This article deals with strategy implementation and execution which means that translating a decision into action is essentially an administrative task. The article discusses matching organisation’s strategy implementation with the structure to be able to achieve the organisation’s objectives.
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Table of Contents
Strategy Implementation
Strategy implementation is concerned with translating a decision into action. This presupposes that the decision itself (i.e. the strategic choice) is made with some thoughts being given to feasibility and acceptability. The allocation of resources to new courses of action is needed to be undertaken and there may be a need for adopting the organisation” s structure to handle new activities as well as training personnel and devising appropriate systems. Strategic implementation is often called the action stage of strategic management.
Strategy implementation and execution is essentially an administrative task. This is equally true of putting the strategy in place and getting individuals or the whole of the managerial challenge to “make it happen” It involves the following:
a. Building an organisation capable of carrying out the strategic plan.
b. Developing strategy-supportive budget and programmes
c. Instilling a strong organisation-wide commitment both to organisational objectives and the chosen strategy.
d. Linking the motivation and reward structure directly to achieving the targeted results.
e. Installing policies and procedures that facilitate strategy implementation.
f. Developing information and reporting system to track and control the progress of strategy implementation.
g. Exerting the internal leadership needed to drive implementation forward and to keep improving the strategy being executed.
Managers at all levels in the organization are involved in the development of an action agenda for implementation and execution. Each manager starting from the headquarters of the organisation down to each operating department is involved in providing answers to such questions as “what is required for us to implement part of our overall strategic plan and how can we best get it done?”
When this is properly done, the tasks will involve scrutinising every operating activity to see what action can be taken in order to improve strategy practices and behaviours in the organisation members.
The task of implementing and executing a strategy is a process of moving deliberately to create a variety of “fits” that provides the organisation with strategy. The task of consciously fitting the “way we see things around here” to the requirements of first-rate strategy execution, according to Thompson Strickland, produces a strategy- supportive organisational culture and work climate.
However, implementation fails and is defeated completely if the ingrained attitude, and the practices of the managers and employees are hostile or at cross-purposes with the needs of the strategy, and if their customary ways of doing things block strategy implementation instead of facilitating it.
In view of the importance of proper implementation and execution of strategy to an organisation’s success, Thompson and Strickland suggest that a number of fits are required and they include:
1) Strategy and the internal organisational structure
2) Strategy and organisational skills/technical know-how/operational capabilities
3) Strategy and the allocation of budgets and staff size
4) Strategy and the organisation’s system of reward and incentives
5) Strategy and internal policies, practices and procedures.
6) Strategy and the internal organisation’s atmosphere, which are determined by the values and beliefs shared by managers and employees, the philosophies and decision making styles of senior managers, and other factors that make up the organisation’s personality and culture.
Broadly speaking, the management task of strategy implementation is done by scrutinising the whole internal organisation to diagnosis what strategy-supportive approaches would be needed and the actions to take to accomplish such strategies. In this task, the different pieces of the implementation plan need to be arranged into a pattern of action that will produce an orderly change from the old strategy to the new strategy. The management will need to ensure that the necessary changes embarked upon will not create disruption and disaster.
In this regard, both the sequence of actions and the speed of implementation are important aspects of uniting the entire organisation behind strategy accomplishment. The challenge to the leadership of the organisation is how to stimulate the enthusiasm, pride, commitment and dedication of managers and employees such that an organization-wide crusade emerges to carry out the chosen strategy and to achieve the targeted results.
Thompson and Strickland consistently maintain that the two things that lie at the root of what separates the best managed organisations from the rest are:
a. Supervisor entrepreneurship involving a well-conceived strategy plan that positions the organisation in the right way at the right time.
b. Competent implementation and execution of the chosen strategy.
They noted that a well-formulated, well implemented and executed strategy is the surest route to achieving an attractive competitive advantage and enhanced organisational performance over the long term. Practitioners emphatically state that it is a whole lot easier to develop a sound strategic plan than to implement it or “make it happen”.
Strategy Implementation and Organisational Structure
The job of a strategy manager is complicated when it comes to implementation due to the number of tasks to be performed and the variety of ways in which each of them can be approached.
For successful implementation of a strategy, it has to be along the organisation” s overall condition and setting, the nature of the strategy and the amount of strategy change envisaged. That is to say, shifting to a bold new strategy poses different implementation problems than fine-tuning the strategy already in place. Strategy implementation will also have to be guided along the manager”s own skills, style and methods.
Strategy implementation includes developing an effective organisational structure, redirecting marketing efforts, preparing budgets, developing and utilizing information systems and motivating individuals to act.
Implementing entails mobilising the employees and managers to put formulated strategies into action. Strategic implementation is the most difficult stage in strategicmanagement. It requires personal and personnel discipline, commitment and sacrifice.
Successful strategy implementation hinges upon the manager’s ability to motivate employees, which is more of an art than a science. Strategies formulated but not implemented serve no useful purposes.
Strategy implementation activities affect both employees and managers in the organisation. Every department, division or unit must be involved.
The challenge of implementation is to stimulate managers and employees throughout an organisation to work with pride towards achieving stated objectives.
For effective and adequate Strategic implementation, some organisations development corporate culture and whatever strategy is to be implemented must follow that culture. For example, in Japan, there is an employment pool for an organisation. This is with the concept that the longer an employee is kept in this regard of the corporate culture “this is the way we do it”.
This may create a problem and the strategist must make a decision on how to turn around the fortunes of an ailing organisation, in which case he has the line of the organisation’s culture. There must be the right leadership to implement the necessary strategy in order to achieve the corporate objectives. Usually, an organisation’s culture is one of the major barriers to strategy implementation. If a change is carried out at all costs, the implementation may fail if consideration is not given to the organization’s culture and structure.
Matching Organisation’s Structure Strategy
A few hard and fast rules must be considered for a strategic implementation to be successful. This is because every strategy is grounded in its own set of key success factors and certain critical tasks. Also, every firm has some historical backgrounds based on the previous organisation’s decisions. The easy way out is to design the internal organisational structure around key success factors and critical tasks inherent in the firms strategy. This implies that the organisation’s structure must be matched with the formulated strategies for success. To be able to achieve this Thompson and Strickland highlights five sequence procedures as a useful guide for fitting structure to strategy.
They are:
(i) Pinpoint the key functions and task requisite for successful strategy execution.
(ii) Reflect on how the strategy’s critical functions and organisational
units relate to those that are routine and to those that provide staff support.(iii) Make strategic critical business units and functions the main organisational building blocks.
(iv) Determine the degree of authority needed to manage each organisational unit, bearing in mind both benefits and cost of decentralised decision making.
(v) Provide for co-ordination among the various organisation’s units
The organisational structure must fit the size of the organisation, the strategy, volatility, complexity of the environment and personnel characteristics.
Quite often changes in strategy require changes in the way an organisation is structured for two major reasons:
i) Structure largely dictates how objectives and policies will be established. Objectives and policies are stated largely in terms of products in an organisation whose structure is based on product groups.
ii) Structure dictates how resources would be allocated. If an organisation’s structure is based on customer groups, then
resources would be allocated in that manner. A restructuring gives all top managers added responsibilities and encourage the introduction of new products. However, the structure that is good for one organisation may not be good for another.
Note that all successful firms in a given industry do not end to organize themselves in a similar way. For example, consumer good companies tend to emulate the product firm of organisation. Small firms tend to be functionally structured (centralised), medium-sized firms tend to be divisionally structured (decentralized); large firms tend to use SBUs or matrix structure. As organisations grow, their structure generally change from simple to complex as a result of linking together of several basic strategies.
The transition from strategy formulation to strategy implementation requires a shift in responsibilities from strategist to divisional and functional manager. This shift may create implementation problems in responsibilities especially if strategy formulation decision comes as a surprise to middle and lower-level managers.
Managers and employees are motivated more by perceived self interests than by the organisation’s interests unless the two coincide. So, it is important that divisional and functional managers be involved as much as possible in strategy formulation and implementation. Managers and other employees throughout an organisation should participate early and directly in strategy implementation decisions. A top-down flow of communication is essential for developing bottom-up support.
Marketing Implementation and Execution
In addition to organising culture and structure, marketing is another crucial matter in strategy implementation. No matter the quality and the price of the organisation’s products if there is no adequate market the company will fail. Marketing must be given serious consideration in strategy implementation.
Personnel
Equally crucial to strategy implementation is the personnel factor. This may require training of staff to get the desired change through their newly acquired skills and knowledge. No matter how good a strategy may be, if there is no right personnel in the leadership position to implement, the strategy will fail.
Symptoms of an ineffective organisational structure include too many levels of management, too many meetings attended by too many people, too much attention directed towards unachieved objectives.
