Presenters: Silas Sambu

Violah Jeruto
Joyce Misoi
Emma Kipsoi
Christine Nabisere
 Strategic managers assent that strategic
implementation is the action; it is implementation
that makes or breaks the strategic.

 Take time to deliberate, but when the

time for action comes, stop thinking
and go in.”
 A strategy: is a plan of action or policy designed
to achieve a major or overall aim. It is the
direction and scope of an organization over the
long-term, which achieves advantage for the
organization through its configuration of resources
within a challenging environment, to meet the
needs of markets and to fulfill stakeholder
expectations.
 Strategy implementation: is the translation of
chosen strategy into organizational action so as to
achieve strategic goals and objectives. Strategy
implementation is also defined as the manner in
which an organization should develop, utilize, and
amalgamate organizational structure, control
systems, and culture to follow strategies that lead
to competitive advantage and a better
performance.
 Organizational structure allocates special value
developing tasks and roles to the employees and
states how these tasks and roles can be
correlated so as maximize efficiency, quality, and
customer satisfaction-the pillars of competitive
advantage. But, organizational structure is not
sufficient in itself to motivate the employees.
 Strategy implementation can be termed as a dynamic,
iterative and complex process, which is comprised of a
series of decisions and activities by managers and
employees, affected by a number of interrelated internal
and external factors, to turn strategic plans into reality in
order to achieve strategic objectives.

 Strategy implementation is an iterative process of

implementing strategies, policies, programs and action
plans that allows a firm to utilize its resources to take
advantage of opportunities in the competitive
environment (Harrington, 2006). It is a series of
decisions and resultant actions which commit resources
to achieving intended outcomes. Grinyer & Spender
(1979)
 Strategic implementation is critical to a company’s
success, addressing the who, where, when, and
how of reaching the desired goals and objectives.
It focuses on the entire organization.
Implementation occurs after environmental scans,
SWOT analyses, and identifying strategic issues
and goals. Implementation involves assigning
individuals to tasks and timelines that will help an
organization reach its goals.
 Developing an organization having potential
of carrying out strategy successfully.
 Disbursement of abundant resources to
strategy-essential activities.
 Creating strategy-encouraging policies.
 Employing best policies and programs for
constant improvement.
 Linking reward structure to accomplishment
of results.
 Making use of strategic leadership.
 Excellently formulated strategies will fail if they are
not properly implemented. Also, it is essential to
note that strategy implementation is not possible
unless there is stability between strategy and each
organizational dimension such as organizational
structure, reward structure, resource-allocation
process, etc.
 Strategy implementation poses a threat to many
managers and employees in an organization. New
power relationships are predicted and achieved.
New groups (formal as well as informal) are formed
whose values, attitudes, beliefs and concerns may
not be known. With the change in power and status
roles, the managers and employees may employ
confrontation behavior.
 Moving to the next phase of strategic management
as the focus shifts from strategy formulation to
strategy implementation. Managers successfully
make this shift when they do four things well:
 Identify short-term objectives,
 Initiate specific functional tactics,
 Communicate policies that empower people in the
organization, and
 Design effective reward systems.
 Short-term objectives provide much more specific
guidance for what is to be done, a clear delineation of
impending actions needed, which help translate vision
into action. Short-term objectives help implement strategy
in at least three ways.

 First, they “operationalize” long-term objectives.

• Second, discussion about and agreement on short-
term objectives help raise issues and potential
conflicts within an organization that usually require
coordination to avoid otherwise dysfunctional
consequences.
• The third is that they identify measurable outcomes
of action plans or functional activities, which can be
used to make feedback, correction, and evaluation
more relevant and acceptable.
 Measurable: Short-term objectives are more consistent when they
state clearly: what is to be accomplished, when is it to be
accomplished, how is to be accomplished, and how the
accomplishment is to be measured.

 Priorities: Because of varying degrees of impact short-term

objectives may have on strategic success, they must be placed in a
hierarchy of relative priorities.

 Linked to Long-Term Objectives: Short-term objectives can add

breadth and specificity in identifying what must be accomplished to
achieve long-term objectives; the link between short-term and long-
term objectives should resemble cascades through the firm from
basic long-term objectives to specific short-term objectives in key
operation areas.
 There are four benefits of short-term objectives:
first, short-term objectives give operating personnel
a better understanding of their role in the firm’s
mission. Second, they provide the basis for
accomplishing conflicting concerns. Third, they
provide the basis for strategic control. And finally,
short-term objectives clarify personnel and group
roles.
 Functional tactics are short-term activities each functional area within
the firm undertakes to implement the grand strategy.
Differences between Business Strategies and Functional Tactics
 Three basic characteristics that differentiate functional tactics from

business strategies:
1. Time Horizon: focus on immediate activities.
2. Specificity: business strategies provide general direction; functional
tactics specify activities and how they are expected to be achieved
3. Participants: general managers are responsible for business
strategies. Operating managers establish short-term objectives and
functional tactics that lead to business-level success.
 Empowerment in organizations is being created in many
ways. Training, self-managed work groups, eliminating
whole levels of management in organizations, and
aggressive use of automation are some of the ways. At
the heart of the effort is the need to ensure that
decision-making is consistent with the mission, strategy,
and tactics of the business while at the same time
allowing considerable latitude to operating personnel.
One way operating managers do this is through the use
of policies.
 Policies are directives designed to guide the thinking,
decisions, and actions of managers and their
subordinates in implementing a firm’s strategy.
 Policies are designed to control decisions while defining allowable discretion
within which operational personnel can execute business activities. They do
this in several ways:
 Policies establish indirect control over independent action by clearly stating
how things are to be done now.
 Policies promote uniform handling of similar activities.
 Policies ensure quicker decisions by standardizing answers to previously
answered questions.
 Policies institutionalize basic aspects of organization behavior.
 Policies reduce uncertainty in repetitive and day-to-day decision-making.
 Policies counteract resistance to or rejection of chosen strategies by
organization members.
 Policies offer predetermined answers to routine problems.
 Policies afford managers a mechanism for avoiding hasty and ill-conceived
decisions in changing operations.
1. Policies empower people to act. Compensation, at least theoretically,
rewards their action.
 There are five major types of compensation plans:
 Stock Options: A common measure of shareholder wealth creation is
appreciation of company stock price. Therefore, a popular form of bonus
compensation is stock options. Stock options provide the executive with the
right to purchase company stock at a fixed price in the future.
 Restricted Stock: A restricted stock plan is designed to provide benefits
of direct executive stock ownership. In a typical restricted stock plan, an
executive is given a specific number of company stock shares. The
executive is prohibited from selling the shares for a specified time period.
Should the executive leave the firm voluntarily before the restricted period
ends, the shares are forfeited.
 Golden Handcuffs: These refer to a restricted stock plan, where the
stock compensation is deferred until vesting time provisions are met or to
bonus income deferred in a series of annual installments. This type of plan
may also involve compensating an executive a significant amount upon
retirement or at some predetermined age.
 Golden Parachutes: These are a form of bonus
compensation that is designed to retain talented
executives. A golden parachute is an executive
perquisite that calls for a substantial cash payment
whether the executive quits, is fired, or simply retires. In
addition, the golden parachute may also contain
covenants that allow the executive to cash in on non-
vested stock compensation.
 Cash: Executive bonus compensation plans that focus
on accounting measures of performance are designed to
offset the limitations of market-based measures of
performance. This type of plan is most usually
associated with the payment of periodic (quarterly or
annual) cash bonuses.
 STRUCTURING AN EFFECTIVE ORGANIZATION
 There are three fundamental trends are

driving decisions about effective

organizational structures in the 21st century:
globalization, the Internet, and speed of
decision-making.
 How should managers structure effective

organizations? The following are useful

guidelines:
 Match structure to strategy: A large body of research
that examined how the evolution of a business over time
and the degree of diversification from a firm’s core
business affected its choice of organizational structure,
four basic conclusions were drawn:
 A single-product firm or single dominant business firm
should employ a functional structure
 A firm in several lines of business that are somehow
related should employ a multi divisional structure
 A firm in several unrelated lines of business should be
organized into strategic business units
 Early achievement of a strategy-structure fit can be a
competitive advantage
 Balance the demands for control/differentiation with the
need for coordination/integration: Specialization of work
and effort allows a unit to develop greater expertise,
focus, and efficiency. Dividing activities in this manner,
sometimes called “differentiation,” is an important
structural decision. At the same time, these separate
activities, however they are differentiated, need to be
coordinated and integrated back together as a whole so
the business functions effectively.

 Restructure to emphasize and support strategically

critical activities: At the heart of the restructuring trend
is the notion that some activities within a business’s
value chain are more critical to the success of the
business’s strategy than others.
 Re engineer strategic business processes: Business process re-
engineering (BPR) is intended to reorganize a company so that it
can best create value for the customer by eliminating barriers that
create distance between employees and customers. It involves
fundamental rethinking and radical redesign of a business process.
Companies that have successfully re-engineered their operations
have pursued the following steps:
• Develop a flow chart of the total business process.
• Try to simplify the process first; eliminate tasks and streamline.
• Determine which parts of the process can be automated.
• Benchmark strategy-critical activities; consider outsourcing or
reorganizing others.
 Design a structure for performing remaining activities;
reorganize/assign people accordingly.
 Downsize and self-manage: Organizational structure should exist for
strategy critical activities. Non-critical activities should be done outside the
company whenever possible. Also, management levels should be
minimized.
 Allow multiple structures to operate simultaneously within the organization
to accommodate products, geography, innovation and customers: The
matrix organization was one of the early structural attempts to do this so
that skills and resources could be better assigned and used within a large
company.
 Take advantage of being a virtual organization: A virtual organization is
defined as a temporary network of independent companies linked primarily
by information technology to share skills, access to markets, and costs.
Outsourcing was an early driving force for the virtual organization trend.
Strategic alliances allow partners to the alliance to focus on what they do
best, farm out everything else, and quickly provide value to customers.
 Web-based organizations: The Web’s contribution electronically has
simultaneously become the best analogy in explaining the future virtual
organization. So it is not just the Web as in the Internet, but also a web
like shape of successful organization structures in the future.
 Clarifying strategic intent: leaders’ help
stakeholders embrace change by setting forth
a clear vision of where the business’s strategy
needs to take the organization. Strategic
intent is an articulation of a simple criterion
or characterization of what the company must
become to establish and sustain global
leadership.
 Leaders spend considerable time shaping and
refining their organizational structure and
making it function effectively to accomplish
strategic intent. Since leaders are attempting
to embrace change, they are often rebuilding
or remaking their organization to align it with
the ever-changing environment and the
needs of strategy
 Leaders know well that the values and beliefs
shared throughout their organization will
shape how the work of the organization is
done. And when attempting to embrace
accelerated change, reshaping their
organization’s culture is an activity that
occupies considerable time for most leaders.
1.Emphasize key themes or dominant
values
2. Encourage dissemination of stories and
legends about core values
3. Institutionalize practices that systematically
reinforce desired beliefs and values
4.Adopt some very common themes in their
own unique ways:
 A simple framework for managing the
strategy-culture relationship is by identifying
four basic situations a firm might face: link to
mission, maximize synergy, manage around
the culture, and reformulate the strategy or
culture
 Certo and Peter( 1993) proposed a five-stage
model of the strategy implementation
process:
 determining how much the organization will

have to change in order to implement the

strategy under consideration, under
consideration;
 analyzing the formal and informal structures
of the organization;
 analyzing the "culture" of the organization;
 selecting an appropriate approach to

implementing the strategy;

 Implementing the strategy and evaluating the

results.
 What is required for us to implement our part
of the overall strategic plan and how can we
best get it done?”
1. Building an organization capable of executing
the strategy
2. Establishing a strategy-supportive budget.
3. Installing internal administrative support
systems
4. Devising rewards and incentives that are
tightly linked to objectives and strategy.
5. Shaping the corporate culture to fit the
strategy.
6. Exercising strategic leadership
 Galbraith (1977) as cited in Brodwin and
Bourgeois (1984) suggests that several major
internal aspects of the organization may need
to be synchronized to put a chosen strategy
into action. Major factors are technology,
human resources, reward systems, decision
process and structure. This factors tend to be
interconnected, so a change in one may
necessitate change in one or more others.
• strategy (the coherent set of actions selected
as a course of action);
• structure (the division of tasks as shown on
the organization chart);
• systems (the processes and flows that show
how an organization gets things done);
• style (how management behaves);
 staff (the people in the organization);
 shared-values (values shared by all in the

organization); and
 skills (capabilities possessed by the

organization
 "How can I, as a general manager, develop a
strategy for my business which will guide
day-today decisions in support of my longer-
term objectives?
 The strategic leader is primarily a

thinker/planner rather than a doer.

 The leader must wield enough power to
command implementation
 Accurate and timely information must be

available
 The strategist (if he is not the leader) should

be insulated from personal biases and

political influences that might affect the
content of the plan.
 "I Have a strategy -now how do I get my
organization to implement it?
 The role of the strategic leader is that of an

architect, designing administrative systems

for effective strategy implementation.
 the Change Approach doesn't help managers
stay abreast of rapid changes in the
environment. It can backfire in uncertain or
rapidly changing conditions. Finally, this
approach calls for imposing the strategy in
"top down" fashion, it is subject to the same
motivational problems as the Commander
Approach.
 "How can I get my top management team to
help develop and commit to a good set of
goals and strategies?"
 the leader employs group dynamics and

"brainstorming" techniques to get managers

with differing points of view to contribute to
the strategic planning process.
 A more fundamental criticism of the
Collaborative Approach is that it is not really
collective decisions making from an
organizational viewpoint because upper-level
managers often retain centralized control
 "How can I get my whole organization
committed to our goals and strategies?"
 The strategic leader concentrates on

establishing and communicating a clear

mission and purpose for the organization
 this approach also has several limitations.
First, it only works with informed and
intelligent people.
 Second, it consumes enormous amounts of

time to install.
 Third, it can foster such a strong sense of

organizational identity among employees that

it becomes a handicap
 How can I encourage my managers to
develop, champion, and implement sound
strategies?"
 The strategic leader is not interested in

strategizing alone, or even in leading others

through a protracted planning process
 this approach requires that funds be available
for individuals to develop good ideas
unencumbered by bureaucratic approval
cycles and that tolerance be extended in the
inevitable cases where failure occurs despite
a worthy effort having been made.
 Quinn's (1982) approach is based on the
assumption the incremental processes are,
and should be, the prime mode used for
strategy setting. The same philosophy is also
represented by Mintzberg
 Quinn(1982) argues that incrementalism is

the most appropriate model for most

strategies changes,
• Improve the quality of information utilized in
corporate strategic decisions.
• Cope with the varying lead times, pacing
parameters, and sequencing needs of the
subsystems through which such decisions
tend to be made.
• Deals with the personal resistance and
political pressures any important strategic
change encounters.
 Build the organizational awareness,
understanding, and psychological
commitment necessary for effective
implementation.
 Decrease the uncertainty surrounding such

decisions by allowing for interactive learning

between the enterprise and its various
impinging environments.
 Improve the quality of the strategic analysis
and choices by involving those people closest
to the situation and by avoiding premature
closure on the basic of potentially incorrect
decisions.
 The first problem is that, although strategies
need to be developed around the business
units (SBUs), of the corporation, these units
often do not correspond to parts of the
organizations structure
 A second problem area is that traditional
management reports are not sensitive
enough to monitor the implementation
strategies, thus the strategic manager not
fully aware of what is happening
 Third, implementing strategy involves
change, which in turn involves uncertainty
and risk
 Finally, management systems :-such as

compensation schemes, management

development, communications systems and
so on) are often in place as a result of past
strategies; they are rarely tuned or revised to
meet the needs of new ones.
• allocating clear responsibility and
accountability for the success of the overall
strategy project;
• limiting the number of strategies pursued at
any one time;
• identifying actions to be taken to achieve the
strategic objective, allocating detailed
responsibilities for actions - and getting
agreement for them;
 Identifying a lists of milestones, or major
intermediate progress points;
 identifying key performance measures to be

monitored throughout the life of the strategy

project, and creating an information system
to record progress
 The essence of strategy is choosing what not
to do”
Michael Porter