Strategic Implementation

Strategy Implementation

Strategic ManagementThe set of decisions and actions used to formulate

and implement strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals.

Strategy ImplementationThe stage of strategic management that involves

the use of managerial and organizational tools to direct resources toward achieving strategic outcomes.

Structural Mechanism

Organizational Systems The Organisational System provides the mechanism for

the distribution of authority & responsibility within the Organisation .It is also related with subdividing the total authority & responsibility among different organisational units & positions .

There are six organizational systems which are as below:-

1. Information System.2. Control System.3. Appraisal System.4. Motivation System.5. Development System &6. Planning System.

1. Information System. A structure subdivides the total responsibility while the

information system serves to coordinate the divided responsibility. If a strategy is to be effectively implemented, Organisational arrangements that provide the information to managers to perform their task & relate their work to others are necessary. The information system, therefore, serves two important purposes: it enables the managers to know what they need to grasp in order to perform their tasks & also to coordinate their activities with others.

A broader term “management information system” (MIS) is used to denote the organisational arrangements designed to aid managers in performing their activities.

2. Control System. Control has traditionally been considered as a major

management function. While controlling, the manager essentially deals with “the measurement & correction of the performance of activities of subordinates in order to make sure that enterprise objective & plan devised to attain them are being accomplished”. In other words, control ensures that the implementation of strategy takes place according to predetermined plans.

The control cycle.

1. Establish standards. 2. Measure performance. 3. Evaluate performance

against standards. 4. Determine corrective

performance.

3. Appraisal system.

The achievement of organisational objectives has to be monitored if the implementation of strategy is to take place. The appraisal system performs this critical role of evaluating managerial performance in the light of organisational objectives. Managerial appraisal is an important element in the total control system.

The use of the results of appraisal have to be guided by the true function of measurement which is “to increase the perceptions of the problems limiting achievement”. Only a system of appraisal that provides the strategists with an understanding of the problems before the managers who are responsible for implementation, is an effective system. In this context management by objectives (MBO) provides participatory method of performance & objective setting, where managers can be involved in appraisal so that they themselves & their superiors know what has prevented them from achieving the desired objectives.

4. Motivation System. The motivation system plays a positive role in inducing

strategically desired behaviour so that managers are encouraged to work towards the achievement of organisational objectives. But, as yet, there is no complete understanding of how motivation works. However, it is known that incentives play an important role in motivation. Incentives are the means by which individuals can be encouraged to perform better. Generally, the incentives are divided into two groups : the monetary & the non monetary incentives. Monetary incentives are provided in the form of money. Salary, bonus, profit sharing plan, & so on, are common monetary incentives. Non- monetary incentives are in the form of rewards, recognition, designation, perquisites, & so on.

5. Development System. Management development is considered to be a

“process of gradual, systematic improvement in the knowledge, skills, attitudes, & performance of those individuals in an organisation who carry management responsibilities”. The strategic aim of a development system is to see that the new experience is provided in the light of strategic tasks required for the implementation of strategy. The development system has to be activated in such a manner that it prepares the managers to perform a vital function in strategy implementation.

6. Planning System. In an organisation, the function of formulation of strategy is a staff function

while the implementation of strategy is a line function. Both these views prevails & affects organisational policies related to the role of the planning system.

Strategists are concerned with the mechanism of the planning system & the way it should be changed to suit the requirements of a new or modified strategy. It would be natural to expect that the planning system would work better in a centralised manner in entrepreneurial & functional structured organisations. In divisional organisation, the planning system could be a decentralised one with the active involvement of SBU-level managers in the formulation as well as implementation of strategy. Thus, it is important to adapt the planning system to the requirements of the strategy that is to be implemented.

Conclusion. In this way, we can say that, Organisational system like

information, control, appraisal, motivation, development, & planning form the core of any structure. Each of these systems plays a significant role in strategy implementation. There design has to come from a consideration of the requirement of the strategy being implemented. In implementation, these systems have to be changed to suit the requirements of a new or modified strategy.

There are different organization structure according to different strategies of an organization.

1. Entrepreneurial StructureThe most elementary form of structure and is appropriate for an organization that is owned and managed by one person. A small-scale industrial unit, a small proprietary concern, or a mini-service outlet may exhibit the characteristics of organizations, which are based on an entrepreneurial structure.

Advantages of Entrepreneurial Structure o Quick decision-making, as power is centralized. o Timely response to environmental changes

Disadvantages of Entrepreneurial Structure o Excessive reliance on the owner-manager and so proves to be demanding for the owner-manager o May divert the attention of owner-manager to day-to-day operational matters and ignore strategic decision o Increasingly inadequate for future requirements if volume of business expands

Advantages Disadvantages• Increases strategic and operational

control, permitting corporate-level executives to address strategic issues

• Quick response to environmental changes

• Increased focus on products and markets

• Minimizes problems associated with sharing resources across functional areas

• Facilitates development of general managers

• Increased costs incurred through duplication of personnel, operations, and investment

• Dysfunctional competition among divisions may detract from overall corporate performance

• Difficulty in maintaining uniform corporate image

• Overemphasis on short-term performance

Divisional Structure

Disadvantages Of Matrix Structure

Conflict in organizational authorityProblem of defining the extent of Project

Manager’s authority.Functional groups may tend to neglect

their normal duties.Results in a complex structure and difficult

to manage

4. The Strategic Business Unit (SBU)

Any part of a business organization, which is treated separately for strategic management purposes. When organizations face difficulty in managing divisional operations due to an increasing diversity, size, and number of divisions, it becomes difficult for the top management to exercise strategic control. Here, the concept of an SBU is helpful in creating an SBU-organizational structure. In multidivisional organizations, an SBU structure can greatly facilitate strategy-implementation efforts.

Advantages of Strategic Business Unit (SBU)

º Establishes coordination between divisions having common strategic interests.

º Facilitates strategic management and control of large, diverse organizations.

º Fixes accountability at the level of distinct business units.

Disadvantages of Strategic Business Unit (SBU) º There are too many different SBUs to handle effectively in a large,

diverse organisation. º Difficulty in assigning responsibility and defining autonomy for SBU

heads. º Addition of another layer of management between corporate and

divisional management.

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