Strategy Implementation

Types of Strategy – Mintzberg & Waters (1985) RUDIE

Type Description

Intended What was originally planned

What was planned and

Deliberate
implemented

Realized What was actually pursued

What was planned but

Unrealized
dropped

Reactive strategies that

Emergent
emerged unplanned

Examples:

 TATA - Air India: Intended and realized strategies (merger with Vistara,
rebranding, customer experience overhaul).

 CavinKare, Jubilant: Emergent strategy during COVID (hand sanitizer

products).

Mintzberg's 10 Types of Strategies U CUPI PIE

Type Feature

Planned Precise top-down implementation

Type Feature

Entrepreneurial Founder-led direction, flexible

Ideological Value/vision-based (e.g., vegetarian-only firms)

Umbrella General guidance, decentralized execution

Process HQ sets structure, units form strategies (e.g., CISCO)

Unconnected Subunits with autonomy (e.g., hospitals)

Consensus Collective convergence

Imposed Forced from outside (e.g., M&As)

Identified “4+2” Management Practices. CESS LIMT

🔹 Primary Practices (Must-have 4):

1. Strategy – Sharp, focused, well-communicated.

2. Culture – High expectations, empowered teams (Netflix example).

3. Execution – Flawless operations, consistent delivery.

4. Structure – Simple, low-bureaucracy, fosters collaboration.

🔹 Secondary Practices (Pick any 2):

5. Talent – Retain and promote internal talent.

6. Innovation – Disruptive and bold; don't fear cannibalization.

7. Leadership – Right CEO can uplift performance.

8. Mergers/Partnerships – Growth through smart acquisitions (e.g., TATA-Starbucks).

Again:

Here are your Strategy Implementation – Session 1 & 2 Notes prepared in MBA-level academic format, with
clear headings and bullet points to help with revision, assignments, or discussions.

📘 SESSION 1: Introduction to Strategy Implementation

Prof. Muneza Kagzi | EPGP IIM Kozhikode

🔷 Course Overview

 Credits: 2 | Duration: 20 hours (8 sessions)

 Objective: Understand the linkage between strategy formulation and implementation

 Approach: Group discussion, real-world company analysis

🎯 Learning Outcomes

 Analyze organizational complexities in strategy implementation

 Apply frameworks to understand execution challenges

 Evaluate the role of leadership, functions, systems, culture

📊 Evaluation

 Group Project (Presentation only):

o Identify a strategy implementation problem in an Indian listed company

o Analyze using course concepts (BSC, structure, culture)

o Data: Annual reports, news, websites

🧠 Core Concepts

🔁 Strategy Formulation vs. Implementation

 Formulation = Planning

 Implementation = Doing

 Execution is the bridge between strategy and results

🔄 Strategic Management Process

1. Mission

2. Objectives

3. External & Internal Analysis

4. Strategy Formulation

5. Implementation

6. Competitive Advantage
🧭 Types of Strategy – Mintzberg & Waters (1985)

Type Description

Intended What company planned

Deliberate What was actually executed from intended

Realized What actually happened

Emergent Reactive, unplanned strategy

Unrealized Intended but not implemented

Case Examples:

 TATA–Air India: Revamp branding, merged with Vistara

 CalvinKare & Jubilant: Emergent strategies (hand sanitizers during COVID)

🧩 Mintzberg's 10 Strategy Types

1. Planned

2. Entrepreneurial

3. Ideological

4. Umbrella

5. Process

6. Unconnected

7. Consensus

8. Imposed

🏆 What Makes Firms Outperform? (Evergreen Project)

4+2 Management Practices

 Primary (Must have 4):

1. Strategy – Clear, communicated, consistent

2. Culture – Empowerment, performance-driven

3. Execution – Consistent, error-free delivery

4. Structure – Lean, cooperative

 Secondary (Any 2):

 1. Talent

2. Innovation

3. Leadership

4. Mergers & Partnerships

📘 SESSION 2: Strategy and Structure

Prof. Muneza Kagzi | EPGP IIM Kozhikode

🔁 Recap

 Linkage between formulation and implementation

 Strategy types

 4+2 Management Practice framework

📦 Case Discussion: Beijing EAPS Consulting (BEC)

 First EAP consulting firm in Mainland China

 Fast growth → 6 to 20 employees

 Core issue: Structural conflict causing delay and stress

🔍 Case Problems

1. Matrix organization led to conflicting authorities

2. Employees confused about who to report to

3. Project vs. department managers causing dual reporting pressure

4. No clarity in project manager authority

🧱 Understanding Organization Structure

🔹 Attributes

 Hierarchy of authority

 Centralization vs. decentralization

 Degree of formalization
  Reporting relationships

🔹 Types of Structure

Type Characteristics

Simple Owner-driven, best for small firms

Functional Organized by department (e.g. R&D, Sales)

Multidivisional (M-form) Divided by products/geographies

Matrix Cross-functional; dual reporting (used at BEC)

🔁 Matrix Structure

 Employees report to both project and functional managers

 Benefits:

o Collaboration

o Cross-functional skill growth

 Challenges:

o Span of control increases

o Confusion in authority

o Delay due to conflicting priorities

✅ Recommendations for BEC

1. Define clear authority & decision rights for project managers

2. Support from top management

3. Orientation & training programs

4. Foster collaboration between functional and project managers

5. Encourage job rotation

6. Transparent communication and employee involvement in change

📌 Key Takeaways

 Strategy–Structure Fit is essential for successful execution

 Choose structure based on business size, environment, and complexity

  Matrix structure is ideal for project-based work but must be well-managed

 Periodic restructuring and communication are necessary for sustained growth

📚 References

 Olson, Slater & Hult (2005). The importance of structure and process to strategy implementation

 Hitt, Ireland, Hoskisson – Strategic Management (9th Edition)

Case Summary

As BEC grew rapidly, it introduced a matrix organizational structure to manage multiple projects across various
departments like Marketing, Training, R&D, Consulting, and newly formed Project Departments A & B.

However, this led to operational dysfunction due to:

 Ambiguous reporting lines (dual authority: functional vs. project managers)

 Employee overload and confusion about responsibilities

 Internal conflict and reduced morale

 Cultural stress as the firm moved from collegial to performance-driven culture

The founders now faced the challenge of how to align structure, culture, and processes with their fast-
growing business strategy without losing their core values.

Here are comprehensive MBA-style case notes for “Beijing EAPs Consulting Inc.” tailored for strategy
implementation and organizational structure analysis:

🧾 Case Notes: Beijing EAPs Consulting Inc.

Source: Ivey Publishing | Used in Prof. Muneza Kagzi's Strategy Implementation Course | IIM Kozhikode

🏢 Company Overview

 Founded: 2001, Beijing

 Core Service: Employee Assistance Programs (EAPs)

 Position: First and leading EAP consulting firm in mainland China

 Clients: Siemens, Samsung, IBM, Lenovo, China Development Bank, Guangdong Mobile
  Workforce:

o 6 employees till 2006 → 20+ by 2007

o Over 40 part-time counselors (students, school & hospital psychologists)

📈 Strategic Shift

 Early Focus (2001–2006):

o Research-oriented

o Informal structure, high learning focus

 Shift in 2006:

o Business growth after big client (Guangdong Mobile)

o Strategic move: From research → market-focused delivery

o Change required structure revamp to manage scale and complexity

🧠 Service Delivery Model (Typical Project)

1. Interviews – Identify stress triggers

2. Brochures – Educational material for employees

3. Helpline – Confidential psychological consulting

4. Training – On-site sessions for staff and managers

🔧 Organizational Evolution

Pre-2006 (Startup Phase)

 No formal departments or hierarchy

 All full-time employees involved in all stages of the project

 Flat structure; flexible and learning-oriented

 Informal but effective due to small team

🏢 Post-2006 (Growth Phase)

 Formal structure introduced:

o Departments: Marketing, Consulting, R&D, Training, Administration

o Project Depts A & B created to reduce scheduling overload

 o Matrix Structure introduced – employees reported to both functional and project managers

 Leadership roles:

o CEO (Mr. Zheng) led Consulting & Training

o Vice President led Marketing & Project Dept A

o Chief Consultant (academician) led R&D

⚠️Key Problems Identified

1. Matrix Conflicts

 Dual reporting: Department manager vs. Project manager

 Employees confused about task priorities and reporting authority

 Lack of clarity → Internal conflict, missed deadlines, stress

2. Ambiguous Project Manager Role

 Not fully accepted by departmental staff

 Peers in hierarchy → lack of control

 Project managers couldn’t enforce decisions effectively

3. Overloaded Employees

 Many working on 10+ tasks with strict deadlines

 High client expectations + internal ambiguity = burnout

4. Culture Clash

 Shift from collegial, learning culture to performance-driven business culture

 Internal communication and collaboration deteriorated

Departmental Responsibilities (Post-2006)

 Marketing: Branding, media relations, customer acquisition

 Consulting: Quality management, internal team building, service delivery

 Training: Course design, program implementation, publication

 R&D: Research strategy, product innovation, external collaboration

 Administration: Finance, HR, office operations

 Project Depts A & B: Resource allocation, cross-functional coordination, client handling

🔄 Structural Analysis

🔹 Pre-2006: Simple Structure

 Flat, informal, efficient for small teams

 Enabled cross-functional learning

🔹 Post-2006: Matrix Structure

 Suited for project-based delivery

 Challenges:

o Dual authority lines → confusion

o Increased complexity with growing scale

o Misalignment between project urgency & functional capacity

💡 Strategic Insights & Recommendations

1. Clarify Roles and Authority:

o Define reporting lines more clearly

o Empower project managers with formal authority on execution

o Use RACI Matrix for role clarity (Responsible, Accountable, Consulted, Informed)

2. Strengthen Communication & Collaboration:

o Encourage regular joint meetings between departments and project teams

o Reinforce cross-functional teamwork and trust

3. Employee Support & Workload Management:

o Introduce resource planning tools

o Hire additional staff or redistribute work to avoid burnout

o Consider dedicated resource pools for urgent tasks

4. Leadership Alignment:

o Senior leaders must set clear goals and expectations for matrix cooperation

o Consider dual-reporting coordination protocols

5. Retain Learning Culture:

o Integrate structured project retrospectives

 o Keep the culture of sharing and post-project reviews alive

📌 Strategic Learnings from the Case

 Structure must evolve with strategy and organizational growth

 Matrix structures require strong communication, clear authority, and collaborative leadership

 Early stage flexibility should give way to process discipline as business scales

 Organizational culture needs active nurturing during rapid transitions

Great — let’s now apply both McKinsey’s 7S Framework and Mintzberg’s Strategy Typologies to the Beijing
EAPs Consulting Inc. (BEC) case, while linking them directly to the key challenges the company is facing.

🧩 1. McKinsey 7S Framework Application for BEC

The McKinsey 7S framework identifies 7 interdependent organizational elements that must be aligned for
successful strategy execution.

Element BEC Situation Challenge Being Addressed

Growth without strategic alignment across

Shift from research-focused to business-growth-
Strategy structure & systems has led to internal
oriented (2006 onward).
confusion and inefficiencies.

Adopted a matrix structure post-2006 with dual Employees face conflict in reporting &
Structure
reporting lines. prioritization; managers have unclear authority.

No formal processes for conflict resolution or task Lack of execution clarity, inefficient
Systems
allocation across departments and projects. communication, and overload on staff.

Initially: Learning-oriented, team-based culture.

Shared Cultural mismatch is increasing resistance and
Now: Commercial focus with unclear cultural
Values stress during growth.
realignment.

Leadership was collegial and informal; now

Style mismatch—leaders not assertively
Style struggling with scaled formal management
enforcing new structure & roles.
demands.

Limited pool of qualified psychologists; Talent constraints leading to burnout and

Staff
overworked employees juggling multiple roles. productivity loss.
Element BEC Situation Challenge Being Addressed

High technical (psychology) skills, but low Skills mismatch for managing growth in a matrix
Skills
management/project coordination skills. organization.

✅ This framework highlights the need for internal realignment between structure, leadership style, systems,
and shared values to support the new growth strategy.

🧠 2. Mintzberg’s Strategy Typology for BEC

Let’s classify BEC’s strategic trajectory using Henry Mintzberg's 10 strategy types:

Mintzberg Strategy
Application to BEC Challenge Solved
Type

Entrepreneurial In early stages (2001–2006), company operated Worked well in small, cohesive teams
Strategy with a visionary, founder-driven, flexible model. with informal roles.

Post-2006, leadership attempted to implement a Aimed to manage growing client base

Planned Strategy
structured project management system. and complex services.

Project managers were expected to operate semi- Did not succeed due to undefined
Umbrella Strategy
autonomously under the overall growth strategy. authority and inconsistent processes.

Functional managers still controlled their internal Created conflict due to horizontal
Process Strategy operations and expected project managers to (project) vs. vertical (departmental)
align accordingly. control issues.

BEC’s expansion into mobile sector was based on Growth happened organically but
Emergent Strategy client opportunity (Guangdong Mobile) rather without full internal readiness, causing
than pre-formulated plan. structural strain.

✅ Mintzberg's model reveals that BEC transitioned too quickly from an entrepreneurial model to a
planned/project-driven one without addressing internal systems and leadership coordination.

Summary: What Challenges Do These Frameworks Help Diagnose & Solve?

Challenge Framework Insight/Solution

Unclear authority & 7S – Structure, Systems; Mintzberg – Redefine decision rights. Clarify project vs.
dual reporting Process/Umbrella conflict functional authority. Introduce RACI matrix.

Improve workforce planning. Hire/train

Employee burnout & 7S – Staff, Skills; Mintzberg – Emergent
project managers. Prioritize capacity
overload growth without planning
management.

Cultural dilution 7S – Shared Values, Style Reaffirm organizational values. Communicate

Challenge Framework Insight/Solution

culture-fit expectations during hiring &

during scaling
expansion.

Weak project
7S – Systems, Style; Mintzberg – Shifted Build strong SOPs and project governance.
execution despite
too fast from Entrepreneurial to Planned Train leaders for formal structures.
growth

Here are structured MBA-style case notes for Session 3: New Balance Athletic Shoe Inc. based on the
presentation by Prof. Muneza Kagzi (EPGP, IIM Kozhikode) on Management Control Processes.

📘 Session 3: Management Control Process

🧠 Case: New Balance Athletic Shoe Inc.

🔁 Case Context

 Year: 2005

 Event: Adidas acquired Reebok

 Challenge: Should New Balance alter its unique differentiation strategy amidst increasing
consolidation in the footwear industry?

🧩 McKinsey 7S Framework – Application to New Balance

Element New Balance Context Strategic Role

Differentiation – focused on performance, fit, quality, not Provides sustainable

Strategy
fashion competitive advantage

Distribution mix – from big box chains (e.g., Walmart) to urban Balances reach with brand
Structure
niche sellers identity

Local manufacturing (25%), outsourced (75%)Lean Increases responsiveness,

Systems
manufacturing – NB2E initiative operational control

Shared Deep-rooted performance culture, no celebrity endorsements, Aligns internal actions with
Element New Balance Context Strategic Role

Values social responsibility (e.g., $2M tsunami aid) brand promise

Management promotes teamwork, collaboration with Asian

Style Reflects executional excellence
partners

Enables lean systems & fast

Staff Cross-functional teams, strong internal collaboration
execution

Supports quick delivery and

Skills Manufacturing and supply chain agility, strong retail partnerships
consistent quality

⚖️Key Strategic Tensions

Tension Description NB’s Challenge

Profitability vs. Growth needs investment, but must not

Offshoring vs. local responsiveness
Growth compromise margins

Short-term vs. Long- 24-hour delivery vs. strategy

Fast response vs. long-term brand investment
term distraction

NB2E integration across all

Whole vs. Parts Balancing divisions and unified brand strategy
operations

🔧 NB2E (New Balance Executional Excellence)

A strategic initiative focused on:

 Faster responsiveness (target: 24-hour delivery)

 Lean processes (cut-through assembly, NB2E)

 Enhanced retailer relations

 Positioned as a capability builder (for possible expansion into fashion segments)

➕ Pros

 Improves responsiveness, avoids markdowns

 Enables product innovation cycles

 Strengthens NB’s differentiation

➖ Cons

 May stretch operational capacity

  24-hr delivery may be over-ambitious

 May distract leadership from core strategy or acquisitions

🌍 Offshoring vs. Domestic Production

Model Implications

Domestic Owned Control, responsiveness (e.g., USA factories)

Foreign Contracted Cost efficiency, risks in coordination

Balanced Sourcing New Balance's current approach – mix of internal and outsourced

💡 Managing Tensions – Harvard Framework (Dodd & Favaro, 2006)

Only 38% of companies managed both profitability & growth simultaneously over 20 years.

Resolution Approach:

 Identify tensions

 Strengthen the uniting factors:

o Profitability vs. Growth → Focus on Customer Benefit

o Short-term vs. Long-term → Emphasize Sustainable Earnings

o Whole vs. Parts → Leverage Diagonal Assets (resources/capabilities that benefit both individual
units and corporate synergy)

🇮🇳 New Balance in India

 Available via Ajio, Myntra, etc.

 Retail presence in metro cities

 Growing digital-first brand perception

📌 Key Takeaways

 New Balance’s differentiation strategy is viable but under pressure due to industry consolidation.

 NB2E is a strategic asset—improving speed and flexibility, but must not distract from broader
objectives.

 McKinsey 7S and tension management frameworks offer tools to maintain strategic focus while
adapting.
  Executional alignment is critical to sustain differentiation in a commoditizing market.

Here are structured MBA-level case notes for New Balance Athletic Shoe, Inc. — focusing on challenges and
solutions using relevant Strategy Implementation frameworks like McKinsey 7S, Balanced Scorecard, and
tension management from HBR.

🧾 Case Summary – New Balance Athletic Shoe, Inc.

📍 Context

 2005: Adidas acquires Reebok, increasing market consolidation

 New Balance (NB) remains independent, with a unique operating model based on domestic
manufacturing, no celebrity endorsements, and a performance-first product focus

 Jim and Anne Davis, sole owners, consider how NB should respond strategically

🚨 Key Strategic Challenges

Challenge Description

1. Market Consolidation Adidas + Reebok creates a stronger rival to Nike. NB risks falling behind in brand
Pressure power and scale.

Inventory issues, quality lapses, slow deliveries, and SKUs misaligned with
2. Operational Inefficiencies
demand.

3. Scale vs. Core Philosophy Scaling domestic manufacturing while staying lean and responsive.

4. Brand Visibility vs. Competing with Nike’s and Adidas’s massive endorsement-driven marketing with
Identity a “no endorsement” model.

5. Design Limitations Conservative designs limit appeal to fashion-forward youth markets.

Reliance on independent sales reps may lack control, especially as retail

6. Sales Model Dependence
competition tightens.

✅ Strategic Initiatives Taken

🔧 NB2E (New Balance Executional Excellence)

 Adopted Lean Manufacturing (TPS principles) in 2004

  Goal: 100% order delivery within 24 hours

 Shift from batch to pair-by-pair flow

 Cut lead time from 8.5 to 2.5 days

📦 Flexible Supply Chain

 Mix of domestic manufacturing (25%) and outsourcing (75%)

 Local assembly using cut-through and sourced-upper methods

 Worked to reduce supplier lead time from 12 to 9 weeks

🧩 McKinsey 7S Framework – Diagnosis & Solution

7S Element Challenge Solution

No clear growth path post Adidas– Maintain differentiation but selectively invest in faster
Strategy
Reebok fashion delivery

Introduce performance-linked coordination and training for

Structure Complex sales network via agents
agents

Inventory & quality issues; poor NB2E: Lean systems, SKU rationalization, faster product
Systems
design cycle cycles

Shared
Legacy values may limit adaptability Promote innovation alongside performance integrity
Values

Encourage cross-functional decision-making and data-

Style Conservative leadership
driven retail collaboration

Strong team ethic but conservative

Staff Upskill & empower design for fashion responsiveness
design teams

Strong in operations; weak in Leverage ops + selectively invest in brand-building without

Skills
branding celebrity focus

⚖️Tension Management – HBR Framework (Dodd & Favaro)

Tension Current Conflict Unifying Focus

Profitability vs. Costly domestic production vs. Improve customer value through speed, fit, and
Growth global expansion loyalty

Short-term vs. Long- Inventory reduction vs. 24-hour

Focus on sustainable earnings via lean execution
term fulfillment goal
Tension Current Conflict Unifying Focus

SKU overload from independent Align parts through diagonal assets – cross-
Whole vs. Parts
sales actions functional teams, tech systems

🎯 Balanced Scorecard (BSC) Mapping

Perspective Current Situation Strategic Focus

Improve margins via Lean & agile supply

Financial Solid profitability but scale limitations
chain

Strong loyalty but limited appeal to fashion

Customer Segment-focused design & personalization
segment

Internal Process Slow product cycles, high inventory NB2E execution, SKU rationalization

Learning & Design innovation, cross-functional

Conservative design culture
Growth upskilling

💡 Additional Strategic Solutions

1. Refine Branding

 Continue “Endorsed by No One™” but highlight real athletes, user stories, and values like authenticity
and performance.

2. Design Innovation

 Invest in a design lab focused on quick-turn lifestyle models

 Partner with fashion colleges or niche designers

3. Digital-First Distribution

 Strengthen D2C channel (online platforms, own stores)

 Use analytics to personalize marketing for loyal users

4. Retailer Relationship Enhancement

 Use NB2E to provide value-added inventory planning tools to smaller retailers

 Deepen strategic collaborations beyond Foot Locker

5. Selective Global Expansion

 Focus on emerging urban markets (India, Southeast Asia)

 Push core differentiators: fit, width, and domestic quality

📌 Conclusion

New Balance’s challenge is not to copy Nike or Adidas, but to scale operational excellence and brand
relevance while staying true to its core values.

NB2E is a powerful platform for improvement, but its success depends on strategic prioritization, faster
innovation, and controlled but bold execution.

Here are detailed MBA-style notes based on the presentation:

📘 Session 4: Organizational Culture and Strategy Implementation

Prof. Muneza Kagzi | EPGP, IIM Kozhikode

🧠 Organizational Culture: Definitions

Perspective Definition

Cognitive Shared values, beliefs, ideologies, and norms that shape behavior

A set of reinforcements applicable to members sharing common knowledge (Bushardt et al.,

Behavioral
2011)

🎯 Strategy & Culture Interlinkage

 Culture shapes strategic intent, mission, and vision.

 Strong alignment ensures effective implementation.

 Culture influences:

o Mission statements

o Vision

o Corporate identity (values, ethics, intent)

🌏 Hofstede’s Cultural Dimensions (Key to Global Strategy Adaptation)

Dimension Explanation

Power Distance Acceptance of unequal power (High: India, China / Low: UK, Germany)

Individualism vs. Collectivism Focus on self vs. group goals (US vs. Japan)
Dimension Explanation

Masculinity vs. Femininity Performance/status vs. care/quality of life

Uncertainty Avoidance Need for rules and structure (Strong: Japan / Weak: Sweden)

Long-term vs. Short-term Orientation Future-focused vs. tradition-focused thinking

🔗 Reference: Prof. Geert Hofstede – pioneer in cross-cultural organizational behavior

📣 Culture and Communication in Strategy

 High-context cultures (Asia): Indirect, emotional, trust-based communication

 Low-context cultures (West): Direct, data-driven, persuasive communication

 Implication: Brand messages, change initiatives, and strategy deployment must be culturally adapted

Case: Bancolombia – Talent, Culture & Value Creation in Mergers

📍 Background

 Merger of three banks: Bancolombia, Conavi, and Corfinsura (2005–2006)

 Drivers: Regulatory pressure, need for universal banking model, consolidation

 Each firm had strong, unique cultures:

o Conavi: People-centric, warm, stable

o Corfinsura: Elite, investment-focused

o Bancolombia: Strategy-focused, niche HNI client base

🚨 Challenges During Merger

1. Cultural misalignment: Different HR practices, values, customer orientation

2. Talent concerns: Job insecurity, unclear roles post-merger

3. Strategic integration: Different markets and priorities

4. Employee resistance: Emotional attachment to legacy cultures

5. Brand confusion: Multiple brands → unclear market positioning

✅ Success Factors
  Santa Marta leadership meeting: Formed a unified mission & core values

 Golden Rules of Integration: Guiding principles for merger execution

 Co-creation of culture: Not imposition; emphasis on “ideal bank”

 Mentoring & communication: Peer-to-peer coaching; Q&A with leaders

 Culture workshops: “United for an Ideal Bank” training programs

 Retention of benefits: Preserved seniority, HR policies to reduce fear

 Performance system (AVS): Sales targets aligned with new culture

🧩 Culture & Reward Structure Alignment (Bushardt et al., 2011)

Reward Type Description Impact

Ensures baseline motivation &

System Rewards Standardized benefits (insurance, holidays, perks)
retention

Individual Performance-linked (bonuses, recognition,

Drives alignment with strategic goals
Rewards promotions)

 Effective Strategy Implementation = Strong Culture × Reward Alignment

🔄 Model:

Culture Strength Reward Structure Congruence Outcome

High High Optimal Implementation

Low Low Poor Strategy Execution

🧠 Key Academic References

 Mooij (2010) – Tailoring Strategy to Fit Culture (IESE Insight)

 Bushardt et al. (2011) – Organizational Culture, Reward Structure, and Strategy Implementation

✍️Key Takeaways

 Strategy implementation is not mechanical — it's deeply influenced by culture and people systems.

 Cross-cultural awareness, especially in global or merged entities, is critical.

 Aligning organizational culture with formal systems (structure, rewards, leadership) creates
successful, sustainable change.
 Bancolombia’s merger shows how intentional culture co-creation, strong communication, and
leadership can overcome resistance and create value.

Here are structured MBA-level notes for the case:

📘 Bancolombia: Talent, Culture, and Value Creation in Mergers

🧠 Case Summary

Bancolombia became Colombia’s largest bank through two major mergers:

 1998: BIC + Banco de Colombia

 2005: Bancolombia + Conavi + Corfinsura

The case focuses on the human, cultural, and organizational challenges of integrating these companies,
and how leadership used communication, training, and strategic clarity to drive successful integration and
value creation.

🚨 Core Strategic & Organizational Challenges

Challenge Description

Old Bancolombia was results-driven; Conavi people-oriented; Corfinsura was elite

Cultural Clashes
and specialized. Alignment was critical.

Uncertainty about jobs, benefits, and roles during the merger process threatened
Talent Retention
retention and morale.

Merged firms had different legacies, priorities, and operating models. Needed
Strategic Alignment
shared strategy, values, and mission.

3 strong brands; preserving all would confuse customers. Needed single brand
Brand Confusion
identity.

Operational Different systems, product portfolios, and service processes created friction and
Integration customer dissatisfaction.

Employee Change-fatigue, legacy loyalties, and lack of clarity on career future led to
Resistance resistance or disengagement.

🧩 Application of McKinsey 7S Framework

Element Pre-Merger Misalignments Actions Taken

Different business models (investment Santa Marta meeting created unified

Strategy
banking, mortgages, retail banking) vision, mission, values

Clear structure within 30 days of legal

Structure Separate hierarchies, unclear roles
merger approval

Conflicting IT systems, HR policies, sales Unified back-end systems; AVS for

Systems
metrics performance management

Shared Different work cultures & customer Cultural Transformation Workshops:

Values orientation “United for an Ideal Bank”

Different management styles: soft vs. Coaching for leaders, face-to-face

Style
aggressive transparent communication

Mistrust, job security concerns, unclear Preserved seniority, benefits, and

Staff
future offered training & mentoring

Gaps in digital banking, cross-selling, sales Training 12,000+ employees + peer

Skills
culture coaching for new capabilities

📊 Balanced Scorecard Focus Areas Post-Merger

Perspective Key Actions

Financial Focus on mortgage growth (190% YoY), universal banking model, ADR growth

Initial dip in satisfaction (esp. Conavi users), later improved via unified brand,
Customer
training

Internal Process Rapid systems integration (adopted Bancolombia’s), product consolidation

Cultural workshops, leadership coaching, peer mentoring, Great Place to Work

Learning & Growth
ranking

M&A Execution Strategy & Tools

Tool / Approach Role in Integration

“Golden Rules of Integration” Defined guiding values for merger execution

Cultural Transformation Workshops Experiential workshops to align mindset, behaviors, and trust

AVS System (Added Value System) Performance-based sales force alignment

Mentor & Coaching Program Old Bancolombia leaders mentored Conavi/Corfinsura teams
Tool / Approach Role in Integration

Transparent Communication Core to retention and trust; direct Q&A, not just top-down

🎯 Short-Term Wins

 Rolled out unified benefits quickly (Bancolombia standards)

 Communicated job security (seniority preserved)

 Sales success: Mortgage loan product “Everyone will own a home”

 190% YoY growth in mortgage segment

 High placement in Great Place to Work Colombia (2006)

💬 Leadership Philosophy

“A merger is about anthropology, not technology” – Jairo Burgos

“Change is like changing a flat tire while the car is moving” – Jorge Londoño
“We didn’t want to impose culture, but co-create a new one”

⚖️Tension Management (HBR Framework)

Tension Resolution Strategy

Stability vs. Change Offered certainty (benefits, seniority) + coached toward new goals

Legacy vs.
Maintained legacy relationships but shifted focus to universal banking
Innovation

Prioritized speed in structure clarity; accepted imperfect short-term integration for

Speed vs. Accuracy
long-term cohesion

🧭 Key Learnings for Strategy Implementation in M&A

1. Human capital is core to M&A success — not just financial or operational alignment.

2. Cultural integration must be structured, not left to evolve organically.

3. Visible leadership and transparent communication reduce fear and resistance.

4. Training and upskilling turn uncertainty into opportunity.

5. Shared vision and experiential learning create unity across legacy boundaries.
6. Short-term wins build momentum and trust in the new entity.

7. Brand unification and symbolism matter for external and internal alignment.

Here is the application of Kotter’s 8-Step Change Model to the Bancolombia merger case — showing how
each step played out and which specific challenges were addressed through it.

📘 Kotter’s 8-Step Change Model – Applied to Bancolombia Merger

Kotter Step Actions Taken by Bancolombia Challenge Solved

Leadership openly addressed customer Broke complacency among

1. Establish a sense dissatisfaction, brand confusion, and internal legacy staff and built a case for
of urgency mistrust. They emphasized how failure to cultural and strategic
unify would harm competitiveness. alignment.

The leadership team included top executives Overcame resistance and silos
2. Form a powerful from all three banks (Bancolombia, Conavi, between merged entities.
guiding coalition Corfinsura), ensuring representation and Created cross-organizational
shared ownership. legitimacy.

Crafted a shared vision, mission, and core

Aligned all employees behind a
3. Create a vision for values in Santa Marta summit. Emphasized
common future to reduce
change “ideal bank” focused on customers, ethics,
cultural clashes.
and inclusion.

Used face-to-face town halls, internal Reduced employee fear and

4. Communicate the
branding, and two-way Q&A sessions. Senior confusion. Improved trust and
vision
leaders explained “why” behind changes. credibility.

- Removed structural barriers (defined org

Employees felt safe,
5. Empower others chart within 30 days) - Unified HR systems
supported, and capable of
to act on the vision and benefits - Gave managers autonomy to
navigating the new culture.
run transformation workshops

- Unified bank under the Bancolombia brand -

Built credibility for the change
6. Create short-term Rolled out new mortgage product with 190%
process and increased morale
wins YoY growth - Achieved top rank in Great Place
quickly.
to Work Colombia

7. Consolidate gains Rolled out AVS (performance system), cross- Maintained momentum,
and produce more training, and a mentoring program across the reinforced cultural norms,
change bank. Leaders kept up feedback loops. avoided backsliding.

8. Anchor new - “United for an Ideal Bank” became a mantra Ensured long-term cultural
Kotter Step Actions Taken by Bancolombia Challenge Solved

- Integration became part of leadership integration, turning change

approaches in the
development - Cultural behaviors embedded from event to ongoing
culture
in performance metrics mindset.

🎯 Summary of Impact

 Change was human-first, not policy-first

 Kotter’s model explains why Bancolombia succeeded where many M&As fail

 Culture, communication, and leadership were deliberately structured—not left to chance

✅ Major Challenges Solved Through Kotter’s Model:

 ❌ Cultural misalignment

 ❌ Job insecurity & attrition risks

 ❌ Brand confusion

 ❌ Resistance to integration

 ❌ Communication breakdowns

 ❌ Operational inefficiencies post-merger

A balanced scorecard is a strategic management framework used to measure and manage an
organization’s performance from multiple perspectives beyond just financial results. It was developed by
Robert Kaplan and David Norton to provide a more comprehensive view of business success by translating
strategy into actionable objectives and measurable outcomes128.

The balanced scorecard typically tracks performance across four key perspectives:

 Financial Perspective: How the organization creates value for shareholders (e.g., revenue, profitability,
return on investment)138.

 Customer Perspective: How customers view the organization and their satisfaction (e.g., customer
satisfaction, loyalty, market share)138.
 Internal Processes Perspective: How well internal processes and operations are performing to add
value (e.g., productivity, quality, innovation)138.

 Learning & Growth Perspective: The organization’s ability to innovate, improve, and learn (e.g.,
employee training, knowledge, culture, innovation)138.

For each perspective, organizations define:

 Objectives: What they aim to achieve.

 Measures (Key Performance Indicators): How progress is tracked.

 Targets: Specific performance goals.

 Initiatives: Actions to reach those goals123.

The balanced scorecard helps align day-to-day work with strategy, improves communication across the
organization, and allows regular tracking and adjustment of progress towards strategic goals148.

Here are comprehensive, MBA-level notes for:

📘 Session 5: Strategy Implementation and the Balanced Scorecard (BSC)

Prof. Muneza Kagzi | EPGP IIM Kozhikode

🔁 Introduction: Why Financial Metrics Are Not Enough

 Financial metrics like Net Profit Ratio, EPS, and Market Cap are lagging indicators.

 Successful strategy implementation requires balancing both leading and lagging indicators.

 Enter: Balanced Scorecard (BSC) by Kaplan & Norton.

📊 Balanced Scorecard (BSC): The Four Perspectives

Perspective Focus Metrics/Elements

Long-term ROCE, cash flow, margins,

Financial
shareholder value capital utilization

Value delivered to Satisfaction, retention,

Customer
customers acquisition, reputation

Internal Operational efficiency Manufacturing, R&D,

Process & innovation budgeting, design cycle

Learning & Infrastructure for Employee training,

 Perspective Focus Metrics/Elements

Growth improvement engagement, IT alignment

💡 The BSC links strategy to execution and ensures departments are aligned with long-term
goals.

🧭 Strategy Map

 A visual representation of how various strategic objectives are linked across the four perspectives.

 Shows cause-effect logic:

o E.g., investing in employee training → better product development → improved customer

satisfaction → increased profits

🏢 Case Study: Transworld Auto Parts (TWAP)

📍 Context

 Post-2008 crisis, TWAP faced downturn

 CEO Ellen Bright restructures by closing truck and mid-size divisions

 Focuses on Luxury and Economy divisions in Europe and Asia

 Implements BSC and strategy maps for focused execution

🎯 Division Strategies

Division Strategy Type Key Elements

Product Innovation, high performance,

Luxury
Differentiation premium quality

Low cost, fuel efficiency, lean

Economy Cost Leadership
production

Execution Priorities by Division

 Luxury Division Economy Division

- Partner with customers- Lead in - Cut costs- Coordinate with suppliers-

product innovation- Shorten time-to- Redesign for material savings- Reduce
market- Invest in CAD/CAM- Recruit top downtime- Implement JIT and Lean-
R&D talent- Improve quality Grow volume via new customers

🔍 Why Use a Balanced Scorecard at TWAP?

 Financial metrics = lagging indicators

 BSC introduces:

o Leading indicators (e.g., process improvement, innovation)

o Alignment between strategy & operations

 Strategy maps make goals visible and actionable

⚖️Performance Evaluation – Who Did Better?

Division Performance

Luxury Achieved financial goals, failed on innovation/process/engagement

Economy Missed financials, excelled in process & learning indicators

🔎 Economy Division had a better strategy map & BSC:

They built leading capabilities that can result in sustained performance over time.

🧩 Luxury Division’s Revised Strategy Map

Goal: Sustainable value via innovation

BSC Perspective Key Objectives

Financial Increase ROCE, cash flow, asset utilization

Customer Grow market share, high reputation, valued partner

Internal Process Excel at development, reduce time-to-market

Learning & Growth Engage employees, align IT, develop TQM & R&D skills

🎯 Aligns with product differentiation but requires better process and learning focus for long-
term success.
 📚 References

 Kaplan & Norton (2000, 2001) – HBR & Accounting Horizons

 Atkinson (2006) – Role of BSC in Strategy Implementation

✅ Key Takeaways

 Strategy execution is about alignment — not just setting goals.

 BSC & Strategy Maps help translate abstract strategies into concrete actions across departments.

 Economy division's BSC shows how focusing on process & capability building leads to sustainable
results.

 Lagging financial results must be complemented by leading indicators like innovation, customer
engagement, and learning.

✅ Summary and Context of the Case: TWA Parts (Abridged)

🧾 Case Summary

TWA Parts (TWAP) is a global auto parts manufacturer that faced declining performance after
the 2008 global financial crisis. Under new CEO Ellen Bright, the company undertook a major
strategic overhaul by:

1. Shutting down its Mid-priced and Truck divisions, which were loss-making.

2. Refocusing on its two remaining profitable divisions:

o Luxury Division – Competing on product innovation and performance

o Economy Division – Competing on cost-efficiency and durability

To ensure effective strategy implementation, TWAP adopted the Balanced Scorecard (BSC) and
Strategy Maps to guide execution and performance monitoring.

🌍 Business Context

 Pre-2008: TWAP was a diversified, multi-division firm with global presence across Europe, North
America, and Asia.

 Post-2008 Financial Crisis:

o Industry faced consolidation, reduced demand, and pricing pressures.

 o TWAP’s Mid-priced and Truck divisions became unsustainable and were shut down.

🎯 Strategic Response

 CEO Ellen Bright chose to:

o Focus TWAP’s resources on profitable segments.

o Align operations with clear, differentiated strategies for each division.

o Adopt a Balanced Scorecard (BSC) approach to track:

 Financial performance

 Customer value

 Internal processes

 Learning and growth

🏭 Division-Level Strategies

Division Strategy Market Focus

Product Differentiation – High Europe, high-end

Luxury
performance, fast innovation segment

Cost Leadership – Durability, low China, emerging

Economy
total cost markets

📌 Key Implementation Elements

 Built strategy maps to visualize goals and align operations.

 Identified leading indicators (e.g., training, R&D, process efficiency) to predict future performance.

 Measured lagging indicators (e.g., revenue, cash flow) to assess financial health.

 Used BSC to balance short-term results with long-term capability building.

🔍 Case Purpose

The case is designed to:

 Illustrate the use of Balanced Scorecard and Strategy Maps in real-world execution.

 Highlight challenges in strategy implementation across business units.

 Compare divisions on strategic focus, alignment, and execution discipline.

 Explore the tension between short-term performance and long-term capability development.

Here are detailed, MBA-level notes from the case “TWA Parts (Abridged)” with challenges and
solutions analyzed using Balanced Scorecard (BSC), Strategy Maps, and McKinsey 7S
frameworks.

🧾 Case Overview: TWA Parts (TWAP)

 CEO: Ellen Bright

 Industry: Auto parts (OEM & aftermarket)

 Divisions: Economy, Luxury, Mid-priced, Truck

 Action: Shut down loss-making mid-priced and truck divisions

 New Focus:

o Luxury Division → Differentiation via innovation

o Economy Division → Cost leadership via durability and low lifetime cost

 Market Goal: Growth in Europe & Asia (esp. China)

🧩 Strategic Frameworks Applied

🎯 Balanced Scorecard (BSC) & Strategy Map Insights

🔹 Luxury Division

Perspectiv Strategy Achievement

Challenges
e Focus s

Met &
↑ ROCE,
Financial exceeded None major
Cash Flow
targets

Good market
Innovation, Slight dip in
share and
Customer Customer quality
new product
Satisfaction perception
launches
Perspectiv Strategy Achievement
Challenges
e Focus s

Reduce raw
material
Process Minor
Internal cost,
metrics close quality
Process Quality,
to targets deviations
Partner
R&D

Employee
Learning & engagement Sustainabilit
Good scores
Growth , R&D y unclear
investment

✅ Well-executed but narrow focus – Prioritized a few metrics effectively, aligned with
innovation strategy.

🔹 Economy Division

Strategy Achievement
Perspective Challenges
Focus s

ROCE &
↓ COGS, ↑ Did not meet
cash flow
Financial ROCE, financial
below
Revenue goals
targets

High
Low lifetime customer Slightly
Customer cost, quality, ratings, under
retention market share target
growth

JIT, defect
Still
Internal reduction, Met almost all
adapting
Process supplier process goals
systems
performance

TQM, Strong Long-term

Learning & lean/JIT, training, payback
Growth employee system still
skill-building investments pending

✅ Strong long-term orientation, built execution capabilities, but short-term financials fell short.
🚨 Key Challenges and Solutions – Strategy Implementation View

Framewor Solution/
Challenge Division
k Lens Response

Despite meeting
1.
learning &
Misalignment BSC – Lag
Econom process goals,
between vs Lead
y financials lagged
goals & Indicators
→ shows strategy
outcomes
execution delay

Internal debate
2. Innovation McKinsey between R&D
vs Efficiency 7S – (future) and ops
Luxury
Resource Systems (current) →
Conflict & Style Resolved via BSC
focus

Scored financially
but
3. Over-focus
BSC underinvested in
on limited Luxury
Breadth people/process –
measures
short-term
success risk

Extensive
4. Workforce McKinsey training, lean/JIT
& supplier 7S – Staff, Econom rollouts, supplier
transformatio Skills, y upgrades →
n Systems effective but slow
to deliver profits

Focus on asset
5. Market Process + utilization, raw
uncertainty & Financial material cost
Both
production integratio mgmt, and
volatility n predictive
planning

📉 Financial Analysis Snapshot (2008)

 Operating
Revenue Key
Division Income (USD
(USD M) Observation
M)

Low-margin,
Economy 2,255 +20
low-growth

High-margin,
Luxury 2,939 +208 premium
potential

Mid-
745 -398 Loss-making
Price

Truck 742 -187 Loss-making

→ Rational to shut mid-price & truck, invest in Luxury for innovation and Economy for scale.

🧠 Who Did Better? Analysis Using Frameworks

Criteria Economy Division Luxury Division

Strategy Map ✅ Comprehensive, ❌ Narrow, focused only on

Quality linked, long-term key drivers

Execution ✅ Met 70–80% of

✅ Met all financials, some
Strength operational & L&G
customer/process goals
(BSC) goals

Short-Term ❌ Missed cash flow and

✅ Exceeded targets
Results ROCE

Long-Term ✅ Built systems, TQM, ❌ Less investment in

Capability supplier networks people/process innovation

🎯 Conclusion:

 Luxury Division performed better in short-term financials.

 Economy Division had a better BSC design and stronger foundation for future gains.

✅ Recommendations & Improvements

🔹 Luxury Division:

 Expand employee training & engagement programs

 Balance innovation with process control (quality slipped)

 Build cross-functional R&D-manufacturing coordination

🔹 Economy Division:

 Strengthen cost discipline and procurement

 Leverage process improvements into revenue gains

 Communicate value proposition better (low lifetime cost)

🔗 Takeaways for Strategy Implementation

 BSC is not just measurement—it’s alignment: economy division used it well.

 Short-term results ≠ long-term success: luxury division’s focus may lead to stagnation.

 Strategy must be backed by learning, process, and people systems (McKinsey 7S).

 Strategic tension (e.g., innovation vs cost-cutting) must be actively managed.

Here are comprehensive, MBA-level notes for:

📘 Session 5: Strategy Implementation and the Balanced Scorecard (BSC)

Prof. Muneza Kagzi | EPGP IIM Kozhikode

🔁 Introduction: Why Financial Metrics Are Not Enough

 Financial metrics like Net Profit Ratio, EPS, and Market Cap are lagging indicators.

 Successful strategy implementation requires balancing both leading and lagging indicators.

 Enter: Balanced Scorecard (BSC) by Kaplan & Norton.

📊 Balanced Scorecard (BSC): The Four Perspectives

Perspective Focus Metrics/Elements

Long-term ROCE, cash flow, margins,

Financial
shareholder value capital utilization

Value delivered to Satisfaction, retention,

Customer
customers acquisition, reputation

Internal Operational efficiency Manufacturing, R&D,

Process & innovation budgeting, design cycle

Learning & Infrastructure for Employee training,

 Perspective Focus Metrics/Elements

Growth improvement engagement, IT alignment

💡 The BSC links strategy to execution and ensures departments are aligned with long-term
goals.

🧭 Strategy Map

 A visual representation of how various strategic objectives are linked across the four perspectives.

 Shows cause-effect logic:

o E.g., investing in employee training → better product development → improved customer

satisfaction → increased profits

🏢 Case Study: Transworld Auto Parts (TWAP)

📍 Context

 Post-2008 crisis, TWAP faced downturn

 CEO Ellen Bright restructures by closing truck and mid-size divisions

 Focuses on Luxury and Economy divisions in Europe and Asia

 Implements BSC and strategy maps for focused execution

🎯 Division Strategies

Division Strategy Type Key Elements

Product Innovation, high performance,

Luxury
Differentiation premium quality

Low cost, fuel efficiency, lean

Economy Cost Leadership
production

Execution Priorities by Division

 Luxury Division Economy Division

- Partner with customers- Lead in - Cut costs- Coordinate with suppliers-

product innovation- Shorten time-to- Redesign for material savings- Reduce
market- Invest in CAD/CAM- Recruit top downtime- Implement JIT and Lean-
R&D talent- Improve quality Grow volume via new customers

🔍 Why Use a Balanced Scorecard at TWAP?

 Financial metrics = lagging indicators

 BSC introduces:

o Leading indicators (e.g., process improvement, innovation)

o Alignment between strategy & operations

 Strategy maps make goals visible and actionable

⚖️Performance Evaluation – Who Did Better?

Division Performance

Luxury Achieved financial goals, failed on innovation/process/engagement

Economy Missed financials, excelled in process & learning indicators

🔎 Economy Division had a better strategy map & BSC:

They built leading capabilities that can result in sustained performance over time.

🧩 Luxury Division’s Revised Strategy Map

Goal: Sustainable value via innovation

BSC Perspective Key Objectives

Financial Increase ROCE, cash flow, asset utilization

Customer Grow market share, high reputation, valued partner

Internal Process Excel at development, reduce time-to-market

Learning & Growth Engage employees, align IT, develop TQM & R&D skills

🎯 Aligns with product differentiation but requires better process and learning focus for long-
term success.
 📚 References

 Kaplan & Norton (2000, 2001) – HBR & Accounting Horizons

 Atkinson (2006) – Role of BSC in Strategy Implementation

✅ Key Takeaways

 Strategy execution is about alignment — not just setting goals.

 BSC & Strategy Maps help translate abstract strategies into concrete actions across departments.

 Economy division's BSC shows how focusing on process & capability building leads to sustainable
results.

 Lagging financial results must be complemented by leading indicators like innovation, customer
engagement, and learning.