong focus on outcomes- - Temporary in nature- Lacks
based projects High adaptability continuity
Support Systems in Strategy Execution
Strategy execution requires more than just people and plans—it depends heavily on support
systems that align organizational processes, resources, and behaviors with strategic goals.

1. Need for Budgets in Strategy Execution

• Allocates Resources Strategically: Ensures that financial resources are directed to


critical strategic activities.
• Controls Spending: Prevents wastage and monitors financial discipline.
• Enables Performance Tracking: Budgets act as benchmarks for evaluating
performance.
• Facilitates Decision-Making: Helps managers prioritize initiatives and investments.
• Drives Accountability: Budgetary allocations set responsibility centers.

2. Strategy-Supportive Policies

• Provide Operational Guidance: Policies turn strategic intent into specific rules and
procedures.
• Ensure Consistency: Helps standardize behavior across the organization.
• Empower Employees: Clearly defined policies reduce ambiguity in decision-making.
• Enable Delegation: Support autonomy while ensuring alignment with strategy.

3. Best Practices and Managerial Actions

• Benchmarking: Studying successful competitors and industry leaders to adopt effective


methods.
• Continuous Improvement (Kaizen): Emphasizing ongoing improvements in processes
and performance.
• Lean Practices: Removing waste and optimizing value delivery.
• Six Sigma: Reducing errors through data-driven quality management.
• Agile Methods: Emphasizing speed, flexibility, and customer focus.

4. Information Systems in Strategy Execution


• Data-Driven Decisions: Real-time access to information improves decision-making.
• Performance Monitoring: Dashboards and KPIs track execution progress.
• Coordination and Communication: Facilitates collaboration across departments and
units.
• Scenario Planning: Helps forecast outcomes and prepare contingency plans.
• Integration of Functions: ERP and MIS systems align operations with strategic goals.

5. Reward Systems

A well-designed reward system motivates employees to align their actions with strategic
objectives.

Types of Rewards:

• Monetary: Bonuses, incentives, profit sharing.


• Non-Monetary: Recognition, career advancement, training opportunities.
• Intrinsic Rewards: Job satisfaction, autonomy, sense of purpose.

6. Guidelines for Effective Compensation Systems

Guidelines Description
Align with Strategy Tie rewards to specific strategic objectives.

Performance-Based Link compensation to individual, team, or organizational performance.

Transparency Make the reward system clear and understandable.

Fairness and Equity Ensure internal and external equity to boost morale.

Flexibility Adapt rewards to different roles, levels, and departments.

Recognition-Oriented Include formal and informal recognition mechanisms.

Compliance Adhere to legal and regulatory frameworks.

Feedback Loop Regularly review and update based on performance data and employee feedback.

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