What Is The Difference Between Strategy Formulation And Strategy Implementation Significant Problems Encountered in Implementing a New Strategy in a Business

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Significant Problems Encountered in Implementing a New Strategy in a Business

“Strategy is defined as the determination of a firm’s basic long-term goals and objectives and the taking of courses of action and the allocation of resources necessary to achieve those goals” Chandler (1962)

Strategy is a process and can be addressed in less than three steps. They are: strategic analysis; this is the stage where the strategist identifies opportunities, threats, strengths and weaknesses in the environment through analysis; the strategic formulation stage is where the choice is made and the strategy implementation stage is the stage where the strategy is implemented.

Strategy implementation or strategy implementation is defined as “the transformation of strategy into organizational action through organizational structure and design, resource planning, and strategic change management.”

Analyzing the definition, it turns out that the implementation of the strategy is somewhat complicated. Therefore, the successful implementation of a strategy would be how well the various components are successfully integrated and interacted in its implementation.

A good tip would be to critically look at the components used in the implementation of the strategy in order to identify important problems that have arisen when implementing a new strategy in the company. These are discussed below: Organizational structure and design; and strategy implementation; the translation of strategy into organizational action using organizational structure also depends on the type of structure used in the organization. This is because the needs of an international organization differ from those of a small business. It is also possible that the extent of devolution or centralization may affect the implementation of the strategy.

For example, the use of a matrix structure, often in the form of product and geographic divisions or functional and divisional structures that operate in parallel; the time it takes to make decisions can be much longer than with more conventional structures. The organizational structure and design aspect of strategy implementation deals with how the organization’s human resources are mobilized and organized to implement the company’s strategy. The main important problems encountered when using the organizational aspect of strategy implementation is the fact that most employees may leave the company if they feel that they are actually being exploited if they are not motivated. This is especially true when the CEO or top management sets the strategy for employees.

Another problem that is encountered here is the mode and manner of information delivery. When a blockage occurs that prevents the flow of information processes, it means that decisions are made based on outdated or outdated information. This can be solved by devolving a central command to facilitate the flow of information between all ranks and files, especially when implementing a new corporate strategy. The structure and structure of the organization must be recognized, where operational and strategic decisions are made, if the implementation of a new strategy succeeds in some business, compromises must be found.

The next aspect of strategy implementation – resource planning establishes the resources and competencies to be created. It deals with identifying the resources needed and how those resources are used and controlled to build the competencies needed to successfully implement strategies. This resource configuration depends on: protecting unique resources, that is, if the strategy depends on the uniqueness of a particular resource, such as a patent; and must be protected; by legal means; resource matching, (combining resources to create competencies) business process reengineering (to create dynamic performance improvement) and leveraging experience to improve competency through learning and continuous improvement.

One of the main problems with strategy implementation as a result of resource planning is the failure to translate strategic goal statements, such as winning market share, into critical factors that make the goal achievable and ultimately achievable. This critical success factor analysis can be continued at the beginning of resource planning. For example, a specific timeline may be required if an organization is trying to introduce, say, a new product by Christmas. If production and its marketing were to be successful, the timing would need to be studied in detail; as well as the allocation of funds for this undertaking. The problem here is that it’s hard to know where to start because of the disparity in the times required for different activities.

Scholes and Johnson (1999) write that the circularity of the problem is quite common in the development of an action plan, and raises the question of where to start – market forecast, available funds, production level constraint or what? The answer is that it may not really matter where the starting point is, as the plan will need to be reworked and adjusted many times. A useful guideline is to introduce the problem through what appears to be the main change. An organization planning new growth strategies can start by evaluating market opportunities. A person starting a new business can start with a realistic estimate of how much capital they may have.

Critical path analysis is recommended for strategies whose implementation is planned in detail. Another problem is the conflict between departments in the allocation of funds, especially when money is involved in the implementation of a new strategy.

The next component in the strategy implementation phase is strategic change management. It is generally accepted that strategic changes are based on four fundamentals:

1. The organization has a clear overview of the strategy to be followed.

2. Changes will not take place if there is no commitment to change

3. The approach to strategic change management is likely to depend on the context.

4. Changes must address the powerful influence of paradigm and cultural network on the strategy followed by the organization.

There are two types of change – incremental change – which relies solely on the skills, routines and beliefs of organizational participants so that the change is effective and likely to win their commitment, and transformative change – which requires the organization to change its paradigm. over time. It may be a change in routine (“the way things are done around here”. It may also be a change in strategy that prompts the change. While strategy implementation is about organizational structure, control systems, and resource planning that affect the day-to-day activities of organizational members; people’s behaviors and perceptions are not may have changed.

In order to successfully implement the strategy, management must also adopt appropriate styles for managing change. For example, there is a problem with managing change based on misinformation or using inadequate information, education and communication style. This includes explaining the reasons and means of strategic change. Collaboration or participation involving those affected by the strategic change in identifying strategic issues; intervention, directing and coercive styles.

Related to strategic change management is the issue of change management. Managing the change that occurs as a result of implementation becomes completely complex. For example, some managers lose their position due to a change (delay), others may be laid off due to an increase in position, still others may lose their job titles or the position they held most dear due to the reorganization of business processes. . This demotivates employees and the organization may lose some competent employees. Others may need to be retrained for new positions or demoted if they want to stay in the organization. Such a problem can be avoided if management adopts a participative management style and involves employees from strategy formulation to its implementation stages.

In conclusion, it would be useful to point out that just as there are many definitions of strategy, the style of its implementation and the accompanying problems and solutions may also differ. However, since implementation involves controlling the behavior and sometimes the perceptions and culture of others, most of the problems are people-related, and possible solutions are likely to depend on management style and management behavior in terms of structure, availability and allocation of resources.

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