1. Strategy Implementation
Organising

2. Strategy Implementation
Strategy implementation is the sum total of the activities and choices required for the execution of the strategic plan
Process by which objectives, strategies and policies are put into action thru the development of programmes, budgets and procedures.

3. Implementation a key part of strategic management
Poor implementation can be blamed for a number of strategic failures
3 questions to consider:
Who are the people who carry out the strategic plan?
What must be done to align the co.’s operations in the new direction?
How is everyone going to work together to do what is needed?

4. Problems encountered when attempting to implement a strategic change:
Implementation took more time than initially planned
Unanticipated major problems arose
Activities ineffectively coordinated
Competing activities and crises took attention away from implementation
Involved employees have insufficient capabilities
Lower level employees inadequately trained
Uncontrollable external environmental factors
Departmental managers provided inadequate leadership and direction
Key implementation tasks and activities poorly defined
Information system inadequately monitored activities

5. Who Implements Strategy?
More people typically involved in the implementation of strategy than in the formulation
Heads of functional areas, directors of divisions or strategic business units (SBUs) along with their subordinates
Plant managers,project managers, unit heads
Operational managers, first line supervisors down to every employee

6. What Must Be Done?
Establishing programmes to create a series of new organisational activities, budgets to allocate funds to the new activities and procedures to handle the day to day details
The purpose of a programme is to make the strategy action oriented.
A matrix of change helps managers decide how quickly change should proceed, in what order change should take place, whether the proposed systems are stable and coherent.

7. A matrix of change can address the following questions:
Feasibility – Is transition likely to be difficult?
Sequence of execution – Where should change begin? Does sequence affect success? Are there reasonable stopping points?
Location – Should programme be instituted at new site or should reorganise existing facilities at reasonable cost?
Pace and nature of change – Should change be slow/fast, incremental or radical?
Stakeholder evaluations – Which new programmes and current activities offer the greatest sources of value?

8. After programmes have been developed, the budget process begins
An ideal strategy might be found to be completely impractical after specific implementation programmes are costed in details
After the programme, corporate and divisional budgets are approved, procedures must be developed.
Procedures are the primary means by which organisations accomplish much of what they do.

9. Achieving Synergy
Synergy is said to exist if the return on investment (ROI) of each division is greater than what the return would be if each division were an independent business
Synergy can take place in 6 forms:
Shared know-how : benefit from sharing knowledge or skills
Coordinated strategies : aligning business strategies and developing a coordinated response to common competitors (horizontal strategy)
Shared tangible resources : e.g manufacturing facility or R&D lab

10. Achieving Synergy
Economies of scale or scope : coordinating activities can reduce inventory, increase capacity utilisation, improve market access
Pooled negotiating power : combine purchasing to gain bargaining power over common suppliers to reduce costs and improve quality as well as with distributors
New business creation : establishing joint ventures among internal business units

11. How Is Strategy to Be Implemented?
Should activities be grouped differently?
Should decision making be centralised?
Should corporation have a “tall” structure with a narrow span of control or a “flat” structure with a wide span of control?

12. Stages of Corporate Development
Stage I : Simple Structure
Typified by entrepreneur founds a co. to promote an idea
Tend to make all important decisions
Little formal structure
Entrepreneur supervises employees himself
Strenghts : Flexibilty and Dynamism
Weakness : Crisis of leadership

13. Stage II : Functional Structure
Entrepreneur replaced by a team of managers who have functional specialisations
Entrepreneur must learn to delegate
Corporate strategy- dominance of the industry often thru vertical and horizontal growth
Strengths : Concentration and specialisation in industry
Weakness : All eggs in one basket
Next step is diversification and Crisis of Autonomy

14. Stage III : Divisional Structure
Typified by corporation managing diverse product lines in numerous industries
Decentralise decision making
Expand to cover wider geographic areas
Divisional structure with central headquarters and decentralised operating divisions or conglomerate
Crisis of control can develop

15. Evolution towards SBUs
The units are not tightly controlled but are held responsible for their own performance results
Strength : Much more resources
Weakness : so large and complex that tends to become relatively inflexible

16. Stage IV : Beyond SBUs Use of SBUs may result in red tape Crisis
New structures emerging under conditions of
Increasing environmental uncertainty
Greater use of sophisticated technologies
Increasing size and scope of worldwide business corporations
Emphasis on multi-industry competitive strategy
More educated cadre of managers and employees

17. Organisational Life Cycle
The organisational life cycle describes how organisations grow, develop and eventually decline
The stages are:
Stage I – Birth
Stage II – Growth
Stage III – Maturity
Stage IV – Decline
Stage V - Death

18. Movement from growth to maturity to decline and finally death is not however inevitable
A revival phase may occur sometime during the maturity or decline stages
The corporation’s life cycle may be extended by managerial and product innovations e.g implementation of a turnaround strategy

19. Advanced Types of Organisational Structures
2 forms stand out :
matrix structure
network structure
Matrix structure - functional and product forms are combined simultaneously at the same level of the organisation

20. Matrix Structure Manager Project A Sales Finance Personnel Manager
Manufacturing
Sales
Finance
Personnel
Manager
Project B
Manufacturing
Sales
Finance
Personnel

21. Useful when external environment is complex and changeable
Matrix structure developed to combine stability of functional structure with flexibility of product form
Useful when external environment is complex and changeable
But produces conflicts revolving around duties, authority and resource allocation
Matrix structure when 3 conditions exist:
ideas need to be cross fertilized
resources are scarce
abilities to process information and to make decisions need to be improved

22. Temporary cross functional tasks – initially used when a new product line is being introduced. Project manager in charge
Mature matrix – true dual authority structure. Both functional and product structures are permanent e.g Boeing

23. Network Structure – Virtual Organisation
Packagers
Suppliers
Designers
Corporate Headquarters
Advertising Agencies
Distributors
Manufacturers

24. Network structure is could be termed a “non structure” because of virtual elimination of in house business functions
Many activities are outsourced
Virtual organisation composed of a series of project groups or collaborations linked by constantly changing non hierarchical cobweb like electronic networks
Useful when environment unstable and expected to remain so – strong need for innovation and quick response

25. Network structure provides organisation with increased flexbility and adaptability to cope with rapid technological change and shifting patterns of trade and competition
Allows company to concentrate on its distinctive competencies while gathering efficiencies from other firms in their areas of expertise
Criticisms :
Instable structure and subject to tensions
Prevent internal synergies
Overspecialisation

26. Cellular Organisation: A new type of structure
A cellular organisation is composed of cells (self-managing teams, autonomous business units) which can operate alone but which can also interact with other cells to produce a more potent and competent business mechanism
Combination of independence and interdependence to generate and share knowledge and expertise for continuous innovation

27. Trend of using internal joint ventures to temporarily combine specialised expertise and skills within corporation to accomplish task that individual units alone could not accomplish
Cellular form adds value by keeping the firm’s knowledge assets more fully in use than any other type of structure
Beginning to appear in firms that are focused on rapid product and service innovation –providing unique or state of the art offerings