1 Eight Components of Strategy Model Submitted to: Mrs. Rutvi Umrigar Presented by: Pooja Jain Soyeb Jindani

2 Strategy Implementation  What must we do to put the strategy in place, execute it proficiently, and produce good results?  Creating FITS between strategy and external environment and creating FITS inside the organization  Control, coordination, and motivation issues

3 Building a Capable Organization Allocating Resources Establishing Strategy- Supportive Policies Instituting Best Practices for Continuous Improvement Installing Support Systems Tying Rewards to Achievement of Key Strategic Targets Exercising Strategic Leadership Shaping Corporate Culture to Fit Strategy Strategy Implementer’s Action Agenda Figure 11.1: The Eight Components of the Strategy Execution Process

4 Figure 11.2: The Three Components of Building a Capable Organization Staffing the Organization A Company with the Competencies and Capabilities Needed for Proficient Strategy Execution Building Core Competencies and Competitive Capabilities Matching the Organization Structure to Strategy

5 ALLOCATING RESOURCES TO SUPPORT STRATEGY IMPLEMENTATION

6 Allocating Resources to Support Strategy Execution  Resource allocation should fit strategy  Changing strategy requires changes to resource allocation process  Shifting resources — downsizing some areas, upsizing others, getting rid of activities no longer needed, and funding new strategically critical activities  Financial and other resources (physical and human assets)

7 CREATING STRATEGY- SUPPORTIVE POLICIES AND PROCEDURES

8 Fig. 12.1: How Prescribed Policies and Procedures Facilitate Strategy Execution

9 INSTITUTING BEST PRACTICES AND CONTINUOUS IMPROVEMENT

10 Instituting Best Practices and Continuous Improvement  Searching out and adopting best practices is integral to effective implementation  Benchmarking is the backbone of the process of identifying, studying, and implementing best practices  Key tools to promote continuous improvement  Business process reengineering  TQM  Six Sigma quality control

11 INSTALLING STRATEGY- SUPPORTIVE INFORMATION AND OPERATING SYSTEMS

12 Installing Strategy-Supportive Information and Operating Systems  Good information and operating systems are essential for first-rate strategy execution  Support systems can relate to all value-chain activities  Includes all type of Computer Based Information Systems (CBISs):  MIS, DBMS, TPS, DSS, E-commerce and e- business systems, CRM, SCM, etc…  Mobilizing information and creating systems to use knowledge effectively can yield  Competitive advantage

13 TYING REWARDS AND INCENTIVES TO GOOD STRATEGY IMPLEMENTATION

14  Challenge – Behavioral Control  How to ensure actions of employees stay within acceptable bounds  Control approaches  Managerial control Establish boundaries on what not to do, allowing freedom to act with limits Track and review daily operating performance  Peer-based control Exercising Adequate Control Over Empowered Employees

15 Monetary Incentives  Base pay increases  Performance bonuses  Profit sharing plans  Stock options  Retirement packages  Piecework incentives Non-monetary Incentives  Praise  Constructive criticism  Special recognition  More, or less, job security  Stimulating assignments  More, or less, autonomy  Rapid promotion Gaining Commitment: Components of an Effective Reward System

16  Rewards are the single most powerful tool to win the commitment of company personnel to effective strategy implementation  Objectives in designing the reward system  Generously reward those achieving objectives  Deny rewards to those who don’t  Tie incentive compensation to relevant outcomes - both strategic and financial Linking the Reward System to Performance Outcomes

17 BUILDING A STRATEGY- SUPPORTIVE CORPORATE CULTURE

18 Defining Characteristics of Corporate Culture  Core values, beliefs, and business principles  Ethical standards  Operating practices and behaviors defining “how we do things around here”  Approach to people management  “Chemistry” and “personality” permeating work environment  Often told stories illustrating  Company’s values  Business practices  Traditions

19 A company’s culture is manifested in...  Values, business principles, and ethical standards preached and practiced by management  Approaches to people management and problem solving  Official policies and procedures  Spirit and character permeating work environment  Interactions and relationships among managers and employees  Peer pressures that exist to display core values  Its revered traditions and often repeated stories  Its relationships with external stakeholders Identifying the Key Features of Corporate Culture

20 Why is Culture Important?  Matching culture to strategy will improve performance  A culture that promotes attitudes and behaviors that are well-suited to strategy is a valuable ally in the strategy implementation process  Can hinder strategy implementation and performance if not compatible with strategy  A culture where attitudes and behaviors impede good strategy implementation is a huge obstacle to overcome  Provides another means to control, coordinate, and motivate employees

21  A culture based on ethical principles is vital to long-term strategic success  Ethics programs help make ethical conduct a way of life  Executives must provide genuine support of personnel displaying ethical standards in conducting the company’s business  Value statements serve as a cornerstone for culture-building  Can be used to control employees – to behave in the “right” way Grounding the Culture in Core Values and Ethics

22 Thank You