Strategic Management: Formulation and Implementation

Problems Of Successful Implementation

Problems of successful implementation centre around how well or badly the existing organization responds and how adequate its reporting proves to be.

According to Arthur A. Owen, in practice there are four problem areas associated with the successful implementation of strategies:

The first problem is that, although strategies need to be developed around the business units (SBUs), of the corporation, these units often do not correspond to parts of the organizations structure. Business units have an external market-place for goods and services, and their management can plan and execute strategies independent of other pieces of the company. Moreover, the organization structure - and how that functions - derives from its history of take-over, tax considerations, shareholders considerations, economies of scale, personnel strengths and weaknesses, national legal requirements, and so on. Therefore, at any time strategy and structure need to be matched and supportive of each other.

Strategic planners must attempt to cut through the culture of diversified corporation and to plan in relation to the various competitive environments by identifying the strategies for them.

Moreover, these strategies still have to be implemented by the organization as a whole.

A second problem area is that traditional management reports are not sensitive enough to monitor the implementation strategies, thus the strategic manager not fully aware of what is happening. Hence the performance of existing structure is not monitored properly, and as a result control mechanisms may be ineffective.

Third, implementing strategy involves change, which in turn involves uncertainty and risk. Therefore, motivating managers to make changes is a key determinant.

Finally, management systems (such as compensation schemes, management development, communications systems and so on) are often in place as a result of past strategies; they are rarely tuned or revised to meet the needs of new ones.

Alexander adds additional factors that are also significant:

To counter these problems Owen suggests the following: