MGT. 406- STRATEGIC MGT.

CHAPTER 8 STRATEGY EXECUTION

8.1 Construct an effective organizational chart.
8.2 Why strategy implementation is more difficult than strategy formulation.
8.3 Importance of annual objectives and policies in achieving organizational for strategies to be implemented.
8.4 The relationship between production/operations and strategy implementations

8 STRATEGY EXECUTION

5 KEYS TO SUCCESSFUL STRATEGY EXECUTION

Strategy execution is the implementation of a strategic plan in an effort to reach organizational goals. It comprises
the daily structures, systems, and operational goals that set your team up for success.
Even the best strategic plans can fall flat without the right execution. In fact, 90 percent of businesses fail to reach
their strategic goals, which researchers believe is due to a gap between strategic planning and execution.
“If you’ve looked at the news lately, you’ve probably seen stories of businesses with great strategies that have
failed,” says Harvard Business School Professor Robert Simons, who teaches the online course Strategy Execution. “In
each case, we find a business strategy that was well formulated but poorly executed.”
How can you equip yourself and your team to implement the plans you’ve crafted? Here are five keys to successful
strategy execution you can use at your organization.

KEYS TO SUCCESSFUL STRATEGY EXECUTION

1. Commit to a Strategic Plan
Before diving into execution, it’s important to ensure all decision-makers and stakeholders agree on the
strategic plan.
Research in the Harvard Business Review shows that 71 percent of employees in companies with weak
execution believe strategic decisions are second-guessed, as opposed to 45 percent of employees from
companies with strong execution.
Committing to a strategic plan before beginning implementation ensures all decision-makers and their teams
are aligned on the same goals. This creates a shared understanding of the larger strategic plan throughout the
organization.
Strategies aren’t stagnant—they should evolve with new challenges and opportunities. Communication is
critical to ensuring you and your colleagues start on the same page and stay aligned as time goes on.

2. Align Jobs to Strategy

One barrier many companies face in strategy execution is that employees’ roles aren’t designed with
strategy in mind.
This can occur when employees are hired before a strategy is formulated, or when roles are established to
align with a former company strategy.
In Strategy Execution, Simons posits that jobs are optimized for high performance when they line up with an
organizational strategy. He created the Job Design Optimization Tool (JDOT) that individuals can use to assess
whether their organization's jobs are designed for successful strategy execution.
The JDOT assesses a job’s design based on four factors, or “spans”: control, accountability, influence, and
support.
“Each span can be adjusted so that it’s narrow or wide or somewhere in between,” Simons writes in the
Harvard Business Review. “I think of the adjustments as being made on sliders, like those found on music
amplifiers. If you get the settings right, you can design a job in which a talented individual can successfully execute
your company’s strategy. But if you get the settings wrong, it will be difficult for any employee to be effective.”

3. Communicate Clearly to Empower Employees

When it comes to strategy execution, the power of clear communication can’t be overlooked. Given that a
staggering 95 percent of employees don’t understand or are unaware of their company’s strategy, communication
is a skill worth improving.
Strategy execution depends on each member of your organization's daily tasks and decisions, so it’s vital to
ensure everyone understands not only the company's broader strategic goals but how their individual
responsibilities make achieving them possible.
Data outlined in the Harvard Business Review shows that 61 percent of staff at strong-execution companies
believe field and line employees are given the information necessary to understand the bottom-line impact of their
work and decisions. In weak-execution organizations, just 28 percent believe this to be true.
To boost your organization’s performance and empower your employees, train managers to communicate
the impact of their team's daily work, address the organization in an all-staff meeting, and foster a culture that
celebrates milestones on the way to reaching large strategic goals.

4. Measure and Monitor Performance

Strategy execution relies on continually assessing progress toward goals. For this to be possible, key
performance indicators (KPIs) should be determined during the strategic planning stage, and success should be
defined numerically.
A numeric goal allows you and your team to regularly track and monitor performance and assess if any
changes need to be made based on that progress.
For instance, your company’s strategic goal could be to increase its customer retention rate by 30 percent
by 2022. By keeping a record of the change in customer retention rate on a weekly or monthly basis, you can
observe data trends over time.
If records show that your customer retention rate is decreasing month over month, it could signal that your
strategic plan requires pivoting because it’s not driving the change you desire. If, however, your data shows steady
month-over-month growth, you can use that trend to reasonably predict whether you’ll reach your goal of a 30
percent increase by 2022.
 5. Balance Innovation and Control
While innovation is an essential driving force for company growth, don’t let it derail the execution of your
strategy.
To leverage innovation and maintain control over your current strategy implementation, develop a process to
evaluate challenges, barriers, and opportunities that arise. Who makes decisions that may pivot your strategy’s
focus? What pieces of the strategy are non-negotiable? Answering questions like this upfront can allow for clarity
during execution.
Also, remember that a stagnant organization has no room for growth. Encourage employees to brainstorm,
experiment, and take calculated risks with strategic goals in mind.

EXECUTION IS A KEY TO SUCCESS

It also struck me in those early days with AT&T that, although execution is a key to success, it is no easy task.
Here was a company with an ingrained culture and structure, a set way of doing things. For the company to adapt to its
new competitive environment, major changes would be necessary, and those changes would be no simple cakewalk.
Obviously, developing a competitive strategy wouldn’t be easy, but the massive challenges confronting the company
made it clear to me early on that:

MAKING STRATEGY WORK IS MORE DIFFICULT THAN THE TASK OF

STRATEGY MAKING
Execution is critical to success. Execution represents a disciplined process or a logical set of connected activities
that enables an organization to take a strategy and make it work. Without a careful, planned approach to execution,
strategic goals cannot be attained. Developing such a logical approach, however, represents a formidable challenge to
management.

MANAGERS ARE TRAINED TO PLAN, NOT EXECUTE

One basic problem is that managers know more about strategy formulation than implementation. They are trained
to plan, not execute plans. In most MBA programs I’ve looked at, students learn a great deal about strategy formulation
and functional planning. Core courses typically hone in on competitive strategy, marketing strategy, financial strategy, and
so on. The number of courses in most core programs that deal exclusively with execution or implementation? Usually
none. Execution is most certainly touched on in a couple of the courses, but not in a dedicated, elaborate, purposeful
way. Emphasis clearly is on conceptual work, primarily planning, and not on doing. Added to the lack of training in
execution is the fact that strategy and planning in most business schools are taught in “silos,” by departments or
disciplines, and execution suffers further. The view that marketing strategy, financial strategy, HR strategy, and so on is
the only “right” approach is deleterious to the integrative view demanded by execution. It appears, then, that most MBA
programs (undergrad, too, for that matter) are marked by an emphasis on developing strategies, not executing them.
Bright graduates are well versed in strategy and planning, with only a passing exposure to execution. Extrapolating this
into the real world suggests that there are many managers who have rich conceptual backgrounds and training in
planning but not in “doing.” The lack of formal attention to strategy execution in the classroom obviously must carry over to
a lack of attention and consequent underachievement in the area of execution in the real world.
If this is true—if managers are trained to plan, not to execute—] then the successful execution of strategy becomes
less likely and more problematic. Execution is learned in the “school of hard knocks,” and the pathways to successful
results are likely fraught with mistakes and frustrations. It also follows logically that managers who know something about
strategy execution very likely have the advantage over their counterparts who don’t. If managers in one company are
better versed in the ways of execution than managers in a competitor organization, isn’t it logical to assume, all other
things being equal, that the former company may enjoy a competitive advantage over the latter, given the differences in
knowledge or capabilities? The benefits of effective execution include competitive advantage and higher returns to
shareholders, so having knowledge in this area would clearly seem to be worthwhile and beneficial to the organization.

EXECUTION IS A PROCESS, NOT AN ACTION OR STEP

A point just made is critical and should be repeated: Execution is a process. It is not the result of a single decision or
action. It is the result of a series of integrated decisions or actions over time.
This helps explain why sound execution confers a competitive advantage. Firms will try to benchmark a successful
execution of strategy. However, if execution involves a series of internally consistent, integrated activities, activity
systems, or processes, imitation will be extremely difficult, if not impossible. Execution is a process that demands a great
deal of attention to make it work. Execution is not a single decision or action. Managers who seek a quick solution to
execution problems will surely fail in attempts at making strategy work. Faster is not always better!

EXECUTION INVOLVES MORE PEOPLE THAN

STRATEGY FORMULATION DOES
In addition to being played out over longer periods of time, strategy implementation always involves more people
than strategy formulation. This presents additional problems. Communication down the organization or across different
functions becomes a challenge. Making sure that incentives throughout the organization support strategy execution efforts
become a necessity and, potentially, a problem. Linking strategic objectives with the day-to-day objectives and concerns
of personnel at different organizational levels and locations becomes a legitimate but challenging task. The larger the
number of people involved, the greater the challenge of effective strategy execution.
HAVING A MODEL OR GUIDELINES FOR EXECUTION
Managers need a logical model to guide execution actions. Without guidelines, execution becomes a helter-skelter
affair. Without guidance, individuals do the things they think are important, often resulting in uncoordinated, divergent,
even conflicting decisions and actions. Without the benefit of a logical approach, execution suffers or fails because
managers don’t know what steps to take and when to take them. Having a model or roadmap positively affects execution
success.

STRATEGY IS THE PRIMARY DRIVER

It all begins with strategy. Execution cannot occur until one has something to execute. Bad strategy begets poor execution
and poor outcomes, so it’s important to focus first on a sound strategy. Good people are important for execution. It is vital
to get the “right people on the bus, the wrong people off the bus,” so to speak. But it’s also important to know where the
bus is going and why. Strategy is critical. It drives the development of capabilities and which people with what skills sit in
what seats on the bus. If above—given today’s highflying, competitive markets—the importance of strategy, direction, and
the requisite critical skills and capabilities necessary for success are emphasized even more.

MANAGING CHANGE
Execution or strategy implementation often involves change. Not handling change well will spell disaster for
execution efforts and reducing resistance to new ideas and methods. It also means knowing the tactics or steps needed to
manage the execution process over time. Do managers implement change sequentially, bit by bit, or do they do
everything at once, biting the bullet and implementing change in one fell swoop? The wrong answer can seriously hamper
or kill execution efforts. Knowing how to manage the execution process and related changes over time is important for
execution success.

THE POWER STRUCTURE

Execution programs that contradict the power or influence structure of an organization are doomed to failure. But
what affects power or influence? Power is more than individual personality or position. Power reflects strategy, structure,
and critical dependencies on capabilities and scarce resources. Knowing what power is and how to create and use
influence can spell the difference between execution success and failure.

COORDINATION AND INFORMATION SHARING

These are vital to effective execution. Knowing how to achieve coordination and information sharing in complex,
geographically dispersed organizations is important to execution success. Yet managers are often motivated not to share
information or work with their colleagues to coordinate activities and achieve strategic and short-term goals. Why? The
answer to this question is vital to the successful execution of strategy.

CLEAR RESPONSIBILITY AND ACCOUNTABILITY

This is one of the most important prerequisites for successful execution, as basic as it sounds. Managers must
know who’s doing what, when, and why, as well as who’s accountable for key steps in the execution process. Without
clear responsibility and accountability, execution programs will go nowhere. Knowing how to achieve this clarity is central
to execution success.

THE RIGHT CULTURE

Organizations must develop execution-supportive cultures. Execution demands a culture of achievement,
discipline, and ownership. But developing or changing culture is no easy task. Rock climbing, white-water rafting, paint-
gun battles, and other activities with the management team are fun. They rarely, however, produce lasting cultural
change. Knowing what does affect cultural change is central to execution success.

LEADERSHIP
Leadership must be execution biased. It must drive the organization to execution success. It must motivate
ownership of and commitment to the execution process. Leadership affects how organizations respond to all of the
preceding execution challenges. It is always at least implied when discussing what actions or decisions are necessary to
make strategy work. A complete analysis of execution steps and decisions usually defines what good leadership is and
how it affects execution success, directly or indirectly.

CONTROLS, FEEDBACK, AND ADAPTATION

Strategy execution processes support organizational change and adaptation. Making strategy work requires
feedback about organizational performance and then using that information to fine-tune strategy, objectives, and the
execution process itself. There is an emergent aspect of strategy and execution, as organizations learn and adapt to
environmental changes over time. Adaptation and change depend on effective execution methods. As important as
controls and feedback are, they often don’t work. Control processes fail. They don’t identify and confront the brutal facts
underlying poor performance. Adaptation is haphazard or incomplete. Understanding how to manage feedback, strategy
reviews, and change is vital to the success of strategy execution. These are the issues that impact the success or failure
of strategy execution efforts. Coupled with the issues previously mentioned (longer time frames, involvement of many
people, and so on), these are the areas that present formidable obstacles to successful execution if they are not handled
properly. They also present opportunities for competitive advantage if they are understood and managed well. The last
words, “managed well,” hold the key to success. Knowing the obstacles or potential opportunities is necessary but not
sufficient. The real issue is how to deal with them to generate positive execution results. The major significant point or
thrust of this chapter is that execution is not managed well in most woeful situation
8.1 CONSTRUCT AN EFFECTIVE ORGANIZATIONAL CHART

An organization chart is a graphical representation of relationships between an organization’s departments, functions and
people. It can also indicate the progression of information, obligation and announcing from base up or hierarchical. Its
utilization across the globe is a demonstration of its viability. The following are a few guidelines for drawing hierarchical
graphs and organization outline best practices to make your organization diagram more significant and valuable. Except if
you're a little organization with not many representatives, authoritative outlines are certainly going to be unpredictable,
with perhaps many between connections among offices or capacities.

At the point when your association graph turns out to be excessively huge and complex like the one above, it very well
may be parted into more modest outlines. You can part it by division, project, site, locale and so on Whatever it is that
bodes well to others in your association. This makes it simpler for the watcher to comprehend the obligations or the
assumptions for every division.

By separating the organization diagram into little graphs makes it turns out to be a lot simpler to screen progress or
responsibility of representatives. So it tends to be simpler to spread work among laborers with less burden. It likewise
makes it exceptionally simpler to do a similar examination of a circumstance with the goal that asset allotment can be
smoothed out to fulfill the needs of various circumstances.

At the point when enormous associations have numerous association diagrams covering their sub-units it is probably
going to be hard to examine them together initially.

With a diagram covering a few pages it can likewise be befuddling working out the associations between every substance
displayed in the graph. With creately as your association graph outlining apparatus, you can keep away from this issue
utilizing the chart connecting highlight. This permits watchers of the diagram to see the associations between graphs,
explore between the various outlines and potentially prefer to singular worker profiles. For example, take a look at the
below org chart. It shows the top hierarchy of the company. Now click on the highlighted box (the blue right-hand CEO
box) and it will take you down to another org chart that further breaks down that department. You can quickly move back
to the original chart by clicking the arrow buttons in the bottom toolbar. Go ahead and try it yourself.

The creation of an organizational chart of a company has a very specific purpose. It works as a visual aid that can
clarify tasks like, who reports to whom, who is responsible for each task, obligations within the company and many more.
The chart usually has a simple form. At the top you can see the head of each department or the business owner. That
depends on the chart form you will choose to use as well as the structure of your company.

In the past, hierarchical diagrams have been utilized basically by Human Resources, business pioneers and recently
added team members. HR is regularly liable for keeping up with the organization outline by refreshing it with recently
added team members and when representatives change positions or leave the organization. At the point when other
specialty units need the organization diagram, they realize who to go to. Business pioneers utilize the authoritative graph
in a few occasions, for example, for introductions, to legitimize adding or decreasing headcount, and to figure out where a
worker may have the chance to move work jobs.

For the recently added team member, the association diagram can be a life saver, assisting them with learning names
and titles and to all the more likely get where they fit into the by and large corporate construction. Recently added team
members get names tossed at them continually and the organization diagram can be an extraordinary asset to discover
who that load of individuals really are. Any representative, indeed, can profit from having their collaborator's names,
photographs, and expert and individual profiles readily available.

Since present day organization diagram programming is frequently a cloud-based application, each alter is consequently
saved progressively, guaranteeing simply the most recent rendition is distributed. With regards to making those updates,
HR doesn't need to be the just one with the obligation. Indeed, arrangements today can even match up information with
other interior HR frameworks to guarantee the organization outline is consistently cutting-edge. Workers and directors can
get into the application simply to make changes also.
Another factor in keeping representatives glad includes development openings. Gallup found that chances to develop are
among the main three factors that keep representatives content. Organization diagram programming assists everybody
with finding the ranges of abilities that may not be accessible in their own area of expertise. The pool of ability
unexpectedly grows, giving workers the adaptability to utilize their gifts and capacities across offices and across the
organization.

Everything begins, be that as it may, with correspondence. Each worker in the organization should know what they are
generally anticipated to do, how their job adds to the general accomplishment of the organization, and where they have
freedoms to develop their abilities. Organizations should characterize jobs and individual development ways to give
representatives something to seek to and afterward give the schooling and preparing to arrive.

There are a few issues with the conventional organization diagram, notwithstanding. The most clear is that as of not long
ago, it was a static report. HR doesn't generally recall or have the opportunity to make the updates, especially when an
organization is developing quickly and including headcount a normal premise. The organization graph rapidly turns into a
verifiable record instead of a continuous asset. Each additional or changed position requires a manual alter, then, at that
point the new archive should be rearranged. When everybody has the refreshed outline, it's obsolete the second any
position is added or changed.

The counter-impact of these required alters is it changes view of the graph's handiness. Everybody comprehends it is
probable off base so they either manage with terrible information or they decide not to utilize it by any stretch of the
imagination. Rather than it being a continuous portrayal of the organization, it is hypothetical. Not by and large the sort of
information business pioneers can rely upon for settling on cool headed choices.

Another issue with obsolete devices are they struggle acclimating to the more inventive and reformist authoritative
constructions of a considerable lot of the present organizations. Rather than the handily delineated designs of item and
division-based organizations, for example, we are seeing more "level" and "holacracy" structures that really have next to
no construction to them by any means. These associations have a cross-cooperation culture that urges everybody to do
what should be done, work in various groups and offer their abilities any place they can best be utilized. Rather than
storehouses, these organizations are more a "group of groups." While this plan might encourage advancement,
innovativeness and joint effort, how would you define the boundaries to address it?

Fortunately, with arising innovation, association graphs has come into this advanced age. Present day organization
outlines can do significantly more than graph with boxes and lines. Indeed, organization outline programming takes care
of the entirety of the issues built into Visio and PowerPoint, for example, while adding highlights each representative can
appreciate. It's as of now not simply an administration instrument.

At the point when organizations can draw in their representatives, associate them to one another in both expert and
individual manners, and assist them with being more useful, it's astounding what can occur. In the event that you haven't
seen what current organization outlines can do, it merits the exploration to find its many advantages.

Representatives can transfer headshot photographs or get inventive with realities about themselves. Organizations can
make this fun, requesting workers to transfer a photograph from them with their number one group pullover, cherished
pet, or partaking in their #1 diversion. These photos can be an incredible way for representatives to introduce an alternate
side of themselves, assisting them with adapting their work title and empower exchange among collaborators.
Past work titles, the product incorporates openings for associations to add custom fields, for example, past schooling,
current undertakings, "Get some information about… ", related preparing, and explicit ranges of abilities, just to give some
examples. These are list items that are profoundly advantageous for anybody looking for somebody with a specific
information base. These efficiencies add up rapidly. By introducing each representative and their involvement with the
fingertips of clients, individuals discover who they need rapidly so they can be more useful and become acquainted with
each other a lot quicker.

Business association diagram programming interfaces individuals, regardless of what their identity is, their main thing or
where they work. This is the best answer for a developing organization, a scattered labor force, or any association hoping
to cultivate a community oriented culture of sharing thoughts and data

Envision strolling to a gathering and having the option to examine the profiles of each and every individual who will be in
that gathering while you are coming. Not any more abnormal presentations or neglected tasks on which you might have
cooperated. With the tap of a finger, you can see precisely which projects on which you've teamed up, who they report to
and individual realities that assist with beginning a discussion.

Every representative profile connects to their contact data, simplifying associations. Some product incorporates a get-
away and work plan, making it simple to see when the best an ideal opportunity to contact somebody may be and who
their reinforcement is the point at which they are out.
The hierarchical diagram unexpectedly turns into an imperative asset for the whole association, turning out to be essential
for the day by day schedule and something everybody appreciates utilizing.

Few out of every odd association utilizes association diagrams the same way, in any case, the individuals who have
carried out current organization outline programming discover they can accomplish more than they expected when they
originally bought it. Here are a couple of utilization cases to give you a thought of how the present organization diagrams
can be useful to an association. Make Sensible Groupings

When organization charts are being broken down into sub-charts, sensible grouping and linking is a must since the
connection of each chart and the flow should be easily understandable to the viewer. 

Sensible grouping is done based on how individuals, jobs, functions or activities are differentiated and aggregated. The
information flow also requires optimizing within each group but at the same time clearly differentiating it from the other
groups.
Within most firms, executives rely on vertical and horizontal linkages to create a structure that they hope will match the
needs of their firm’s strategy. Four types of structures are available to executives: (1) simple, (2) functional, (3)
multidivisional, and (4) matrix (Figure 9.6 “Common Organizational Structures”). Like snowflakes, however, no two
organizational structures are exactly alike. When creating a structure for their firm, executives will take one of these types
and adapt it to fit the firm’s unique circumstances. As they do this, executives must realize that the choice of structure will
influence their firm’s strategy and strategic options in the future. Once a structure is created, it constrains certain future
strategic moves, and supports others. If a firm’s structure is designed to maximize efficiency, for example, the firm may
lack the flexibility needed to react quickly to exploit new opportunities.

(1) Simple Structure

Many organizations start out with a simple structure. In this type of structure, an organizational chart is usually not
needed. Simple structures do not rely on formal systems of division of labor. On the plus side, the flexibility offered by
simple structures encourages employees’ creativity and individualism. Informality has potential negative aspects, too.
Important tasks may be ignored if no one person is specifically assigned accountability for them. A lack of clear guidance
from the top of the organization can create confusion for employees, undermine their motivation, and make them
dissatisfied with their jobs. Thus when relying on a simple structure, the owner of a firm must be sure to communicate
often and openly with employees.

(2) Functional Structure

As a small organization grows, the person in charge of it often finds that a simple structure is no longer adequate to
meet the organization’s needs. Organizations become more complex as they grow, and this can require more formal
division of labour and a strong emphasis on hierarchy and vertical links. In many cases, these firms evolve from using a
simple structure to relying on a functional structure.
 Using a functional structure creates advantages and disadvantages. An important benefit of adopting a functional
structure is that each person tends to learn a great deal about his or her particular function. By being placed in a
department that consists entirely of marketing professionals, an individual has a great opportunity to become an expert in
marketing. Thus a functional structure tends to create highly skilled specialists. Second, grouping everyone that serves a
particular function into one department tends to keep costs low and create efficiencies. Also, because all the people in a
particular department share the same background training, they tend to get along with one another. In other words,
conflicts within departments are relatively rare.
Using a functional structure also has a significant downside: executing strategic changes can be very slow when
compared with other structures. Suppose, for example, that a textbook publisher decides to introduce a new form of the
textbook that includes “scratch and sniff” photos that let students smell various products in addition to reading about them.
If the publisher relies on a simple structure, the leader of the firm can simply assign someone to shepherd this unique new
product through all aspects of the publication process.
If the publisher is organized using a functional structure, however, every department in the organization will have to
be intimately involved in the creation of the new textbooks. Because the new product lies outside each department’s
routines, it may become lost in the proverbial shuffle. And unfortunately for the books’ authors, the publication process will
be halted whenever a functional area does not live up to its responsibilities in a timely manner. More generally, because
functional structures are slow to execute change, they tend to work best for organizations that offer narrow and stable
product lines.
The specific functional departments that appear in an organizational chart vary across organizations that use
functional structures. In the example offered earlier in this section, a firm was divided into five functional areas: (1)
marketing, (2) production, (3) human resources, (4) information technology, and (5) customer service. In the TV show The
Office, a different approach to a functional structure is used at the Scranton, Pennsylvania, branch of Dunder Mifflin. As of
2009, the branch was divided into six functional areas: (1) sales, (2) warehouse, (3) quality control, (4) customer service,
(5) human resources, and (6) accounting. A functional structure was a good fit for the branch at the time because its
product line was limited to just selling office paper.

(3) Multidivisional Structure

Many organizations offer a wide variety of products and services. Some of these organizations sell their offerings
across an array of geographic regions. These approaches require firms to be responsive to local customers’ needs. Yet,
as noted, functional structures tend to be fairly slow to change. As a result, when they expand, many firms abandon the
use of a functional structure as no longer optimal for their larger size. Often the new choice is a multidivisional structure. In
this type of structure, employees are divided into departments based on products, services, and/or geographic regions.

(4) Matrix Structure

Within functional and multidivisional structures, vertical linkages between bosses and subordinates are central for
decision making, communications, and accountability. Matrix structures, in contrast, rely heavily on horizontal
relationships (Ketchen & Short, 2011). In particular, these structures create cross-functional teams that each work on a
different project. This offers several benefits: maximizing the organization’s flexibility, enhancing communication by
emphasizing both vertical (top-down) and horizontal communications across functional lines, and supporting a stronger
spirit of teamwork and collaboration. A matrix structure can also help develop new managers. In particular, a person with
limited managerial experience can become a team leader for a relatively small project in developing their talents for
leading others.

Boundaryless Organizations
Most organizational charts show clear divisions and boundaries between different units. The value of a much
different approach was highlighted by former GE CEO Jack Welch when he created the term boundaryless organization.
A boundaryless organization is one that removes the usual barriers between parts of the organization as well as barriers
between the organization and others (Askenas et al., 1995). Eliminating all internal and external barriers is not possible, of
course, but making progress toward being boundaryless can help an organization become more flexible and responsive.

Reasons for Changing an Organization’s Structure

Creating an organizational structure is not a one-time activity. Executives must revisit an organization’s structure
over time and make changes to it if certain danger signs arise. For example, a structure might need to be adjusted if
decisions with the organization are being made too slowly or if the organization is performing poorly.
How to create an effective organizational chart

The creation of an organizational chart for a company has a very specific purpose. It works as a visual aid that can
clarify tasks like, who reports to whom, who is responsible for each task, obligations within the company, and many more.
The chart usually has a simple form. At the top, you can see the head of each department or the business owner. That
depends on the chart form you will choose to use as well as the structure of your company.

Τhe steps to create an organizational chart are the following:

1. Choose the correct organizational template for your chart
There are three different types of organizational charts that can help you run your small business. You
should choose the template based on the type of chart that will suit you the best.
You can try the Hierarchical chart also known as the Top-down organizational chart. This one shows the
reporting structure of the business, top to bottom. In other words, it starts with the business owner or the head of
each department and moves on to the people reporting directly to them. Their names are placed in boxes below
the managers and those boxes are connected with each other by a line.
If you own a bigger company then you might want to go directly for the Functional organizational chart. A
large company is usually divided into departments. The Functional chart allows you to keep each department
separated, declare the managers and the people reporting to them. If your business has grown to a point where,
communication between the departments is necessary, you will want to think about using the Matrix organizational
chart. More complicated in structure, the Matrix chart allows people from different departments to work with each
other and give frequent reports, without any complications.

2. Use organizational chart tools

Creating the chart sounds easier than it is. In other words, you want all the help you can get, to create the
correct chart. There are online tools, free and paid, that will assist you. Do some research and narrow down your
options to the tools that suit your company’s needs and preferences. Do not be afraid to use free online business
organizational tools, or even pay for them. You can also try the MS Word default organizational tools. In the long
run, they will help your company.

3. Use the correct information to fill out the chart

Each placeholder, in the chart, holds a specific position. You need to ensure that the information of each
person will be completely clear. You can include only the name and the position of each person. You can add a
small bio. Regardless of which option you choose, you should have the correct information and update them
frequently. This will prevent future problems and misunderstandings.
Using an organizational chart will ensure that, tasks and obligations will run smoother within your company.
The chart will help with:
★ The communications between the different departments
★ Planning for the growth and the transition of the company
★ Time-saving. The chart will clarify everyone’s work and obligations, thus saving time for every employee.
★ Showing that your business has a truly strong structure. It is important for all your associates and future
partners to know that your company is strong and functioning perfectly.
Some companies do not need an organizational chart. Others do. The moment you start hiring new staff
members is the moment you know, you will need a chart. Keep it simple, in the beginning. Work with the chart to
see how it fits your company. After you have gotten accustomed to using the simple chart, you can try something
more complicated. Remember; always keep it up to date as your business grows. Eventually, the first chart might
not be useful anymore, but keep it stored somewhere. You never know when you might need it again.

Five tips to create an organizational chart

Organizational charts play a critical role in the workplace. They display and communicate internal structure within
the organization, allowing individuals to understand the hierarchy of teams, departments, and the organization as a whole.

Top tips to create an organization chart

When it comes to creating your organizational chart, the first step is not to draw a diagram of your current
workforce and reporting structure. Instead, we strongly recommend taking a step back to think critically about your
organization design, before laying out your organization chart. Taking a talent optimization approach, your organizational
design should be dictated by your business strategy—and your strategy may require a different organizational model than
what currently exists.
There is no right or wrong organizational model. The type you choose will be entirely dependent on your company’s
goals and the structure it will take to get there.
Here are the most common types of organizational charts, their pros, and cons, and why you might choose one
type over another:
Hierarchical organizational model
This is the most common type of org chart. It shows the C-Suite at the top, followed by senior leadership, middle
managers, and further on down the line.
In hierarchical models, employees are usually grouped by department and skill set. The benefit to a hierarchical
model is that it’s familiar, stable, and has a clear chain of command that’s easy for employees to understand and follow.
However, there is often a disconnect between departments due to low visibility. It can also result in work delays, as
decisions go up the chain of command for approval.
This type of model can work for mid-size and enterprise-level businesses, as well as small businesses that are
looking to scale. As your organization grows, you will likely find yourself working with a hierarchical organization chart.

Matrix organizational model

A matrix model is when employees are grouped by project or product teams, and report to one or more functional
managers. So if you work in marketing, you might find yourself reporting to the head of the product team and the head of
the marketing team.
The benefit to a matrix organizational model is that it uses cross-functional groups, encouraging more open
communication and collaboration across departments. It could work well for a larger business that has a number of
product lines. However, many organizations that have used this model found that it created split loyalties between
different managers and resulted in conflicting priorities.

Flat organizational model

A flat organizational chart removes middle management, allowing for faster decision-making. Flat models work well
for newer companies and startups, where the need is for quick decision-making and risk-taking to get the company off the
ground. Autonomy in these types of organizations is pushed down to the lowest level possible to allow for rapid growth.
As your organization grows, you’ll likely need to shift away from a flat model. Eventually, there will be too many
direct reports for each executive to handle, and middle managers will handle some of the decision-making; this
streamlines and speeds things up.

Remove the names. Focus on roles and responsibilities.

Organizational models built around individuals are headed for dysfunction. Taking names out of the equation allows
you to focus on designing your organization optimally, rather than around specific individuals.
When you’re designing your organization, pay attention first to the roles your business strategy requires. What are
the core responsibilities and scope of each role? Then think about the reporting structure for each role. For example, if
your business strategy is to innovate and bring new products to market, ask yourself: does this individual have either the
autonomy to make the decision or quick access to a decision-maker? If not, you might need to change the reporting
structure on your org chart to allow them to more rapidly bring products to market.
With the names removed, think about how you’d design your company if you were starting from scratch. What key
roles would you include? What teams would you build? Who would be responsible for which aspects of your business
strategy? Select your organizational model from the answers to these questions, then turn your attention to how your
current employees fit into those roles.

8.2 WHY STRATEGY IMPLEMENTATION IS MORE DIFFICULT THAN STRATEGY FORMULATION.

If you're relatively new to management, you might be wondering what the term “strategy implementation” means.
Strategy implementation is the process of turning plans into action to reach a desired outcome. Essentially, it’s the art of
getting stuff done. The success of every organization rests on its capacity to implement decisions and execute key
processes efficiently, effectively, and consistently. But how do you ensure that implementing a strategy will be successful?

In the online course Management Essentials, Harvard Business School Professor David Garvin says successfully
implementing and executing strategy involves “delivering what’s planned or promised on time, on budget, at quality, and
with minimum variability—even in the face of unexpected events and contingencies."

While developing a strategy is one of the first steps to implementing organizational change, the implementation
itself is vital to a company’s success. Without an efficient implementation process, even the best-laid plans may not come
to fruition.

If you're a manager who wants to implement strategic change within your organization, follow these seven steps to
introduce and roll out a new strategy successfully.

In strategy formulation, strategies are designed and developed, and the best strategy is selected for
implementation in accordance with the objectives of the organization.

The existing business strategy is analyzed in the process of strategy formulation, and the ways in which it can be
enhanced is determined. In addition, the issues being faced by the organization are identified and solutions are
determined. Different plans are formed, keeping in view all the factors that are relevant for the organization. After this, the
strategy most appropriate is formulated so that it can subsequently be implemented in the next stage of strategic
management.

In any organization, strategy formulation is carried out at three levels, i.e. the corporate level, business level and
the functional level.
Strategy Formulation

Strategy formulation refers to the process of choosing the most appropriate course of action for the realization of
organizational goals and objectives and thereby achieving the organizational vision. The process of strategy formulation
basically involves six main steps. Though these steps do not follow a rigid chronological order, they are very rational and
can be easily followed in this order.

1. Setting Organizations’ objectives - The key component of any strategy statement is to set the long-term objectives
of the organization. It is known that strategy is generally a medium for realization of organizational objectives.
Objectives stress the state of being there whereas Strategy stresses upon the process of reaching there. Strategy
includes both the fixation of objectives as well the medium to be used to realize those objectives. Thus, strategy is
a wider term which believes in the manner of deployment of resources so as to achieve the objectives.
While fixing the organizational objectives, it is essential that the factors which influence the selection of objectives
must be analyzed before the selection of objectives. Once the objectives and the factors influencing strategic
decisions have been determined, it is easy to take strategic decisions.
2. Evaluating the Organizational Environment - The next step is to evaluate the general economic and industrial
environment in which the organization operates. This includes a review of the organization's competitive position. It
is essential to conduct a qualitative and quantitative review of an organization's existing product line. The purpose
of such a review is to make sure that the factors important for competitive success in the market can be discovered
so that the management can identify their own strengths and weaknesses as well as their competitors’ strengths
and weaknesses.
After identifying its strengths and weaknesses, an organization must keep a track of competitors’ moves and
actions so as to discover probable opportunities of threats to its market or supply sources.
3. Setting Quantitative Targets - In this step, an organization must practically fix the quantitative target values for
some of the organizational objectives. The idea behind this is to compare with long term customers, so as to
evaluate the contribution that might be made by various product zones or operating departments.
4. Aiming in context with the divisional plans - In this step, the contributions made by each department or division or
product category within the organization is identified and accordingly strategic planning is done for each sub-unit.
This requires a careful analysis of macroeconomic trends.
5. Performance Analysis - Performance analysis includes discovering and analyzing the gap between the planned or
desired performance. A critical evaluation of the organization's past performance, present condition and the desired
future conditions must be done by the organization. This critical evaluation identifies the degree of gap that persists
between the actual reality and the long-term aspirations of the organization. An attempt is made by the organization
to estimate its probable future condition if the current trends persist.
6. Choice of Strategy - This is the ultimate step in Strategy Formulation. The best course of action is actually chosen
after considering organizational goals, organizational strengths, potential and limitations as well as the external
opportunities.

Strategy Implementation

Strategy implementation is the translation of chosen strategy into organizational action so as to achieve strategic
goals and objectives. Strategy implementation is also defined as the manner in which an organization should develop,
utilize, and amalgamate organizational structure, control systems, and culture to follow strategies that lead to competitive
advantage and a better performance.

Organizational structure allocates special value developing tasks and roles to the employees and states how these
tasks and roles can be correlated so as to maximize efficiency, quality, and customer satisfaction-the pillars of competitive
advantage. But, organizational structure is not sufficient in itself to motivate the employees.

An organizational control system is also required. This control system equips managers with motivational
incentives for employees as well as feedback on employees and organizational performance. Organizational culture refers
to the specialized collection of values, attitudes, norms and beliefs shared by organizational members and groups.

Following are the main steps in implementing a strategy:

➢ Developing an organization having the potential of carrying out strategy successfully.

➢ Disbursement of abundant resources to strategy-essential activities.
➢ Creating strategy-encouraging policies.
➢ Employing best policies and programs for constant improvement.
➢ Linking reward structure to accomplishment of results.
➢ Making use of strategic leadership.
Excellently formulated strategies will fail if they are not properly implemented. Also, it is essential to note that
strategy implementation is not possible unless there is stability between strategy and each organizational dimension such
as organizational structure, reward structure, resource-allocation process, etc.

Strategy implementation poses a threat to many managers and employees in an organization. New power
relationships are predicted and achieved. New groups (formal as well as informal) are formed whose values, attitudes,
beliefs and concerns may not be known. With the change in power and status roles, the managers and employees may
employ confrontation behaviour.
 Main Differences between Strategy Formulation and Strategy Implementation

Strategy Formulation Strategy Implementation

Strategy Formulation includes planning Strategy Implementation involves all

and decision-making involved in those means related to executing the
developing an organization's strategic strategic plans.
goals and plans.

In short, Strategy Formulation is placing In short, Strategy Implementation is

the Forces before the action. managing forces during the action.

Strategy Formulation is an Strategic Implementation is mainly an

Entrepreneurial Activity based on Administrative Task based on strategic
strategic decision-making. and operational decisions.

Strategy Formulation emphasizes on Strategy Implementation emphasizes

effectiveness. efficiency.

Strategy Formulation is a rational Strategy Implementation is basically an

process. operational process.

Strategy Formulation requires Strategy Implementation requires

coordination among a few individuals. coordination among many individuals.

Strategy Formulation requires a great Strategy Implementation requires specific

deal of initiative and logical skills. motivational and leadership traits.

Strategic Formulation precedes Strategy Strategy Implementation follows Strategy

Implementation. Formulation.

Strategy formulation vs strategy implementation

Two of the most vital stages of a strategic management process are strategy formulation and strategy
implementation. In strategy formulation, various strategies are developed and the most appropriate one is then selected
so that the goals and objectives of the organization can be accomplished. On the other hand, when the strategy is actually
put into action, the process is known as strategy implementation. In other words, strategy formulation pertains to the
development of plans, while strategy implementation pertains to the application of those plans. When strategy formulation
is successful, it does not mean that there will be successful strategy implementation as the two are distinct from one
another. In this article, the two terms are described in detail and the differences between them are highlighted.

Strategy formulation
In strategy formulation, strategies are designed and developed, and the best strategy is selected for
implementation in accordance with the objectives of the organization.

The existing business strategy is analyzed in the process of strategy formulation, and the ways in which it can be
enhanced is determined. In addition, the issues being faced by the organization are identified and solutions are
determined. Different plans are formed, keeping in view all the factors that are relevant for the organization. After this, the
strategy most appropriate is formulated so that it can subsequently be implemented in the next stage of strategic
management.

The steps given below are part of strategy formulation:

● Developing long-term goals and objectives of an organization so that strategic decisions can be taken.
● Examining the organizational environment by performing the SWOT analysis. This analysis is carried out to
determine the strengths and weaknesses of the company, and monitoring the activities of the competitors to
comprehend the opportunities and threats.
● Establishing quantitative and measurable targets to ensure that both the short-term and the long-term goals of the
organization are attained.
● Developing targets for every level of the organization so that they work together to achieve organizational
objectives on the whole.
● Analyzing performance to determine the extent to which the actual performance of the organization is different from
the desired performance.
● Examining the different strategies and choosing the one that is most appropriate for the organization.
In any organization, strategy formulation is carried out at three levels, i.e. the corporate level, business level and
the functional level.
Strategy implementation
Strategy implementation is the next step of strategic management, where the strategy that has been developed is
executed with the aim of achieving organizational objectives. In strategy implementation, the decisions that have been
made earlier are converted into action.

Strategy implementation involves taking corrective actions so as to enhance performance and attain the desired
outcomes.

Strategy implementation typically involves the following activities:

● Assigning resources, including human resources, money, machinery, technology, etc. to activities that are needed
for the execution of strategy.
● Establishing policies and procedures
● Developing the organizational structure to facilitate the execution of strategy.
● Training the workforce
● Establishing a reward structure for achieving results.
● Adopting a strategic leadership approach within the organization.

Difference between strategy formulation and strategy implementation

The difference between strategy formulation and strategy implementation has been detailed below:

1. Meaning
Strategy formulation is the process in which the strategic objectives and plans of the organization are developed,
while strategy implementation signifies the process in which the strategy that has been determined is executed. In other
words, decisions are made in strategy formulation, which are then enforced in strategy implementation.

2. Key idea
In strategy formulation, all the forces required for action are positioned, while strategy implementation involves
managing those forces while they are being implemented.

3. Kind of process
Strategy formulation can be considered as a logical process as it involves a series of processes that flow in a
logical order. In contrast, the strategy implementation process is operational in nature.

4. Focus on
The focus of strategy formulation is on effectiveness, whereas the focus of strategy implementation is on efficiency.

5. Carried out by
It is the responsibility of the top management to formulate strategies and plans in accordance with the objectives of
the organization. These strategies are then implemented by the middle level management, i.e. the functional managers.

6. Skills required
Intuitive and analytical skills are mainly required for strategy formulation. On the other hand, strategy
implementation essentially requires motivational skills as well as leadership skills to coordinate several people to work
towards the same goal.

7. Type of function
Strategy formulation is an entrepreneurial function, while strategy implementation is an administrative function

Strategy formulation vs strategy implementation – tabular comparison

A tabular comparison of strategy formulation and strategy implementation is given below:

Strategy Formulation Strategy Implementation

Designing and developing organizational Executing the strategy developed

strategy

Positioning the forces Managing the forces

 Logical Operational

Effectiveness Efficiency

Top management Middle level management

Intuitive and analytical skills Motivational and leadership skills

Entrepreneurial function Administrative function

7 KEY STEPS IN THE IMPLEMENTATION PROCESS

1. Set Clear Goals and Define Key Variables

The first step of the process is straightforward: You must identify the goals that the new strategy should achieve.
Without a clear picture of what you’re trying to attain, it can be difficult to establish a plan for getting there.
One common mistake when goal setting—whether related to personal growth, professional development, or
business—is setting objectives that are impossible to reach. Remember: Goals should be attainable. Setting goals that
aren’t realistic can lead you and your team to feel overwhelmed, uninspired, deflated, and potentially burnt out.
To avoid inadvertently causing low morale, review the outcomes and performances—both the successes and
failures—of previous change initiatives to determine what’s realistic given your timeframe and resources. Use this past
experience to define what success looks like.
Another important aspect of goal setting is to account for variables that may hinder your team’s ability to reach
them and to lay out contingency plans. The better prepared you are, the more successful the implementation will likely be.

2. Determine Roles, Responsibilities, and Relationships

Once you’ve determined the goals you’re working toward and the variables that might get in your way, you should
build a roadmap for achieving those goals, set expectations among your team, and clearly communicate your
implementation plan, so there’s no confusion.
In this phase, it can be helpful to document all of the resources available, including the employees, teams, and
departments that will be involved. Outline a clear picture of what each resource is responsible for achieving, and establish
a communication process that everyone should adhere to.
Implementing strategic plans requires strong relationships and, as a manager, you’ll be in charge of telling people
not only how to interact with each other and how often, but also who the decision-makers are, who’s accountable for what,
and what to do when an unforeseen issue arises.

3. Delegate the Work

Once you know what needs to be done to ensure success, determine who needs to do what and when. Refer to
your original timeline and goal list, and delegate tasks to the appropriate team members.
You should explain the big picture to your team so they understand the company's vision and make sure everyone
knows their specific responsibilities. Also, set deadlines to avoid overwhelming individuals. Remember that your job as a
manager is to achieve goals and keep your team on-task, so try to avoid the urge to micromanage.

4. Execute the Plan, Monitor Progress and Performance, and Provide Continued Support
 Next, you’ll need to put the plan into action. One of the most difficult skills to learn as a manager is how to guide
and support employees effectively. While your focus will likely be on delegation much of the time, it’s important to make
yourself available to answer questions your employees might have, or address challenges and roadblocks they may be
experiencing.

Check in with your team regularly about their progress and listen to their feedback.

One effective strategy for monitoring progress is to use daily, weekly, and monthly status reports and check-ins to
provide updates, re-establish due dates and milestones, and ensure all teams are aligned.

5. Take Corrective Action (Adjust or Revise, as Necessary)

Implementation is an iterative process, so the work doesn’t stop as soon as you think you’ve reached your goal.
Processes can change mid-course, and unforeseen issues or challenges can arise. Sometimes, your original goals will
need to shift as the nature of the project itself changes.

It’s more important to be attentive, flexible, and willing to change or readjust plans as you oversee implementation than it
is to blindly adhere to your original goals.

Periodically ask yourself and your team: Do we need to adjust? If so, how? Do we need to start over? The answers to
these questions can prove invaluable.

6. Get Closure on the Project, and Agreement on the Output

Everyone on the team should agree on what the final product should look like based on the goals set at the
beginning. When you’ve successfully implemented your strategy, check in with each team member and department to
make sure they have everything they need to finish the job and feel like their work is complete.

You’ll need to report to your management team, so gather information, details, and results from your employees, so that
you can paint an accurate picture to leadership.

7. Conduct a Retrospective or Review of How the Process Went

Once your strategy has been fully implemented, look back on the process and evaluate how things went. Ask
yourself questions like:
Did we achieve our goals?
If not, why? What steps are required to get us to those goals?
What roadblocks or challenges emerged over the course of the project that could have been anticipated? How can we
avoid these challenges in the future?
In general, what lessons can we learn from the process?
While failure is never the goal, an unsuccessful or flawed strategy implementation can prove a valuable learning
experience for an organization, so long as time is taken to understand what went wrong and why.

Successful strategy implementation can be challenging, and it requires strong leadership and management skills.
Effective delegation, patience, emotional intelligence, thorough organizational abilities, and communication skills are
crucial.

Conclusion – Strategy formulation vs strategy implementation

Strategy formulation and strategy implementation are two important functions of strategic management. Strategy
formulation takes place before strategy implementation in this process. In strategy formulation, different strategies are
developed after analyzing the business environment, organizational vision for the future, and the resources and
competencies available. From these strategies, the strategy that is best for the organization is selected. This strategy is
then implemented in the strategy implementation process, where the strategy identified in the strategy formulation process
is put into action. These two processes are critical for an organization as they ensure that the organization accomplishes
its strategic plans and objectives and stays ahead of competition in the market.

Why is strategy implementation more difficult than strategy formulation?

Strategies are actions a company's management takes to build revenues, improve productivity and increase profits.
Strategy formulation involves making critical choices -- what products or services to sell, and where and how to sell them.

Many companies have an annual strategic planning process involving members of the management team in which
strategies for the upcoming year are formulated. From there, specific tactics -- also called tasks or projects -- are outlined
to implement the strategies.

A strategy, for example, might be to begin marketing the company's products in Mexico. During the implementation
phase, the management team must decide on the specific steps that must be taken to enter this new market, and
determine the company resources required to complete each step.
 ● Lack of Human or Financial Resources
Small companies in particular often have trouble implementing strategies because they do not have sufficient
personnel to accomplish all the tactics that have been drawn up. Financial resources can be a constraint on
implementation as well. Company management often finds it necessary to prioritize its strategies -- make a judgment
about which ones are most critical to implement given the finite or even scarce financial resources available.

● Difficulty of Planning the Sequence of Tactics

Implementation is a complex process because some strategies require a lengthy series of steps. A business
strategy may also require a degree of timing to be successful, such as deciding the best time of year to launch a new ad
campaign. Managers must be skilled at envisioning each of the steps and the amount of time that will be required to
complete each one, according to the Harvard Business School.

In the example about entering the Mexican market, a company that's new to international sales can find it difficult to
determine all the necessary tactical steps, and their sequence, in order to accomplish implementation smoothly and
without wasting financial resources.

● Resistance to Change
A change in strategic direction causes ripple effects of change throughout the organization. Entire departments or
divisions may have to be reorganized to implement the revised strategies. Reporting relationships may be redrawn. All
employees may not agree with the new strategic direction. They may resent the new responsibilities they have been
given, and, as a result, not put forth the maximum effort that is required for the new strategies to succeed.

Part of top management's job is to convince all members in the organization that the changes, in the long run, will
benefit everyone, according to American City Business Journals. If management communicates the reasons behind the
change in strategy, resistance can be minimized, and employees are more likely to support the decisions that were made.

● Necessity of Teamwork
Strategic implementation is not as simple as the small-business owner handing out a list of tasks and due dates to
each employee. Personnel within departments and across functional areas must build a spirit of teamwork, pulling
together to efficiently implement each strategy.

If there is friction within departments or functional areas, even the most brilliant strategies may not be successfully
implemented because vital communication will be lacking among team members. Successful implementation requires
everyone involved to contribute their knowledge, special skills and time.

For example, a retailer opening a new location will ask its marketing team to select the best location, but this
decision should be made in conjunction with the finance team. The financial staff will be asked to develop cost projections
for the new location, and to determine whether the company can afford the rent and other costs of the location
recommended by the marketing team.

Which stage in the strategic management process is most difficult?

The implementation stage is often the most difficult stage of strategic management simply because the
implementation process is often poorly defined. A poorly defined implementation process causes confusion and
uncertainty and makes it difficult, and often impossible, to successfully implement the strategy.
Strategy implementation is the most difficult stage in the strategic-management process because it requires
personal discipline, commitment and sacrifice. Successful strategy implementation hinges upon managers' ability to
motivate employees, which is more of an art than a science.
According to a quote often attributed to Yogi Berra, “In theory, there is no difference between theory and practice;
in practice, there is.” Strategic implementation is so difficult because it is much easier to draw up a list of ideas that should
hypothetically work than it is to make those ideas a reality.
Strategy Implementation is arguably the most important part of the entire strategic management process. At this
point, each member of the team should have a clear understanding of the plan and should know how they play a part
within it. This is the stage where your strategy is put into action.
The implementation stage of strategic management is often considered the most difficult stage of strategic
management. This does not have to be the case, however. Understanding the causes of implementation difficulties will
allow managers to avoid them and to successfully implement firm strategies.
Strategy is difficult because it not only entails difficult analytical thinking, but also involves combining that with
identifying actions to take, and with the challenges of moving both the analytical and the action components through the
organizational environment of a company.
Strategy implementation skills are not easily mastered, unfortunately. In fact, virtually all managers find
implementation the most difficult aspect of their jobs – more difficult than strategic analysis or strategy formulation.
Strategies that are not implemented constitute little more than academic exercises. The ability to implement
strategies is one of the most valuable of all managerial skills.
Strategy Implementation Often Considered the Most Difficult Stage in Strategic Management
The implementation stage of strategic management is often considered the most difficult stage of strategic
management. This does not have to be the case, however. Understanding the causes of implementation difficulties will
allow managers to avoid them and to successfully implement firm strategies.
Resources Are Often Lacking
Deciding to implement a strategy is one thing, but the actual implementation requires resources such as staff and
capital. Often, firms will create a strategy but fail to account for the resources that are needed to actually implement this.
Not surprisingly, this creates immense difficulties and, often, makes the implementation phase of strategic management
the most difficult.
Processes May Be Poorly Defined
The implementation stage is often the most difficult stage of strategic management simply because the
implementation process is often poorly defined. A poorly defined implementation process causes confusion and
uncertainty and makes it difficult, and often impossible, to successfully implement the strategy.
Lack of Support
The support of employees and managers is needed in order to successfully implement a strategy. When there is a
lack of support, people do not proactively make the changes that are needed to adapt to the strategy. This creates large
difficulties for strategy implementation.
No Follow-up
One of the largest difficulties in strategic management occurs when there is no followup to the strategy
implementation. When this happens, managers simply enact a strategy but fail to check if it has been successfully
implemented. This makes the implementation difficult, because there is no way to ensure that it has been successful.
Put Your Strategic Plan To Work With Implementation
Implementing your strategic plan is as important, or even more important, than your strategy. It is the critical
actions that move a strategic plan from a document that sits on the shelf to actions that drive business growth. The sad
reality is that the majority of companies who have strategic plans fail to implement. Don’t be part of the majority!
According to a Fortune cover story, nine out of ten organizations fail to implement their strategic plan for the following
reasons:

● 60% of organizations do not link strategy to budgeting

● 75% of organizations do not link employee incentives to strategy
● 86% of business owners and managers spend less than one hour per month discussing strategy
● 95% of a typical workforce does not understand their organization’s strategy

A strategic plan provides a business with the roadmap it needs to pursue a specific strategic direction and set of
performance goals, deliver customer value, and be successful. However, this is just a plan, it does not guarantee that the
desired performance will be reached any more than having a roadmap guarantees the traveler will arrive at the desired
destination. However, the more complete and purposeful the implementation, the more successful the company will be in
the marketplace.
Implementation is the process that turns strategies and plans into actions in order to accomplish strategic
objectives and goals. Whereas the strategic plan addresses the what and why of activities, implementation addresses the
who, where, when, and how. It is believed that implementation is as important, or even more important, than strategy. The
fact is that both are critical to success. In fact, companies can gain competitive advantage through implementation if done
effectively.

Example article on why strategy implementation is more difficult:

“This Airline is So Going to Shut Down!” – A Strategy Faux Pas
In this article, I take the example of an airline's poor execution of its strategy and what it tells about the
importance of strategy implementation. Further, I talk about the reason why strategy implementation is tougher
than strategy formulation.
This article and an experience that I will share here will help you explain why strategy implementation is more
difficult than strategy formulation.
“If you were to make me a 10-slide presentation on the Marketing Strategy of anything, the last 8 of them should be
on how you’re going to implement whatever you have formulated in the first 2”
These are golden words of one of my mentors in the really early part of my career. This is true. It got even more
clear to me in one of the electives that I took during MBA.
It was an elective on Strategic Marketing.
The kind of time and effort we were told to put on marketing strategy implementation went on to explain why
strategy implementation is more difficult than strategy formulation.
Considering how many large corporations really mess up the strategy implementation part, it makes it a piece of
really good advice that my mentor gave me early on.
And when you see so many strategy implementation faux-pas, you would begin to think, was the strategy even a
good one?
Most cases of confused positioning also happen to be the cases of poor strategy implementation.
What is on paper is not in play.
And what is in play was never supposed to be like that.
Pretty much like a multiple personality disorder in a person.
A bad strategy need not really be a bad strategy per se. It could be just a really bad execution of a strategy that
was actually quite good.
Whereas a good strategy with a good strategy execution makes a good strategy really good and useful.

A little about the Indian Aviation Industry

I have very recently started flying more frequently than I ever did. I am someone who completely enjoys the
experience of a good airport and flight experience (and I really regret that Kingfisher got busted before I traveled by air for
the first time).
 But since Kingfisher went bust, the aviation industry in India has moved ahead in sort of two steps. One was the
introduction of the budget airlines like Indigo, SpiceJet and Go Air which made flying possible for a big chunk of the Indian
mass.
The other was the downturn of the industry leading to a floundering state of certain established airlines like Jet
Airways and a further worsening of state of affairs for the already sluggish Air India.
These two steps did not happen simultaneously. There was a period of time when both the budget carriers and
established carriers co-existed.
However, with growing cost pressures due to increasing fuel prices and operating expenditure, the budget carriers
proved to be more pressure resistant.
And naturally, also due to the competition within the industry, it made complete sense for most of the carriers to
offer tickets at really competitive prices.
Mind you, this is irrespective of what their initial positioning as a brand was.
Being low on price turned out to be a necessity and adopting measures to make the airlines low on cost was the
solution.
It meant a total change of strategy.
And here comes the part which would explain why strategy implementation is more difficult than strategy
formulation.

A Recent Funny Flight Experience

This goes back to a few months back when I was traveling on board this 20-something-year old private airline of
India.
I have already mentioned the name of this airline somewhere up there in the article and you will be able to easily
guess it as you read more.
This airline which began services in the early ’90s is said to have come in and redefined the onboard experience
back in the day.
Compared to a really humble Indian Airlines experience, this airline modeled every aspect of their service on the
benchmark of the international standards.
Even its frequent flyer program that was one of the first and the best loyalty programs in the Indian market is not
that sought after anymore.
When I had booked that flight I came to know that the airline had recently discontinued free meals on two out of its
five seat classes.
Instead, it had introduced what it called a ‘Gourmet Menu’ from which one could order food onboard with on-the-
spot payment.
For the kind of food that is served on airlines, ‘Gourmet’ is a slight misrepresentation of facts. And it is nowhere
close to the real in-flight gourmet food that you see in the image I found on the internet above.
It was funny and I smirked at the thought of what they called Gourmet.
Then came the day of my flight.

This Airline is So Going to Shut Down!

I was on-board, mid-air when the hostesses rushed in with their food carts to quickly cover the 30 rows in this short
1-hour flight.
This discontinuation of food for two out of the five seat classes meant that the air hostesses had to keep with them
a list of passengers who were from the other three classes and were entitled to the food.
Check. A long printed list was there with the air hostesses.
Now with this discontinuation of the free meals, it could have been possible that a person in say seats 14A and in
14C could be traveling with the ticket which had the meal on it, whereas the person on 14B was not in those three seat
categories which were entitled to the meal.
Now, this situation was very much unfamiliar for an airline that served food to every passenger since forever and, in
fact, took pride in having a great in-flight food experience.
This was clearly unlike Indigo Airlines, which basically had such a strategy and systems in place from day one and
therefore had their crew completely smooth in this scenario.
For Jet Airways it was extremely new to be picking out passengers and serving food selectively.
I was somewhere in row 7-8 in that flight and I could see the challenge this pretty lady was facing already before
she even got to my row. This was, in fact, true for both the ladies that were in charge of the cabin that morning.
Some of the things that happened were:
● They looked clearly impractical at handling this new system of the list. It turned out that the list had an error
somewhere and a person who was supposed to get a meal (as it was mentioned on his boarding pass as well)
was not on the list. This took a few minutes of checking the boarding pass and unpleasant exclamations for her
and the crew to sort that out.
● The menu was a new one. Jet Airways never worked with a menu kind of a concept. They always had a fixed
menu. It was funny how one of the passengers called out for an order of a particular sandwich and both the
cabin ladies had a tough time understanding which sandwich was it that the person wanted out of the 4-5 types
of sandwich that their cart had.
 ● Another passenger who ordered something paid in cash with a much higher denomination of the currency. I
could see how all hell broke loose after that. It became a challenge for the lady to find change to return to the
flyer.
● Although she told the passenger that she would return the change in the due course of the flight, it got clear to
her eventually in the next few rows that it might not be possible. That is because everyone had only big notes
to offer and the crew did not have currency on themselves to make the return.
● Adding on to this ruckus they made an announcement that they will either accept only cards or currency
exactly equal to the product price.

And it was exactly then that I couldn’t really take it anymore. I laughed. “This airline is going to shut down”, I
thought to myself.

Let me Explain Why Strategy Implementation is More Difficult Than Strategy Formulation
This is a classic example of how successfully implementing strategic decisions is the only way to ensure that any
strategy will be a success.
Behaving like a low-cost airline was a strategic decision that this airline chose to make. But, it is clear that there is
much more to it than just behaving like one.
For a start, there have to be micro and macro level changes that should be brought about to make the
implementation of the strategy a success.

So, in this case, the management should have reflected more on the implementation of whatever they thought was
a good strategy to think:
● What systems do we have in place to cull-out a list of flyers who are entitled to a meal?
● Have I put in the menu cards in the flights coming in straight from the printing press or have I trained my cabin
crew on what is in the menu? What thing is which? And maybe what does each of the things taste like?
● If we are accepting payments by cash, are we keeping enough cash with the cabin crew already to give back
the change?
● Again, have we really thought about the implementation at a micro level and do we think that this can be
executed without any hassles?

Basic things to think about and do, right?

But this is where great strategies fall flat. And that’s the reason which will explain why strategy implementation is
more difficult than strategy formulation.
That’s because good strategy execution requires that all the resources, people and brand elements involved in that
interaction need to be in line with the strategy.
And implementation and execution are the moment of truth when that happens.

Conclusion
I believe that the greatest barriers to strategy implementation are not being able to think the entire experience
through and not making ready the resources to carry out the implementation part.
The example that I shared above shows how an airline that decided to change its course, its strategy and did not
do a really good job in the strategy implementation part.
Implementation and execution of strategy turn out to be the most important thing that you as marketing strategists
need to take care of. Because no strategy will be worth anything if it is not backed up by good implementation.

8.3 IMPORTANCE OF ANNUAL OBJECTIVES AND POLICIES IN ACHIEVING ORGANIZATIONAL FOR

STRATEGIES TO BE IMPLEMENTED.

Strategy implementation requires a firm to establish annual objectives, devise policies, motivate employees, and allocate
resources so that formulated strategies can be executed.  Strategy is the grand design or an overall ‘plan’ which an
organization chooses in order to move or react towards the set objectives by using its resources. Strategies most often
devote a general programmed of action and an implied deployment of emphasis and resources to attain comprehensive
objectives. An organization is considered efficient and operationally effective if it is characterized by coordination between
objectives and strategies. There has to be integration of the parts into a whole. Strategy helps the organization to meet its
uncertain situations with due diligence. Without a strategy, the organization is like a ship without a rudder. It is like a
tramp, which has no particular destination to go to. Without an appropriate strategy effectively implemented, the future is
always dark and hence, more are the chances of business failure.
Strategy is a major course of action through which an organization relates itself to its environment particularly the
external factors to facilitate all actions involved in meeting the objective of the organization.
·    Strategy is the blend of internal and external factors. To meet the opportunities and threats provided by the
external factors, internal factors are matched with them.
·    Strategy is the combination of actions aimed to meet a particular condition, to solve certain problems or to
achieve a desirable end. The actions are different for different situations.
 ·    Due to its dependence on environmental variables, strategy may involve a contradictory action. An
organization may take contradictory actions either simultaneously or with a gap of time. For example, a firm is
engaged in closing down of some of its business and at the same time expanding some.
·    Strategy is future oriented. Strategy actions are required for new situations which have not arisen before in
the past.
·    Strategy requires some systems and norms for its efficient adoption in any organization.
·    Strategy provides overall framework for guiding enterprise thinking and action.

The purpose of strategy is to determine and communicate a picture of enterprise through a system of major
objectives and policies. Strategy is concerned with a unified direction and efficient allocation of an organization’s 
resources. A well made strategy guides managerial action and thought. It provides an integrated approach for the
organization and aids in meeting the challenges posed by environment.

In implementing strategies, annual objectives and policies play an important role. Annual objectives are specific,
measurable statements of what a business is expected to achieve within an annual period. These are usually one part or
phase of the organization’s longer-term goals. To conclude, annual objectives are desired milestones an organization
needs to achieve to ensure successful strategy implementation.

   In the generic definition, annual objectives are simply the company’s goals for a calendar year. In most cases these
goals should target a degree of improvement. In addition, it is a key component of policy deployment. Strategies are
turned into three to five-year breakthrough objectives. The current year’s goals are stripped off of these breakthrough
objectives and become annual objectives. Most annual objectives should be frontloaded, meaning that the majority of the
gains should happen sooner rather than later.

         Establishing annual objectives is a decentralized activity that directly involves all managers in an organization. The
use of decentralization within the organization wherein all management actively participates toward implementing the
strategy that has been established will be essential for successful strategy implementation. In any organization, the
necessity to engage in strategic management is imperative as it will allow for the organization to establish the blueprint for
how managers, employees, and other stakeholders will achieve organizational goals.

         Active participation in establishing annual objectives can lead to acceptance and commitment. 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; and (4) establish
organizational, divisional, and departmental priorities.

They should be established at the corporate, divisional, and functional levels in a large organization. Also annual
objectives should be stated in terms of management, marketing, finance/accounting, production/operations, research and
development, and information systems accomplishments.

       Annual objectives are placed upon the allocation of resources, which is one of the reasons why they are essential for
strategy implementation because any successful implementation relies on resources being allocated to the appropriate
departments. Annual objectives also enable the organization to evaluate the performance of managers, which is essential
for ensuring that management is achieving the goals and objectives set forth by the strategy. Without effective evaluation
techniques, managers who are failing to succeed will continue to engage in negative practices that inhibit the strategy
from being successfully implemented.

Annual objectives assist the organization in ensuring that long-term success occurs as the organization is able to
monitor the implementation and how it is progressing over a long-term basis. The different departments and divisions
throughout the organization are able to ascribe to the allotted objectives and strive towards a common goal with annual
objectives.

       Considerable time and effort should be devoted to ensuring that annual objectives are well conceived, consistent with
long-term objectives, and supportive of strategies to be implemented. We must always remember that annual objectives
should be measurable, consistent, reasonable, challenging, clear, communicated throughout the organization,
characterized by an appropriate time dimension, and accompanied by commensurate/appropriate rewards and sanctions. 

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
 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. Annual objective should be:
a. consistent across hierarchical levels and form a network of supportive aims. Horizontal consistency of objectives is as
important as vertical consistency of objectives.
b. measurable, consistent, reasonable, challenging, clear, communicated throughout the organization, characterized by
an appropriate time dimension, and accompanied by commensurate rewards and sanctions. (SMART – specific,
measurable, attainable, realistic, timely)
c. Too often, objectives are stated in generalities, with little operational usefulness.
d. Annual objectives should be compatible with employees’ and managers’ values and should be supported by clearly
stated policies.

Clear annual objectives do not guarantee successful strategy implementation, but they do increase the likelihood
that personal and organizational aims can be accomplished. Overemphasis on achieving objectives can result in
undesirable conduct, such as faking the numbers, distorting the records, and letting objectives become ends in
themselves. Therefore managers must be alert to these potential problems.

WHAT ARE OBJECTIVES?

Objectives are the specific measurable results of the initiative. Objectives specify how much of what will be accomplished
by when.

There are three basic types of objectives. They are:

Process objectives. These are the objectives that provide the groundwork or implementation necessary to achieve your
other objectives. 
Behavioral objectives. These objectives look at changing the behaviors of people (what they are doing and saying) and
the products (or results) of their behaviors. 

Community-level outcome objectives. These are often the product or result of behavior change in many people. They
are focused on change at the community level instead of an individual level. 

*It's important to understand that these different types of objectives aren't mutually exclusive. Most groups will develop
objectives in all three categories.

Objectives should be S.M.A.R.T. + C.:

Specific. That is, they tell how much (e.g., 10%) of what is to be achieved (e.g., what behavior of whom or what outcome)
by when (e.g., by 2025)?
Measurable. Information concerning the objective can be collected, detected, or obtained.
Achievable. It is feasible to pull them off.
Relevant to the mission. Your organization has a clear understanding of how these objectives fit in with the overall vision
and mission of the group.
Timed. Your organization has developed a timeline (a portion of which is made clear in the objectives) by which they will
be achieved.
Challenging. They stretch the group to set its aims on significant improvements that are important to members of the
community.

WHY SHOULD YOU CREATE OBJECTIVES?

There are many good reasons to develop objectives for your initiative. They include:
A. Having benchmarks to show progress. 
B. Completed objectives can serve as a marker to show members of your organization, funders, and the greater
community what your initiative has accomplished.
C. Creating objectives helps your organization keep focused on initiatives most likely to have an impact.
D. Keeping members of the organization working toward the same long-term goals.

WHEN SHOULD YOU CREATE OBJECTIVES?

Your community organization should create objectives when:
 Your organization has developed (or revamped) its vision and mission statements, and is ready to take the next
step in the planning process.
 Your organization's focus has changed or expanded. For example, perhaps your organization's mission relates to
care and caring at the end of life. You have recently been made aware of new resources, however, to positively
affect the lives of those deeply affected by the death of a loved one. If your organization were to apply for this new
grant, it would clearly expand upon your current work, and would require objectives as you developed your action
plan.
 The organization wants to address a community issue or problem, create a service, or make a community change
Long-Term Objective and Supporting Annual Objectives
When developing long-term objectives, it is always important to focus on the vision of a firm. For instance, a
developing manufacturing company may set its long-term objectives as the achievement of ISO 9001:2008. This quality
management system is based on eight principles defining how a firm should work to ensure that it meets the needs of its
customers in the best way possible using superior production and management strategies. In order to achieve these long-
term objectives, the following annual objectives will be very important:
 To cut the cost of production and improve efficiency at the plant by using emerging technologies
 To understand the needs of the customers and be able to create products that meet these needs in the best way
possible
These two annual objectives may be of benefit to the firm as it seeks to achieve its long-term objective of ISO 9001:2008

Policies
  Objectives are the principles that guide a business, and policies are the rules that embody these objectives. When
policies align with objectives, a business operates in service of an overall idea that unifies its products and its protocols.
When a company's policies do not support its objectives, employees may feel disoriented, confused or disillusioned.

        Policies are usually guidelines which facilitate the ability of a company or organization to reach predetermined
objectives formulated by top-level management.  Business objectives are generally the endpoints associated with plans
designed to reach company goals. Both policies and business objectives may be formulated into plans as determined by a
business organization. While the objective is the end to a plan, policy is the mode and manner used to reach each
objective.

Definitions:
A. Changes in a firm’s strategic direction do not occur automatically. On a day-to-day basis, policies are needed to make
a strategy work.

B. Broadly defined, policy refers to specific guidelines, methods, procedures, rules, forms, and administrative practices
established to support and encourage work toward stated goals.

C. Policies let both employees and managers know what is expected of them, thereby increasing the likelihood that
strategies will be implemented successfully.
       
 On a day-to-day basis, policies are needed to make a strategy work. Policies facilitate solving recurring problems
and guide the implementation of strategy. Broadly defined, 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. Policies set boundaries, constraints, and limits on the kinds of administrative
actions that can be taken to reward and sanction behavior; they clarify what can and cannot be done in pursuit of an
organization’s  objectives. 

          Policies let both employees and managers know what is expected of them, thereby increasing the likelihood that
strategies will be implemented successfully. They provide a basis for management control, allow coordination across
organizational units, and reduce the amount of time managers spend making decisions. Policies also clarify what work is
to be done and by whom. They promote delegation of decision making to appropriate managerial levels where various
problems usually arise. Many organizations have a policy manual that serves to guide and direct behavior.  Policies are
designed to guide the behaviour of managers in relation to the pursuit and achievement of strategies and objectives.
Policies are instrument for strategy implementation.

The term policy has various definitions in management literature. Some authors equate policy with strategy. Others
do this inadvertently by using "policy" as a synonym for company mission, purpose or culture. Policy much more narrowly
as specific guides to managerial action and decisions in the implementation of strategy. This definition permits a sharper
distinction between the formulation and implementation of functional strategies.

Policy refers "to specific guidelines, methods, procedures, rules, forms, and administrative practices established to
support and encourage work towards stated goals." Most authors consider procedures and rules to be policies.
Procedures can be defined as chronological steps that must be followed to complete a particular action; rules can be
defined as actions that can or cannot be taken. Neither a procedure nor a rule provides much latitude in decision making,
so some writers do not consider either to be a policy.

Policies and procedures help enforce strategy implementation in several ways:

 Policy institutionalizes strategy-supportive practices and operating procedures throughout the organization.
 Policy reduces uncertainty in repetitive and day-to-day activities in the direction of efficient strategy execution.
  Policy limits independent action and discretionary decision and behavior. Procedures establish steps how things
are to be handled.
 Policy helps align actions and behaviors with strategy. This minimizes zigzag decisions and conflicting practices
and establishes consistent patterns of action in terms of how the organization is attempting to make the strategy
work.
 Policy helps to shape the character of the working environment and to translate the corporate philosophy into how
things are done, how people are treated, and what corporate beliefs and attitudes mean in terms of everyday
activities.
 Policy helps establish a fit between corporate culture and strategy.

Koontz and O'Donnell suggest that the following principles determine the potential effectiveness of policies in relation to
strategy implementation:
 Policies should reflect objectives
The existence of a policy can only be justified if it leads to the achievement of the organization's objectives.
 Policies should be consistent
Policies which conflict with each other should be avoided.
 Policies should be flexible
In general policies should neither be ignored nor departed from indiscriminately.

The extent to which a policy is mandatory, as opposed to advisory, should be clear.

 Policies should be communicated, taught and understood
It is important to ensure that employees understand the existence and meaning of policies, and appreciate why
they exist.
 Policies should be controlled
Stated policies can be assessed and controlled as part of any formal planning system and strategic review.

Policies may be written and formal or unwritten and informal. There are at least seven advantages to formal written
policies:
 Managers are required to think through the policy's meaning, content, and intended use.
 The policy is explicit so misunderstandings are reduced.
 Equitable and consistent treatment of problems is more likely.
 Unalterable transmission of policies is ensured.
 Authorization or sanction of the policy is more clearly communicated, which can be helpful in many cases.
 A convenient and authoritative reference can be supplied to all concerned with the policy.
 Indirect control and organizational coordination, key purposes of policies, are systematically enhanced.

Policies can exist for any functional tasks undertaken by the organization. Moreover, effective decisions cannot be
made without regard to their impact on other areas of the business. In addition, Policies are empowerment tools. They
simplify decision making. The guide the decision and action of managers their subordinates in strategy implementation.
They provide standard operating procedures. They are generally formal and written. The roles of policies in strategy
implementation are:
A. Policies promote uniform handling of similar activities. This coordinates tasks. Frictions are reduced.
B. Policies ensure quicker decisions by standardizing answers to routine problems. They empower employees.
C. Policies reduce uncertainty in day-to-day decision making. They provide predetermined answers.
D. Policies establish a consistent pattern of managerial actions.
E. policies reduce resistance to organizational strategies.
F. Policies establish indirect control over independent action. Misunderstanding. They improve job performance.
G. Policies help understand the business environment

Importance of Your Business Policy

The policies and methods of implementation you choose as a business leader to adopt will directly affect how your
employees perform. Some business leaders don't want to have everything in a rigid format while others like to implement
specific processes at every stage of the company operational process. This is a business owner's decision.
Keep in mind that some policies and procedures are designed to prevent legal issues while others are designed to
build a company image, experience and culture. A business leader should be aware of how policies are affecting his
team. If a dress code is becoming a problem for the majority of employees, a new policy such as a casual Friday policy
could change the office dynamic in a positive direction. If no cell phone policy exists but employees are spending hours on
personal calls, texts and social media then a new policy with training should be implemented and managed to improve
productivity. Managers should regularly evaluate company policies and their effectiveness to the business' success.

Building Business Policies

Establishing policies generally starts with a business owner or his initial leadership team writing an employee
handbook and business plan with mission and vision. The team must consider what are standard policies regulated by
federal and state regulations. Some regulated policies include privacy policies, anti-discrimination rules, overtime and
holiday pay and even healthcare programs.
 Most businesses will find these regulated rules are similar among many companies though some companies decided
to go beyond the required policies. Then there are the operations and cultural policies. These include the image that
leaders want the company to have and the internal corporate culture they are working to establish. Everything from dress
code to smoking at work might be defined by a business policy.
Once the main policies are created, business leaders must keep a pulse on how employees and customers respond
to the policies. If a policy is having a negative impact on the overall productivity of the company, feedback must be sought
and adjustments considered. Every business leader must have this as his own policy for success. Businesses are fluid
entities that are always changing. Being too rigid can result in negative performance and negative results.
Troubleshooting production problems sometimes start with troubleshooting business policies.

Why are policies important

Policies provide guidance, consistency, accountability, efficiency, and clarity on how an organization operates. This offers
members of the co-operatives guidelines and principles to follow.

Guidance
 Policies define the goals of an organization and provide guidance about how to achieve objectives.
 Policies identify key activities, such as the collection of rental arrears and capital replacement planning.
 Policies also address things
 Policies can also provide guidance for the board on how to handle issues as they arise.
Consistency
 Established policies and procedures ensure the organization’s processes do not deviate or deteriorate over
time, even if key board members, contractors or employees leave.
 Consistent policies also help new board members get up to speed quickly on how the organization operates and
what’s expected of them as a board member.

Accountability
 When policies and procedures are well established and consistently followed, an organization can refute
allegations of unfairness or legal violations that residents may file against it.

Efficiency
 Formal, written policies and procedures improve overall organizational performance by keeping everyone “on
the same page” when it comes to expectations and issues.
 While organizations can operate without written housing policies and procedures, operations tend to be much
more efficient and effective with them in place.

Clarity
 When everyone is 100% clear about what needs to be done, how it needs to be done and who’s responsible for
doing it, it leads to smooth operations.

Objective vs Policies
The difference between objectives and policies is that objectives are the goals that are desired to be accomplished
whereas policies are the tools to achieve them.
Any organization should be well aware of its objectives at the primary level so that they are not rendered directionless in
the future. The objectives are of the utmost importance whereas policies, on the other hand, are important means of
progress but are not indispensable.
Policies are the designed system of principles that guide people or organizations to achieve the desired goals. It is a
statement that is implemented and followed as a procedure or the protocol.
Objectives are the goals to be achieved whereas policies help to achieve these goals by setting a set of rules and
guidelines for the process to be followed to achieve those goals. Objectives form the basis of any kind of organization.

Parameters of
comparison Objective Policies

Objectives are the set of predetermined

ideas or goals for any organization or the Policies are the means to achieve
individual to achieve the desired the desired goals by stating
Definition destination. various guidelines and set of rules.

These are of the primary and utmost Policies are not of basic
importance to the individual and the importance to the existence of the
Need organizations. organization.

Objectives are required for better Policies are required to provide an

functioning of any organization to let them organized way of achieving what
Importance fall directionless. is desired.

Curators Objectives are usually created by the top- Policies can be created or
level officials of the management suggested by anyone in the
Parameters of
comparison Objective Policies

companies. organizational committee.

The purpose of the objective is to The main purpose of the policies

summarize the plans of the company in a is to help in the achievement of
Purpose precise manner the objectives.

Relationship between Annual Objectives and Policies

There exists a close relationship between annual objectives and policies within an organizational setting. Annual
objectives focus on how to implement strategies based on the realities within an organization. It involves understanding
the capacity of the employees and the organization in general and then setting specific goals that should be achieved
based on these capabilities. Policies, on the other hand, look at the rules, procedures, guidelines, or administrative
practices that are put in place by the top management to define how stakeholders should work towards achieving the
vision of an organization.
After setting annual objectives, the managers will need to ensure that the set policies within the firm are followed
to make it easy to predict their pattern of work. The policies will help in defining the dos and don’ts that should be followed
in the implementation process. The policies define organizational culture, and when implementing annual objectives,
employees are bound by the culture to work in a given pattern.

8.4 THE RELATIONSHIP BETWEEN PRODUCTION/OPERATIONS AND STRATEGY IMPLEMENTATIONS

In the growing global competition, the productivity is the key for the survival of any business organization. Among
different functions in an organization, production/ operations function is a vital function which does the Job of value
addition to product/service, respectively. Maximizing the value addition automatically results in productivity improvement.
This can be done starting from the stage of product development and concentrating on various other intermediate tasks
and finally through implementation of proper quality control system and maintenance of equipments. This amounts to
tackling the management issues in each and every sub system of production/operation function.

Production/operations function is that part of an organization which is concerned with the transformation of a
range of inputs into required outputs (product/services) having the required quality level. Production and Operation are
major factors which are taken in consideration when implementing strategy of an organization. Strategy begins with goals,
which naturally follow from an entity’s mission. But for practical purposes goals cannot stand in isolation. They are
informed by an repetitive sensing of the external environment and the organization’s internal capabilities. Implementing
Business Strategies Business strategizing is much more than visioning, planning and forecasting.

Any part of the industrial process that is treated as a distinct element for the purposes of such design and
organizational considerations as planning, accounting, and control. A production operation is characterized by stability in
both the labor process and the equipment used by the operator. Distinctions are made between basic technological
operations, auxiliary operations, and servicing operations.

Technological operations consist of purposeful changes in the form, size, and condition of raw materials or semi
finished products, or in the structural, mechanical, physical, or other qualities of these materials and products. These
changes are made with the instruments of labor in order to obtain the product of labor. Technological operations are part
of the technological process of a production shop, section, or assembly line. They are carried out at a particular work
position on a single object or on several simultaneously processed objects by a single worker or production brigade.
Where production is automated, workers may either have no role in technological operations or they may function
merely as observers.

Technological operations may be automatic or semiautomatic; they may be machine operations, combined hand-
and-machine operations, or purely hand operations; they may also be done by special instruments. The component
structure of a technological operation varies according to the exact nature of the technological process. The constituent
elements of technological operations are positioning (ustanovka), cutting (perekhod), and passing (prokhod). Every
change in position of the work piece while the operation is being performed is called a reposition; each new surface
produced by a tool constitutes a new cut. A cut that results in a single layer of material being removed is called a pass.
 Production planning focuses on technological operations and on the allocation of equipment for these operations.
Norms are set for the amount of labor, materials, energy, and equipment time to be expended on each technological
operation. The labor of operators is rated and paid in terms of the technological operation performed, and in some cases
quality control measures are applied to each technological operation.

Auxiliary operations are production operations involving the enterprise’s construction of the technical equipment and
the instruments needed for the manufacturing process. These operations also include repairs to equipment, buildings, and
other facilities. Servicing operations provide materials, semi finished products, and energy for the basic and auxiliary
industrial processes. They also provide transport and inspection services, as well as laboratory testing and research.

One of the goals in organizing production is to combine all technological, auxiliary, and servicing operations in
space and time in such a way that an even rhythm of production is assured, conditions are created for a high level of labor
productivity, and the fixed and working capital of the enterprise are used as effectively as possible.

In this modern age of changing economies rapidly, all substantive issue of strategy have been redefined as issue
of implementation. Nowadays business strategy of an organization is more focused between the internal capabilities of
the company and its external environment. The modern subject of business strategy is a set of analytic techniques for
understanding better, and so influencing, a company’s position in its actual and potential marketplace”.
Production/Operation management is the process which combines and transforms various resources used in the
Production/Operation subsystem of an organization into value added product/services in a controlled manner as per the
policies of an organization. Production system is consist of input and output. Inputs are resources required for the
manufacture of a product or service.

Outputs are direct outcome (actual product or service) or indirect outcome (taxes, wages, salaries) of a
production system. When it comes to operations, organization concern more on cost, quality of product, reliability and
atmosphere at work. Organizations do change there strategies due to current PESTEL (Political, Economical, Social,
Technological, Environmental and Legal) factors. Political Factor Political factor refers to the government policies, current
government system in the country, political stability. This is a major factor for implementing strategy in an organization.

Political factor can create advantages and opportunities for an organization. Economical factor This factor refers to
economical situation. All organizations are affected by current national and international economical situation. This could
be current exchange and inflation rate, economical growth, current interest rate. Social factor Social factor affects our
attitude, interest and opinion. This factor affect a lot when we implement strategy. It tends to increase production of a
business due to some social reasons. Like in Christmas times, people buy more gifts and decoration stuff.

Organizations should follow current social factors to be on track. Change in social behaviour also affects on
operations as staffs tendency to work. Technological factor New technologies can create new products and affect on
operations. As new technology comes in it helps in development of a product and all over changes to the operations of an
company.

Technology can reduce cost of a product and helps in improving its quality. Environmental factor This is a major
issue in implementing strategies nowadays. It involves weather and climate changing. World is going through climate
changes.

In recent months we have seen a lot of snow in Britain. This had a major affect on businesses. People could not
come to work due to heavy snow. Production was slow. Demand of non common things were high. Legal factor Legal
factor can affect how a company operates, demand of its product and its cost. This factor involve legislation in which
company operates. Changes in health and safety law, consumers law and employment law has a major affect on planning
strategies of an business.

 Political e. g. EIJ enlargement, the Euro, international trade, taxation policy Economic e. . interest rates, exchange
rates, national income, inflation, unemployment, Stock Market Social e.
 g. ageing population, attitudes to work, income distribution Technological e. g. innovation, new product
development, rate of technological obsolescence Environmental e. g.
 global warming, environmental issues Legal [pic] e. g. competition law, health and safety, employment law SWOT
analysis also have a great impact in business strategy of an organization. It gives a brief idea of strength,
weakness, opportunities and threat of an organization.
 This helps them to improve their operations and quality of product. As we can take an example of Pizza Hut. Pizza
Hut is a international brand and always has first mover advantage. Running a business involves planning for current era
and future. Pizza Hut has adopted many different strategies to achieve its targets. People behavior keep changing by time
to time.

Strategy changes time by time when launching a new product. Focusing customers as new competitors Jump in the
race. Operations within the store also keep changing. This result in different business strategy.

Pizza Hut follow a product development strategy. This involve substantial modification of or additions to its present
product range, which in turn might require extensive research and development. Pizza Hut keep widen their product range
by introducing new product to its menu. They lead market segment, they have money to indulge in research and
development. Operation strategy concerns the prototype of strategic decisions and actions which set the role, objective
and activities of the operation. The term ‘operations strategy sounds at first like a contradiction.

First we perform the Analysis of an organization, what are its needs and key points and then we make choice of
what strategy to adopt and then we implement strategy. Production [operations limits, competence, and course of actions
can greatly improve or inhibit the ability of objectives. Production processes is normally consist of more than 70 percent of
a firms total assets. (Fred David 2005) An important part of the strategy implementations process takes place at the
production site.

Production related decisions on plant size, , plant location, product design, , kind of tooling, size of inventory,
inventory control, quality control, cost control, choice of equipment , use of standards, Job specialization, employee
training, equipment and recourse utilization shipping and packaging, and technological innovation can have a major
impact on the success or failure of strategy implementation efforts.

Example of adjustment in production systems that could be required to implement various strategies are a bank
formulates and selects a strategy to add ten new branches, a production related implementation concern is site location.

The largest bicycle company in the united state, Huffy , recently ended its own production of bikes and now
contacts out those services to Asian and Mexican manufacturers. Huffy focuses instead on the design, marketing, and
distribution of bikes, but it no longer produces bikes itself. The Dayton, Ohio, company closed its plants in Ohio, Missouri,
and Mississippi. Just- n-time OIT) production approaches have withstood the test of time. 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.

Harley-Davidson reports that at one plant alone, JIT freed $22 million previously tied up in inventory and greatly
reduced reorder lead time. Factors that should be a looked carefully before locating production facilities include the
prevailing wage rates in the area, the availability of major resources, transportation costs related to shipping and
receiving, the location f major markets, the availability of trainable employees and political risks in the area or country. For
high technology companies, production costs may not be as important as production flexibility because major products
changes can be needed often.

Industries such as biogenetics and plastics rely on production system that must be flexible enough to allow
frequent changes and the rapid introduction of new products. An article in Harvard Business Review explained why some
organizations get in to trouble; “They too slowly realize that a change in product strategy alerts the tasks of a production
system. These tasks, which can be stated in terms of requirements for costs, product flexibility, volume flexibility, product
performance, and product consistency, determine which manufacturing policies are appropriate.

As strategies shift over time, so must production policies covering the location and scale of manufacturing facilities,
the choice of manufacturing process, the degree of vertical integration of each manufacturing facility, the use of R;D units,
the control of the production system, and the licensing of technology’. A common management practice, cross training of
employees, can facilitate strategy implementation and can yield many benefits. Employees gain a better understanding of
the whole business and can contribute better ideas in planning sessions.

What Is the Relationship of Operations Management to the Overall Organizational Strategy?

Operations management is how business leaders take raw materials and convert them into saleable goods. This is true
when the saleable products are products or services. The organizational strategic goal is to use operations management
to be as efficient as possible. When operations management is efficient, goods and services are produced at a higher
capacity, reducing the cost per unit. Business leaders need to consider all strategies that improve efficiency and company
profitability. Problems in efficiency require cost-cutting measures.

Operations Management Definition

The definition of operations management is that management and control with regard to the design,
implementation and creation of the products or services that a company makes. Operations managers control ordering
supplies, scheduling labor and the use of facilities, which create what the company sells. Controlling costs and using labor
and materials efficiently is imperative to keep the costs of goods sold (COGS) to a minimum.

For example, a company that manufacturers wallets has a department led by the operations manager, who is the
one that oversees the wallet manufacturing plant. Administrative, sales and distribution departments might be located at a
completely different facility, and with different leadership. The COGS requires using textile materials such as leather and
thread. Workers must operate the machines that sew the wallets together. There are utility costs and maintenance costs
that go into running the manufacturing plant. Operations managers control the budget for all operations expenditures. If
manufacturing is deemed inefficient, operations costs are highly scrutinized.

Operations Management Strategy

Operational management seeks to keep those costs down by constantly evaluating where money is going in
producing the goods. With the wallet manufacturing plant, the operations manager could use bulk purchases of textile
materials to get a discount on pricing. He might change traditional light bulbs for energy-efficient LED bulbs, which would
reduce energy costs or he might use part-time labor for certain tasks, so as to reduce payroll costs.

Every one of these options is a strategy that feeds into the overall goal of keeping the COGS low. With all of the other
expenses in the company remaining the same, if the COGS are reduced, the company makes more money. Making more
money is the ultimate goal of every for-profit company, so being successful in creating efficient systems means that a
significant goal has been achieved.

Relationship of Operations Management

The relationship of operations management with other functional areas in the overall organizational strategy is
important to consider. The cost of goods sold is not the only area where costs controls take place. The business leaders
need to consider all levels of costs from operations, sales, administrative and distribution. Strategies must match the
overall mission and vision of the company.

For example, if the wallet manufacture's mission is to provide higher quality handmade wallets, then bulk
automation with machines doesn't feed into this strategy. The COGS may be more expensive because the labor costs in
operations go up. If that is the case, the company needs to consider increasing the price of the products or to reduce
costs elsewhere in the company, perhaps in administrative areas.

Another example is if the company is expanding and needs to increase production. In this instance, costs will
increase, but with proper operations management, double production won't mean that the COGS pricing will not double.
The organizational strategy here is to scale up the production and sales in a way that enables a greater profit-per-unit
ratio, because production has achieved greater efficiency. Every step must consider the effect of that strategy to the
COGS; it must also consider what the effect of that strategy is on the overall bottom line of the company. Every company's
goal is to be as profitable as possible. Having good operations management provides the efficiency to achieve that.

Connecting Business Strategy and Operations

Most companies have a strategic plan. However, over the years I have seen it time and again. Strategy, although
perceived by some as defined, is largely misunderstood across the organization, not tied-in to operations and therefore
poorly executed in operations and as a result ignored as the hour-to-hour, crisis-to-crisis mode of management becomes
more firmly entrenched. Does your company have an operations strategy developed and being executed to carry the
strategic plan? In all likelihood, the answer is no.

The most common missing ingredient to success in companies I have seen over the years is a well-planned and
defined action plan for improvement that is being consistently and constantly well-executed. The symptoms can vary but,
in essence, what is missing are: well-defined and agreed-upon business goals, operational objectives, action plans and
performance measures.

As a result, some functions within the company are often diametrically opposed to one another and operate in a way
that makes meaningful business performance improvement nearly to outright impossible.

Companies need a way to focus and stay focused. They need, in effect, a well-defined and well-executed strategy and
action plan. No strategic plan in and of itself can help a company change and move ahead to capture more market share,
improve products, increase customer satisfaction, or whatever is recommended within the context of a strategy.
 Effective strategic business planning requires a dynamic, methodical process that keeps the organization focused on
the right issues and actions. This means management must diligently define and redefine the four essential components
of a successful strategy and tactical actions:

Strategic goals, which are brief statements of what top management wants to achieve in terms of growth, products,
markets, profits and the like. Improvement objectives, which are specific and measurable performance improvements set
within certain timeframes and tied to specific strategic goals. Action plans, which translate objectives into a specific set of
steps, responsibilities, schedules and cross-functional teams for implementing the plans to achieve the objectives.

Performance measures, which provide quantitative means of reviewing, evaluating and updating actions, improvement
objectives, strategic goals, and process performance. Done well and in concert, these four components allow an
organization to think and manage strategically, to formulate objectives and action plans that mesh with strategic goals and
to continually measure process performance results and to evaluate where there is need for further changes If a strategic
plan is not translated and executed in this way, a company misses the opportunity to focus its entire organization on
specific objectives and actions and to develop common values and beliefs.

Taking these steps requires courage, confidence, hard work and persistence, but the rewards can be nothing less
than a winning strategy for your company and a focus on vision and a common purpose for the entire organization.

Putting operations into the loop

I’ve observed many times that top management feels far more compelled to focus on – and far more comfortable with
– issues involving marketing, sales and finance than it does operations. Even if a company has actually developed
objectives and actions plans for operations, it seldom has specific strategic impact results in mind.

Operational goals are, instead, couched in traditional performance measures that may have no correlating connection
to the right goals, objectives and action plans. In today’s manufacturing environment, where supply chain management
and lean manufacturing can contribute so much to customer satisfaction, working capital performance, lead times and
profits, operations can no longer be left out of the strategic planning loop.

It is very common to find manufacturing companies operating with an implicit strategy that everyone “sort of knows.”
Worse, when senior management is questioned about business strategy, what often emerges is that only a generic
strategy exists.

But an unarticulated, generic business strategy is just not good enough. In fact, it can be a critical mistake. Clearly,
manufacturing and supply chain management is where “big money” is spent and where major contributions in market
share, inventories, customer service, lead times, profits and many other important measures of business performance
must be achieved. Now, and in the coming years, operations can no longer be left in a reactive mode to respond to
whatever whims that keep changing direction. Operations is clearly an area where profits can be made or lost.

Planning operational objectives effectively

The very essence of planning operational objectives effectively is a continual process of ensuring that operations is
constantly and consistently doing the “right things right.” This process involves continuously reassessing current strategies
including objectives, action plans, and measurements. It also involves developing new or modified objectives, action plans
and measurements, whenever needed. Effective strategic operations planning must continually and systematically
perform the following two tasks:

Reassess the current strategies, objectives, action plans and performance measurements, and examine how well
they are reflected in the company’s overall strategic plan. Develop new or modified objectives, action plans and
performance measurements that are well-connected to the overall strategic plan.
Like any continuous process, effective operational strategy planning must always be asking:
“Where do we want and need to go?” and,

“How are we going to get there?”

These questions are defined in concrete terms as you connect business strategy with operations strategy to form an
overarching competitive strategy for increasing sales, profits, ROA, ROE, stockholder value, and market share (see
Figure 1).

Once these goals are defined or redefined, you need to ask, “What operational performance improvements will be
needed and when to achieve the strategy?”

What Is The Importance Of Production And Operation Management?

Production and Operations Management involves managing the transformation to create products or services.
This is important as it keeps the business fresh and allows for new products and services to be created. The operations
manager is responsible for ensuring that the business remains effective by creating new products and services that will
meet the customers’ needs. Cost, quality and delivery are all needs that the customer will be interested in. The operations
manager will have some responsibility in deciding what processes should be used to produce the product. Choices they
may face include technology, process flow and job design. The quality of the product or service is important and should be
continuously improved.
The scheduling of tasks and jobs to ensure that the needed capacity is achieved is another responsibility the
operations manager will need to take on. They will also manage the inventory by deciding what to order, when to order it
and how much to order. The movement of the products will also be important in this role. Product management is also
important because those in question will be aware of what is needed, by whom it is needed and how to market the
product. They will also know what market the items should be focused on. Workers need a plan to make them aware what
is needed, and when it is needed, and this is another role of the production management team. Although a product
manager must oversee the entire lifecycle of a particular product, they must also recognize that their main focus should be
on driving forward new product development.
Production/Operation concerns when implementing strategies Introduction In the growing global competition,
productivity is the key for the survival of any business organization. Among different functions in an organization,
production/ operations function is a vital function which does the Job of value addition to product/service, respectively.
Maximizing the value addition automatically results in productivity improvement. This can be done starting from the stage
of product development and concentrating on various other intermediate tasks and finally hrough implementation of
proper quality control system and maintenance of equipments.
This amounts to tackling the management issues in each and every sub system of production/operation function.
Production/operations function is that part of an organization which is concerned with the transformation of a range of
inputs into required outputs (product/services) having the required quality level. Production and Operation are major
factors which are taken in consideration when implementing strategy of an organization. Strategy begins with goals, which
naturally follow from an entity’s mission.
But for practical purposes goals cannot stand in isolation. They are informed by an repetitive sensing of the
external environment and the organization’s internal capabilities. Implementing Business Strategies Business strategizing
is much more than visioning, planning and forecasting.
In this modern age of changing economies rapidly, all substantive issue of strategy have been redefined as issue of
implementation. Nowadays business strategy of an organization is more focused between the internal capabilities of the
company and its external environment. The modern subject of business strategy is a set of analytic echniques for
understanding better, and so influencing, a company’s position in its actual and potential marketplace”.
Production/Operation management is the process which combines and transforms various resources used in the
Production/Operation subsystem of an organization into value added product/services in a controlled manner as per the
policies of an organization. Production system is consist of input and output. Inputs are resources required for the
manufacture of a product or service.
Outputs are direct outcome (actual product or service) or indirect outcome (taxes, wages, salaries) of a production
system. When it comes to operations, organization concern more on cost, quality of product, reliability and atmosphere at
work. Organizations do change there strategies due to current PESTEL (Political, Economical, Social, Technological,
Environmental and Legal) factors. Political Factor Political factor refers to the government policies, current government
system in the country, political stability. This is a major factor for implementing strategy in an organization.
Political factor can create advantages and opportunities for an organization. Economical factor This factor refers to
economical situation. All organizations are affected by current national and international economical situation. This could
be current exchange and inflation rate, economical growth, current interest rate. Social factor Social factor affects our
attitude, interest and opinion. This factor affect a lot when we implement strategy.
It tends to increase production of a business due to some social reasons. Like in Christmas times, people buy more
gifts and decoration stuff. Organizations should follow current social factors to be on track. Change in social behaviour
also affects on operations as staffs tendency to work. Technological factor New technologies can create new products
and affect on operations. As new technology comes in it helps in development of a product and all over changes to the
operations of an company.
Technology can reduce cost of a product and helps in improving its quality. Environmental factor This is a major
issue in implementing strategies nowadays. It involves weather and climate changing. World is going through climate
changes. In recent months we have seen a lot of snow in Britain. This had a major affect on businesses. People could not
come to work due to heavy snow. Production was slow. Demand of non common things were high. Legal factor Legal
factor can affect how a company operates, demand of its product and its cost. This factor involve legislation in which
company operates. Changes in health and safety law, consumers law and employment law has a major affect on planning
strategies of an business.
Political e. g. EIJ enlargement, the Euro, international trade,taxation policy Economic e. . interest rates, exchange
rates, national income, inflation, unemployment, Stock Market Social e.g. ageing population, attitudes to work, income
distribution Technological e. g. innovation, new product development, rate of technological obsolescence Environmental
e. g. global warming, environmental issues Legal [pic] e. g. competition law, health and safety, employment law SWOT
analysis also have a great impact in business strategy of an organization. It gives a brief idea of strength, weakness,
opportunities and threat of an organization.

This helps them to improve their operations and quality of product.

As we can take an example of Pizza Hut. Pizza Hut is a international brand and always has first mover advantage.
Running a business involves planning for current era and future. Pizza Hut has adopted many different strategies to
achieve its targets. People behaviour keep changing by time to time.
Strategy changes time by time when launching a new product. Focusing customers as new competitors Jump in
the race. Operations within the store also keep changing. This result in different business strategy.
Pizza Hut follow a product development strategy. This involve substantial modification of or additions to its pre sent
product range, which in turn might require extensive research and development. Pizza Hut keep widen their product range
by introducing new product to its menu. They lead market segment, they have money to indulge in research and
development. Operation strategy concerns the prototype of strategic decisions and actions which set the role, objective
and activities of the operation. The term ‘operations strategy sounds at first like a contradiction.
Choice of strategy, Analysis of strategy and Implementation of strategy are related to each other.
First we perform the Analysis of an organization, what are its needs and key points and then we make choice of
what strategy to adopt and then we implement strategy. Production [operations limits, competence, and course of actions
can greatly improve or inhibit the ability of bjectives. Production processes is normally consist of more than 70 percent of
a firms total assets. (Fred David 2005) An important part of the strategy implementations process takes place at the
production site.
Production related decisions on plant size, , plant location, product design, , kind of tooling, size of inventory,
inventory control, quality control, cost control, choice of equipment , use of standards, Job specialization, employee
training, equipment and recourse utilization shipping and packaging, and technological innovation can have a major
impact on the success or failure of strategy implementation efforts. Example of adjustment in production systems that
could be required to implement various strategies are a bank formulates and selects a strategy to add ten new branches,
a production related implementation concern is site location.
The largest bicycle company in the united state, Huffy , recently ended its own production of bikes and now
contacts out those services to Asian and Mexican manufacturers. Huffy focuses instead on the design, marketing, and
distribution of bikes, but it no longer produces bikes itself. The Dayton, Ohio, company closed its plants in Ohio, Missouri,
and Mississippi. Just- n-time OIT) production approaches have withstood the test of time. 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.
Harley-Davidson reports that at one plant alone, JIT freed $22 million previously tied up in inventory and greatly
reduced reorder lead time. Factors that should be a looked carefully before locating production facilities include the
prevailing wage rates in the area, the availability of major resources, transportation costs related to shipping and
receiving, the location f major markets, the availability of trainable employees and political risks in the area or country. For
high technology companies, production costs may not be as important as production flexibility because major products
changes can be needed often.

Industries such as biogenetics and plastics rely on production system that must be flexible enough to allow
frequent changes and the rapid introduction of new products. An article in Harvard Business Review explained why some
organizations get in to trouble; “They too slowly realize that a change in product strategy alerts the tasks of a production
system. These tasks, which can be stated in terms of requirements for costs, product flexibility, volume flexibility, product
performance, and product consistency, determine which manufacturing policies are appropriate.
As strategies shift over time, so must production policies covering the location and scale of manufacturing facilities,
the choice of manufacturing process, the degree of vertical integration of each manufacturing facility, the use of R;D units,
the control of the production system, and the licensing of technology’. A common management practice, cross training of
employees, can facilitate strategy mplementation and can yield many benefits. Employees gain a better understanding of
the whole business and can contribute better ideas in planning sessions.
Production/Operation concerns when implementing strategies Introduction In the growing global competition,
productivity is the key for the survival of any business organization. Among different functions in an organization,
production/ operations function is a vital function which does the Job of value addition to product/service, respectively.
Maximizing the value addition automatically results in productivity improvement. This can be done starting from the stage
of product development and concentrating on various other intermediate tasks and finally hrough implementation of
proper quality control system and maintenance of equipments.
This amounts to tackling the management issues in each and every sub system of production/operation function.
Production/operations function is that part of an organization which is concerned with the transformation of a range of
inputs into required outputs (product/services) having the required quality level. Production and Operation are major
factors which are taken in consideration when implementing strategy of an organization. Strategy begins with goals, which
naturally follow from an entity’s mission.
But for practical purposes goals cannot stand in isolation. They are informed by an repetitive sensing of the
external environment and the organization’s internal capabilities. Implementing Business Strategies Business strategizing
is much more than visioning, planning and forecasting.
In this modern age of changing economies rapidly, all substantive issue of strategy have been redefined as issue of
implementation. Nowadays business strategy of an organization is more focused between the internal capabilities of the
company and its external environment. The modern subject of business strategy is a set of analytic echniques for
understanding better, and so influencing, a company’s position in its actual and potential marketplace”.
Production/Operation management is the process which combines and transforms various resources used in the
Production/Operation subsystem of an organization into value added product/services in a controlled manner as per the
policies of an organization. Production system is consist of input and output. Inputs are resources required for the
manufacture of a product or service.
Outputs are direct outcome (actual product or service) or indirect outcome (taxes, wages, salaries) of a production
system. When it comes to operations, organization concern more on cost, quality of product, reliability and atmosphere at
work. Organizations do change there strategies due to current PESTEL (Political, Economical, Social, Technological,
Environmental and Legal) factors. Political Factor Political factor refers to the government policies, current government
system in the country, political stability. This is a major factor for implementing strategy in an organization.
Political factor can create advantages and opportunities for an organization. Economical factor This factor refers to
economical situation. All organizations are affected by current national and international economical situation. This could
be current exchange and inflation rate, economical growth, current interest rate. Social factor Social factor affects our
attitude, interest and opinion. This factor affect a lot when we implement strategy.
It tends to increase production of a business due to some social reasons. Like in Christmas times, people buy more
gifts and decoration stuff. Organizations should follow current social factors to be on track. Change in social behaviour
also affects on operations as staffs tendency to work. Technological factor New technologies can create new products
and affect on operations. As new technology comes in it helps in development of a product and all over changes to the
operations of an company.
Technology can reduce cost of a product and helps in improving its quality. Environmental factor This is a major
issue in implementing strategies nowadays. It involves weather and climate changing. World is going through climate
changes. In recent months we have seen a lot of snow in Britain. This had a major affect on businesses. People could not
come to work due to heavy snow. Production was slow. Demand of non common things were high. Legal factor Legal
factor can affect how a company operates, demand of its product and its cost. This factor involve legislation in which
company operates. Changes in health and safety law, consumers law and employment law has a major affect on planning
strategies of an business.
Political e. g. EIJ enlargement, the Euro, international trade,taxation policy Economic e. . interest rates, exchange
rates, national income, inflation, unemployment, Stock Market Social e.g. ageing population, attitudes to work, income
distribution Technological e. g. innovation, new product development, rate of technological obsolescence Environmental
e. g. global warming, environmental issues Legal [pic] e. g. competition law, health and safety, employment law SWOT
analysis also have a great impact in business strategy of an organization. It gives a brief idea of strength, weakness,
opportunities and threat of an organization.

This helps them to improve their operations and quality of product.

As we can take an example of Pizza Hut. Pizza Hut is a international brand and always has first mover advantage.
Running a business involves planning for current era and future. Pizza Hut has adopted many different strategies to
achieve its targets. People behaviour keep changing by time to time.
Strategy changes time by time when launching a new product. Focusing customers as new competitors Jump in
the race. Operations within the store also keep changing. This result in different business strategy.

Pizza Hut follow a product development strategy. This involve substantial modification of or additions to its pre sent
product range, which in turn might require extensive research and development. Pizza Hut keep widen their product range
by introducing new product to its menu. They lead market segment, they have money to indulge in research and
development. Operation strategy concerns the prototype of strategic decisions and actions which set the role, objective
and activities of the operation. The term ‘operations strategy sounds at first like a contradiction.
Choice of strategy, Analysis of strategy and Implementation of strategy are related to each other.
First we perform the Analysis of an organization, what are its needs and key points and then we make choice of
what strategy to adopt and then we implement strategy. Production [operations limits, competence, and course of actions
can greatly improve or inhibit the ability of bjectives. Production processes is normally consist of more than 70 percent of
a firms total assets. (Fred David 2005) An important part of the strategy implementations process takes place at the
production site.
Production related decisions on plant size, , plant location, product design, , kind of tooling, size of inventory,
inventory control, quality control, cost control, choice of equipment , use of standards, Job specialization, employee
training, equipment and recourse utilization shipping and packaging, and technological innovation can have a major
impact on the success or failure of strategy implementation efforts. Example of adjustment in production systems that
could be required to implement various strategies are a bank formulates and selects a strategy to add ten new branches,
a production related implementation concern is site location.
The largest bicycle company in the united state, Huffy , recently ended its own production of bikes and now
contacts out those services to Asian and Mexican manufacturers. Huffy focuses instead on the design, marketing, and
distribution of bikes, but it no longer produces bikes itself. The Dayton, Ohio, company closed its plants in Ohio, Missouri,
and Mississippi. Just- n-time OIT) production approaches have withstood the test of time. 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.
Harley-Davidson reports that at one plant alone, JIT freed $22 million previously tied up in inventory and greatly
reduced reorder lead time. Factors that should be a looked carefully before locating production facilities include the
prevailing wage rates in the area, the availability of major resources, transportation costs related to shipping and
receiving, the location f major markets, the availability of trainable employees and political risks in the area or country. For
high technology companies, production costs may not be as important as production flexibility because major products
changes can be needed often.
Industries such as biogenetics and plastics rely on production system that must be flexible enough to allow
frequent changes and the rapid introduction of new products. An article in Harvard Business Review explained why some
organizations get in to trouble; “They too slowly realize that a change in product strategy alerts the tasks of a production
system. These tasks, which can be stated in terms of requirements for costs, product flexibility, volume flexibility, product
performance, and product consistency, determine which manufacturing policies are appropriate.
As strategies shift over time, so must production policies covering the location and scale of manufacturing facilities,
the choice of manufacturing process, the degree of vertical integration of each manufacturing facility, the use of R;D units,
the control of the production system, and the licensing of technology’. A common management practice, cross training of
employees, can facilitate strategy mplementation and can yield many benefits. Employees gain a better understanding of
the whole business and can contribute better ideas in planning sessions.
Strategic Management Process for Production and Operation
For success of organizational strategic objective, strategic planning has to trickle down to various function areas
of the business. In order to build strategy management process a sequential process as below is followed:
Competition Analysis: In this step company evaluates and studies current competition in the market and practices that
are followed in the industry for operations and production vis-à-vis company policies

Goal Setting: Next step involves narrowing down the objective towards which the organization wants to move towards.

Strategy Formulation: The next step is breaking down of organizational goals into operations and production strategies.

Implementation: The final step is to convert operations and production strategies into day to day activities like production
schedule, product design, quality management etc.
As organizations are always customer-centric, production and operation strategy for organization are built around them

Productivity. Measurement of formulated operations and production strategy is important to maintain alignment with the
organization objectives. In simple terms productivity is defined as sum of total output per employee or per day.
Productivity of company is dependent on industry and environmental conditions in which it is operating.
Two essential part of productivity are labor and capital. In scenario of limited resources, optimum and efficient
utilization of labor and capital will generate favorable productivity. Productivity measurement also enables company to
identify areas which require improvement or special focus. Also productivity provides ready report card to measure status
against company’s production objective. Productivity measurement can be classified in three categories based on the
inputs used for calculation. Partial productivity ration of output is compared to one of resource used for example, labor
productivity where output is compared to the labor wages. Total productivity measure takes into consideration sum of all
input factors which are used for the output. In the modern age technology plays an important part in productivity.

Wastivity. Another important factor is the case of production is wastivity. Not 100% of input would be converted to output,
there is going to waste during production. Wastivity is reciprocal of productivity. Classic examples of wastivity are
defective products and services which either have to be re-cycle or disposed of completely. Other example is idle capacity
of material, man-power equipment etc.