Chapter 5

Strategic Implementation, Evaluation and Controlling

Strategic implementation is concerned with execution of
selected strategies. The implementation of strategy may be
hindered by many factors. Among others unsuccessfully
implementation of the strategy is caused by unsatisfactorily
coupling of strategy and operational action, insufficient
attention to the negotiation of outcomes in decision situation
and bad strategic choice (defective strategies). Successful
implementations of strategies require institutionalization of
strategy (needs effective communication and ensuring
acceptance among members), formulation of derivative plan
and programs, translation of general objectives in to specific
objectives and resource mobilization and allocation
 There are three major approaches to strategic implementation;
structural implementation, functional implementation, and
behavioral implementation. Structural implementation of
strategy involves designing organizational structure that can
provide means for interaction and coordination among
organizations part and members. The structure of the
organization and strategic implementation are interdependent.
Thus strategists have to understand the relationship and
properly match them. They have to identify appropriate forms
of organizational structure (mechanistic and organic),
departmentation and design system that enable to use both
formal and informal organization effectively and efficiently.
 Functional implementation of strategy deals with the
development of polices and plans in the different areas
functions which an organization undertakes (marketing
function, financial function, production function, personnel
function etc…). The functional policies and plans need to
properly integrate to ensure successful implementation of
strategy. To do so, strategists need to check internal
consistency, relevance of strategy to developing
organizational capabilities, make trade-off in decision,
check the extent of linkages among functions and determine
time of implementation of policies and plans. Importantly
also, strategists ought to ensure consistency of corporate
strategy with different functional strategies.
In addition to structural implementation and functional
implementation, successful strategic implementation
demand knowledge of behavioral sciences and
effective application the knowledge. Strategic
leadership and communication, developing good
organizational culture, ensuring corporate governance,
managing strategic change, managing conflict,
promoting learning and growth of the organization are
some of the critical factors related to behavioral
implementation aspects of strategy.

 
 THE NATURE OF STRATEGY EVALUATION

A. Importance of Strategy Evaluation

1. The strategic-management process results in decisions that can have
significant, long-lasting consequences. Erroneous strategic decisions can
inflict severe penalties and can be exceedingly difficult, if not impossible, to
reverse.

2. Most strategists agree, therefore, that strategy evaluation is vital to an

organization’s well-being; timely evaluations can alert management to
problems or potential problems before a situation becomes critical.

3. Strategy evaluation includes three basic activities:

     a. Examining the underlying bases of a firm’s strategy.
     b. Comparing expected results with actual results.
     c. Taking corrective actions to ensure that performance.
 Cont’d.
4. The strategy-evaluation stage of the strategic-management
process

5. Strategy evaluation can be a complex and sensitive undertaking.

Too much emphasis on evaluating strategies may be expensive
and counterproductive. Yet, too little or no evaluation can create
even worse problems. Strategy evaluation is essential to ensure
that stated objectives are being achieved.

6. It is impossible to demonstrate conclusively that a particular

strategy is optimal, but it can be evaluated for critical flaws. Here
are four criteria to use in evaluating a strategy:
B. The Process of Evaluating Strategies
1. Strategy evaluation is necessary for all sizes and kinds of
organizations.
 Strategy evaluation should initiate managerial questioning of
expectations and assumptions, trigger a review of objectives
and values, and stimulate creativity in generating
alternatives and formulating criteria of evaluation.
2. Evaluating strategies on a continuous rather than a periodic
basis allows benchmarks of progress to be established and
more effectively monitored.
3. Managers and employees of the firm should continually be
aware of progress being made toward achieving the firm’s
objectives. As critical success factors change, organizational
members should be involved in determining appropriate
corrective actions.
II. A STRATEGY-EVALUATION FRAMEWORK

The strategy-evaluation activities in terms of key questions that should

be addressed, alternative answers to those questions, and appropriate
actions for an organization to take.
 Measuring Organizational Performance

1. Another important strategy-evaluation activity is measuring

organizational performance. This activity includes comparing
expected results to actual results, investigating deviations from
plans, evaluating individual performance, and examining progress
being made toward meeting stated objectives. Both long-term and
annual objectives are commonly used in this process.
2. Failure to make satisfactory progress toward accomplishing long-
term or annual objectives signals a need for corrective action.

3. Quantitative and Qualitative criteria commonly used to evaluate

strategies:
C. Taking Corrective Action
1. The final strategy-evaluation activity, taking corrective
action, requires making changes to reposition a firm
competitively for the future.
2. Examples of changes that may be needed are altering
an organization’s structure, replacing one or more key
individuals, selling a division, or revising a business
mission.
3. Taking corrective action raises employees’ and
managers’ anxieties. Research suggests that
participation in strategy-evaluation activities is one of
the best ways to overcome individuals’ resistance to
change.
Example of corrective actions:
• Altering an organizational structure
 Replacing one or more key individuals
 Selling a division of the company
 Revising a business mission or objective
 Reviewing company’s policy
 Issuing stock or revised capital
 Adding more sale stock
 Allocating resources difference
 Difficulties in Strategy Evaluation
1. Increase in environment’s complexity
2. Difficulty predicting future with accuracy
3. Increasing number of variables
4. Rate of obsolescence of plans
5. Domestic and global events
6. Decreasing time span for planning certainty
 Characteristics of Strategy Evaluation

• Economical
• Meaningful
• Generates useful information
• Timely information
• Provides accurate picture of events
CHARACTERISTICS OF AN EFFECTIVE EVALUATION SYSTEM

A. Strategy evaluation must meet several basic requirements to be

effective.
I. Strategy-evaluation activities must be economical; too much
information can be just as bad as too little information.
II. Strategy-evaluation activities should also be meaningful; they
should specifically relate to a firm’s objectives.
III. Strategy-evaluation activities should provide timely information; on
occasion and in some areas, managers may need information
daily.
IV. Strategy evaluation should be designed to provide a true picture of
what is happening.
B. There is more than one ideal strategy-evaluation system.
The unique characteristics of an organization, including its size,
management style, purpose, problems, and strengths can determine a
strategy-evaluation and control system’s final design.