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 STRATEGY
IMPLEMENTATION
Strategy formulation & implementation

Strategy Formulation Strategy Implementation

Does the strategy fit the How well has the strategy
resources & environment? been executed?

Strongly • Achieve strategic competitiveness

• Earn above-average returns Successfully

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 STRATEGY FORMULATION VS.
IMPLEMENTATION
Strategy Formulation Strategy Implementation (SI)
(SF)  Managing forces during the

Ch 7 -4
 Positioning forces before action
the action  Focus on efficiency
 Focus on effectiveness  Primarily operational
 Primarily intellectual  Requires special motivation
 Requires good intuitive & leadership skills
and analytical skills  Requires coordination among
 Requires coordination many people
among a few people
Implementing Strategies

“The greatest strategy is doomed if

it’s implemented badly.”
– Bernard Reimann

Ch 8
-5
Nature of Strategy Implementation
Management Perspectives

 Shift in responsibility

Divisional or
Strategists Functional
Managers

Ch 7 -6
 MANAGEMENT ISSUES CENTRAL
TO STRATEGY IMPLEMENTATION
 Establish annual objectives  Match managers to strategy
 Devise policies  Develop a strategy-supportive

Ch 7 -7
 Allocate resources culture
 Alter existing organizational  Adapt production/operations
structure processes
 Restructure & reengineer  Develop an effective human

 Revise reward & incentive resources function

 Downsize & furlough as needed
plans
 Minimize resistance to change Link performance & pay to
strategies
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 STRATEGY IMPLEMENTATION
 Strategies that have been carefully
formulated are of little value if they cannot be
successfully implemented.
 Strategy implementation involves
transferring formulated strategies into action

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 STRATEGY IMPLEMENTATION
CONT’D …
 For successful execution of the formulated
strategy, the following must be considered:
Acquiring human, financial, & physical
resources
Organizational structure, culture, & internal
systems must be consistent with the formulated
strategy
Making necessary internal changes in order to
achieve the objectives
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 COMPONENTS OF STRATEGY
IMPLEMENTATION
1. Is the formulated strategy communicated properly?
2. Are structuring mechanisms properly aligned?
3. Are functional area conflicts reconciled?
4. Does leadership inspire commitment to the formulated
strategy
5. Do reward systems reinforce appropriate behavior?
6. Are functional issues addressed & implemented?
7. Does the control system provide appropriate feedback?

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S.N YOUR ORGANIZATION’S STRATEGY
To what extent do you agree with the ff
1 2 3 4 5
implementation components of your orgzn?
IMPLEMENTATION
1 Is the formulated strategy communicated 1 2 3 4 5
properly?
2 Are structuring mechanisms properly 1 2 3 4 5
aligned?
3 Are functional area conflicts reconciled? 1 2 3 4 5

4 Does leadership inspire commitment to 1 2 3 4 5

the formulated strategy
5 1 2 3 4 5
Do reward systems reinforce
appropriate behavior?
6 1 2 3 4 5
Are functional issues addressed &
implemented? 12
7 Does the control system provide 1 2 3 4 5
appropriate feedback?
1. COMMUNICATING STRATEGY
 Before a strategy can be implemented it must be
understood.
 A clear understanding of strategy gives purpose to the
activities of each organization member.
 It allows the employee to link whatever task is at
hand to the overall organizational direction

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2. STRATEGY & STRUCTURE
 Achievinga fit between strategy & structure is
a complex process that involves how:
 Activities will be grouped &
 Groups will be coordinated

 Structure dictates how objectives and policies

will be established
 Structure dictates how resources will be allocated

 Changes in strategy often lead to changes in

organizational structure
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 ALFRED CHANDLER’S WORK
ON STRATEGY AND STRUCTURE

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3. RECONCILING FUNCTIONAL
AREA CONFLICTS
 Operations – maintain efficiency by having few
production runs & variations as possible
 Marketing – provide customers with wider
product lines & as many options as possible
(color, accessories, etc.)
 This can lead to conflict & poor strategy
implementation unless it is explicitly managed
 Thus,integrate functional strategies – formulation,
communication, participation, & trade-offs
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4. LEADERSHIP
COMMITMENT
 Thebehavior & activities of top management
contribute to strategy implementation by:
 Supporting the strategy & building the culture
of the organization by example

 Making decisions based on skills, personality,

& experience

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5. DESIGN & IMPLEMENT
REWARD SYSTEMS
 Recognizing or not outstanding performance
sends different signals
 The timing & criteria used to determine salary
increments & bonuses have impacts on
performance
 Differentiate b/n monetary reward vs. status,
recognition, & attention – there are employees
who highly value the latter

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SKILLS NEEDED FOR IMPLEMENTATI
ON
Team and Craftsman skills:
 Organizations need the capability to
 manage their systems
 controlling the financial and human resources aspects
properly.
 Theyshould possess a balance of skills necessary to
implement a strategy successfully.
 The breadth of services or products offered has
implications for the types of skill required.

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PROBLEMS IN SI

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Strategy Review, Evaluation,
and Control
The best formulated and best
implemented strategies become
obsolete as a firm’s external and
internal environments change.

Therefore, it is essential for strategists

to systematically review, evaluate, and
control the execution of strategies.
Ch 9
-23
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 BRAINSTORMING
1. What is monitoring and evaluation? Why do
we evaluate a strategy? i.e what is the
purpose of control?
2. How will we evaluate a strategy? i.e write the
Steps in controlling & evaluation process!
3. Why does actual performance sometimes not
match the desired performance in the strategic
objectives?
4. What is BSC & 7-S-Framework? Explain
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STRATEGY CONTROL &
EVALUATION
Why does actual performance sometimes not match the
performance desired in the strategic objectives?
 Was the strategic plan severely flawed in its
formulation?
 Did management’s implementation of the plan fall
short?
 Were there uncontrollable factors external to the
organization that prevented achievement of the plan?
These questions suggest the importance of Control &
Evaluation and a need to understand how the plan can go
awry.

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 PURPOSE OF CONTROL
 To determine whether:
selected strategies implemented
successfully
resources are used wisely
Set objectives are achieved, etc.

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 STEPS IN CONTROLLING &
EVALUATION PROCESS
 Steps in controlling & evaluation
process:
1. Setting standards for performance
2. Measure actual performance
3. Compare actual performance with the standard
4. Analyze the reasons for significant deviations, if any
5. Take corrective action when performance does not
fall within acceptable range

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 CONTROL SYSTEMS
▫ Control is one of the Functions of Mgmt & is
needed at all levels & in all activities of an
organization
▫ Components control systems include
▫ Budgets,
▫ Statistical reports,
▫ Policies/procedures, &
▫ Performance appraisal
▫ progress toward desired ends must be periodically
monitored & evaluated in order to take corrective
action timely
▫ In general, control is necessary for goal30
achievement
 TYPES CONTROL SYSTEMS
1. Strategic control
 Entails corporate-level managers to evaluate the
performance of division managers & their units using
long-term & strategically relevant criteria
2. Financial control
 Entails objective criteria (e.g. ROI) that corporate-level
managers use to evaluate both individual business units
& the managers responsible for their performance
▫ Companies using cost leadership strategy emphasize
financial controls, whereas those using differentiation
strategy emphasize strategic controls
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 CONTROL SYSTEMS CONT’D …

• There are also non-financial controls that are

used as early warning signals to potential
problems

1. Productivity measures

2. Quality measures

3. Personnel related measures

4. Feedback from customers 32

 EVALUATION SYSTEMS
 Evaluation refers to measuring & controlling the organization’s
progress with respect to its strategy & when discrepancies exist,
taking corrective action
 Corrective action may require adjusting performance objectives
because of:
 Changes in circumstances
 Shifting contingency plan
 Fine-tuning strategies

Process evaluation
•Emphasizes on uncovering the deficiencies in an ongoing
program
Outcome evaluation
 Could be undertaken at the end of the entire strategic
management process with the aim of determining what has33
been accomplished
CONTEMPORARY
STRATEGIC
MANAGEMENT
ISSUES
 7-S MODEL / FRAMEWORK
 The international consulting firm of McKinsey &
Company has developed the McKinsey 7-S Framework
for evaluating strategy
 The underlying premise of this model is that the value of
any given strategy depends not only on its content but
equally on whether it can be successfully executed
 By McKinsey partners Tom Peters & Robert Waterman
– concluded that:
 “Structure alone could not solve the problem of how
to coordinate resource allocation, incentives, &
actions across large organizations.”
 Thus, the 7-S Framework is based on the concept that
any strategy, in order to be successfully implemented,
must fit with the culture of the organization.
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 7-S MODEL CONT’D …
 According to the model:
 A strategy is usually successful when the other S’s in the
framework fit, or support, the strategy
 If a chosen strategy has run into problems during
implementation, it is often because there is a lack of fit
b/n the strategy & one or more of the other S’s
 The 7-S model posits that organizations are successful when
they achieve an integrated harmony among
 Three hard S's of strategy, structure, & systems, &
 Four softS's of skills, staff, style, & super-ordinate goals
(now referred to as shared values)

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Chapter 5 Strategy Implementation, Control and Evaluation

Systems

Style
Structure

Shared
Values

Staff
Strategy

Skills
 BALANCED SCORECARD
 A new approach to strategic management was
developed in the early 1990's by Drs. Robert Kaplan
(Harvard Business School) and David Norton. They
named this system the 'balanced scorecard'. 
 The balanced scorecard is a management system (not
only a measurement system) that enables organizations
to clarify their vision and strategy and translate them
into action.
 It provides feedback around both the internal business
processes and external outcomes in order to
continuously improve strategic performance and
results.
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BALANCED SCORECARD CONT’D …
 The balanced scorecard suggests that we view
the organization from four perspectives, and to
develop metrics, collect data and analyze it
relative to each of these perspectives:
1. The Financial Perspective

2. The Customer Perspective

3. The Business Process Perspective

4. The learning & Growth Perspective

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 BALANCED
THE BALANCED SCORECARD
SCORECARD
FINANCIAL/REGULATORY
CUSTOMER
To satisfy our constituents,
To achieve our vision,
what financial & regulatory
what customer needs must
objectives must
we serve?
we accomplish?

INTERNAL
To satisfy our customers and
stakeholders, in which business
processes must we excel?

LEARNING & GROWTH

To achieve our goals, how
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must we learn, communicate
and grow?
 AUTOMATION
  Automation is the process of creating a software system that
supports the implementation of institutional activities using BSC.
 Automation of the BSC implementation of the org is a necessity to
handle the huge amount of data and information that will flow

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between individuals/teams and supervisors within each tier of the
org cascading structure.
 CASCADING
 While org level balanced scorecard is designed to describe,
measure, and help manage the strategy, cascading enables all
of these things throughout the org.
 In essence, cascading lies in aligning the organization to the

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strategy regardless of the organization structure.
 It involves developing and aligning each scorecard to high
level scorecard through strategic objectives, measures,
targets, and initiatives to track contributions to overall org
goals.
 Cascading represents commitment among teams and
individuals to focus resources and activities in pursuit of
broad organization-wide priorities.
 CASCADING WITH A # OF
TIERS
 The main objective here is to link the strategic directions to the
operational plans.
 To do this the Balanced scorecard taskforce has divided the

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organization into # tiers (eg. 4) and cascaded the strategic objectives
and initiatives accordingly. Eg AAU’s 88

Tiers Offices
Tier 1 President’s Office, Vice Presidents

Tier 2 Directors and Officers of central administration

Tier 3 Departments, Centers, and units/sections
Tier 4 Teams and Individuals
 MONITORING AND
EVALUATION
  Monitoring and evaluation is highly
interrelated management functions without
which the success of an organization cannot
be measured.
 Monitoring is an ongoing process of
meticulous follow up of activities by which an
organization obtains regular feedback on the
execution of planned activities towards
meeting the objectives and performance
targets.
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 Evaluation is a rigorous assessment of either completed or
ongoing activities to determine the extent to which they
are achieving stated objectives and contributing to
decision making.
 A comprehensive evaluation is an assessment that

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includes process evaluation, cost-benefit evaluation and
impact evaluation.
 In effect, evaluation compares

 what has been accomplished with

 what should have been accomplished and then

 makes a judgment about how well it was done.

 DATA COLLECTION AND
INFORMATION FLOW
 Monitoring and evaluation is performed for the sole
purpose of achieving the stated strategic objectives of the

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org at all levels.
 To this end, the Balanced Scorecard system is equipped
with an automated system to collect data on daily, weekly,
monthly, quarterly, biannually, and annual basis.
 Moreover, the automated system will help to regularly
monitor and evaluate the performance of individuals,
teams, units, offices, directorates as well as top
management of the org according to their tier structure
against the stated objectives.
 Monthly, Quarterly and Yearly
Performance Report Preparation
 Once the activities of each individual/team is filled out and agreed
upon by the staffs and their respective supervisors, monitoring of
their performance will follow.

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 To this end, each supervisor will fill out or collect the performance
forms and survey results that are compiled by other staffs regarding
the specific tasks and specific individuals/teams performance.
 These activities will be conducted monthly, quarterly, biannually,
and annually depending on the type of activity being evaluated and
the agreed upon time schedule.
 Likewise the higher level tiers will be evaluated by their
supervisors based on the activities and the achievements registered.
 FEEDBACK AND CORRECTIVE
MECHANISMS
 The purpose of a feedback is to analyze the strengths and
weaknesses in the implementation of activities and to seek for
the best way forward.
 In the process, the individual performer and the evaluator

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should discuss and reach consensus on the stated feedbacks and
show their agreement by signing at the bottom of the form.
 A separate feedback form will be filled in and documented
systematically at the end of each evaluation period.
 Similarly, based on the monthly/quarterly performance reports
from teams, sections, departments and the like, subsequent
offices receiving the report must also provide written feedbacks
to the lower units.
 Subsequent to the agreed up on feedback, the
implementer/performer should incorporate
activities that have not been correctly
implemented in the next action period.
 If such activities are thought to be unachievable

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because of convincing reasons, then performer
together with the immediate supervisor should
revise the previously set objectives, initiatives
and activities and/or their performance indicators
and measurements.
 GRIEVANCE HANDLING ON
PERFORMANCE EVALUATION
 When the staffs have complaint on his/her performance evaluation
result, the staff has to present his/her complaint in written form to the
next level official within five days of an official announcement of
evaluation result.

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 The next level official who receives employee complaint will verify
the complaint by discussing it with the immediate supervisor and pass
decision on the issue by comparing the individual performance with
his/her scorecard.
 The decision of the next official will be communicated to the
individual/team as well as the supervisor who filled the evaluation.
 However, the individual/team can further take the complaint to the
grievance handling office of the org if s/he is not satisfied with the
decision of the higher level offices.
 A clear system for measuring the value of results produced is an
essential prerequisite for a reward system that motivates workers at the
level where the value is created.
 Therefore, at the beginning of each fiscal year, each staff member,
together with his or her director/department head, should develop
agreed-upon individual goals, performance measures and targets that

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align with the org’s strategic goals – using standard form or template.
  Based on these agreed-upon measures and targets, the org will
introduce a rewarding mechanism in two ways:
 through positive recognition systems in which the successful behavior
is recognized and
 through team-based reward systems in which results are rewarded.
 CONTD…
 The focus of the rewarding performance system should be on
building a recognition and reward system that links rewards
with performance.
 Furthermore, employees could be rewarded for individual

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performance through job promotions, salary upgrades, or
bonuses, while those who are not performing well will be
denied any of these privileges and even could be punished if
their action is negatively influencing the implementation of
the org. BSC. 
 However, using the Balanced Scorecard simply for the
punishment of individuals is not recommended but rather as
a tool for the org’s performance improvement.
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 REVIEW AND CLOSING

Direction: How will you

use your new knowledge?

Gas: What
Luggage: resources or
What new support do you
knowledge will need?
you take with
you?

Exhaust: What
are you leaving
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behind?
I Thank
You!
Abera D. (PhD)
251911336043
[email protected]

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