Importance of Strategy Implementation

Strategy implementation is crucial because it concerns action rather than just brainstorming
ideas. It enables a team to understand that the strategies presented are viable. Strategy
implementation serves as a great tool for team development as every member can participate
in the process. It relies on thorough communication and the right tools.

Basic Features of Strategy Implementation

The primary features of strategy implementation are as follows:

Integrated Process

Strategy implementation is a holistic and integrated process. It implies that different activities
that constitute strategy implementation are interdependent. For instance, an organization's
promotional strategy's activities are interrelated and have to be executed in accordance with
each other.

Action Oriented

A strategy should be actionable. It can be made actionable via various management processes,
including planning and organizing. The management is not just responsible for formulating a
plan but also for converting the plan into action.

Varied Skills

It suggests that strategy implementation concerns wide-ranging skills. Vast knowledge,

abilities, positive attitude, and organizational skills are required to implement a strategy.
Proficiency in these skills helps in allocating resources, crafting policies, and devising
structures.
Wide Involvement

Strategy implementation demands the participation of all the components of a system. It

includes the top, middle, and lower level management. The top management has to maintain
transparency and clarity while communicating the strategy to be implemented. The middle
management must further regulate the norms and ensure no miscommunication happens.

Wide Scope

It covers a range of administrative and managerial activities. For instance, to implement

a marketing strategy, you must prepare a marketing budget, conduct market research, develop
a promotional plan, conduct test marketing, launch the product, and collect customers'
feedback.

Process of Strategic Implementation

When approaching a goal or a project, the process of strategic implementation governs how
you’ll put your plan into action. Its purpose is to help determine how you’ll source your
resources, what policies or programs you’ll put into place, and who will help you execute the
strategy.

The implementation process should follow an environmental scan and SWOT analysis to
identify any potential risks inherent to the strategy.

Without strategy formulation and implementation, it can be challenging to achieve goals.

Prerequisites of Strategic Implementation

Before any strategy can be implemented, there are a few prerequisites your organization
needs to achieve success. Sourcing these essential items in advance will help you successfully
implement a strategy.

As a management team, consider the following:

 Do you have people with the right skills and experience to implement the strategy?

 Do you have the resources you need (such as time and money) to execute the
implementation?
 Is your management structure designed for open communication and frequent meetings?

 Are you equipped with the technology needed to achieve your objectives?

Before you proceed to your implementation process, review your strategy, and ensure you’re
providing your team with what they need to succeed.

Aspects of Strategic Implementation

Strategy formulation and implementation work hand in hand, and the following aspects help
connect the dots to ensure the execution runs smoothly.

 Establish the right work environment and corporate culture that supports and embraces
strategy implementation. By motivating employees and rewarding success, you’ll improve
the effectiveness of your strategy.

 Employ a team of highly skilled and experienced professionals to tackle individual

supporting projects.

 Improve internal communication to ensure all team members have the support and
knowledge they need.

 Develop procedures or policies which help teams better achieve their goals.

 Create a healthy budget and allocate the resources needed to implement the strategy.

Successful strategic implementation involves participation from the entire organization. While
the management team may be tasked with overseeing the goal to completion, it’s your team
that will be completing the work.

Ensure the right structure and systems are in place to support the workflow through your
teams. Employees should be aware of their responsibilities, who they’re accountable to, and
the tools available to assist them with their tasks.

7 Key Steps in the Strategic Implementation Process

There are seven key steps for an organization to achieve success in their strategy formulation
and implementation process.
1. Set Goals

Ensure from the onset that all goals are realistic and attainable within your set timeframe and
resource allocation. Determine whether the goals are companywide or department specific.
Then identify any key variables or obstacles that may arise and develop contingency plans.

2. Determine Roles

Communicate your implementation strategy with your team. This will help you establish what
responsibilities each department will take on and outline your action plan for colleagues and
stakeholders.

3. Assign Work

Assign tasks to your team members. Each individual should understand the overarching goal
and how their specific assignment supports it. Deadlines should be clearly communicated to
ensure the project stays on task.

4. Execute and Monitor

It’s time to put your strategic plan into action. All team members should have the resources
they need to complete the task at hand. Regularly check in with your team to monitor progress
and address any roadblocks that may arise.

5. Adjust and Revise

This is often the most important step of the process. As issues or challenges arise, shift your
approach, and take corrective action to your process as needed. So long as you share updates
with your team and all stakeholders, staying agile throughout strategic implementation will
greatly improve your project outcome.

6. Complete the Job

Continue to check in on your team members to ensure the project is on track and that no
additional resources are needed to achieve the goal. Update all stakeholders with any
important details of the job or delays in your team’s progress.

7. Review and Reflect

The final step of the process is to conduct a retrospective of the strategy implementation.
Reflect on the overall process, and review what went well and what did not. Use these
learnings to improve your strategy for future projects.

Tips for Effective Strategy Implementation

A team reaches its end goal prior to the deadline while learning more about the project, the
company, and its capabilities only with effective strategy implementation. The following tips
help in strategy implementation:

Establish Systematic Communication

Various company tools, such as messaging software or project management software, facilitate
communication. Making yourself available for discussions by setting up office hours or having
open email addresses ensures effective communication of ideas, complaints, and appreciation.

Equip with Right Tools for Job

An idea turns futile when you do not have the proper tools to complete a project. To keep your
team moving forward and reach its goal, you must provide the right tools for every job.

Foster Honesty

You must practice being honest, not just to your team but also to yourself. Honesty in
a workplace helps everyone grow and creates a more cohesive team. It facilitates trust among
team members. You must look through the challenges of your team with an honest view and
give unbiased remarks on the situation.
Ensure Clarity

The clarity in goals and strategies is a must for strategy implementation. After all, only when
all the team members are clear on the expectations, duties, goals, and methods will they be
able to increase productivity at work.

Strategy Implementation Challenges

Teams might often face the following challenges during the strategy implementation process:

 Inadequate Support: Often, companies lag in reinforcing a culture of support, leading to

independent team members and reduced overall work efficiency.

 Inability to Track Progress: Lack of proper software for project documentation weakens
strategy implementation.

 No Safeguards: The inability to establish safeguards or address potential challenges leads

to several problems. Planning for potential issues saves time and frustration.

 Lack of Communication: Miscommunications are major roadblocks that delay strategy

implementation.

 Lack of Effective Training: Inability to train members and entrusting them with duties
leads to various problems.

Resource Allocation

Resource allocation is defined as the allocation or division of resources that are used in
the implementation of strategy in an organization. According to Churchman, “In
organizations, the decision-making Junction is the responsibility of management.

In order to execute its responsibility, an organization’s management requires information

about the resources available to it and their relative effectiveness for achieving
organization’s purpose. Resources are acquired, allocated, motivated and manipulated
under the manager’s control. They include people, materials, plant and equipment, money
and information.”

A project and a procedure would be successfully implemented only if the adequate

amount of resources is allocated to them. Efficient allocation of resources, such as –
financial, human, and technical, is imperative for strategy implementation. However,
allocation of resources does not ensure that strategies will be successful. The efficient
plans, projects, and procedures are the main drivers of success. It can be said that
resources are required to take action.
Strategy implementation deals with two types of resource allocation, namely one -time
resource allocation and continuous resource allocation. A one-time resource allocation
implies that resources are allocated and employed in a process only once; while a
continuous resource allocation demands a constant inflow of the required resources.

For example, equipments and technologies are implemented only once; thus, it is one -time
resource allocation. On the other hand, financial and information resources are needed at
the regular interval of time to run the organization. This is an example of continuous
resource allocation.

Resource Allocation at Different Levels: Corporate Level and Business Level

Resources planning and allocation occurs at two levels in the organization —first at the
corporate level, and second the business level. Resource planning and allocation at the
corporate level considers how resources should be allocated between the various
divisions, department or business or functions.

At the business level, resource planning and allocation deals with the issues of how
resources should be deployed within any one part of the organization so that it best
supports the strategies implemented.

In other words, it concerns with the operational aspects of resource planning and the
detailed assessment of strategic capability.

1. Resource Allocation at Corporate Level:

Resource planning and allocation at the corporate level relates to the allocation of
resources among business functions, operating divisions, geographical areas or service
departments and how these parts contribute to the overall strategies. Portfolio analysis
and the balance of an organization’s resources are of support in this regard. In large multi-
business corporations the allocation process and issues of balance could comprise several
stages of resource allocation.

The larger issues of resource allocation to support the implementation of strategies relate
to two approaches that can be explained in terms of perceived need for change and the
extent of central direction. These issues determine the approach to allocation.

The perception of the degree of change required in the resource base relate to the extent
to which the aggregate level of resources might need to change for the success of the
strategic change.

The second approach considers the extent to which the corporate level issues detailed
directions for the allocation of resources. Alternatively, the resources are allocated
according to the plans and needs of the various units of the organization. This depends
upon the organization structure and the level where decisions are made.
Generally, three situations occur in the allocation of resources:

1. Few changes in the overall resources base.

2. Growth in the overall resource base, and

3. Decline in overall resource base

In case strategic development requires few changes in the overall resource base, the
managers in organization manage resource allocation accordingly. In such a situation
resource allocation is made either according to a formula where central direction is high
or free bargaining that characterize decentralization.

These methods are considered to be too right that create obstacles in the way of
incremental alternations in strategies important to the organization’s development. Many
organizations use a combination of formula and bargaining methods. For example, a
company’s advertising budget might be 5 percent of sales.

Then there will be some scope for bargaining. The formula approach is criticized for usual
disagreements about the validity or fairness of the formula. The attempts to amend or
refine the formula may make it more complex by adding additional factors such as
weighting. It is also said that this type of formula is arbitrary.

Zero-based budgeting to some extent help to put some check on this process and relate
allocations to needs of the business or division or unit marginal shifts in resources.
However, some degree of discretion about resource allocation by a department or division
itself within its global sum is needed.

The perception of the degree of change determines approaches to resource allocation. The
defender organization is more likely to use the formula approach as it tries to minimiz e
the change the organization experiences in seeking out strategic developments that
require few changes in resource allocation.

On the other hand, the prospector organizations are more likely to operate closer to the
free bargaining approach. Such organizations look for new opportunities by a resource
allocation regime that discourages the status quo.

Allocations during Growth:

Strategists may use different approaches to resource allocation in organization

implementing strategic changes that require significant changes in resource base. During
growth new resources are allocated selectively across the organization and no area suffers
a reduction in resources.
Here again two approaches are followed:

1. Priority determination, and

2. Open competition

While adopting the first approach, the corporate level determines the priority areas and
imposes the resource allocation. The second approach envisages the center to allocate
resources through a process of open competition operating an internal investment bank
from which divisions or departments can bid for additional resources.

Most organizations during growth follow constrained bidding a mid-path where

departments/divisions of the organization can bid for additional resources but within
defined criteria and constraints.

Allocation of Resources in Static or Declining Situations:

ADVERTISEMENTS:

Declining situations will necessitate some areas to reduce in absolute terms, to maintain
other areas and/or to support new developments.

The management may adopt the following approaches to allocate the resources:

(a) Center may impose reallocation for example, plant closures.

(b) The reallocation is done in an openly competitive way

Earmarking a proportion of the total organizational resources for reallocation to new

ventures and diverting resources from one area to another achieve

(c) Constrained bidding.

ADVERTISEMENTS:

The difficulties in reallocating resources could be solved in the following ways:

1. By amalgamating related areas or activities,

2. Creation of new units outside the normal structure,

3. By closing down one part of the organization.

Allocating Shared Resources:

The issue of allocation of shared resources relates to the extent to which overlap, sharing
or duplication of resources take place between the various parts of the organization. This
issue is linked to the structure and systems of the organization.

The issues of sharing and overlap will partly determine the extent to which the corporate
level is willing to decentralize the process of resources that require a high degree of
coordination or cooperation between departments/divisions will need more central
direction.

On the other hand strategies, that require largely independent divisions or subsidiaries,
detailed direction from the center is not so important. Where sharing or overlap does
exist, three ways can be adopted to allocate shared resources.

1. Indirectly by an overhead recovery charge from the center to the division

2. Directly by charging-out for services taken (either from central services or from other
divisions

3. Directly by passing managerial responsibility to a designated division which then cross -

charges other users.

The direct methods places in the same hand the accountability and responsibility for
resource management, but create a new bureaucracy to administer the charging out
system.

1. Internal services which can be delivered in a genuine supplier-customer relationship

(e.g. computer services, personnel), for example through service- level agreements.

2. Major items of overhead where an incentive is needed to encourage divisions/

departments to think more strategically (e.g. floor space).

2. Resource Allocation at the Business Level:

The value chain is a means of analyzing the way in which an organization’s strategic
capability can be understood. An organization must understand what particular value
activities most contribute to the success of the strategies. For example, cost advantages or
differentiation from competitors. The way in which linkages between the value activities
is managed also determines an organization’s strategic capability.

When planning the implementation of new strategies the two issues are of central
importance in the resource planning.

i. Planning must establish which value activities are of greatest importance to successful
implementation of the selected strategies and ensure that these are planned with
particular care.
ii. Planning must address resource requirements throughout the value chain, including
linkages between value activities and with the value chains of suppliers, channels or
customers.

Resource planning at the business level is essentially detailed, it is nonetheless important

to understand how the detailed operational resource plans underpin the strategies of the
organization.

It is, therefore, helpful to put the detailed plan in a strategic framework by ensuring
that three central issues are considered:

1. Resource identification

2. Fit with existing resources

3. Fit between required resources

1. Resource Identification:

Resource identification addresses the question exactly what resources will a strategy
require and how should these resources be configured? The resource to be effective
requires that the planner clearly knows the detailed resource needs.

Both at individual and at a corporate level managers manage very much on the basis of
their past experience. Therefore, it is likely that new strategies will be considered in the
light of old expectations or existing bases of operating rather than in view of future
requirements.

The resource requirements of specific strategies will essentially vary in detail. For
example while a low-price strategy will emphasize cost-efficient plant and processes,
simplicity of operating processes and low cost distribution systems; a strategy of
differentiation requires different kinds of skills and resources with particular emphasis on
strengths in marketing, research and creativity, product development and engineering.
Therefore, there is a need to identify value activities that are critical to the success of
particular strategies.

i. The effective planning of resource requirements of separate value activities and the
matching between the management systems and the approach determine the competitive
position of an organization.

The planning processes labor supervision not only emphasize the cost efficiency but also
ensures that management systems support these plans and deliver cost efficiency. This is
likely to involve tight cost control, detailed reporting, highly structured quantitative
targets.

In contrast differentiation strategies are likely to involve ‘looser’ systems of reporting and
control, but a strong emphasis on coordinating the separate value activities to ensure that
they are genuinely adding value in the process of creating and delivering the product or
service.

The planning of value activities and management systems support strategy

implementation faces these problems:

a. New strategies may require organizations to shift their approach.

b. Pursuing a differentiation strategy does not absolve management from any need to plan
cost efficiency

c. Diverse organizations are likely to position different products and businesses in

different ways.

2. Fit with Existing Resources:

Another important issue in resource allocation is achieved the match between the existing
resource configuration with the required resources. The organization must reconfigure
the current resources that they support the new strategies and the new resources also fit
with the existing resources.

For example, a company may decide to produce and market a new product range through
a new division or even a new company to avoid problems of conflict or incompatibility
with existing operations. So the planning and allocation of resource also lead to the
structural considerations and issues of managing change.

3. Fit between Required Resources:

The way in which the linkages work between the value-activities including suppliers,
channels and customers is an essential ingredient of successful strategies. There must be
consistency in the way that the various value activities are planned in order to support the
strategy.

4 Main Factors Affecting Resource Allocation

Resource association involves the commitment and distribution of resources between

divisions, units, businesses and departments. Since resources are generally scarce, the
process of resource allocation is quite complex.

The factors that affect resource allocation are discussed as follows:

1. Organization’s Objectives:
It requires allocation of various types of resources. The priority of tasks is judged by the
amount of resources allocated to them. Thus, the top management should ensure that the
high-priority work should be given more resources so that it is achieved in a stipulated
time and cost.

For instance, the top management announces that the priority objective for market
research department is to research the consumers’ buying pattern for a particular product
through survey, which involves filling up the questionnaire by customers and telephonic
interviews with customers.

However, if an organization fails to provide the resources for the research process, it
cannot be considered as the priority objective. Therefore, the resource alloc ation should
be according to the priorities of objectives.

2. Preference of Dominant Strategists:

It affects the process of resource allocation. The strategists having high authority
dominate the decisions regarding resource allocation. The departmental he ads try to
attract the resources to their respective departments by creating interest in the dominant
strategists.

3. Internal Politics:
It influences the distribution of resources within an organization. Internal politics leads to
securing greater resources by the influential heads/departments of the organization.
These heads or departments are considered to be more effective.

4. External Influence:
It includes the influences of government, financial institutions, shareholders, and public.
Government laws related to labor or pollution may require additional investment by
organizations to implement related measures. Similarly, financial institutions may impose
high interest rates on loans, which may affect the budget of the organization.

Thus, it can be said that if there are no clear strategies, the process of resource allocation
could be distorted. Every organization should ensure that the resources are in balance
with the stated objectives.

In addition to these factors, there are various difficulties that are faced during
allocation of resources, which are as follows:

i. Scarcity of Resources – It implies that there is a lack of financial, human, and

technological resources. The major problem faced by organizations is to make a choice out
of scarce resources. Thus, scarcity leads to a problem of choice.

ii. Overstatement of Resource Needs – It takes place in case of bottom up approach. The
departments with more authoritative employees may ask for more resources than they
need, which may hamper the budget and strategic planning process.

iii. Tendency to Imitate the Competitors – It leads to lower capability to develop

competitive advantage. Sometimes, organizations imitate the resource allocation pattern
of its competitors even if different strategies are followed by the competitors.
Social Responsibilities of Business and Business Ethics

The concept of Business social responsibilities and business ethics plays a significant role in
increasing stake. In the long run, businesses grant mutual benefits for both communities &
business houses. One of the most interesting chapters of Business Studies class 11, named
Social Responsibilities of Business and Business Ethics will familiarize you with a variety of
similar concepts. As businesses have now become an essential part of our living, let us
understand this chapter through simple and easy notes.

What are the Social Responsibilities of Business and Business Ethics?

Social responsibility means sustaining the equilibrium between the impacts of the
environment. These are duties best in the interest of society that should be performed by a
business firm. Business Ethics is considered as the most structured, critical topic in the world
of business studies class 11 commerce subject. These principles are conducted in business
organizations utilizing and complying with all the rules & regulations. Here are some points
for the social responsibilities of business:
Existence and Growth

Registering your presence in the industry and continuity in business are two of the most
critical objectives of any firm. So the business should be driven by public satisfaction by
fulfilling the demands of society. Responding to the requirements and needs of the people of
the nation can help in achieving the goal.

Provide Long-Term Interests

Businesses mainly provide long-term interests for needful people and in social cooperation. It
should be done to maintain the reputation and goodwill of the firm or company. The business
should avoid indulging in activities like black marketing, hindrance, adulteration, etc. as per
the chapter social responsibilities of business and business ethics.

Relief in Government Regulations

Government intervention is not considered a good sign for any business. Therefore, businesses
should be run according to the regulations set by the government. It portrays a clean image
in society.

Facilitation of Resources in Business

As an integral part of society, giving back to society is one of the social responsibilities of
business and business ethics. This would help in solving the drawbacks of society like
unemployment. Since businesses use the resources of the community; therefore, they should
give back.

Social Contribution Through Business

Many business activities cause environmental damage such as pollution, emitting harmful
chemicals, discrimination, etc. Therefore, it should be the responsibility of entire businesses to
support social responsibility and keep a check on the same.

What are Business Ethics?

Business Ethics are considered very important for all business organizations. Adhering to
business ethics avoids not only the risk of government intervention and legal battles in law
courts but also improves the profitability of the company. Business ethics are essential
because self-regulation is desirable in a market economy and leads to many favourable
outcomes. Most of the large corporations have enquired about ethics and compliance
programs that are embodied with corporate governance.

Types of Business Ethics

These are the various types of business Ethics as per the chapter social responsibility of
business and business ethics-

Commitment to Excellence

Ethical executives lead to a commitment to excellence which demonstrates personal integrity

and courage. It is done by the information, preparation, and continuously endeavours to
increase their proficiency in all areas of responsibility.

Personal Responsibilities

These include the beliefs of an individual. The different firms have different approaches on
various matters like honesty, obedience to elders, willingness to perform duties, etc.

Personal Loyalties

A subordinate should be honest with his superior. As long as things are transparent between
various levels in the company, everything will work smoothly.

Corporate Responsibilities

Though the corporate houses are treated as separate legal entities, they also have to look after
their moral responsibilities. These might not be similar to the personal codes, but they should
be performed.

Economic Responsibilities
According to the chapter social responsibilities of business and business ethics, these include
individual ethics of financial nature. For some, borrowing money is immoral. It is a rare kind of
business ethic, as credit plays a huge role in business activities.

Promise Keeping & Trustworthiness

Trustworthiness demonstrates and forthcoming in information and correcting of fact. It is

worth the promise-keeping in social responsibility.

Difference Between Social Responsibilities and Business Ethics

In business studies class 11, the two terms convey their meaning interchangeably, but these
terms have different meanings. Both business ethics and social responsibility acts differ from
one company to another company. The difference between business ethics and social
responsibility is the main issue for every business organization to consider.

Business Ethics explains a moral character in the business environment as a social

responsibility. Ethical standards are an aspect that is concerned with positive and negative.
The most gaining factor is making a profit is the most prominent thing in business. While
creating money is the only concern of a particular business moreover. As per the social
responsibilities of business and business ethics, businesses should have good reputable
business ethics that benefit the community & society. This should be the primary goal of
business ethics, helping the public and business environment, etc.

ETHICAL ISSUES IN STRATREGIC MANAGEMENT

Corporate Culture is a set of important assumptions- often un-stated but most members share
in common. Something like

“people at top do not understand” or “Whether you work or don’twork, you will get salary”,
“there is stagnation at Top” or “Turnover is important.”

Thus shared things like uniforms, Shared sayings, shared actions

like service oriented approach, shared feelings like “hard work isnot rewarded here” creates a
Corporate culture.

Strategists have four approaches to create a strategy related supportive culture. This depends
on strategy-culture relationship.
Corporate Politics and Power: Power is an ability to influence others and politics is
carrying out activities though not prescribed by any Policy to gain advantages and influence
distribution. Corporate politics is not good or bad but it creates divisiveness which is not good.

Sources of Power : ‘Reward Power’ – ability of Manager to rewardpeople of his choice. ‘

Coercive Power’ – Ability to penalise negative results. ‘Legitimate Power’ Ability of Mangers
toinfluence behaviour of sub ordinates. Referent Power is Managers to create liking among
subordinates due to charisma or knowledge.Expert Power is due to competence, knowledge
and experience of Managers.
To inculcate these value and ethics:

 Consider Values & Ethics of a person during recruitment.

 Incorporate in new comer trainees and in training programme.
 Top management to set examples.
 Communicate Values & Ethics through wide publicity.
 Consistently monitor and nurture values and build ethics.
 Social Responsibility along with ethics becomes a stated or un- stated requirement. It
gets attended in Strategic Planning through environmental appraisals. It has differing
views, while some do notwant it to be considered in business operations, others boast
aroundit. However, most business houses observe a balance and undertake to deliver
social responsibility and business objectiveswithout contradicting each other.
 Social Responsibility extends beyond the workforce and stakeholders and many
business houses take up activities forcommunity welfare, rural development, sports etc.
Presently, with ISO:14001:2004 which concerns EnvironmentManagement Systems, it
has become a necessity to address themode and means of delivering social responsibility.

Like any other strategic functions, for successful implementation,Organisations need to

allocate resources, create Organisation