Zafra, May Jumawid, Bryan Joseph Degoma, Junaisah Nissi

There must be a translation of strategic thought into strategic action. Implementing strategy affect an organization from top to bottom; it impacts all the functional and divisional areas of business.

Successful strategy formulation does not guarantee successful strategy implementation.

It is always more difficult to do something (strategy implementation) than to say you are going to do it (strategy formulation)!

 Strategy formulation is positioning forces before the action. Strategy implementation is managing forces during the action. Strategy formulation focuses on effectiveness. Strategy implementation focuses on efficiency.

 Strategy formulation is primarily an intellectual process. Strategy implementation is primarily an operational process. Strategy formulation requires good intuitive and analytical skills. Strategy implementation requires special motivation and leadership skills.

Managers and employees are motivated more by perceived self-interests than by organizational interests, unless the two coincide. Therefore, it is essential that divisional and functional managers be involved as much as possible in strategyformulation activities.

Managers and employees throughout an organization should participate early and directly in strategy-implementation decisions. Their role in strategy implementation should build upon prior involvement in strategyformulation activities.

Annual objectives:
1. represent the basis for allocating resources 2. are a primary mechanism for evaluating managers 3. are the major instrument for monitoring progress toward achieving long-term objectives 4. establish organizational, divisional, and departmental priorities

Annual objectives should be measurable, consistent, reasonable, challenging, clear, communicated throughout the organization, characterized by an appropriate time, dimension, and accompanied by commensurate rewards and sanctions.

Annual objectives should be compatible with employees values and should be supported by clearly stated polices.

 Policy
specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work toward stated goals instruments for strategy implementation

 Policies
set boundaries, constraints, and limits on the kinds of administrative actions that can be taken to reward and sanction behavior clarify what can and cannot be done in pursuit of an organizations objectives

Policies let both employees and managers know what is expected of them, thereby increasing the likelihood that strategies will be implemented successfully. Policies serve as a mechanism for implementing strategies and obtaining objectives. It should be stated in writing whenever possible. They represent the means for carrying out strategic decisions.

 Resource allocation
central management activity that allows for strategy execution often based on political or personal factors

Strategic management enables resources to be allocated according to priorities established by annual objectives

Financial

Physical

Human

Technological

Number of factors that commonly prohibit effective resource allocation Overprotection of resources To great an emphasis on short-run financial criteria Organizational politics Vague strategy targets Reluctance to take risks Lack of sufficient knowledge

Effective resource allocation does not guarantee successful strategy implementation because programs, personnel, controls, and commitment must breathe life into the resources provided. STRATEGIC MANAGEMENT itself is sometimes referred to as a resourceallocation process.

Jumawid, Bryan Joseph

Conflict

Disagreement between two or more parties on one or more issues

 Conflict is not always bad Absence of conflict

Signal indifference or apathy

Can energize opposing groups to act May help managers identify problem

Conflict Management and Resolution

Avoidance Defusion Confrontation

Changes in Strategy Changes in Structure 1. Structure largely dictates how objectives and policies will be established. 2. Structure dictates how resources will be allocated

ORGANIZATIONAL STRUCTURE

OBJECTIVES AND POLICIES

STRATEGIES

New strategy Is formulated

New administrative problems emerge

Organizational performance declines

Organizational performance improves

New organizational structure is established

Basic Forms of Structure

Functional Structure
Divisional Structure Strategic Business Unit Structure (SBU) Matrix Structure

 Group tasks and activities by business function

 Can be organized in one of four ways:

By geographic area By product or service By customer By process

 Appropriate for organizations whose strategies need to be tailored to fit the particular needs and characteristics of customers in different areas.

Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall

 Most effective for implementing strategies when specific products or services need emphasis.

 Allows an organization to cater effectively to the requirements of clearly defined customer groups.

 Similar to functional structure Key difference is division is accountable for profits and revenues.

 Group similar divisions into strategic business units and delegate authority and responsibility for each unit to a senior executive who reports directly to the chief

 The most complex of all designs because it depends upon both vertical and horizontal flows of authority and communication

Most companies practicing pay-forperformance

 Dual bonus system becoming more common

Based on both annual objectives and longterm objectives

Profit Sharing
Incentive compensation used by 30% of companies

Gain Sharing
Performance targets set for employees or departments

Tests for Performance-Pay Plans

Does the plan capture attention?

Do employees understand the plan?

Is the plan improving communication?

Does the plan pay out when it should?

Is the company or unit performing better?

Change raises anxiety over fear of:

Economic loss Inconvenience Uncertainty Break in status-quo

Resistance to change
Single greatest threat to successful strategy implementation

 Force Change Strategy Educative Change Strategy Rational or Self-Interest Change Strategy

 Giving orders and enforcing those orders; Advantage = Fast Disadvantage = Plagued by low commitment and high resistance.

 Presents information to convince people of the need for change; Disadvantage = implementation of slow and difficult. But evokes greater commitment and less resistance.

 Attempts to convince individuals that the change is to their personal advantage. If successful, implementation is easy However, changes are seldom to everyones advantage.

 Consists of 4 steps 1. Participation 2. Motivation or Incentive 3. Communication 4. Feedback

 Involves anticipating the focus of resistance and its intensity Eliminating unnecessary resistance Mustering power base base necessary Planning the process of change Monitoring and controlling

Junaisah Nissi L. Degoma

 set a goal in 1988 to reduce its toxic air emission by 90% not later than year 1992.

Zero Spills, Zero Release, Zero Incidents and Zero Excuses.

Environmental Issues Ozone depletion Global warming Depletion of rain forests Waster management Clean air Clean water Erosion Pollution control Developing biodegradable products and packages

Environmental concerns touch all aspects of a business operations including workplace risk exposures, packaging, waste reduction, energy use, alternative fuels, environment cost accounting and recycling practices.

Environmental affairs can no longer be simply a technical function performed by specialist in a firm; more emphasis must be placed on developing and environmental perspective among all employees and managers of the firm.

Some companies also include environmental factors in their performance appraisal instruments and trying environmental performance directly to raises, bonuses and promotions.

 Managing environmental affairs can no longer be a secondary function of company operations. Firms that excel in the management of environmental affairs will benefit from construction relations with consumers, regulators, vendors and other industry players substantially improving their prospects of success.
Starik and Caroll advocate strategic environmental management whereby firms formulate and implement strategies from an environmental perspective.

Strategist should strive to preserve, emphasize and build upon aspects of an existing culture that support proposed new strategies. Meanwhile, aspects of an existing culture that is opposed to a proposed strategy should be identified and changed.

Ways and Means for Altering an Organizations Culture

1. Recruitment 2. Training 3. Transfer 4. Promotion 5. Role modeling

6. Revising vision and/or mission

7. Redesigning physical spaces/facades 8. Altering reward system

 Formal statements of organization philosophy, or materials used for recruitment and selection Designing of physical spaces, facades, building Deliberate role modeling, teaching and coaching by leaders Explicit reward and status system, promotion criteria What leaders pay attention to Organizational systems and procedures

Plant size Plant location Product design Choice of equipment Size of inventory Inventory control Quality control Job specialization Employee training

Equipment and resource utilization Technological innovation Shipping and Packaging

Just In Time (JIT) production approaches can significantly reduce the cost of implementing strategies.
An inventory strategy that companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs. With JIT, parts and materials are delivered to a production site just as they are needed, rather than being stockpiled as a hedge against later deliveries.

Hospital Bank

Adding a cancer center (Product Development) Adding 10 new branches (Market Development)

Purchase specialized equipment and add specialized people. Perform site location analysis.

Beer brewery

Purchasing a barley farm operation (Backward Integration)

Revise the inventory control system.

 Strategic responsibilities of the human resource manager include assessing the staging needs and costs for alternative strategies proposed during strategy formulation and developing a manpower plan for effectively implementing strategies. This plan must consider how best to manage spiraling health care insurance costs. Employers health coverage expenses consume an average 26 percent of firms net profits, even though most companies now require employees to pay part of their health insurance premiums. The plan must also include how to motivate employees and managers during a time when layoffs are common and workloads are high.

Work/family strategies have become so popular among companies today that the strategies now represent a competitive advantage for those firms that offer such benefits as:
1. 2. 3. 4. 5. 6. 7. 8. elder care assistance, flexible scheduling job sharing adoption benefits an on-site summer camp, employee help lines, pet care, and even lawn service referrals.

Three especially important variables used in the ranking the best companies for Working Mothers
availability of flextime advancement opportunities and equitable distribution of benefits among companies.

Other important criteria are compressed weeks, telecommuting, job sharing, childcare facilities, maternity leave for both parents, mentoring, career development, and promotion for women.
Some organizations have developed family days, when family members are invited into the workplace, taken on plant or office tours, dined by management, and given a chance to see exactly what other family members do each day.