Chapter 6
Strategic
Implementation
Strategic Management: Chapter 06 Strategic Implementation
Page 1
chapter objectives
 After this finish chapter student will
understand:
 Who implements strategy?
 What must be done?
 How is strategy to be implemented?
Strategic Management: Chapter 06 Strategic Implementation
Page 2
Introduction
The process by which strategies & policies are put
into action through the development of programs,
budgets & procedures.
 may involve changes within overall culture,
structure, management system
 conducted by middle & lower level managers
reviewed by top management
 sometimes referred to as operational planning,
involving day to day decisions in resource
allocation
Strategic Management: Chapter 06 Strategic Implementation
Page 3
Consideration!
Who implements strategy?
 What must be done?
 How is strategy to be implemented?
Strategic Management: Chapter 06 Strategic Implementation
Page 4
Who implement strategy?
 Everyone in the organization
 Clear communication to every employee
about the new selected strategy
Top management is a man actor.
Strategic Management: Chapter 06 Strategic Implementation
Page 5
What must be done?
 All levels of manager work together to
develop
program,
budget,
and
procedures for implementing strategy;
and to establish and maintain company’s
distinctive competence.
Strategic Management: Chapter 06 Strategic Implementation
Page 6
Programs
 a statement of the activities or steps needed to
accomplish a single-use plan
 makes the strategy action oriented
 e.g. Intel allied with HP to develop successor to
Pentium Pro chip; assembled team to do long term
research into computer chip design
Strategic Management: Chapter 06 Strategic Implementation
Page 7
Budget
 a statement of a firm’s programs in terms of dollars
 detailed plan of new strategy, also specifies pro
forma financial performance
Procedures
 a system of sequential steps or techniques detailing
task to be done for day-to-day activities
Strategic Management: Chapter 06 Strategic Implementation
Page 8
How is strategy to be implemented?
Organizing activities before implementation:
 staffing, structuring, directing, control and
evaluation, and feedback and correction.
 Change in strategy means change in parts of
organization.
 Kind of skills needed to implement new
strategy
 Centralization or decentralization
Strategic Management: Chapter 06 Strategic Implementation
Page 9
Structure follows strategy
Changes in corporate strategy lead to change in
organizational structure.
 new strategy is created
 new administrative problems emerge
 economic performance declines
 new appropriate structure is invented
 profit returns to its previous level
Strategic Management: Chapter 06 Strategic Implementation
Page 10
Stages of Corporate Development
Maturity
-Divisional
Growth
Birth
structure
-Functional
-Simple
-Decentralization
structure
structure
Into investment
-Concentration -Vertical & center
horizontal
in niche
-Concentric &
strategy
strategy
Conglomerate
versification
Strategic Management: Chapter 06 Strategic Implementation
Decline
-Structural Dead
-Dismemberment
surgery
Of structure
-Profit
-Liquidation or
Strategy
bankruptcy
Follow by
retrenchment
Page 11
Organisational Life Cycle
Dominant Issue
Popular strategies
Likely structure
Stage 1 Birth
Concentration in a
niche
Entrepreneur-dominated
Stage 2 Growth
Horizontal &
vertical growth
Functional management
emphasised
Maturity
Concentric &
conglomerate
diversification
Decentralisation into profit
or investment centres
Decline
Profit strategy
followed by
retrenchment
Structural surgery
Liquidation or
bankruptcy
Dismemberment of
structure
Stage 3
Stage 4
Stage 5 Death
Strategic Management: Chapter 06 Strategic Implementation
Page 12
Reengineering & Strategy Implementation
Reengineering is a radical redesign of business
processes to achieve major gains in cost,
service or time
 it is not a type of structure
 it is an effective way to implement a
turnaround strategy
 it strives to break away from the old rules &
procedures that developed in the firm
 “if this were a new co., how would we run this
place?”
Strategic Management: Chapter 06 Strategic Implementation
Page 13
Reengineering implementation
Organize work
Extend the work
Shift work time
Add more work...
Strategic Management: Chapter 06 Strategic Implementation
Page 14
Designing job to implement strategy
Job design – make employees more relevant
to company and vs; job assignment to individual
& group
Job enlargement – combine similar tasks
Job rotation – rotate employee task or place
Job enrichment – giving employees more
autonomy and control over activities
Strategic Management: Chapter 06 Strategic Implementation
Page 15
Staffing
Hiring & firing -policies & rules
Hiring & training requirements change with
new strategy adopted
 Matching the manager to the strategy
- dynamic industry expert, analytical
portfolio manager, cautious profit, planner,
turnaround specialist
Strategic Management: Chapter 06 Strategic Implementation
Page 16
Leading
Managing corporate culture
 Assessing strategy culture compatibility
(1) is planned strategy compatible with current culture
(2) is culture easily modified to make it more
compatible with new strategy
(3) is management willing/able to make organisational
changes , accept delays & costs increase
(4) is management still committed to implement
strategy
Strategic Management: Chapter 06 Strategic Implementation
Page 17