Report

Implementing Strategies: Management &

Operations Issues
• Presented by:
• Fatima Ashraf 7837
• Madiha Saleem 7866
• Iqra Akram 7881
• Faiza Ahmad 7885
• Kalsoom Fatima 7877
Nature of Strategy Implementation:
Strategy implementation is the second stage of strategic
management.

Contrast Between Strategic Implementation and

Strategic Formulation
Strategy formation focus on effectiveness
Strategy implementation focus on effacing
Strategy formulation is primarily an operational process
Strategy formulation requires good intuitive and an analytical
skills
Strategy implementation requires motivation & leadership
Management Perspective:
Establish annual objective
Devise policies
Allocate resources
Alter an existing organizational structure
Revise reward and incentive plan.
Develop strategy supportive culture
Human resource function
Budget allocation
Annual Objective:
Short term milestone that organization must
achieve to reach its long term objective.
Annual objective essential because they are:
 Represent the basis for resource allocation
 Primary mechanism for evaluating manager
 Major instrument for monitoring progress
toward achieving long term objective
 Establish organizational divisional and
departmental priorities.
Policies:
Specific guidelines, methods, procedures,
rules, forms to support and encourage
work together stated goals.
Policies are instrument for strategy
implementation.
 Resource Allocation
The process of dividing up and
distributing available, limited
resources to competing,
alternative uses that satisfy
unlimited wants and needs.
 Relation with Strategic Management:
Central management activity
Allows for strategy execution
Political & personal factors applied by
organizations having non-strategic
management approach
Types of Resources:
1. Financial resources
2. Physical resources
3. Human resources
4. Technological resources
 Factors Prohibiting Effecting
Resources Allocation:
 Overproduction of resources
 Organizational politics
 Vague strategy targets
Managing Conflicts:
“A disagreement between two or more parties on one or
more issues”.
Reasons:
 Competition for limited resources
 Establishing annual objectives can lead to conflict.
Example:
A manager can have objective to deduce bad doubts by
50% in a given year & can have conflict with the
manager having objective to increase sales by 20%.
 Matching Structure with Strategy:
Change in strategy lead to changes in organizational
structure.

Reasons for Changing Structure:

1. Structure dilates how policies & objectives will be
established.
2. Structure dilates how resources will be allocated

Example: Customer Groups

 The structure might be suitable only 91 firm.

 Growth of organization leads to changes in structure
 Structure can shape choices of strategies.
Matching Structure with Strategy
Types of structural changes needed to
implement new strategies

Functional
Divisional by geographic area
Divisional by product
Divisional by customer
Divisional process
Strategic business unit (SBU) structure
Matrix
 Functional or centralized structure

Functional structure groups tasks & activities by

business function, such as production/operations,
accounting/finance, R&D, MIS.
 A university may structure its activities by major
functions that include academic affairs, student
service, maintenance, athletics & accounting.
 Merits of functional structure
 Simple & inexpensive.
 Allows rapid decision making.
 Efficient use of managerial & technical talent.
 Promotes specialization of labor.
 Widely use of resources.
 Minimizes need for elaborate control .
 Demerits of functional structure
 Delegation of authority is not encouraged.
 Minimize career development.
 Leads to communication problem.
 Leads to narrow thinking.
 Accountability is forced to the top.
 Inadequate planning for products & markets.
Divisional or decentralized
structure

 As a small organization grows, it has

more difficulty managing different
products or services in different markets.
 The divisional structure can be
organized into four ways.
 Divisional structure by geographic area

 This divisional structure is appropriate for

organizations whose strategies to be fit for the
particular needs & characteristics of
customers in different geographic area.
 This type of structure can be most
appropriate for organizations that have similar
branched facilities located in widely dispersed
areas
 Example: Mcdonald’s
 Divisional structure by product or service

 This type of structure is most appropriate for

implementing strategies when specific products or
services need special emphasis.
 This structure is widely used when an organization offers
few products or services.
 Microsoft recently reorganized the whole corporation
into three large divisions by product. Headed by
president. New divisions are
 Platform products & services
 Business
 Entertainment & devices
 Divisional structure by customers
 This type of structure is appropriate for
organizations to cater the requirements of clearly
defined customer groups.
 Example : Book publishing companies often organize
their activities around customer groups such as
 Universities
 Colleges
 Secondary schools
 Divisional structure by process
 This type of structure is appropriate when
activities are organized according to the way
work is actually performed. This structure is
similar to a functional structure.
 Example : In Textile Mills activities are divided
according to their process. cutting, dying,
printing.
 each process (division) would be responsible
for generating profits.
 Merits of divisional structure
 Creates career development chances.
 Leads to competitive environment internally.
 Allows strict control or attention to regions,
product, customer, process.
 Promotes delegation of authorities.
 Accountability is clear.
 Allows easy adding of new products or
regions.
 Demerits of divisional structure
 Costly.
 Lead to limited sharing of resources & ideas.
 Requires skilled management.
 Some regions , products, customers, process
may special attention.
 Each division requires functional specialist
who must be paid.
 Elaborate control system.
The Strategic Business Unit Structure:
Use: In large firms
Introduction:
A separate operating division of a company with some
degree of autonomy referred to as a (Strategic
Business Unit) structure.
Need Of Business:
When the number, size and diversity of divisions in an
organization increase, controlling and evaluating
divisional operations becomes difficult for
strategists.
Solution:
The solution of this problem is the “SUB” structure.
Advantages of SBU Disadvantages of SBU
Structure Matching with Structure
Strategy
1. Improving coordination 1. Increase expenses
2. Channeling accountability 2. Inter functional rivalry
3. Manageable task 3. Slow response time
4. Minimum problems 4. Responsibility
5. Response 5. Critical process
6. Focus

Despite its disadvantages many organizations

use this structure.
 The Matrix Unit Structure:
Use: In large firms
Introduction:
An organizational structure that facilitate the horizontal flow of skills
and information as well as vertical flow of authority and
communication.
Need for Matrix Structure:
1. Management of large projects.
2. Product development process.
Working of Matrix Structure:
Employee report on day to day performance to the project manager
and also report to HOD.
Manager’s authority flows horizontally.
HOD authority flows vertically.
Advantages Disadvantages
1. Project objectives clear 1. Require excellent
2. Employees can see communication
result 2. Costly
3. Shifting down project is 3. Violates unity of
easy communication
4. Facilitates uses of 4. Dual budget authority
special equipments 5. Dual sources of reward
5. Resources are shared and punishment
6. Shared authority and
reporting
7. Require mutual trust.
 Restructuring
• Reducing the size of the firm in terms of
number of employees, division or units
and the number of hierarchical levels in
the firm`s organizational structures.
• Primary benefit of restructuring is cost
reduction
• Primarily concerned with the
shareholders well being.
 Restructuring
Also called
• Downsizing
• Rightsizing
• De-layering
 Reengineering
• Reconfiguring or redesigning work
jobs and processes to improve cost,
quality, service and speed.
• It is primarily concern with the
employees and customers well being
than shareholders wellbeing.
 Reengineering
Also called
• Process management
• Process Innovation
• Process redesign