Strategic Management: Formulation and Implementation

Operationalizing The Strategy - Summary

The tasks of operationalizing the strategy include establishing objectives, allocating resources, developing functional strategies and devising policies.

Annual objectives serve as guidelines for action, directing and channelling efforts and activities of organization members. Annual objectives are derived from long-term objectives. They must be consistent, measurable, and prioritized.

Resource allocation is a central management activity that allows for strategy execution. Strategists have the power to decide which divisions, departments, or SBUs are to receive how much money, which facilities, and which executives. The primary tool for making resource allocations is the budget process.

Functional strategies are derived from business strategy and provide directions to key functional areas within the business in terms of what must be done to implement strategy.

Policy refers to specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work towards stated goals.

These issues are central strategy-implementation activities common to all organizations. The next chapter examines the institutionalization phase of strategy implementation, also important to successful strategy implementation.