Strategy Implementation Dr. R. S. Aurora Chair Professor and Director Guru Nanak Institute of Management Studies

What is Strategy Implementation? Involves a broad range of efforts aimed at transforming strategic intentions into actions. Constitutes firm’s realized strategy Ability to implement strategies is one of the most valuable managerial skills

Why Strategy Implementation is Difficult?  Organizational Immune System – Resist change  Difficult Paradoxes – Participative management and motivating subordinates to accept change  Number of variables involved  Interlink between factors affecting change  Need to change everything at once

Activity Centered Change Programs Analyses common pattern of failure in introducing change Focus is on change centered on an activity that is suppose to bring change rather than on desired results Individual elements reflect rationality yet fail collectively

Elements of Activity Centered Change Program:  Senior management, dissatisfied with past performance, develops new strategic ideas requiring organizational change Example: Declining sales leading to shift in strategy of improving customer satisfaction  Initiating a program for producing desired change Example: Initiating program “Customer is King”

 Management of program is delegated to those in staff positions Example: King Customer Program handed over to Director of Quality  Senior Management is “handled” by staff personnel in charge of the program Example: CEO’s speech prepared by Director of Quality

 Staff in charge of the program focus on range of issues under their direct control Example: Director of Quality develops new training program  Performance measured by success of the program Example: Number of people graduating from the new training and development program

 A small change is accepted as success of the program Example: Success of the training program  To continue the change initiative new programs introduced Example: New program to reduce cost initiated

 Confusion with regards to old and new program as the same can conflict Example: Cost reduction by eliminating quality programs  Cynicism creeps in and status quo supported Example: Every new program looked upon as a bother

Strategic Programming  Strategy formulated on the basis of pre- established missions and objectives  Short range programs evolved to implement strategy  Budgets evolved to provide monetary resources  Results evaluated and put in feedback loop  Used first by Robert McNamara, Secretary of Defence  Also known as Planning, Programming and Budgeting System

Generic Model of Strategic Programming Introduction of Mission Derivation of Objectives Identification of Alternative Strategies Evaluation of Alternatives Selection of Preferred Alternatives Creation of Master Plan / Program Creation of Medium run Plan / Program Creation of Short run Plan / Program Evaluation of Results Feedback Loop Establish Master Budget Establish Medium Run Operating Budget Establish sort run tactical Budget Strategy Formulation Strategy Implementation

Limitations of Strategic Programming  Required Conditions: * Stability * Simplicity * Industry Maturity * Capital Intensity * Tightly Coupled Operations * External Control

Organizational Learning  Result of knowledge based competition  Is combination of discovering new things and acting in ways that allow the organization to adapt to changes and sustain and improve competitiveness  Called for since business units face uncertain conditions and survival depends on learning and adapting to new ways

Stephen Covey States One level of learning well suited to management is like climbing a ladder; but higher level of Learning, one that requires leadership, involves questioning whether or not the ladder is leaning against the right wall

The Model of Organizational Learning Learning from History and Experience Systematic Problem Solving Experimentation with New Approaches Learning from the Best Practices of Others DISCOVERY ACTION Incremental Adaptive Changes Quantum Generative Changes Evolutionary Acts Revolutionary Acts

Strategic Leadership  Strategic leadership involves: the ability to anticipate, envision, maintain flexibility and empower others to create strategic change the ability to anticipate, envision, maintain flexibility and empower others to create strategic change multi-functional work that involves working through others multi-functional work that involves working through others consideration of the entire enterprise rather than just a sub-unit consideration of the entire enterprise rather than just a sub-unit a managerial frame of reference a managerial frame of reference

Successful Strategic Actions Strategic Leadership and the Strategic Management Process Effective Strategic Leadership Strategic IntentStrategic Mission shapes the formulation of and influence

Strategic Leadership and the Strategic Management Process Strategic Competitiveness Above-Average Returns Formulation of Strategies Implementation of Strategies Successful Strategic Actions yields

Factors Affecting Managerial Discretion External Environment Industry structure Rate of market growth Number and type of competitors Nature and degree of political/legal constraints Degree to which products can be differentiated External Environment

Factors Affecting Managerial Discretion Characteristics of the Organization Characteristics of the Organization Size Age Culture Availability of resources Patterns of interaction among employees External Environment

Factors Affecting Managerial Discretion External Environment Characteristics of The Organization Characteristics of The Manager Managerial Discretion Characteristics of the Manager Tolerance for ambiguity Commitment to the firm and its desired strategic outcomes Interpersonal skills Aspiration level Degree of self- confidence

Exercise of Effective Strategic Leadership Establishing balanced organizational controls Emphasizing ethical practice Developing human capital Exploiting and maintaining core competencies Sustaining an effective organizational culture Determining strategic direction Effective Strategic Leadership

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