Behavioural Implementation

• Here we deal with several issues relevant to the behavioural

aspects of strategy implementation. Among these are issues
such as strategic leadership, corporate politics and power,
corporate culture, and corporate ethics and personal values.
These topics are mostly covered in other courses in the
curriculum of management education programmes.
Therefore, our effort all along has been to place these
important issues in the context of strategic management.
• The tasks, skills, styles, roles, and development of
strategic leaders of an organisation.
• • Strategic leaders are responsible for strategic
management of an organisation. They operate at corporate,
business, functional, and operational levels in an
organisation. The major responsibility of strategic
formulation lies with the corporate- and business-level
strategic leaders while the implementation tasks are taken
up by the functional- and operational-level managers.
• • The tasks of strategic leaders are many and varied. The
major tasks that strategic leaders are expected to perform
are: determining strategic direction; effectively managing
the organisational resources portfolio; sustaining an
effective organisational culture; emphasising ethical
practices; establishing balanced organisational controls;
building partnerships; and developing future strategic
leaders.
• • While performing the tasks expected of them, strategic
leaders need to demonstrate the skills of anticipating
competitors' actions and reactions, challenging the existing
views and soliciting diverse views to look at organisational
problems from multiple perspectives, interpreting the
diverse views to derive the correct conclusions, deciding
about trade-offs, risks, and unintended consequences when
making decisions, aligning stakeholders' interests, and
promoting organisational learning.
• • The strategic leaders are expected to have the skills
necessary to implement strategies and also have the ability
to adapt their styles to the needs of particular strategies.
The chosen strategy has a significant impact on leadership
style and strategists have to adapt their style to suit the
requirements of particular strategy.
• • The roles that strategic leaders play are many and varied.
The most important roles in strategic management have to
be played by the CEOs and senior management of an
organisation. Business- level strategic leaders are involved in
business-level strategy formulation and implementation.
The functional- and operational-level managers primarily
are called upon to play the role of implementers of
strategies.
• • The development of strategists is the responsibility of the
top management and they do it through exercising a choice
of strategists and their career planning and development,
and succession planning.
• The role of corporate politics and use of power in strategic
management of an organisation.
• • The use of politics and power, in a positive sense, has
gained ground in strategic management. The theme of the
section on corporate politics and use of power is to
demonstrate how strategists should understand corporate
politics and in what way should the use of power be made
to facilitate the implementation of strategy. The nature of
organisation itself creates the conditions for power and
politics to manifest.
• • The subject of involvement of members of business and
industry in influencing public policy is called corporate
political activity. In the positive sense, such activity may be
seen as collaboration between business and government for
the good of the society. From the perspective of strategic
management, corporate political activity is a means for
creating competitive advantage through several different
means.
• • Politics and power affect the way a strategy is
formulated and implemented. In implementation, politics
and power affect a number of elements. The nature of
strategy implementation requires consensus building,
managing coalitions, and creating commitments. It also
needs conflict resolution and balancing of interests.
Having an understanding of the use of politics and power
can make the doing of the tasks of strategic management
better. A strategic use of politics and power becomes even
more critical where strategy changes are to be made.
• • There are several approaches to a strategic use of power
and politics that may involve tactics such as accepting the
inevitability of politics, using the processes of recruitment
and selection, understanding how an organisation's power
structure works, to be especially conscious of organisational
processes that have a greater potential to promote negative
political activity and to be sensitive and alert to political
signals. It is also wise to know when to go slow and when to
push through decisions and try to lead rather than to dictate
strategy.
• The role of corporate culture in strategy management.

• • Corporate culture is composed of beliefs and values that

the members of an organisation share in common. These
have a significant impact on corporate life and no effort
concerning strategy implementation can be successful if
culture is not strategy supportive. By relating strategy to
culture, we have described how a strategist can evolve a
meaningful approach to creating a good strategy culture fit.
• • A popular approach, called the competing values
framework, to classifying the different types of corporate
culture refers to clan, adaptability, market, and bureaucratic
cultures.
• • Corporate culture can be strength or a weakness. When
the culture supports strategy implementation it is strength
and when it obstructs it becomes weakness. The need for
strategists is to create a strategy supportive culture.
• • Four approaches to creating a strategy-supportive culture
are described in the chapter: to ignore corporate culture, to
adapt strategy implementation to suit corporate culture, to
change the corporate culture to suit the strategic
requirements, and to change the strategy to fit the
corporate culture.
• The contribution of corporate ethics and personal values in
strategic management.
• • Corporate (or business) ethics is a part of ethics that deals
with conduct of business according to what is right and
wrong. Personal values refer to a conception of what an
individual or group regards as desirable. Values are in nature
while ethics is a generalised value system.
• • Personal values and business ethics seek to prevent an
indiscriminate use of power politics within organisation.
Strategy has a moral component that is often realised by
strategists but is found too difficult to put into practice. All
managerial decisions, particularly strategic decisions, are
ultimately subjective, so having purity of mind is essential
for strategists so that the subjectivity does not harm the
strategic interests of the organisation.
• • Corruption in industry is an important issue for strategists
as it affects the reputation of the organisation outside and
creates problems of governance
• within. Strategists have to provide the right values and
ethical sense to the organisation they manage.
• • Values, ethics, and strategy are intimately interrelated.
Values affect the sense of ethics of managers that
determines their choice in strategic decision making.
• • Organisations are formulating value-based, globally
consistent codes for ethical understanding, and appropriate
decision making at all levels even as they face immense
external challenges. They are also strengthening the
systems for detecting fraud within organisations.
• • Behavioural implementation is concerned with
inculcating the right set of values, reconciling divergent
values, and modifying values that are not consistent with
the strategy.
• With the conclusion of this chapter, we now move to the
last part of strategy implementation. The next chapter
focuses on the nitty-gritty of strategy implementation,
that is, the functional and operational implementation.
Functional and Operational
implementation.
• Functional strategies operate at the third level below the
corporate- and business-level strategies. Functional
strategies deals with a relatively restricted plan providing
objectives for a specific function, allocation of resources
among different operations within that functional area and
coordination between them for optimal contribution to the
achievement of the organisational objectives. Functional
strategies are derived from business and corporate
strategies and are implemented through functional and
operational implementation.
• The nature, need and development of functional plans and
policies and recognise the relevance of vertical fit and horizontal
fit to functional strategies.

• • Functional strategies deal with a relatively restricted plan

designed to achieve objectives in a specific functional area,
allocation of resources among different operations within that
functional area, and coordination among different functional
areas for optimal contribution to the achievement of the
business- and corporate-level objectives.

• • Strategies operate at different levels and there has to be

congruence and coordination among these strategies that is the
vertical fit. The congruence and coordination among different
activities taking place at the same level is the horizontal fit.

• Vertical fit leads to the alignment of the functional areas to the

requirements of a strategy resulting in strategic management of
these functional areas.
• • Horizontal fit leads to the alignment of the activities taking
place at the working level and is done through operational
implementation.

• • Operational implementation is the approach adopted by an

organisation to achieve operational effectiveness. When an
organisation performs value-creating activities optimally and in
better way than its competitors can perform it results in
operational effectiveness.

• • Functional strategies are defined in terms of functional plans

and policies which are the plans or tactics to implement
business strategies. Plans are made to select a course of action
while policies are required to act as guidelines to action.
Functional plans and policies, therefore, are in the nature of
tactics to make a strategy work.
• • Functional plans and policies are developed to ensure that
strategic decisions are implemented by all the parts of an
organisation; a basis is available for controlling activities, the
time spent by functional managers in decision-making is
reduced, similar situations occurring anywhere in the
organisation are handled in a consistent manner, and there
is coordination across the different functions.
• • The process of development of functional plans and
policies is similar to that for strategy formulation.
Environmental and organisational factors relevant to each
functional area are taken into account, matched to the
organisational objectives, and implementation activities
such as resource allocation are done.
• Financial plans and policies.

• • Financial plans and policies are set in terms of the sources,

usage, and management of funds.
• Marketing plans and policies.

• • Marketing plans and policies are done in terms of

segmentation, targeting, positioning and the areas of
marketing mix of product, price, place, and pro motion.
• Operations plans and policies.

• • Operations plans and policies take into account the

production system, operations planning and control, and R
& D.
• Personnel plans and policies.

• • Personnel plans and policies are based on the personnel

system, organisational and employee characteristics, and
industrial relations.
• Information management plans and policies.

• • Information management plans and policies are

formulated on the various aspects of acquisition and
retention, processing and synthesis, retrieval and usage,
transmission and dissemination, and the integrative,
systemic and supportive factors.
• Consideration in and mechanisms for integration of
functional plans and policies.
• • Since the development of functional plans and policies is
based on a process of segregation, integration is necessary
to aggregate the functions. Strategists have to take into
account considerations of the need for internal consistency,
relevance to organisational capability, trade-offs, intensity of
linkages, and timing of functional plans and policies so that
effective implementation takes place.
• • Mechanism used for integrating functional plans and
policies include information systems, direct contact, task
forces, full-time integrators, and teams.
• Four areas of operational effectiveness and techniques
used in each of them and illustrate the application of these
techniques by managers.
• • Operational implementation is based on the operational
effectiveness areas of productivity, processes, people, and
pace. Operational effectiveness is performing similar
activities within an organisation better than rivals perform
them.
• • Productivity is the measure of the relative amount of
input needed to secure a given amount of output.
• • Processes are courses of action used for operational
implementation.
• • People are the stakeholders in the organisation. The
significant people are the investors, employees, suppliers,
and customers.
• • Pace is the speed of operational implementation and is
measured in terms of time. Efficiency is the parameter often used
to express the pace of operational implementation.

• • Each of these four areas of operational effectiveness has a range

of management techniques and methods several of which are of
recent origin.

• • Managers face difficulty in exercising choice among the myriad

operational effectiveness techniques available. Such choice
should be exercised based on the requirements of the strategies
being implemented.

• The deals with the last phase of strategic management, i.e.,

strategic evaluation and control.
Strategic evaluation and Control.

• The chapter has dealt with the final phase of strategic

management, i.e., strategic evaluation and control. The main
points covered in this chapter are as follows:

• The nature and importance of; and the barriers to, strategic
evaluation and control and the role of participants in evaluation
to make it effective.

• • The nature of strategic evaluation is judgmental. Through

evaluation, strategists can adjudge whether their strategy is in
consonance with the environment and whether the performance
of tasks would lead to the achievement of objectives. Strategic
evaluation and control tests the effectiveness of strategy.
• • The importance of evaluation lies in its ability to control
strategy implementation and performance. The reasons for
importance are several: need for feedback, appraisal, and
reward; check on the validity of strategic choice;
congruence between decisions and intended strategy;
successful culmination of the strategic management process
and creating inputs for new strategic planning.
• • There are various participants in evaluation including the
shareholders, board of directors, CEOs, SBU heads, financial
controllers, and audit committees. The board of directors
and the CEOs enact the central role while the other
participants play a supportive role.
• • Because evaluation involves assessment of performance,
certain barriers can be expected. Five major types of
barriers in evaluation discussed in the chapter are: the limits
of control, difficulties in measurement and resistance to
evaluation, tendency to rely on short-term assessment, and
relying on efficiency versus effectiveness.
• • Effective evaluation can take place through observing
certain guidelines for control. These state that the control
should involve only the minimum amount of information,
monitor only managerial activities and results, be timely,
use long-term and short-term controls, aim at pinpointing
exceptions, emphasise the reward of meeting, or exceeding
standards.
• The four types of strategic controls.

• • Evaluation operates at two levels: strategic and

operational. Strategic control is aimed at a continual
assessment of the changing environment to see that the
strategy is not out of line with it. It can be exercised through
premise control, implementation control, strategic
surveillance, and special alert control.
• • Premise control aims to test the assumptions on the basis
of which strategy is formulated.
• • Implementation control assesses whether or not the
different aspects of implementation need any change.
• • Strategic surveillance monitors the environment for broad
range of events inside and outside the organisation that
might affect the course of strategy.
• • Special alert control to create rapid-response ability to
meet unexpected changes and crises.
• The process of operational control.

• • Operational control is directed towards the evaluation of

real-time action. The process of evaluation consists of four
elements: (a) Setting standards in terms of quantitative and
qualitative criteria; (b) The measurement of performance
through the information system; (c) Analysing variances by
comparing the actual performance with standards; and (d)
Taking corrective action through checks on performance and
standard, and a reformulation of strategies, plans, and
objectives.
• The various techniques for exercising strategic control and
operational control.
• • There are several techniques available for exercising
strategic control and operational control. Strategic control
may be done through strategic momentum control and
strategic leap control systems.
• • Strategic control through strategic momentum control
focuses on the continual validity of the assumptions on
which strategies were formulated. There are three
approaches to strategic momentum control of responsibility
control centres, underlying success factors, and the generic
strategies.
• • Strategic leap control is applicable when the
environment is unstable. There are four techniques used
for strategic leap control: strategic issue management,
strategic field analysis, systems modelling, and scenarios.
• • The evaluation techniques for operation control internal
analysis, comparative analysis, and comprehensive
analysis. Besides there are two other sets of techniques:
the special-purpose and auditing techniques.
• • Internal analysis consists of value chain, quantitative, and
qualitative analysis. Comparative analysis consists of
historical analysis, industry norms, and benchmarking.
Comprehensive analysis consists of key factor rating,
business intelligence systems, and balanced scorecard.
Special-purpose techniques are of network techniques,
MBO, parta system, MOU system, and evaluation studies in
NGOs. The auditing techniques are of social and
environmental audit.
• The role of information, control, and reward systems in
evaluation.
• • The three organisational systems of information, control,
and reward play differing, but significant, roles in strategic
evaluation and control.
• • Information system enables managers to keep track of
performance through relevant and timely data available for
evaluation.
• • Control system is at the heart of any evaluation process
for setting standards, measuring performance, analysing
variances and taking corrective action. The control system
prepares the ground for the process of strategic evaluation
and control to take place.
• • Reward system in an organisation zeroes in on the
contribution employees make to the achievement of its
objectives and reward that contribution in proportionate
measure. Reward system helps develop and motivate
personnel to receive rewards on the basis of performance
appraisal. Reward system is linked to control system at one
end and motivation of the employees at the other.
• With this chapter, we conclude our discussion of the process
of strategic management.