Tuesday, 17 December 2019

Unit 10: Strategy Implementation


Unit 10: Strategy Implementation

Most strategies need resources to be allocated to them if they are to be implemented successfully.

A successful strategy formulation does not guarantee successful strategy implementation.

It affects an organisation from top to bottom; it affects all divisional and functional areas of business.

Implementation of strategy involves a number of interrelated decisions, choices, and a broad range of activities.

It requires an integration of people, structures, processes etc.

M.C. Kinsey’s 7-S model is good at capturing the importance of all these elements in the implementation of strategy.

A company’s ability to acquire sufficient resources needed to support new strategic initiatives and steer them to the appropriate organisational units has a major impact on the strategy implementation process.
Bottom-up Approach: In this approach, resources are distributed through a process of aggregation from the operating level.

The operating levels work out the requirements of each subunit and the resources are allocated accordingly.

Capital Budgeting: used for long-term commitment of resources, such as capital investments in mergers, acquisitions, joint ventures etc.

McKinsey 7-S Model: A model of organisational effectiveness that postulates that there are seven internal factors of an organisation that needs to be aligned and reinforced in order for it to be successful.

Necessary for more routine resource allocation for conducting operations.

Notes Top-down Approach: In this approach, resources are allocated through a process of segregation down to the operating levels.

The Board of Directors, the Managing Director or members of top management typically decide the requirements of each subunit and distribute resources accordingly.

Zero Based Budgeting: Budget requests in detail from the scratch, without relying on the previous budget allocations.

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