OVERVIEW OF STRATEGIC

MANAGEMENT
Chapter 02: Chapter 04:
The Business The Internal Chapter 06:
Vision and Mission Assessment Strategy
Intended Learning Intended Learning Analysis

01 03 05
Outcomes Outcomes and Choice

Chapter 01:
The Nature of
02
Strategic Management
Chapter 03:
The External
Assessment
04 Chapter 05:
Strategies in
Action Intended
06
Intended Learning Intended Learning Outcomes
Outcomes. Learning
Outcomes
 CHAPTER 7
Implementing Strategies: Management and Operations
Issues
 The Nature of Strategy Implementation

Strategy Implementation

Often is called the “action stage” of

strategic management. Implementing
strategy means mobilizing employees
and managers to put formulated
strategies into action.
 Strategy formulation vs. Strategy implementation

 Strategy formulation is positioning  Strategy implementation is

forces before the action.
01
managing forces during the
action. 01
 Strategy formulation focuses on  Strategy implementation focuses
effectiveness.
02 on efficiency.
02
 Strategy formulation is primarily  Strategy implementation is
an intellectual process.
0 primarily an operational process. 0
 Strategy formulation requires good
3  Strategy implementation requires 3
0
special motivation and leadership
intuitive and analytical skills.
0 skills.

 Strategy formulation requires 4  Strategy implementation requires 4

coordination among a few
individuals. 0 coordination among many
individuals. 0
 Management Perspectives

Divisional
Shift in Responsibility
&
Functional
In all but the smallest
organizations, the transition from Managers
strategy formulation to strategy
implementation requires a shift in
responsibility from strategists to
divisional and functional managers. Strategists
 Management Perspectives

Divisional
Shift in Responsibility
&
Functional
Implementation problems can
arise because of this shift in Managers
responsibility, especially if strategy
formulation decisions come as a surprise
to middle- and lower-level managers.
Strategists
 Management Perspectives

 Establish annual objectives

 Devise policies
 Allocate resources
 Alter an existing organizational structure
 Restructure and reengineer
 Revise reward and incentive plans
Management Issues Central  Minimize resistance to change
to  Match managers with strategy
Strategy Implementation  Develop a strategy supportive culture
 Adapt production/operations processes
 Develop an effective human resources
function
 Downsize and furlough as needed
 Link performance
 Annual Perspectives

Annual is a decentralized activity that

Objectives
directly involves all managers in an organization.
 Annual Perspectives

Annual objectives are essential for strategy implementation

because they:

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 Perspectives

The purpose of annual objectives can be summarized as

follows:
 Annual objectives serve as guidelines for action, directing and channeling efforts
and activities of organization members.
 They provide a source of legitimacy in an enterprise by justifying activities to stakeholders.
 They serve as standards of performance.
 They serve as an important source of employee motivation and identification.
 They give incentives for managers and employees to perform.
 They provide a basis for organizational design.
 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.
• Clearly stated and communicated objectives are critical to success in all types and

sizes of firms.

• Annual objectives, stated in terms of profitability, growth, and market share by

business segment, geographic area, customer groups, and product, are common

in organizations.

• Objectives should be consistent across hierarchical levels and form a network of

supportive aims.

• Horizontal consistency of objectives is as important as vertical consistency of

objectives.

• For instance, it would not be effective for manufacturing to achieve more than its

annual objective of units produced if marketing could not sell the additional units.
 Policies

Policy refers to specific guidelines,

methods, procedures, rules, forms,
and administrative practices
established to support and
encourage work toward stated goals.

Policies are instruments for strategy

implementation.
 Resource Allocation

Four Types Of
Resource Allocation
Resources:

is a central 1. Financial Resources

management activity that
allows for strategy execution. 2. Physical Resources

3. Human Resources

4. Technological Resources
 Managing Conflict

Conflict
can be defined as a
disagreement between two
or more parties on one or
more issues.
 Various Approaches For
Managing And Resolving
Conflict:

- includes such actions as ignoring the problem in hopes that the

avoidance conflict will resolve itself or physically separating the conflicting
individuals (or groups).

defusion - can include playing down differences between conflicting parties

while accentuating similarities and common interests,
compromising so that there is neither a clear winner nor loser,
resorting to majority rule, appealing to a higher authority, or
redesigning present positions.

- is exemplified by exchanging members of conflicting parties so

confrontation that each can gain an appreciation of the other’s point of view or
holding a meeting at which conflicting parties present their views
and work through their differences.
 Matching Structure with Strategy

Changes in Changes in
strategy structure
 Matching Structure with Strategy

 Structure dictates how objectives & policies

will be established and how resources will be
allocated; e.g. is structure based on location
or based on the product…
CHANDLE’S STRATEGY-STRUCTURE RELATIONSHIP

Organizational
New strategy New administrative
performance
is formulated. problems emerge.
declines.

Organizational
New organizational
performance
structure is established.
improves.