Strategy Implementation

1. Strategy ImplementationStrategy Implementation
By KMIBy KMI

2. ► Establish annual objectivesEstablish annual objectives
► Devise policiesDevise policies
► Allocate resourcesAllocate resources
► Alter an existing organizational structureAlter an existing organizational structure
► Restructure and reengineerRestructure and reengineer
► Revise reward and incentive plansRevise reward and incentive plans
► Minimize resistance to changeMinimize resistance to change
► Match managers with strategyMatch managers with strategy
► Develop a strategy supportive cultureDevelop a strategy supportive culture
► Adapt production/operation processesAdapt production/operation processes
► Develop an effective human resource functionDevelop an effective human resource function
► Downsize and furlough as neededDownsize and furlough as needed
► Link performance and pay to strategiesLink performance and pay to strategies
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3. Organizational StructureOrganizational Structure
► Too many levels of managementToo many levels of management
► Too many meetings attended by too manyToo many meetings attended by too many
peoplepeople
► Too much attention being directed towardToo much attention being directed toward
solving interdepartmental conflictssolving interdepartmental conflicts
► Too large a span of controlToo large a span of control
► Too many unachieved objectivesToo many unachieved objectives
► Declining corporate or business performanceDeclining corporate or business performance
► Losing ground to rival firmsLosing ground to rival firms
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4. Criteria for Evaluating StrategiesCriteria for Evaluating Strategies
►Consistency - Goals and policies areConsistency - Goals and policies are
mutually consistent.mutually consistent.
►Consonance - Adaptive to changes in theConsonance - Adaptive to changes in the
environment.environment.
►Advantage - Provides a competitiveAdvantage - Provides a competitive
advantage.advantage.
►Feasibility - It is possible with availableFeasibility - It is possible with available
resources.resources.
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5. Difficulties in strategy evaluationDifficulties in strategy evaluation
► A dramatic increase in the environment’s complexityA dramatic increase in the environment’s complexity
► The increasing difficulty of predicting the future withThe increasing difficulty of predicting the future with
accuracyaccuracy
► The increasing number of variablesThe increasing number of variables
► The rapid rate of obsolescence of even the bestThe rapid rate of obsolescence of even the best
plansplans
► The increase in the number of both domestic andThe increase in the number of both domestic and
world events affecting organizationsworld events affecting organizations
► The decreasing time span for which planning can beThe decreasing time span for which planning can be
done with any degree of certaintydone with any degree of certainty
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6. Quantitative CriteriaQuantitative Criteria
►Return on investment (ROI)Return on investment (ROI)
►Return on equity (ROE)Return on equity (ROE)
►Profit marginProfit margin
►Market shareMarket share
►Debt to equityDebt to equity
►Earnings per shareEarnings per share
►Sales growthSales growth
►Asset growthAsset growth
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7. Corrective ActionCorrective Action
► Alter the firm’s structureAlter the firm’s structure
► Replace one or mare key individualsReplace one or mare key individuals
► Divest a divisionDivest a division
► Alter the firm’s vision and/or missionAlter the firm’s vision and/or mission
► Revise objectivesRevise objectives
► Alter strategiesAlter strategies
► Devise new policiesDevise new policies
► Install new performance incentivesInstall new performance incentives
► Raise capital with stock or debtRaise capital with stock or debt
► Add or terminate salespersons, employees, orAdd or terminate salespersons, employees, or
managersmanagers
► Allocate resources differentlyAllocate resources differently
► Outsource (or rein in) business functionsOutsource (or rein in) business functionsBy KMI

8. ProcessesProcesses
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Input Output
Direct Supervision
Planning
Processes
Performance
Targets
Balanced
scorecard
Indirect Cultural
processes
Self-control
Internal markets

9. Balanced Score CardBalanced Score Card
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10. By KMI
Advantage Comment
Control Senior management can exercise greater control over the activities
of the organization and co-ordinate their subordinates or sub-units
more easily
Standardization Procedures can be standardized throughout the organization
Corporate view Senior managers can make decisions from the point of view of the
organization as a whole, whereas subordinates would tend to make
decisions from the point of view of their own department or section
Balance of
power
Centralized control enables an organization to maintain a balance
between different functions and departments
Experience
counts
Senior managers ought to be more experienced and skilful in making
decisions
Lower
overheads
When authority is delegated, there is often a duplication of
management effort at lower levels of hierarchy
Leadership In times of crises, the organization may need strong leadership by a
central group or senior managers

11. By KMI
Advantage Comment
Workload It reduces the stress and burden of senior management
Job It provides subordinates with greater job satisfaction by giving them
more say in making decisions which affect their work
Local
knowledge
Subordinates may have a better knowledge than senior
management of ‘local’ conditions affecting their area of work
Flexibility and
speed
Delegation should allow greater flexibility and a quicker response to
changing conditions affecting their area of work
Training Management at middle and junior levels are groomed for eventual
senior management positions
Control By establishing appropriate sub-units or profit centres to which
authority is delegated, the system of control within the organization
might be improved

12. OutsourcingOutsourcing
Outsourcing enables organizationsOutsourcing enables organizations
to benefit from their suppliers’ scaleto benefit from their suppliers’ scale
economies.economies.
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13. Points for considerationPoints for consideration
► Outsourcing major advantage is reducingOutsourcing major advantage is reducing
managers’ workload and they get more time tomanagers’ workload and they get more time to
concentrate on core activitiesconcentrate on core activities
► Standardization of processes will make itStandardization of processes will make it
easier to outsource – some processes may beeasier to outsource – some processes may be
commoditizedcommoditized
► Outsourcing important for peripheral activitiesOutsourcing important for peripheral activities
► Outsourcing core activities could lead to theOutsourcing core activities could lead to the
collapse of an organizationcollapse of an organization
► External suppliers may capture economies ofExternal suppliers may capture economies of
scale and experience effects – proving lessscale and experience effects – proving less
expensive than in-house servicesexpensive than in-house servicesBy KMI

14. Points for considerationPoints for consideration
►Successful relationship managementSuccessful relationship management
neededneeded
►Successful outsourcing depends onSuccessful outsourcing depends on
Specify with precision what is to beSpecify with precision what is to be
suppliedsupplied
The ability to measure what is actuallyThe ability to measure what is actually
suppliedsupplied
The ability to make adjustments ifThe ability to make adjustments if
specifications are not achievedspecifications are not achievedBy KMI

15. AdvantagesAdvantages
►Can save costsCan save costs
►Increase effectiveness where supplierIncrease effectiveness where supplier
deploys higher level of expertisedeploys higher level of expertise
►Allows the organization to focus on its coreAllows the organization to focus on its core
skillsskills
►Quicker than in-house processesQuicker than in-house processes
►Service level agreementsService level agreements
►Cost controlCost control
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16. DisadvantagesDisadvantages
► Single supplier for a complex process difficultSingle supplier for a complex process difficult
to findto find
► Firms may be unwilling to outsource the wholeFirms may be unwilling to outsource the whole
process due to confidentiality concernsprocess due to confidentiality concerns
► Loss of control, especially quality issuesLoss of control, especially quality issues
► Depending on supplierDepending on supplier
► Contracts may be long or inflexibleContracts may be long or inflexible
► If specialist skills are involved, moving to a newIf specialist skills are involved, moving to a new
supplier can become difficultsupplier can become difficult
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