1. Strategic Implementation
Requirements for Strategic Implementation
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

2. Strategic Management Prof. Dr. Majed El-Farra 2012
Strategy implementation- the sum total of all activities and choices required for the execution of a strategic plan
Who are the people to carry out the strategic plan?
What must be done to align company operations in the intended direction?
How is everyone going to work together to do what is needed?
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

3. Common Strategy Implementation Problems
Took more time than planned
Unanticipated major problems
Poor coordination
Competing activities and crises created distractions
Employees with insufficient capabilities
Poor subordinate training
Uncontrollable external environmental factors
Poor departmental leadership and direction
Inadequately defined implementation tasks and activities
Inefficient information system to monitor activities
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

4. Strategy Implementation
Effective strategic implementation requires the follows:
1- Organizational structure appropriateness.
2- Sound leadership of the company.
3- Effective motivational system
4- Annual objectives
5- Functional strategies
6- Clear budget
7- Detailed action plan
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

5. Criticisms of SWOT analysis
Generates lengthy lists
Uses no weights to reflect priorities
Uses ambiguous/vague words and phrases
Same factor can be in 2 categories
No obligation to verify opinion with data or analysis
Requires only a single level of analysis
No logical link to strategy implementation
Prentice Hall, Inc. ©2012

6. Communicating Strategy
Strategy must be clearly understood.
It provides employees with general guidance to make decision.
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

7. Strategic Management Prof. Dr. Majed El-Farra 2012
Strategy & Structure
Definition of Organizational Structure:
The structure can either facilitate or inhibit strategy implementation.
Chandler says: Changes in strategy ultimately lead to changes in the organization’s structure.
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

8. Types of organizational structure
1- Functional
2- Geographical
3- Divisional
4- Customer-based
5- Matrix
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

9. Departmentalization by Type
Functional
Grouping jobs by functions performed
Product
Grouping jobs by product line
Geographic
Grouping jobs on the basis of territory or geography
Process
Grouping jobs on the basis of product or customer flow
Customer
Grouping jobs by type of customer and needs
Copyright © 2005 Prentice Hall, Inc. All rights reserved.

10. Functional Departmentalization
Advantages
Efficiencies from putting together similar specialties and people with common skills, knowledge, and orientations
Coordination within functional area
In-depth specialization
Disadvantages
Poor communication across functional areas
Limited view of organizational goals
Figure 10.2a
Copyright © 2005 Prentice Hall, Inc. All rights reserved.

11. Geographical Departmentalization
Advantages
More effective and efficient handling of specific regional issues that arise
Serve needs of unique geographic markets better
Disadvantages
Duplication of functions
Can feel isolated from other organizational areas
Figure 10.2b
Copyright © 2005 Prentice Hall, Inc. All rights reserved.

12. Product Departmentalization
+ Allows specialization in particular products and services
+ Managers can become experts in their industry
+ Closer to customers
– Duplication of functions
– Limited view of organizational goals
Figure 10.2c
Source: Bombardier Annual Report.
Copyright © 2005 Prentice Hall, Inc. All rights reserved.

13. Process Departmentalization
+ More efficient flow of work activities
– Can only be used with certain types of products
Figure 10.2d
Copyright © 2005 Prentice Hall, Inc. All rights reserved.

14. Customer Departmentalization
+ Customers’ needs and problems can be met by specialists
- Duplication of functions
- Limited view of organizational goals
Figure 10.2d
Copyright © 2005 Prentice Hall, Inc. All rights reserved.

15. An assessment of Org. Structure
No structure is appropriate for all situations.
Appropriate structure may change as the organization develops.
Examples require structure change:
Introducing new strategy, having problems in achieving its objectives, leadership changes.
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

16. Symptoms of an ineffective org. Structure
According to P. Drucker:
1- Too many management levels make cooperation and communication difficult
2- Too many meetings attended by too many.
3- Too much attentions are given to resolve interdepartmental conflict.
4- Excessive decision making at top management.
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

17. Evolution of organizational structure: Alfred D. Chandler
Changing strategy.
Administrative problems leading to decline performance.
Revised structure subsequent return to economic health.
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

18. Structural adjustments: Chandler
When does it happen?
Market expansion.
Product line diversification.
Vertical integration.
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

19. Relationship between strategy and Org. Structure
The process of matching structure to strategy is complex and should be undertaken with a thorough understanding of:
the historical development of the organizational structure.
The requirements of the organization’s environment and technology.
The political relationships that might be affected inside the organization.
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

20. Organizational Culture
. Culture: Refers to the values and patterns of belief and behavior that are accepted and practiced by the members of a particular organizations
Org. culture change as environment changes.
The founder and Top management shape the org. culture.
Change in strategy requires change in culture.
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

21. Organizational Leadership
The leader is an individual who is able to influence the attitudes and opinion of others by motivation and guiding.
The leader must have a clear vision.
Different strategies need different skills.
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

22. Strategy and Motivational systems
Organizational reward system influence the entire organizational climate.
Organizational rewards include all types of rewards, tangible and intangible.
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

23. Deployment of Resources through Budgeting
Budgeting: Is the process of allocating resources to be employed to achieve objectives.
Budget should be directly linked to strategy implementation.
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012

24. Developing functional Strategies
Functional Strategies describe the methods and means at functional level to achieve corporate strategies and business unit strategies.
29/07/1438
Strategic Management Prof. Dr. Majed El-Farra 2012