Strategic Management: Strategy Formulation Vs Implementation

Strategic Management: Strategy implementation is the process by which an organisation translates its chosen strategy into action plans and activities, which will steer the organisation in the direction set out in the strategy and enable the organisation to achieve its strategic objectives.

The development of organisational strategy is a complex and demanding process, and leaders who have devoted time, effort and resources to the selection of a strategy they believe will secure the ongoing success of their company may feel they have reason to be confident about the future.

Strategic Management

Effective implementation is critical to the success of organisational strategy.Strategy implementation requires organisations to put initiatives in place which are focussed and realisable. A strategic focus should encourage an organisation to develop disciplined processes for feeding strategic initiatives across the organisation in a meaningful, realistic and achievable way.

Problems encountered with the implementation of strategy often lie not with any flaws in the strategy itself, but rather in a failure to implement it effectively. Such failures can mean that strategic initiatives are only partially successful and lead to frustration as the hoped for strategic benefits are not realised.

Translating strategy aims into actionable processes in a desiredmanner is, however, not easy. The setting of priorities and the development of plans may present organisations with formidable management challenges. The effective execution of strategy can be impeded by many and varied difficulties including;

  • weak or inconsistent senior-level commitment,
  • a lack of support from managers and employees,
  • cross-departmental conflicts,
  • ambiguity in roles and responsibilities or
  • a lack of accountability.

Following are the main steps in implementing a strategy:

  • Developing an organization having 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.

Strategic decisions are the decisions that are concerned with whole environment in which the firm operates, the entire resources and the people who form the company and the interface between the two.

Features of Strategic Decisions:

  • Strategic decisions have major resource propositions for an organization. These decisions may be concerned with possessing new resources, organizing others or reallocating others.
  • Strategic decisions deal with harmonizing organizational resource capabilities with the threats and opportunities.
  • Strategic decisions deal with the range of organizational activities. It is all about what they want the organization to be like and to be about.
  • Strategic decisions involve a change of major kind since an organization operates in ever-changing environment
  • Strategic decisions are complex in nature.
  • Strategic decisions are at the top most level, are uncertain as they deal with the future, and involve a lot of risk

Strategic decisions are different from administrative and operational decisions. Administrative decisions are routine decisions which help or rather facilitate strategic decisions or operational decisions. Operational decisions are technical decisions which help execution of strategic decisions. To reduce cost is a strategic decision which is achieved through operational decision of reducing the number of employees and how we carry out these reductions will be administrative decision.

The differences between Strategic, Administrative and Operational decisions

Strategic Decisions Administrative Decisions Operational Decisions
Strategic decisions are longterm decisions. Administrative decisions are taken daily. Operational decisions are not frequently taken.
These are considered where The future planning is concerned. These are short-term based Decisions. These are medium-period based decisions.
Strategic decisions are taken in Accordance with organizational mission and vision. These are taken according to strategic and operational Decisions. These are taken in accordance with strategic and administrative decision.
These are related to overall Counter planning of all Organization. These are related to working of employees in an Organization. These are related to production.
These deal with organizational Growth. These are in welfare of employees working in an organization. These are related to production and factory growth.

Strategy Formulation Vs Strategy Implementation

Strategy Formulation Strategy Implementation
Strategy Formulation includes planning and decision-making involved in developing organization’s strategic goals and plans. Strategy Implementation involves all those means related to executing the strategic plans.
In short, Strategy Formulation is placing the Forces before the action. In short, Strategy Implementation is managing forces during the action.
Strategy Formulation is an Entrepreneurial Activity based on strategic decision-making. Strategic Implementation is mainly an Administrative Task based on strategic and operational decisions.
Strategy Formulation emphasizes on effectiveness. Strategy Implementation emphasizes on efficiency.
Strategy Formulation is a rational process. Strategy Implementation is basically an operational process.
Strategy Formulation requires co-ordination among few individuals. Strategy Implementation requires coordination among many individuals.
Strategy Formulation requires a great deal of initiative and logical skills. Strategy Implementation requires specific motivational and leadership traits.
Strategic Formulation precedes Strategy Implementation. Strategy Implementation follows Strategy Formulation.

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