Scanning Formulation Implementation and Control Mission External Reason for Societal existence Environment Objectives General Forces What results to Task Strategies accomplish Environment by when Plan to Industry Analysis achieve the Policies mission & Internal objectives Broad guidelines for Programs Structure decision Process Chain of Command making Activities to monitor needed to performance Budgets Culture accomplish and take Beliefs, Expectations, a plan corrective Cost of the Values action programs Procedures Resources Sequence Assets, Skills of steps Competencies, needed to Knowledge do the job Performance
Feedback/Learning Strategy Execution
“In too many companies there is a grand, and overly vague, long-term goal on one hand…and detailed short-term budgets and annual plans on the other hand … with nothing in between to link the two together … the long term doesn’t start at year five of the current strategic plan. It starts right now!”
Competing for the Future by Gary Hamel and C.K. Prahalad (Harvard Business Press) Issues includes: - What new business to enter - What business to abandon - How to allocate resources - Expand operations or diversity - Merge or form joint venture Issues includes: - Annual objectives - Policies - Employee motivation - Resource allocation Fluctuating = Good performance = Strong vision + Strong vision + Weak Strong implementation implementation
MISSION + CONSEQUENCES STRATEGY Strategy implementation is the total activities and choices required for the execution of a strategic plan. It is the process by which strategies and policies are put into action through programs, budgets, and procedures.
Implementation Process Questions:
– Who are the people to carry out the strategic plan? – What must be done to align operations with new direction? – How is work going to be coordinated? More time than planned Unanticipated problems Activities ineffectively coordinated Crises deferred attention away Employees w/o capabilities Inadequate employee training Uncontrollable external factors Inadequate leadership Poorly defined tasks Inadequate information systems Developing programs, Budget, and Procedure.
Programs: The Purpose of a program to make strategy action
oriented. Compare proposed programs and activities with current programs and activities.
Budgets: After programs has been developed, the budget
process begins. Planning a budget is the last real check a firm has on the feasibility of the selected strategy.
Procedures: Standard operating procedures are developed after
approving budget. They typically detailed the various activities that must be carried out to complete the corporation's programs.
Achieving Synergy: States what actions are going to be taken, by whom, during what time frame, and with what expected results.
Action Plan Elements
•List specific actions. •List dates to begin and end each action. •Name person responsible for each action. •Name person responsible for monitoring timelines and effectiveness of each action. •Estimate expected financial and physical consequences of each action. •Develop contingency plans. Organizational approach to help ensure purposeful action towards desired objectives.
The MBO process involves:
1. Establishing and communicating organizational objectives 2. Setting individual objectives that help implementing organizational one 3. Developing an action plan of activities needed to achieve the objectives 4. Periodically reviewing the performance as it relates to the objectives and including the results in the annual performance appraisal. Successful corporations tend to follow a pattern of structural development as they grow and expand. The structure development is as follow:
• Stage I : Simple Structure; Little formal structure.
• Stage II : Functional Structure; A single-product firm or a
single dominant businesses firm should employ a functional structure.
• Stage III: Divisional Structure; A firm in a several lines of
business that somehow related to should employ a multi divisional structure.
• Stage IV: Beyond SBU’s :A firm in several unrelated lines of
business should be organized into strategic business unit The organizational life cycle describes how organizations grow, develop, and eventually decline. It is the organizational equivalent to the product life cycle in marketing. These stages are: The implementation of new strategies and policies often call for new human resource management priorities and different use of personnel. Same as structure, staffing requirements are likely to follow a change in strategy.
Hiring and Training Requirements Change • Human resources needed to support the strategy • Selection process and procedure • Training is also needed in implementing strategies like retrenchment
Matchingthe Manager to the strategy
• Depending on strategy direction of the firm ◦ Executive type; Executives with a particular mix of skills and experiences • Analytical portfolio manager (Growth—Diversification)) Leading people to use their abilities and skills most effectively and efficiently to achieve organizational objectives.
Corporate culture Like structure and staffing, corporate culture should support the strategy • Affects firm’s ability to shift its strategic direction • Strong tendency to resist change • Corporate culture should support the strategy
Strategy-Culture Compatibility: Consider the following:
• Is the planned strategy compatible with the firm’s current culture? • Can the culture be easily modified to make it more compatible with new strategy? • Is management willing to make major organizational changes? • Is management committed to implementing the strategy?
