Strategy Implementation

Question 1

how much of the companies that have a designed strategy (75% of all) actually achieve that performance?

Answer 1

less than 10%

Question 2

what are the obstacles to strategy implementation? (6) (there is more)

Answer 2

• # of people involved (everyone in the company) -> a lot of input and possibility for mistakes
• possibility of planning & implementing processes to separate (mng only plans)
• focusing on short-term results
• time (usually takes more than planned - several years)
• lack of guidelines (models) for implementation from mng
• lack of coordination

Question 3

def strategy implementation

Answer 3

set of activities required for the execution of a strategic plan

Question 4

state the strategy implementation model (EXAM)

Answer 4

1. (developed strategy) -> presented in a strategic map
2. document the strategy
3. define responsibility
   (simultaneously)
   - adapting organisational culture
   - adapting organisatonal structure
   - define KPIs -> develop specific plans -> align incentive systems
   - communicate the strategy
   - manage change and proper leadership

Question 5

why is documenting the strategy important?

Answer 5

because short sentences in the strategic map (of the first point in the strategy implementation model) can be misunderstood

Question 6

state the descriptions of the strategy activity implementation table (first four cells)

Answer 6

1. strategic activity (definition)
2. description of strategic activity (if needed)
3. manager (name / position)
4. team members (involved, but not responsible)

Question 7

who defined the need to adapt the organisational structure?

Answer 7

Chandler: ‘Structure follows strategy’

• cost-efficiency strategy: mechanical structure
• differentiation strategy: organic structure

Question 8

def macro-organisational structure

Answer 8

hierarchy within the company

Question 9

def micro-organisational structure

Answer 9

descriptions of work positions

Question 10

describe how the organisational structure is adapted

Answer 10

strategy -> change macro-organsational structure

operational planning objectives -> change micro-organisational culture

Question 11

def organsational culture

Answer 11

complex set of ideologies, symbols and core values that are shared throughout the company and influence people behavior and how the company conducts its business

Question 12

describe how the organisational culture is adapted to the strategy (depending on what the ‘current state’ of it is)

Answer 12

• culture fits strategy: maintain
• culture doesn’t fit: change culture
• no culture: create one
  long term processes!

Question 13

why are KPIs needed and what do they mean?

Answer 13

key performance indicators, needed to ensure better implementation of strategy

Question 14

for what should KPIs be defined?

Answer 14

for strategic activities and outcomes, so they can be tracked through time

Question 15

what is the purpose of developing specific plans?

Answer 15

to break the strategy into smaller pieces which are more manageable - if needed (not always)

Question 16

state 6 elements of strategy concretisations

Answer 16

1. projects
2. programs
3. tactical plans
4. budgets
5. action plans
6. procedures

Question 17

def project + example

Answer 17

= complex tasks, that are more or less unique and extend over a longer period of time
construction of a new production plant

Question 18

def program + example

Answer 18

= sets of activities needed to accomplish a plan

increasing the market share in Russia

Question 19

def tactical plan + example

Answer 19

= systems of annual (partial and integral) plans

annual sales plan in a specific market

Question 20

def budget + example

Answer 20

= cost of the programs and other plans (usually annual) a budget of direct material and labor costs

Question 21

def action plan + example

Answer 21

= precisely specified activities used to operationalize the programs and tactical plans
action plan of a training seminar for production workers

Question 22

def procedure + example

Answer 22

= sequence of steps needed to do the job
specifically prescribed and standardized steps
how to serve a guest in a restaurant (e.g. McDonald’s)

Question 23

state the descriptions of the strategy activity implementation table (last 3 cells)

Answer 23

5. projects, programs, tactical plans, procedures (list and explain all plans in a sequential order so the strategy will be executed)
6. risks and uncertainties (internal and externals)
7. expected outcome (at least one)

Question 24

why is it important to align incentive systems and strategy?

Answer 24

so we can make sure that the strategy will successfully implemented, bc people will work for it

Question 25

how are incentive systems aligned with strategy?

Answer 25

with the logic of cascading. data from the strategy activitiy implementation table is put into a table for each specific employee and performance measures are tracked with weights and recurring frequencies.

Question 26

state 4 characteristics of strategy communication.

Answer 26

1. it is management’s responsibility
2. must be carried out through formal communication channels
3. must be carried out in a way so knowledge leaks are minimised (not everyone has to know everything)
4. must be clear and timely

Question 27

state the three steps to overcome resistance to change

Answer 27

1. timely detection of the resistance
2. understanding the reasons for the resistance
3. using proper tactics to overcome it

Question 28

what does leadership (in a broader sense) include?

Answer 28

• staffing
• leadership (narrow understanding - influencing the behaviour of employees)
• communicating
• motivating