The Nature of Strategy Implementation

The implementation of organization strategy involves the application of the management

process to obtain the desired results. Strategy implementation is "the process of
allocating resources to support the chosen strategies". For example, according to
Steiner, "the implementation process covers the entire managerial activities
including such matters as motivation, compensation, management appraisal,
and control processes".

Concept of Strategy Implementation

Strategy implementation is "the process of allocating resources to support the

chosen strategies". For example, according to Steiner, "the implementation
process covers the entire managerial activities including such matters as
motivation, compensation, management appraisal, and control processes".

Strategy Implementation and the Strategic Management Process

The strategy implementation and strategy formulation processes are closely

interrelated. The desired results of an organization are established during the strategy
formulation process.

Implementation consists of the issues involved in putting the formulated strategy to

work. No strategy, no matter how brilliantly formulated, will succeed if it cannot be
implemented.

The Relation Between Strategy Formulation And Strategy Implementation

In order to achieve its objectives, an organization must not only formulate but also
implement its strategies effectively. The Figure represents the importance of both
tasks in matrix form and suggests the probable outcomes of the four possible
combinations of these variables:

 Success is the most likely outcome when strategy is appropriate and

implementation good.
 Roulette involves situation wherein a poor strategy is implemented well.
 Trouble is characterized by situations wherein an appropriate strategy is
poorly implemented.
 Failure involves situations wherein a poor strategy is poorly implemented.

Diagnosing why a strategy failed in the roulette, trouble, and failure cells in order
to find a remedy requires the analysis of both formulation and implementation.
 S.Certo and J. Peter proposed a five-stage model of the strategy implementation
process:

1. determining how much the organization will have to change in order

to implement the strategy under consideration, under consideration;
2. analyzing the formal and informal structures of the organization;
3. analyzing the "culture" of the organization;
4. selecting an appropriate approach to implementing the strategy;
5. Implementing the strategy and evaluating the results.

Implementation is successfully initiated in three interrelated stages:

1. Identification of measurable, mutually determined annual objectives.

2. Development of specific functional strategies.
3. Development and communication of concise policies to guide
decisions.

Organizations successful at strategy

implementation effectively manage
six key supporting factors:

1. Action Planning
2. Organization Structure
3. Human Resources
4. The Annual Business Plan
5. Monitoring and Control
6. Linkage.

The first step in implementation is identifying the activities, decisions, and relationships
critical to accomplishing the activities.
There are six principal administrative tasks that shape a manager's action agenda for
implementing strategy.

The specific components of each of the six strategy-implementation tasks:

1. Building an organization capable of executing the strategy.

The organization must have the structure necessary to turn the strategy
into reality. Furthermore, the firm's personnel must possess the skill
needed to execute the strategy successfully. Related to this is the need to
assign the responsibility for accomplishing key implementation tasks to the
right individuals or groups.
2. Establishing a strategy-supportive budget. If the firm is to
accomplish strategic objectives, top management must provide the people,
equipment, facilities, and other resources to carry out its part of the
strategic plan. Further, once the strategy has been decided on, the key
tasks to performed and kinds of decision required must be identified, formal
plans must also be developed. The tasks should be arranged in a sequence
comprising a plan of action within targets to be achieved at specific dates.
3. Installing internal administrative support systems. Internal
systems are policies and procedures to establish desired types of behavior,
information systems to provide strategy-critical information on a timely
basis, and whatever inventory, materials management, customer service,
cost accounting, and other administrative systems are needed to give the
organization important strategy-executing capability. These internal
systems must support the management process, the way the managers in
an organization work together, as well as monitor strategic progress.
4. Devising rewards and incentives that are tightly linked to
objectives and strategy. People and departments of the firm must be
influenced, through incentives, constraints, control, standards, and rewards,
to accomplish the strategy.
5. Shaping the corporate culture to fit the strategy. A strategy-
supportive corporate culture causes the organization to work hard (and
intelligently) toward the accomplishment of the strategy.
6. Exercising strategic leadership. Strategic leadership consists of
obtaining commitment to the strategy and its accomplishment. It also
involves the constructive use of power and politics, and politics in building a
consensus to support the strategy.