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Chapter Four - Strategic Interpretation

This document discusses strategy implementation and evaluation. It outlines the steps in strategy implementation which include leadership implementation, communicating the strategy, formulating SBU and functional strategies, resource allocation, developing policies, organizational implementation, evaluation and control, and reward systems. It also discusses approaches to strategy implementation and criteria for evaluating strategies such as consistency, consonance, feasibility, and advantage. Finally, it lists reasons why strategy evaluation is difficult, including increased environmental complexity and the difficulty of accurately predicting the future.

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Behailu Tesfaye
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31 views16 pages

Chapter Four - Strategic Interpretation

This document discusses strategy implementation and evaluation. It outlines the steps in strategy implementation which include leadership implementation, communicating the strategy, formulating SBU and functional strategies, resource allocation, developing policies, organizational implementation, evaluation and control, and reward systems. It also discusses approaches to strategy implementation and criteria for evaluating strategies such as consistency, consonance, feasibility, and advantage. Finally, it lists reasons why strategy evaluation is difficult, including increased environmental complexity and the difficulty of accurately predicting the future.

Uploaded by

Behailu Tesfaye
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Chapter Four

Strategy Implementation

Strategy in action.
?
• What are the reasons for the failure of many
government strategies?
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Strategy Implementation
• Strategy implementation is known as action
stage and considered as the most difficult stage
in strategic management process.

• Mohamed et al. (2013) defined strategy


implementation as “the conversion of
strategies into actual action”.
Strategy Implementation

• Implementation of the strategy is as important as


the formulation of the strategy.
• A good strategy by itself does not ensure success.
The success depends, to a very large extent, on
how it is implemented.

• Failure in strategy implementation leads to


failure in performance.
Strategy Implementation
• Strategy-is the blueprint/road map/ indicating
course of action to achieve the desired objectives.

• Implementation-is the proper activation of the


strategy to achieve the objectives.

Puzzle
5 birds sit on the fence, 3 decide to leave.
How many birds are left on the fence?
Strategy Implementation
• Encompasses
– the formulation of the operational details to translate
the strategy into effective practice.

• Operationalizing the strategy requires transcending the


various components of the strategy to different levels;
– mobilization and allocation of resources;
– structuring authority, responsibility, tasks and
information flows;
– establishing policies;
– evaluation and control.
COMPONENTS OF STRATEGY
IMPLEMENTATION
• Strategy activation encompasses
– communicating and motivating;
– setting goals;
– Formulating policies and functional strategies;
– organizational structuring;
– leadership implementation
– resource allocation.
Three Components of Strategy formulation
1. Institutionalizing the – formulating SBU strategies

strategy – setting annual objectives,

– Organizational structuring – developing divisional

– Leadership strategies and policies

implementation – resource allocation

2. Operationalizing the 3. Evaluation and control of

strategy the strategy.


– Measuring performance
– communicating strategy, – Taking corrective measures,
if needed
STEPS IN STRATEGY IMPLEMENTATION
• Leadership implementation
– refers to ensuring the right people in positions responsible for
implementation of the strategy. It encompasses the chief executive officer
(CEO) and the key managers
• Communicating the Strategy
• Formulation of SBU Strategy
• Annual Objectives
• Functional Strategies
• Resource Allocation
• Development of Policies
• Organizational Implementation
• Evaluation and Control
• Reward System
APPROACHES TO STRATEGY
IMPLEMENTATION
• Commander Approach
• Organizational Change Approach
• Collaborative Approach
• Cultural Approach
• Crescive Approach
Chapter Five

Strategy Review, Evaluation, and Control


Strategy Review, Evaluation, and Control

• an appraisal of how well an organization has


performed.
• Strategy of profit oriented organization should
answer these questions;
– Have the firm’s assets increased?
– Has there been an increase in profitability?
– Have sales increased?
– Have productivity levels increased?
– Have profit margin, return on investment, and earnings-
per-share ratios increased?
Strategy Evaluation

• strategy evaluation must have both a long-run


and short-run focus.
• Strategies- often do not affect short-term
operating results until it is too late to make
needed changes.
Strategy Evaluation Process
• includes three basic activities:
1. examining the underlying bases of a firm’s strategy
2. comparing expected results with actual results
3. taking corrective actions to ensure that performance conforms
to plans.

• E.g. of tools
– Balanced score card
– Auditing
Rumelt’s Criteria for Evaluating Strategies

• Consistency: Vision, mission, objectives,


strategies, managers, workers
• Consonance: refers to the need for strategists
to examine sets of trends, as well as individual
trends, in evaluating strategies
• Feasibility
• Advantage
Reasons why strategy
evaluation is more difficult

1. A dramatic increase in the environment’s complexity

2. The increasing difficulty of predicting the future with accuracy

3. The increasing number of variables

4. The rapid rate of obsolescence of even the best plans

5. The increase in the number of both domestic and world events


affecting organizations

6. The decreasing time span for which planning can be done with any
degree of certainty

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