Strategy implementation involves operationalizing and institutionalizing a strategy. Operationalizing means translating strategy into specific policies, procedures, and rules to guide planning. Institutionalizing means incorporating strategy into an organization's culture through values, norms, and roles. Successful implementation also depends on aligning an organization's structure with its strategy. Chandler's research found organizational structure evolves through unit, functional, and multidivisional stages to reflect a firm's growth strategy. The McKinsey 7S framework also emphasizes aligning an organization's strategy, structure, systems, skills, staff, style and shared values for effective implementation.
Strategy implementation involves operationalizing and institutionalizing a strategy. Operationalizing means translating strategy into specific policies, procedures, and rules to guide planning. Institutionalizing means incorporating strategy into an organization's culture through values, norms, and roles. Successful implementation also depends on aligning an organization's structure with its strategy. Chandler's research found organizational structure evolves through unit, functional, and multidivisional stages to reflect a firm's growth strategy. The McKinsey 7S framework also emphasizes aligning an organization's strategy, structure, systems, skills, staff, style and shared values for effective implementation.
Strategy implementation involves operationalizing and institutionalizing a strategy. Operationalizing means translating strategy into specific policies, procedures, and rules to guide planning. Institutionalizing means incorporating strategy into an organization's culture through values, norms, and roles. Successful implementation also depends on aligning an organization's structure with its strategy. Chandler's research found organizational structure evolves through unit, functional, and multidivisional stages to reflect a firm's growth strategy. The McKinsey 7S framework also emphasizes aligning an organization's strategy, structure, systems, skills, staff, style and shared values for effective implementation.
Strategy implementation involves operationalizing and institutionalizing a strategy. Operationalizing means translating strategy into specific policies, procedures, and rules to guide planning. Institutionalizing means incorporating strategy into an organization's culture through values, norms, and roles. Successful implementation also depends on aligning an organization's structure with its strategy. Chandler's research found organizational structure evolves through unit, functional, and multidivisional stages to reflect a firm's growth strategy. The McKinsey 7S framework also emphasizes aligning an organization's strategy, structure, systems, skills, staff, style and shared values for effective implementation.
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Strategy Implementation
Presented By: Deepthi R Dhamsania Druvi P Strategy Implementation The basically administrative task needed to put strategy into practice.
• Successful strategy implementation depends in part on the
organization’s structure. • Strategy must be institutionalized, or incorporated into a system of values, norms and roles that will help shape employee behaviour making it easier to reach strategic goals • Strategy must be operationalized or translated into specific polices, procedures and rules that will guide planning and setting short-term objectives and rewarding effectiveness performances. Chandler’s Thesis • Alfred chandler examined the growth & development of 70 of the largest businesses in the United States, including Du pont, general motors, standard oil and Sears Roebuck.
• He concluded that organizational structure followed and reflected the
growth strategy of the firm.
• According to him, organizations passes through three stages :-
1. Unit structure (field unit, geographical expansion, unit firm) 2. Functional structure 3. Multidivisional structure MULTIDIVISIONAL
STAGE III GENERAL OFFICE FIRM
DIVERSIFICATION
FUNCTIONAL STAGE II PRODUCT DIVISION ORGANIZATION
VERITCAL INTEGRATION
FUNTIONAL DEPARTMENT UNIT FIRM
STAGE I GEOGRAPICAL EXPANSION
FIELD UNIT FIELD UNIT
Strategies and structure
Chandler observed that
• Transition from one structure to another is often delayed and painful.
• Organizations do not readily change structure.
• When organiztions is finally restructured, the entrepreneur often
leaves. SEVEN-S Framework Developed by McKinsey Strategy
Structure Systems
Superordinate Goals/ Values
Skills Style
Staff 1. Structure :- Structure is the organizational chart and associated information that shows who reports to whom and how tasks are both divided up and integrated .
2. Strategy :- Strategy is an action plan to achieve an organizational objective.
Proper implementation is much more important than its implementation.
3. Systems :- Systems define the flow of activities involved in the daily operation of business, including its core processes and its support systems. They refer to the procedures, processes and routines that are used to manage the organization and characterize how important work is to be done
4. Style :- style refers to personality, but to pattern of substantive and symbolic
actions undertaken by top managers. 5. Staff :- staff refers to the number and types of personnel within the organization. Successful organizations view people as valuable resouces who should be carefully nutured, developed, guarded and allocated.
6. Skills :- skills refer to activities organizations do best and for which they are known. Strategic changes may require organizations to add one more new skill or revising old skill.
7. Superordinate goals/values :- This refers to guiding concepts, values, and
aspirations that unite an organization in some common purpose. Strategy implementation
For implementation
• Strategy must be institutionalized
• Strategy must be operationalized Institutionalizing Strategy
• To institutionalize a business strategy, business leaders must also
develop a system of values, norms, roles and groups that will support the accomplishment of strategic goals.
• Culture is also crucial for institutionalizing the strategy
Operationalizing Strategy
• Plan that provides the details needed to incorporate strategy in to
day to day operation.
Operational plans falls into 2 general classes
1. Single use plans 2. Standing plans Single Use Plan A detailed course of action used once or only occasionally to solve a problem that does non occur repeatedly.
• Program :- a single use plan that covers a relatively large set of organizational activities and specifies major steps, their order and timing, and the unit responsible for each step.
• Project :- the smaller and separate portions of the programs.
• Budgets :- formal quantitative statement of the resources allocated to specify programs
or projects for a given period. Standing Plans An established set of decision used by managers to deal with recurring or organizational activities. These help managers to handle similar situations.
• Policy :- a standing plan that establishes general guidelines for decision
making.
• Rules :- standing plans that details specific actions to be taken in a given
situation.
• Procedure :- a standing plan that contains detailed guidelines for handling
organizational actions that occur regularly. The Hierarchy of organizational plans GOALS
STRATEGIC PLANS
Operational plan For non-recurring activities For recurring activities
SINGLE USE PLAN STANDING PLANS
PROGRAMS POLICES
BUDGET STANDARD PROJECTS PROCEDURES AND METHODS
RULES Annual objectives • Identify precisely what must be accomplished each year in order to achieve an organization’s strategic goal.
• They provide managers with specific targets for coming year performance.
• These are linked with organizational long term goals, and they are measurable.
• Annual objectives should quantify performance to decrease dispute over unit
results. Management by objective • The approach was first proposed by Peter Drucker.
• A formal set of procedures that establishes and reviews progress toward
common goals for managers and sub-ordinates.
• Management by objectives (mbo) is a process in which a manager and an
employee agree upon a set of specific performance goals, or objectives, and jointly develop a plan for reaching them.
• Mbo managers focus on the result, not the activity
• The objectives must be clear and achievable, and the plan must include a time frame and evaluation criteria. Elements of the MBO system
• Commitment to the program
• Top-level goal setting • Individual goals • Participations • Autonomy in implementation • Performance review. • SMART (specific, measurable, achievable, realistic, and time-specific) Reward System
• Rewards and incentive contribute to strategy implementation by
