Strategic Management and

Business Policy 15e, Global Edition

Chapter 10:
Strategy
Implementation

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Strategy Implementation (1 of 2)
• Strategy implementation
– the sum total of all activities and choices
required for the execution of a strategic plan

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Strategy Implementation (2 of 2)
• Who are the people to carry out the
strategic plan?
• What must be done to align company
operations in the new intended direction?
• How is everyone going to work together to
do what is needed?

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Ten Common Strategy
Implementation Problems (1 of 2)
1. Took more time than planned
2. Unanticipated major problems
3. Ineffective coordination
4. Competing activities and crises created
distractions
5. Employees with insufficient capabilities

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10 Common Strategy
Implementation Problems (2 of 2)
6. Lower-level employees were inadequately
trained
7. Uncontrollable external environmental factors
8. Poor departmental leadership and direction
9. Key implementation tasks and activities were
poorly defined
10.The information system inadequately monitored
activities

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Developing Programs, Budgets,
and Procedures
• Program
– a collection of tactics where a tactic is the
individual action taken by the organization as
an element of the effort to accomplish a plan

• The purpose of a program or a tactic is to

make a strategy action-oriented.

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Timing Tactics: When to Compete
• Timing tactic
– deals with when a company implements a strategy
• First mover
– first company to manufacture and sell a new product or
service
• Late movers
– may be able to imitate the technological advances of
others, keep risks down by waiting until a new
technological standard or market is established, and take
advantage of the first mover’s natural inclination to ignore
market segments
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Market Location Tactics:
Where to Compete
• Market location tactic
– deals with where a company implements a strategy
• Offensive tactic
– usually takes place in an established competitor’s
market location
• Defensive tactic
– usually takes place in the firm’s own current market
position as a defense against possible attack by a
rival

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Offensive Tactics
• Frontal assault
• Flanking maneuver
• Bypass attack
• Encirclement
• Guerilla warfare

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Defensive Tactics
• Raise structural barriers
• Increase expected retaliation
• Lower the inducement for attack

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Budgets and Procedures
• Planning a budget is the last real check a
corporation has on the feasibility of its selected
strategy.
• Procedures
– detail the various activities that must be carried
out to complete a corporation’s programs
– standard operating procedures

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Achieving Synergy
• Synergy
– exists for a divisional corporation if the return on investment is
greater than what the return would be if each division were an
independent business
• Six Forms of Synergy:
1. Shared know-how
2. Coordinated strategies
3. Shared tangible resources
4. Economies of scale or scope
5. Pooled negotiating power
6. New business creation
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Structure Follows Strategy
• Structure Follows Strategy
– changes in corporate strategy lead to changes in
organizational structure

1. New strategy is created.

2. New administrative problems emerge.
3. Economic performance declines.
4. New appropriate structure is created.
5. Economic performance rises.

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Stages of Corporate Development
I. Simple Structure
– Flexible and dynamic
II. Functional Structure
– Entrepreneur is replaced by a team of managers
III. Divisional Structure
– Management of diverse product lines in numerous industries
– Decentralized decision making
IV. Beyond SBU’s
– Matrix
– Network

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Blocks to Changing Stages
• Internal
– Lack of resources
– Lack of ability
– Refusal of top management to delegate
• External
– Economic conditions
– Labor shortages
– Lack of market growth

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Blocks to Changing Stages
(Entrepreneurs)
• Loyalty to comrades
• Task oriented
• Single-mindedness
• Working in isolation

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Reengineering and
Strategy Implementation
• Reengineering
– the radical redesign of business processes to
achieve major gains in cost, service, or time
– effective program to implement a turnaround
strategy

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Six Sigma
• Six Sigma
– analytical method for achieving near perfect
results on a production line
– emphasis on reducing product variance in
order to boost quality and efficiency
• Lean Six Sigma
– includes the removal of unnecessary steps in
any process and fixing those that remain

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Process of Six Sigma
1. Define a process where results are poorer than
average.
2. Measure the process to determine current
performance.
3. Analyze the information to pinpoint where things
are going wrong.
4. Improve the process and eliminate the error.
5. Establish controls to prevent future defects from
occurring.

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Designing Jobs to
Implement Strategy (1 of 2)
• Job design
– the study of individual tasks in an attempt to make
them more relevant to the company and to the
employees
• Job design techniques:
– Job enlargement
 combining tasks to give a worker more of the same type
of duties to perform
– Job rotation
 moving workers through several jobs to increase variety

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Designing Jobs to
Implement Strategy (2 of 2)
• Job characteristics
– using task characteristics to improve employee
motivation
• Job enrichment
– altering the jobs by giving the worker more
autonomy and control over activities

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Staffing
Characteristics of successful integration
managers include:
1. Deep knowledge of the acquiring company
2. Flexible management style
3. Ability to work in cross-functional teams
4. Willingness to work independently
5. Sufficient emotional and cultural intelligence to
work in a diverse environment

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Staffing Follows Strategy
• One way to implement a company’s business
strategy, such as overall low cost, is through
training and development.
• Executive characteristics influence strategic
outcomes for a corporation.

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Matching the Manager to the Strategy
• Executive type
– executives with a particular mix of skills and experiences
– paired with a specific corporate strategy

• Executive Types:
– Dynamic industry expert
– Analytical portfolio manager
– Cautious profit planner
– Turnaround specialist
– Professional liquidator

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Selection and Management
Development
• Executive succession
– process of replacing a key top manag
• Succession planning
– identifying candidates below the top layer of
management
– measuring internal candidates against external
candidates
– providing financial incentives

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Identifying Abilities and Potential
• Performance appraisal
– systems to identify good performers with
promotion potential
• Assessment centers
– evaluate a person’s suitability for an advanced
position
• Job rotation
– ensures employees are gaining a mix of
experience to prepare them for future
responsibilities
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Problems in Retrenchment
• Downsizing
– the planned elimination of positions or jobs
– Also called “rightsizing” or “resizing”

• Can damage the learning capacity of an

organization
• Creativity drops significantly and becomes very
difficult to keep high performers from leaving the
company

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Guidelines for Successful Downsizing
• Eliminate unnecessary work instead of making
across the board cuts
• Contract out work that others can do cheaper
• Plan for long-run efficiencies
• Communicate the reasons for actions
• Invest in the remaining employees
• Develop value-added jobs to balance out job
elimination

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Leading
• Implementation
– involves leading and coaching people to use
their abilities and skills most effectively and
efficiently to achieve organizational objectives

• Without direction, people tend to do work

according to personal views of what tasks should
be done, how, and in what order.

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Managing Corporate Culture
• Strong cultures are resistant to change.
• Optimal culture supports mission and strategies.
• Management must evaluate what a particular
change in strategy means to the corporate culture,
assess whether a change in culture is needed,
and decide whether an attempt to change the
culture is worth the likely costs.

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Accessing Strategy-Culture
Compatibility
• Is the proposed strategy compatible with the
company’s current culture?
• Can the culture be easily modified to make it more
compatible with the new strategy?
• Is management willing and able to make major
organizational changes and accept probable
delays and a likely increase in costs?
• Is management still committed to implementing
the strategy?
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Action Planning (1 of 2)
• Action plan
– states what actions are going to be taken, by
whom, during what time frame, and with what
expected results

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Action Planning (2 of 2)
1. Specific actions to be taken to make the program
operational
2. Dates to begin and end each action
3. Person responsible for carrying out each action
4. Person responsible for monitoring the timeliness
and effectiveness of each action
5. Expected financial and physical consequences of
each action
6. Contingency plans

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Importance of an Action Plan

• Serves as a link between strategy formulation and

evaluation and control.
• Specifies what needs to be done differently from
current operations.
• Helps in both the appraisal of performance and
identification of any remedial actions
• Explicit assignment of responsibilities for
implementing and monitoring the programs may
contribute to better motivation
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Management by Objectives (1 of 2)
• Management by objectives (MBO)
– encourages participative decision-making
through shared goal setting and performance
assessment based on achieving stated
objectives

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Management by Objectives (2 of 2)
The MBO process involves:
1. Establishing and communicating organizational
objectives
2. Setting individual objectives
3. Developing an action plan to achieve objectives
4. Periodically (at least quarterly) reviewing
performance

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Total Quality Management (TQM)
(1 of 2)
• Total quality management (TQM)
– an operational philosophy committed to
customer satisfaction and continuous
improvement
– committed to quality/excellence and to being
the best in all functions

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Total Quality Management (TQM)
(2 of 2)
TQM’s essential ingredients are:
1. Intense focus on customer satisfaction
2. Internal as well as external customers
3. Accurate measurement of every critical variable
in a company’s operations
4. Continuous improvement of products and
services
5. New work relationships based on trust and
teamwork
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