School of Business
Course Code: Course Name: Strategic Management
Module 5 :Strategy Implementation, Evaluation and
Control
Name of the Faculty: Dr. Ved Prakash Program Name: BBA
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Topics to be Covered
• Operationalizing the strategies
• Identifying annual objectives
• Developing functional strategies,
• Development of policies
• Structural consideration
• Linking structure to strategy
• Resource management and control
• The balance scorecard
Name of the Faculty: Dr. Ved Prakash Program Name: BBA
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Operationalizing the strategies
• A firm that is moving from strategy formulation to strategy
implementation has to give enough consideration to three
interrelated concerns:
a.Identification of measurable mutually determined annual objectives,
b.Development of specific functional strategies,
c.Communication of concise policies to guide decisions.
• It is also important that employees from all the levels in the
organization are involved in strategy formulation.
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Who Implements Strategy?
• Depending on how a corporation is organized, those who implement strategy will
probably be a much more diverse set of people than those who formulate it.
• From large, multi-industry corporations to small entrepreneurial ventures, the
reality is that the implementers of strategy are everyone in the organization.
• Vice presidents of functional areas and directors of divisions or strategic business
units (SBUs) work with their subordinates to put together large-scale
implementation plans.
• Plant managers, project managers, and unit heads put together plans for their
specific plants, departments, and units. SaaS-based company presidents work with
their project managers and developers to meet the latest needs of their customers.
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Identification of Long Term and Annual objectives
• The identification of the long-term objectives of a strategy is a crucial step in the
successful implementation of a strategy.
• Market share, return on investment, return on equity, stock price and expansion
into new markets indicate the ultimate effectiveness of a chosen strategy.
• Annual objective is drawn from long term objectives
• The successful execution of the business's overall long term plan is based on the
accomplishment of these annual objectives.
• Annual objectives also provide a specific basis for monitoring and controlling
organizational performance.
• Such objectives can aid the development of "trigger points that alert top
management
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Developing Functional Strategies
• Functional strategy is the approach a functional area takes to achieve
corporate and business unit objectives and strategies by maximizing
resource productivity.
• It is concerned with developing and nurturing a distinctive
competence to provide a company or business unit with a competitive
advantage.
• Just as a multidivisional corporation has several business units, each
with its own business strategy, each business unit has its own set of
departments, each with its own functional strategy.
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Functional Strategies in Marketing
Key Function Key Consideration
Strategies
Product Type of product Key contributors to profitability Product image Consumer need
Changes that influence customers
Price Price as the basis of competition Price modifications through discounts Uniformity
in pricing Target segments Gross profit margin
Place Level of market coverage Priority geographic areas Key distribution channels
Channel objectives. structure. management Change in marketing mix Sales force
organization territory, market, product)
Promotions Key promotion priorities and approaches Advertising and communication
priorities Media
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Functional Strategies Finance / Accounting
Key Function Key Consideration
Strategies
Capital Acquisition Cost of capital ,Proportion of short and long-terin debt,
Balance between internal and external funding, Appropriate
risk and ownership, Level and forms of leasing
Capital Allocation Priorities in allocation to projects, Basis of final selection of
projects, Capital allocation authority
Dividend and Dividend-payout ratio Stability of dividends Cash flow
working capital requirements Credit policies Credit limits. terms of repayment,
management and collection procedures Payment timing and procedure
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Functional Strategies: Research and Development
Key Function Key Consideration
Strategies
Basic research versus Extent of innovation Vis-a-vis product development.
commercial refinement and modification New projects that support
development growth
Time horizon Emphasis on short term or long term
Organization fit Nature of research (in-house or contracted) Departmental
structure (centralized or decentralized) Relations with
other departments
Basic R&D Posture Offensive or defensive
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Functional Strategies : Production and Operations
Key Function Key Consideration
Strategies
Facilities and Importance of facilities Extent of integration of processes Size
equipment and capacity
Purchasing Sources Selection of suppliers and managing relations
Acceptable forward buying level
Operation Level of inventory, Inventory use, Key control efforts Nature
Planning and of maintenance (preventive or market oriented), Job
control specialization and Plant safety
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Functional Strategies: Personnel and Human Resource
• The strategic importance of functional strategies in the area of
human resource management is now widely accepted.
• HRM contributes to the successful implementation of strategy of the
company by nurturing managerial talent, managing compensation,
and motivating employees.
• Functional strategies in the HRM are aimed at the effective utilization
of human resources in achieving the annual objectives of the firm and
bringing satisfaction to employees. .
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Development of Policies
• Policies are directives designed to help managers and their
subordinates in the implementation of organizational strategy.
• Policies aid in the establishment and control of ongoing operations in
a manner consistent with the firm's strategic objectives.
• Policies also enhance managerial effectiveness by standardizing
many routine decisions and controlling the discretion of managers
and subordinates in implementing operations strategies.
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
How Is Strategy to Be Implemented? Organizing for Action
• Before plans can lead to actual performance, a corporation should be
organized to take advantage of its competitive advantages, programs
should be adequately staffed, and activities should be directed toward
achieving desired objectives.
• Any change in corporate strategy is very likely to require some sort of
change in the way an organization is structured and in the kind of
skills needed in particular positions.
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Linking Structure to Strategy
• Before plans can lead to actual performance, a corporation should be
organized to take advantage of its competitive advantages, programs
should be adequately staffed, and activities should be directed toward
achieving desired objectives
• Any change in corporate strategy is very likely to require some sort of
change in the way an organization is structured and in the kind of
skills needed in particular positions.
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Programs, Budgets and Procedures
• The managers of divisions and functional areas work with their fellow managers to
develop programs, budgets, and procedures for the implementation of strategy. They also
work to achieve synergy among the divisions and functional areas in order to establish
and maintain a company’s distinctive competence.
• The managers of divisions and functional areas work with their fellow managers to
develop programs, budgets, and procedures for the implementation of strategy. They also
work to achieve synergy among the divisions and functional areas in order to establish
and maintain a company’s distinctive competence.
• Programs
• Procedures
• Budgets
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Structural Considerations: Stages of Corporate Development
• Successful, large conglomerate organizations have tended to follow a
pattern of structural development as they grow and expand.
• Beginning with the simple structure of the entrepreneurial firm (in
which everybody does everything), these organizations tend to get
larger and organize along functional lines, with marketing, production,
and finance departments.
• With continuing success, the company adds new product lines in
different industries and organizes itself into interconnected divisions.
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Simple Organizational Structure
• Simple Structure is typified by the entrepreneur or a small team, who
founds a company to promote an idea (a product or a service).
• The entrepreneur or team tends to make all the important decisions and is
involved in every detail and phase of the organization.
• The Stage I company has little formal structure, which allows the
entrepreneur or team to directly supervise the activities of every employee.
• Planning is usually short range or reactive. The typical managerial functions
of planning, organizing, directing, staffing, and controlling are usually
performed to a very limited degree, if at all.
• The greatest strengths of a Stage I corporation are its flexibility and
dynamism.
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Functional Organizational Structure
• Stage II is the point at which the entrepreneur is replaced by a team of
managers who have functional specializations.
• The transition to this stage requires a substantial managerial style
change for the chief officer of the company, especially if he or she was
the Stage I entrepreneur.
• He or she must learn to delegate; otherwise, having additional staff
members yields no benefits to the organization.
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Divisional Organizational Structure
• The corporation’s managing diverse product lines in numerous
industries; it decentralizes the decision-making authority.
• Organizations grow by diversifying their product lines and expanding
to cover wider geographical areas.
• A crisis of control can now develop, in which the various units act to
optimize their own sales and profits without regard to the overall
corporation, whose headquarters seems far away and almost irrelevant.
• Over time, divisions have been evolving into SBUs to better reflect
product–market considerations.
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Strategic Business Unit
• Some firms find it difficult in controlling their divisional operations
because of the increase in diversity, size and number of divisional
units.
• So it becomes a tough task for the corporate management to
evaluate and control its numerous to improve strategy
implementation promote synergy and gain greater control over the
diverse business interests,
• It may become essential add another layer of management when
corporate management finds difficulty in managing the organization.
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Matrix Organization
• A matrix organization is a structure in which there is more than one
line of reporting managers. Effectively, it means that the employees
of the organization have more than one boss!
• he matrix organization structure is complex but helps in achieving the
ultimate goal i.e. reaching higher productivity. It has various benefits.
This type of structure is used in organizations which have diverse
product lines and services.
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Resource Management and Control
• The principle of resource allocation is applied at every level in the
organization.
• It is obvious that the strategic leader plans the overall strategy, but at the
lower levels of the management hierarchy, the allocation of time, raw
material, personnel, etc is planned as part of a continuous scheduling
activity.
• These plans are basically statements of intent.
• Thus, strategies are implemented when resources have been allocated and
used.
• The work of individual salespersons and shopfloor workers is affected by
strategic decisions. It is, therefore, important to ensure that daily activities
are directed by the strategy.
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Corporate Resource Planning
• Corporate resource planning relates to the allocation of resources
between various parts of the organization together with corporate
investment decisions concerning the acquisition of additional
resources.
• If investment funds are limited, their allocation will be based on the
strategic importance of the various spending opportunities.
• Also, the financial evaluation of the viability of each project has to be
considered. If funds are not available, they need to be borrowed to
finance the projects.
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Functional Resource Planning
• When resources are allocated to functions or to particular activities
within functions, it is important to consider the relative importance of
each function.
• Due to the competitive advantage offered by functional activities, an
appreciation of the key success factors and competitive opportunities
is crucial if the resource allocation is to lead to strategic effectiveness.
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Allocating Resources
Types of Controls
• Controls can be established to focus on actual performance results
(output), the activities that generate the performance (behavior), or on
resources that are used in performance (input).
• Output controls specify what is to be accomplished by focusing on
the end result of the behaviors through the use of objectives and
performance targets or milestones.
• Behavior controls specify how something is to be done through
policies, rules, standard operating procedures, and orders from a
superior.
• Input controls emphasize resources, such as knowledge, skills,
abilities, values, and motives of employees.
Measuring Performance
Primary Measures of Corporate Performance
Using Benchmarking To Evaluate Performance
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
BALANCED SCORE CARD (BSC)
School of Business
Course Code: MBDS6003 Course Name: Strategic Management
Crisis Management
School of Business
Course Code: Course Name: Strategic Management
References
• Strategic Management and Business Policy: Globalization,
Innovation, and Sustainability, Thomas L. Wheelen, J. David Hunger,
Alan N. Hoffman, and Charles E. Bamford, 15th Edition, Pearson
Education, 2018.
• Strategic Management, Hitt Michael A, Ireland R. Duane, Hoskisson
Robert E., 12th Edition, Cengage Learning, 2016
