Unit-4

STRATEGY IMPLEMENTATION

A strategy implementation process is a series of steps used to develop and implement a plan.

“Implementation of strategies is concerned with the design and management of systems to achieve the best
integration of people, structures, processes, and resources in reaching organizational purposes.

Mckinsey -7S Framework

IMPLEMENTATION OF STRATEGY

 The 7-S-Model is better known as

McKinsey 7-S. This is because the two
persons who developed this model, Tom
Peters and Robert Waterman, have
been consultants at McKinsey & Co at
that time. Thy published their 7-S-Model
in their article “Structure Is Not
Organization” (1980)

Mckinsey’s 7S Model

1. Shared Value

The interconnecting center of McKinsey's model is: Shared Values. What does the organization stands for and what
it believes in. Central beliefs and attitudes.

2. Strategy

Plans for the allocation of a firms scarce resources, over time, to reach identified goals. Environment, competition,

Customers.

3. Structure

The way the organization's units relate to each other:

centralized, functional divisions (top-down); decentralized (the trend in larger organizations); matrix, network,holding,
etc.

Its types are:

I. Functional Organization Structures

 II. Divisional Organization Structure

III. Product Structure

IV. Market oriented Structure

 V. Geographic Structure

VI. Matrix structure

 Value chain activities are grouped by function and by product or project
 Flat and decentralized
 Promotes innovation and speed
 Norms and values based on innovation and product excellence

VII. Product-Team Structure

 Tasks divided along product or project lines
 Functional specialists are part of permanent cross-functional teams
Implementing Strategy

 Matrix and Product-team structures are useful in competing in fast-changing, high-tech environments
 Matrix and Product-team structures are also useful in multi-business companies

Organizing for Innovation

 Decentralization - Keeping Business Units Small

 Task Forces
 Kaizen – Ongoing improvements
 Reengineering – Breakthrough Results
 Seeking Radical, Disruptive Innovation

4. System

The procedures, processes and routines that characterize how important work is to be done: financial systems; hiring,
promotion and performance appraisal systems; information systems.

1. Annual objectives : Annual objectives guide implementation translating long-term objectives into current targets.
They should be SMART.

2. Functional strategies: game plan for a key functional area within a company

3. Communication of brief policies to guide decisions.

The Role of Policy: reduce variation, institutionalize standard operating procedures, channel synergy, counteract
resistance to change

 Policy institutionalizes strategy-supportive practices.

 Policy limits independent action and discretionary decisions
 Policy aligns actions & behaviors with strategy.
 Policy helps shape character of work environment and translates corporate philosophy into how things are
done, how people are treated, and what corporate beliefs and attitudes mean in everyday terms.
5. Skill

Distinctive capabilities of personnel or of the organization as a whole. Core Competences.

6. Staff

Numbers and types of personnel within the organization.

 HRM function, related activities, rewards and retention of HR.

 Leadership -Leadership is an organization's most valuable resource. It is not to be wasted.

What Competencies Should LEADERS/ MANAGRS’S Possess?

Numerous Roles of Strategic Leaders

Leadership Activities in organization./ Role of Leadership in strategic implementation

1. Introducing changing
2. Integrating conflicting Interests
3. Developing ability of managers
4. Developing appropriate organizational culture.
5. Developing motivation system
6. Clarity in goals
7. Leadership style and relationship in organization.

Role of Leadership –

Jeffraey P Bezos - The founder and CEO of Amazon.com, an online merchant of books and later of a wide variety of
products. Under his guidance, Amazon.com became the largest retailer on the World Wide Web and a top model for
Internet sales.[6] In 2013, Bezos purchased The Washington Post newspaper.

Leadership Style

 Has developed a precise and inventive approach to management.

 Pitching new ideas to write mock news releases for their product’s imagined launch, a way of focusing
their minds on what will most excite customers.
 Annual salaries at amazon are modest by the standards of the technology industry, with compensation
weighted toward lucrative stock benefits designed to instill a sense of ownership and long-term purpose
among employees. The key is measurable performance. His management team produces what some have
called ruthless annual evaluations; top performers get larger stock benefits while laggards sometimes face
pointed suggestions that they find new jobs.
 “he will figure out something you haven’t thought of. . . . If you haven’t thought through exactly how to
delight our customer, that’s a bad thing.”
 “work hard, have fun, make history.”
 Single-minded in his devotion to every new product.
 One of the most coveted honours at Amazon is the “Just Do It” award, given to an employee every couple
of months who strays from his or her job title to do something that will help Amazon. Bezos helps choose
the employee himself and then hands the award — an old Nike shoe — to the winner at a company-wide
event. Those who win the award proudly hang the shoes in their cubicles; in the online directory, a small
icon is placed next to the names of those who win.

Margaret C Whitman - Whitman joined eBay on March 1998, when it had 30 employeesand revenues of
approximately $4 million. During her time as CEO, the company grew to approximately 15,000 employees and
$8 billion in annual revenue by 2008. Originally, when Whitman had joined eBay, she found the website as a simple
black and white webpage with courier font. On her first day, the site crashed for eight hours. She believed the site
to be confusing and began by building a new executive team. Whitman organized the company by splitting it into
 twenty-three business categories. She then assigned executives to each, including some 35,000 subcategories. In
2004, Whitman made several key changes in her management team. Jeff Gordon took over PayPal, Matt Bannick
took control of international operations and Bill Cobb was placed in control of U.S. operations, which has the
colorful U.S. logo, while each international site has unique branding.

Whitman’s Successful Leadership Style

Meg Whitman is a firm believer in influencing relationships with her employees and not controlling them. There
are three leadership strands that Whitman uses at her job as CEO of EBay. First, she realizes she cannot control
the buyers and sellers of EBay. Second, Whitman feels that people are basically good, so trust them. This shows
us that Whitman is a supportive leader. One who emotionally supports her employees and treats them with care
and respect. Whitman says, "Our Company is built and managed on validation.” Third, don’t assume that you know
everything. Whitman is also a participative leader. She listens and lets her employee’s voice there say in meetings
and important decisions within the company. Whitman also believes you must travel and learn from different
countries. You can never learn too much. Meg Whitman is a very knowledgeable leader. Meg Whitman is a prime
example of a leader that developed her leadership traits throughout her career to become a successful leader in
one of the top companies in the world. Meg Whitman was a very charismatic leader who used her influenced
others rather than forcing them to come to work every day. Therefore; Meg Whitman is a well respected leader
of eBay.

If you were to become a successful leader in the future, what qualities would you possess and what type of
leadership style would you likely portray to your employees?

7. Style

Cultural style of the organization and how key managers behave in achieving the organization’s goals.

Culture is a competitive advantage if it:

 Generate Specific Value for the Firm

 Be Rare
 Not easily imitable

Organizational Culture: Make, Buy or Convert

Characteristics Describing Culture

 Individual autonomy
 Structure
 Support
 Identification
 Performance reward
 Conflict tolerance
 Risk tolerance
Impact of organizational culture in strategic implementation

 Setting objectives
 Work ethics
 Motivational pattern
 Influence on Organizational process
 Change Management.

Shaping Organizational Culture

 Emphasize key themes or dominant values

 Encourage dissemination of stories and legends about core values
 Institutionalize practices that systematically reinforce desired beliefs and values
 Adapt some very common themes in their own unique ways
 Manage organizational culture in a global organization:
 Social norms
 Values and attitudes
 Religion
 Education

CSR (CORPORATE SOCIAL RESPONSIBILITY)

 Corporate social responsibility (CSR), also known as corporate responsibility, corporate citizenship, responsible
business, sustainable responsible business (SRB), or corporate social performance, is a form of corporate self-
regulation integrated into a business model.

What Are Ethical Principles?

 Involves concepts of
 Right and wrong behaviors
 Fair and unfair actions
 Moral and immoral behaviors
 Examples of ethical behaviors
 Honesty
 Integrity
 Keeping one’s word
 Respecting rights of others
 Practicing the Golden Rule
 Beliefs about what is ethical serve as a moral compass to guide behaviors of individuals and companies

Three Categories of Management Morality

STRATEGY EVALUATION

Strategy Evaluation : Phase of the strategic Management process in which the top managers determine whether
their strategic choice as implemented is meeting the objectives of the organization.
ESTABLISHING STRATEGIC CONTROL

Four Types of Strategic Control:

1. Premise Controls

2. Implementation Control

3. Strategic Surveillance

4. Strategic alert control

Definitions of Strategic Controls

• Premise Control - Designed to check systematically and continuously whether premises on which the strategy
is based are still valid

• Implementation Control - Designed to assess whether the overall strategy should be changed in light of the
results associated with the incremental actions that implement the overall strategy

• Strategic Surveillance - Designed to monitor a broad range of events inside and outside the firm that are likely
to affect the course its strategy

• Special Alert Control - Thorough, and often rapid, reconsideration of the firm’s strategy because of a sudden,
unexpected event

Effective Controls System

The Best Controls in Organizations are

 Strategic and results oriented

 Understandable
 Encourage self-control
 Timely and exception oriented
 Positive in nature
 Fair and objective
 Flexible

CONTROL PROCESS

Operational Control is exercised through a process of four steps:

1. Establishment of standards
2. Measurement of Actual Performance
3. Comparison of actual performance with standard
4. Taking corrective action
1. Establishing Effective Operational Control Systems
Establish Objectives and Standards

There are two types of standards:

Output Standards - measures performance results in terms of quantity, quality, cost, or time.

Input Standards - measures work efforts that go into a performance task.

2. Measuring Actual Performance

 Measurements must be accurate enough to spot deviations or variances between what really occurs and what
is most desired.
 Without measurement, effective control is not possible.

3. Comparing Results with Objectives and Standards

 The comparison of actual performance with desired performance establishes the need for action.
 Ways of making such comparisons include:
 Historical / Relative / Engineering
 Benchmarking

4. Taking Corrective Action

 Management-by Exception can save the managers time, energy, and other resources, and concentrates
efforts on areas showing the greatest need.
 There are two types of exceptions:
 Problems - below standard
 Opportunities - above standard

CONTROL SYSTEMS AND TECHNIQUES

 financial control,
 budgetary control,
 quality control,
 inventory control,
 operations management,
 computer-based information systems