Unit 4: Strategy implementation & control
Strategy Management notes · PTU syllabus (BBA601-18)
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Unit summary
A brilliant strategy is worthless until it is implemented and controlled. This unit covers the interrelationship between strategy formulation and implementation, the structural and behavioural aspects of implementation (leadership, culture, power, ethics), resource allocation, and strategic evaluation and control techniques.
After this unit you can
- Explain the interrelationship between formulation and implementation
- Explain behavioural implementation — leadership, culture and values
- Explain resource allocation for strategy
- Explain strategic evaluation and control and its techniques
PTU syllabus topics
- Interrelationship between formulation and implementation
- behavioural implementation
- resource allocation
- strategic evaluation and control techniques
- 1Set performance standards
- 2Measure actual performance
- 3Compare with standards
- 4Take corrective action
Topic 1
Interrelationship between formulation and implementation
Nature
Positioning forces before action
Managing forces during action
Focus
Effectiveness — doing the right things
Efficiency — doing things right
Process
Intellectual, analytical
Operational, administrative
Skills
Intuition and analysis
Motivation and leadership
People
Top managers
All managers and employees
- McKinsey 7S framework for implementation: Strategy, Structure, Systems (hard Ss) + Shared values, Style, Staff, Skills (soft Ss) — all must fit.
Success
Good formulation, good implementation
Rescue or ruin
Poor formulation, good implementation
Trouble
Good formulation, poor implementation
Failure
Poor formulation, poor implementation
Issues in implementation
- Designing structure to fit strategy ("structure follows strategy" — Chandler).
- Setting annual objectives, policies and plans (programmes, budgets, procedures).
- Resource allocation and functional strategies.
- Leadership, culture and change management.
- Information and reward systems.
Topic 2
Behavioural implementation
Strategic leadership
- Sets direction, builds commitment, manages change and culture, ensures ethical conduct.
- Style matters: transformational leaders inspire change; transactional leaders manage through rewards.
- Choosing the right top team and changing managers if needed.
Corporate culture
- Culture must support strategy; a mismatch causes resistance.
- Managing culture: link culture with strategy, change it gradually through symbols, stories, reward systems, training and leader behaviour.
- Options when culture and strategy conflict: change strategy, change culture, or manage around the culture.
Power and politics
- Power bases: legitimate, reward, coercive, expert, referent.
- Coalitions and resistance can block implementation — build support and communicate.
Personal values and business ethics
- Values of top managers shape strategic choices.
- Ethical conduct and corporate social responsibility (Section 135, Companies Act — 2% CSR spending) are part of implementation.
Managing change (Lewin)
- 1Unfreezing
Create readiness — explain why change is needed
- 2Changing
Implement new behaviours, systems, structures
- 3Refreezing
Reinforce through rewards, policies, culture
Topic 3
Resource allocation
Resource allocation is distributing financial, physical, human and technological resources among units and activities according to strategic priorities.
- Factors: strategic priorities, availability, past allocations, power and politics, portfolio position (fund stars and question marks; milk cash cows).
Approaches
- Top-down: headquarters decides and distributes.
- Bottom-up: units propose; HQ aggregates.
- Formula-based: fixed percentages.
- Strategic budgeting / zero-based budgeting: every rupee justified from zero.
- Capital budgeting: NPV, IRR, payback for major projects.
Difficulties
- Overprotection of resources by units, emphasis on short-term criteria, organisational politics, vague targets, reluctance to take risks, lack of sufficient knowledge.
Topic 4
Strategic evaluation and control
Strategic evaluation checks whether the strategy, as implemented, is meeting its objectives; strategic control takes corrective action.
- 1Set performance standards
- 2Measure actual performance
- 3Compare with standards (analyse variances)
- 4Take corrective action
- 5Feedback to formulation
Types of strategic control (Schreyögg and Steinmann)
Premise control
Checks whether planning assumptions still hold
Implementation control
Checks whether implementation steps are on track
Strategic surveillance
Broad monitoring for unexpected events
Special alert control
Rapid response to sudden crises (pandemic, disaster)
- Operational control: day-to-day, using budgets, schedules and key success factors.
Techniques of evaluation and control
| Technique | What it does |
|---|---|
| Budgets and variance analysis | Compares actual results with planned figures |
| Ratio analysis and ROI | Measures profitability and efficiency |
| Balanced scorecard (Kaplan and Norton) | Measures financial, customer, internal process, learning and growth perspectives |
| Benchmarking | Compares with best-in-class |
| Management audit | Reviews quality of management |
| Key performance indicators (KPIs) | Track critical outcomes |
| Economic value added (EVA) | NOPAT − (capital × cost of capital) |
| Gantt charts, PERT/CPM | Track project milestones |
- Rumelt's criteria for evaluating strategy: consistency (no conflicting goals), consonance (fits the environment), advantage (creates competitive advantage), feasibility (can be done with available resources).
Exam tip
Write "Rumelt's four criteria" and the four control types — they form a strong framework for any evaluation question.
Key terms
- Strategy implementation
- Putting chosen strategies into action through structure, resources and people
- 7S framework
- McKinsey model of seven interdependent elements needed for implementation
- Resource allocation
- Distributing resources according to strategic priorities
- Premise control
- Checking whether planning assumptions remain valid
- Balanced scorecard
- Performance measurement across financial, customer, internal process and learning perspectives
Quick revision
- Formulation = effectiveness; implementation = efficiency; both needed.
- Structure follows strategy (Chandler); 7S fit.
- Behavioural implementation: leadership, culture, power, ethics, change.
- Resources follow strategic priorities.
- Control types: premise, implementation, surveillance, special alert; Rumelt's four criteria.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.Distinguish formulation and implementation of strategy.
- Q2.What is the McKinsey 7S framework?
- Q3.What is behavioural implementation?
- Q4.What is resource allocation?
- Q5.What is premise control?
- Q6.State Rumelt's criteria for strategy evaluation.
Long-answer questions
- Q1.Explain the interrelationship between strategy formulation and implementation.
- Q2.Discuss the behavioural aspects of strategy implementation.
- Q3.Explain the process of resource allocation and its difficulties.
- Q4.Explain the process of strategic evaluation and control and its techniques.
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