Copyright © 2011 Pearson Education, Inc.                    Ch 7 -2
                                             Publishing as Prentice Hall
       Strategy Formulation vs. 
       Implementation
        Strategy Formulation (SF)                           Strategy Implementation 
        Positioning forces                                                      (SI)
           before the action                               Managing forces during 
        Focus on effectiveness                                the action
        Primarily intellectual                            Focus on efficiency
        Requires good intuitive                           Primarily operational
           and analytical skills                           Requires special 
                                                               motivation and 
        Requires coordination                                 leadership skills
           among a few people                              Requires coordination 
                                                               among many people
                                      Copyright © 2011 Pearson Education, Inc.                    Ch 7 -3
                                             Publishing as Prentice Hall
        Nature of Strategy Implementation
         SI problems can arise because of the shift in responsibility, 
         especially if SF decisions come as a surprise to middle- and 
         lower-level managers. Therefore, it is essential to involve 
         divisional and functional managers in SF.
          Shift in responsibility
                                                              Divisional or 
                   Strategists                                  Functional
                                                                 Managers
                                      Copyright © 2011 Pearson Education, Inc.                    Ch 7 -4
                                             Publishing as Prentice Hall
       Management Issues Central to 
       Strategy Implementation
      Establish annual objectives  Match managers to strategy
      Devise policies                                    Develop a strategy-
      Allocate resources                                    supportive culture
      Alter existing                                     Adapt production/operations 
         organizational structure                            processes
      Restructure & reengineer                           Develop an effective human 
      Revise reward & incentive                             resources function
         plans                                            Downsize & furlough as 
      Minimize resistance to                                needed
         change                                           Link performance & pay to 
                                                             strategies
                                      Copyright © 2011 Pearson Education, Inc.                    Ch 7 -5
                                             Publishing as Prentice Hall
        Purpose of Annual Objectives
        Basis for resource allocation
        Mechanism for management evaluation
        Major instrument for monitoring progress 
        toward achieving long-term objectives
        Establish priorities (organizational, divisional, 
        and departmental)
                                      Copyright © 2011 Pearson Education, Inc.                    Ch 7 -6
                                             Publishing as Prentice Hall