Supplemental Notes On StratMan

Supplemental Notes on StratMan . . . .
Strategy implementation: Organizing for action

Strategy implementation is the sum total of the activities and choices required for the
execution of strategic plan by which strategies and policies are put into action through the
development of programs, budgets and procedures. Although implementation is usually
considered after strategy has been formulated, implementation is a key part of strategic
management. Thus, strategy formulation and strategy implementation are the two sides of same
coin.
Implementing strategy
Depending on how the corporation is organized those who implements strategy will
probably be a much more divorced group of people than those who formulate it. Most of the
people in the organization who are crucial to successful strategy implementation probably had
little to do with the development of corporate and even business strategy. Therefore, they might
be entirely ignorant of vast amount of data and work into formulation process. This is one reason
why involving middle managers in the formulation as well as in the implementation of strategy
tends to result in better organizational performance.
Developing programs, budgets and procedures

The managers of divisions and functional areas worked with their fellow managers to
develop programs, budgets and procedures for implementation of strategy. They also work to
achieve synergy among the divisions and functional areas in order to establish and maintain a
company’s distinctive competence.
Programs
A program is a statement of the activities or steps needed to accomplish a single use plan.
The purpose of program is to make a strategy action oriented.
Budgets
A budget is a statement of corporation’s program in monitory terms. After programs are
developed, the budget process begins. Planning a budget is the last real check a corporation has
on the feasibility of its selected strategy. An ideal strategy might find to be completely
impractical only after specific implementation programs are costed in detail.
Procedures
Procedures are system of sequential steps or techniques that describe in detail how a particular
task or job is to be done.
Synergy achievement
One of the goals to be achieved in strategy implementation is synergy between functions and
business units, which is why corporations commonly reorganize after an acquisition. The
acquisition or development of additional product lines is often justified on the basis of achieving
some advantages of scale in one or more of company’s functional areas.
Stages of corporate development

Successful Corporation tend to follow a pattern of structural development called stages of
development as they grow and expand. Beginning with the simple structure of the
entrepreneurial firm, they usually get larger and organize along functional lines with marketing
production and finance department. With continuing success, the company adds new product
lines in different industries and organizes itself into interconnected divisions. The differences
among these three stages of corporate development in terms of typical problems, objectives
strategies, reward systems and other characteristics as specified in detail in table.
Factors differentiating stage I
stage II and stage III Stage I Stage II Stage III
companies Function
1 Sizing up: major problems Survival and Growth, Trusteeship in
growth dealing nationalization management and
with short term and expansion of investment and
operating problems resources control of large
increasing and
diversified
resources
2 Objectives Personal and Profits and ROI, profits,
subjective meetings earnings per
functionally share
oriented budgets
and performance
targets
3 Strategy Implicit and Functionally Group and
personal oriented, product
exploitation of a diversification
basic product or
service
4 Organization One man show Functionally Multiunit general
specialized group staff office and
decentralized
operating
divisions
5 Measurement and control Personal, Assessment of Complex formula
subjective control functional system geared to
operation comparative
assessment of
performance
measure
6 Reward punishment Informal, personal, More structures Companywide
system subjective policies usually
applied to many
different classes
of managers and
workers
Evaluation and Control in Strategic Management

Evaluation and control information consists of performance data and activity reports. Top
management need not involved. If however, the processes themselves cause the undesired
performance, both top managers and operational managers must know about it so that they can
develop new implementation programs or procedures.
Evaluation and control information must be relevant to what is being monitored. One of the
obstacles to effective control is the difficulty in developing appropriate measures of important
activities and outputs.
Using of measures
Returns on Investment (ROI) are appropriate for evaluating the corporation’s or
division’s ability to achieve profitability objectives. This type of measure, however, is adequate
for evaluating additional corporate objectives such as social responsibility or employee
development. A firm therefore needs to develop measures that predict likely profitability. These
are referred to as steering controls because they measure those variables that influence future
profitability.
Differing of behavior and output control
Controls can be established to focus either on actual performance results or on the activities that
generates the performance. Behavior controls specify how something is to be done through
policies, rules, standard operating procedures and orders from a superior. Output controls specify
what is to be accomplished by focusing on the result on the end result of the behavior through the
use of objectives or performance targets or milestones. They are not interchangeable. Behavior
controls are most appropriate when performance results are hard to measure and a clear
cause-effect connection exists between activities and results. Output controls are most
appropriate when specific output measures are agreed upon and no clear cause-effect connection
exists between activities and results.

Supplemental Notes On StratMan

Uploaded by

Copyright:

Available Formats

Supplemental Notes On StratMan

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Supplemental Notes On StratMan

Uploaded by

Copyright:

Available Formats

Supplemental Notes on StratMan . . . .

Strategy implementation: Organizing for action

Developing programs, budgets and procedures

Stages of corporate development

Evaluation and Control in Strategic Management

You might also like