What is Strategy Implementation and Formulation?

Strategic Implementation Concept

Strategy implementation is a process through which a strategy is put into action. Strategies are only ‘means’ to an ‘end’ i.e. accomplishment of an organization’s objectives which have to be activated through implementation. This is because both the strategic formulation and strategic implementation process are intervened in real-life situations. While the strategic formulation is largely an intellectual process, strategic implementation is more of operational nature. A good strategy without effective implementation is futile for the success of an organization.

The implementation of policies and strategies is concerned with the design and management of systems to achieve the best integration of people, structures, processes, and resources in reaching organizational objectives. Strategy implementation may also consist of securing resources, organizing these resources, and directing the use of these resources within and outside the organization. In an action, the strategy chosen is a promise and implementation is to turn the promise into performance. These tasks of transformation warrant structural and administrative mechanism which can be compatible and workable to be established to reinforce the chosen strategic direction for action. Once the strategy has been determined; it is the job of the management to ensure that the strategy is implemented. The major task of the implementation strategy is to create a fit between the company goals and its other activities. Generally, two types of fits need to be created—

(i)  fits between the strategy and functional policies; and
(ii) fits between the strategy and the organizational structure, process, and systems.

Developing an alternative strategy and making a strategic choice constitute important steps in the process of strategic management. Implementation of the strategy is a vital step in the process. A good strategy without effective implementation can hardly be expected to succeed in the performance. Implementation of strategy in an organization covers a number of inter-related decisions, choices, and a broad range of activities such as the commitments and cooperation of all units, sections, and departments. There are two inter-related tasks involved in the process, i.e. differentiation and integration.

Strategy Formulation and Implementation

Strategy formulation is largely an intellectual process whereas strategy implementation is more operational in character. Strategy formulation requires good conceptual, integrative, and analytical skills but strategy implementation requires special skills in motivating and managing others. Strategy formulation occurs primarily at the corporate level of an organization while strategy implementation permeates all hierarchy levels. In fact, they are not supplanting each other but supplementing each other. In other words, they are not conflicting but contemporary to each other. The relation between strategy formulation and implementation can be best understood by their interdependence. There are two types of linkages between strategy formulation and implementation i.e. forward linkage and backward linkage.

Forward linkage is concerned with the influence of the formulation on implementation. Strategy formulation has forward linkage with implementation in the sense that total implementation activities are geared according to the strategy chosen for implementation. The nature and type of organizational processes and systems are conditioned by the strategy for its successful implementation. Thus, implementation is dependent upon formulation.

Backward linkage, on the other hand, deals with the influence in the opposite direction. Strategy formulation has backward linkage with implementation as an organization tends to adopt those strategies which can be implemented with the help of the existing structure of resources joined with some additional efforts. The strategy is formulated in a particular environment that is dynamic. The feedback from operations, a result of strategy implementation gives notices of the changing environmental factors to which strategy should be seen in continuity rather than in discrete form.

The inter-dependence of formulation and implementation of strategy does not mean that managers are not to distinguish between the two. While interdependence helps management to take corrective action in the light of the feedback given by the implementation, the distinction between the two helps in putting the right perspective on organizational resources both human and physical. When the strategy is put into action through the process of developing internal plans, the feedback mechanism stresses the need to continually assess the implementation of strategy and organizational performance in order to determine any change in the strategy. Thus, those who are responsible for strategy formulation are also responsible for its implementation.

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