Relationship between strategic formulation and implementation
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Strategic management involves identifying strategies to achieve competitive advantage and better performance. It includes strategy formulation and implementation. Strategy formulation is the process of choosing actions to realize organizational goals through evaluating the environment, setting objectives and targets. The six main steps of formulation are setting objectives, evaluation, target setting, performance analysis, and strategy choice. Strategy implementation translates strategies into actions through developing an effective organizational structure, policies, leadership and rewards to efficiently execute strategic plans. Both formulation and implementation are important for organizational success.
Relationship between strategic formulation and implementation
- 2. Strategic Management is all about identification and description of the strategies that managers can carry so as to achieve better performance and a competitive advantage for their organization.
- 3. Strategic management can also be defined as a bundle of decisions and acts which a manager undertakes and which decides the result of the firm’s performance. The manager must have a thorough knowledge and analysis of the general and competitive organizational environment so as to take right decisions.
- 4. Strategy formulation refers to the process of choosing the most appropriate course of action for the realization of organizational goals and objectives and thereby achieving the organizational vision
- 5. The process of strategy formulation basically involves six main steps. Though these steps do not follow a rigid chronological order, however they are very rational and can be easily followed in this order.
- 6. Setting Organizations’ objectives Evaluating the Organizational Environment Setting Quantitative Targets - Aiming in context with the divisional plans Performance Analysis Choice of Strategy
- 7. Strategy implementation is the translation of chosen strategy into organizational action so as to achieve strategic goals and objectives. Strategy implementation is also defined as the manner in which an organization should develop, utilize, and amalgamate organizational structure, control systems, and culture to follow strategies that lead to competitive advantage and a better performance.
- 8. Developing an organization having potential of carrying out strategy successfully. Disbursement of abundant resources to strategy-essential activities. Creating strategy-encouraging policies. Employing best policies and programs for constant improvement. Linking reward structure to accomplishment of results. Making use of strategic leadership.
- 9. Strategy Formulation Strategy Implementation Strategy Formulation includes planning and decision-making involved in developing organization’s strategic goals and plans. Strategy Implementation involves all those means related to executing the strategic plans. In short, Strategy Formulation is placing the Forces before the action. In short, Strategy Implementation is managing forces during the action. Strategy Formulation is an Entrepreneurial Activity based on strategic decision-making. Strategic Implementation is mainly an Administrative Taskbased on strategic and operational decisions. Strategy Formulation emphasizes on effectiveness. Strategy Implementation emphasizes on efficiency. Strategy Formulation is a rational process. Strategy Implementation is basically an operational process. Strategy Formulation requires co-ordination among few individuals. Strategy Implementation requires co-ordination among many individuals. Strategy Formulation requires a great deal of initiative and logical skills. Strategy Implementation requires specific motivational and leadership traits. Strategic Formulation precedes Strategy Implementation. STrategy Implementation follows Strategy Formulation.
- 10. In order to achieve its objectives, an organization must not only formulate but also implement its strategies effectively. The Figure represents the importance of both tasks in matrix form and suggests the probable outcomes of the four possible combinations of these variables: - Success is the most likely outcome when strategy is appropriate and implementation good. - Roulette involves situation wherein a poor strategy is implemented well. - Trouble is characterized by situations wherein an appropriate strategy is poorly implemented. - Failure involves situations wherein a poor strategy is poorly implemented.