Strategy Implementation and Strategy

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Literature review of strategy implementation and strategy process frameworks

Introduction

Great strategies are worth nothing if they cannot be implemented (Okumus and Roper

1999). It can be etended to say that better to implement effecti!ely a second grade

strategy than to ruin a first class strategy by ineffecti!e implementation. "ess than #$% offormulated strategies get implemented (&int'berg 199 &iller *$$* +ambrick and

,anella 19-9). !ery failure of implementation is a failure of formulation.

/he utility of any tool lies in its effecti!e usage and so is the case with strategy. 0trategyis the instrument through which a firm attempts to eploit opportunities a!ailable in the

business en!ironment. /he performance of a firm is a function of how effecti!e it is in

con!erting a plan into action and eecuting it. /hus implementation is the key to

performance gi!en an appropriate strategy.In literature implementation has been defined as 2the process by which strategies and

policies are put into action through the de!elopment of programs budgets and

procedures3 (4heelan and +unger pp1#). /his in!ol!es the design or ad5ustment of the

organisation through which the administration of the enterprise occurs. /his includeschanges to eisting roles of people their reporting relationships their e!aluation and

control mechanisms and the actual flow of data and information through thecommunication channels which support the enterprise (,handler 196* +rebiniak and

7oyce *$$#).

Evolution

/he field of 0trategic management has grown in the last thirty fi!e years de!eloping into

a discipline in its own right. 8orrowing etensi!ely from conomics and 0ocial sciences

it is still fragmented by the presence of number of distinct schools of thought di!ersity inunderlying theoretical dimensions and lack of disciplined methodology. /he

fragmentation is due to high degree of task uncertainty and lack of coordination inresearch a result of lack of uniformity and focus between the strategy field its basedisciplines and practitioners (lfring and :oelberda *$$1 pp 11).

0trategy as a field of en;uiry de!eloped from a practical need to understand reasons for

success and failure among organi'ations. /his led to a focus on o!erall performance and

on the top management. /he works of ,handler (196*) and <ndrews (19=1) created a!iew that strategy is made at the top and eecuted at the bottom further reinforcing the

fields focus on the top management while implementation was seen as secondary (>loyd

and 4oolridge 1996)

/he emergence of corporate planning in the 19=$s further heightened the disconnect between formulation and implementation as operating decisions were made as if plans

did not eist. ?ey insight was that plans were ineffecti!e and line managers needed to be

in!ol!ed in the process (>loyd and 4oolridge *$$$)./he de!elopment of analytical toolslike 8,G @I&0 further reinforced the notion that strategy was an eclusi!e top

management function. /he de!elopment of the strategic management paradigm

delineated the formulation and implementation components of strategy identified roles

for all mangers ecept the lowest operating le!el in the formulation process.Implementation was design of standards measures incenti!es rewards penalties and

controls (>loyd and 4oolridge 1996). &anagers were thought to be more as obstacles. It

1



was &int'berg and 4aters (19-#) whose !iew that strategy is a pattern in a stream of

decisions that epanded the role of other than the top management in strategy making

since strategies could be emergent. 8urgelman (19-A) integrated both the top down and bottom up !iew of strategy by introducing the concept of autonomous de!elopment of

strategy in addition to the normal intended strategy reinforcing the obser!ations of

8ower(19=$) who stated that the top management had little control on what pro5ects get pushed for appro!al.

Bespite these studies till the 199$Cs strategy formulation and implementation were seen

as separate items with a distinct focus on strategi'ing (achie!ing the fit between theen!ironment and the plan) while effecti!e implementation of it was taken as granted.

,ontent research dominated. /he works of &int'berg (19=-) &iller and >rieson (19-$)

@ettigrew (19-#) brought into focus the gaps between formulation and implementation.

/his brought into prominence the research stream concentrating on study of change. /hisalso challenged the paradigm of eplicit formulation and implementation as strategies

could now be emergent unreali'ed. It also strengthened the tiny but growing band of

process researchers who were looking at the role of power culture as shapers of strategy

outcomes.Research on strategy implementation though neglected was taken by few researchers in

form of de!elopment of frameworks (+rebiniak and 7oyce *$$# 8ourgeois and 8rodwin19- 0ki!ington and Baft 1991 &iller 199= Okumus *$$1 7oyce and +rebiniak *$$#)

and in the form of e!aluation of indi!idual factors affecting the implementation process

likeD the interests of middle managers (Guth and &acmillan 19-6) or the usage ofimplementation tactics (Eutt 19-=).

/he present contet for strategic management has been described as hypercompetiti!e

(BCa!eni 199) which ensures that sustained ad!antage is transitory. Fnder these

circumstances strategy and form of organi'ation need to be continuously assessed forappropriateness. /hus fast paced change makes strategy dynamic in character. "earning

has become a key attribute along with organi'ing of knowledge resources. Fnder such

circumstances strategy formulation and implementation are !iewed as intertwined sub processes in the strategy process.

0trategy research has also undergone changes paralleling these changes. 0tarting withlongitudinal process oriented studies of &arch and 0imon (19#-) chandler (196*) bower

(19=$) and mint'berg (19=-) it shifted to use of ;uantitati!e methods which were cross

sectional in nature. <s the legitimacy of the field grew and with ad!ances in research

methods along with liberal inter5ections from social sciences the re emphasis on processual studies has emerged (@ettigrew et al *$$*).

/he de!elopment of the now in !ogue strategy process researchcan be traced to

urope where attention was drawn to the role of power as an influence on strategyoutcomes (@ettigrew 19=A). /he role of culture was probed and later the combined effects

of culture and power were studied (@ettigrew 19-#). < series of large scale empirical

studies (@ettigrew and whipp 1991 @ettigrew et al 199*) de!eloped a process approachwhich combined the content process contet of change with longitudinal data collected

at multiple le!els of analysis thereby introducing the element of time into the study and

allowing for multiple le!els of analysis but integrated. /hus process research has opened

up the firmCs internal processes for study and gi!en an impetus to the role of time and

*



dynamics in addressing issues of strategic choice and change. @rocess research has been

fragmented characteri'ed by limited theory building and empirical testing( @ettigrew et

al *$$*)./he e!olution can be succinctly summari'ed as gi!en below in the table

Descriptor 1950’s and1960’s

190’s 19!0’s 1990’s "1st

century

Environme

nt0table

Bynamic

comple

Bynamic

comple

+ighly

dynamic

+yper

competiti!e

Dominant

paradigm

of strategy

content

Growth

large

corporations

control andcoordination

production

0trategy as

direction of

company production

orientation

,ore

businesses

competiti!e

ad!antage production

orientation

,ore

competencies

production

ser!icesorientation

0er!ices

orientation

learning

#ey toimplementa

tion

>it structurewithstrategy and

contet

Resourceallocation

>actors

along withstructureleading to

efficiency

+ow

structures arecreatedad5usted and

made to

workH

+ow

structures arecreatedad5usted and

made to

workH

$esearc%

@rocessual

longitudinal

case studies

,ross

sectional

;uantitati!e

,ross

sectional

;uantitati!e

@rocessual

"ongitudinal

@rocessual

"ongitudinal

&asis of

corporate

value

added

0kills of

generalmanager

@ortfolio planning

:ale based planning

Be!elopment

capabilitieslearning

"earning and

knowledgecreation

'trategy

logic

4hat

business to

be in

@ortfolio

management

conomies

of scale and

efficiency

,ompete on

strengths

synergy

conomies of

scope

&ased on (ettigrew et al )"00"*+ ,%ittington )"00"*+ -ould and .amp/ell )199*

/hus it can be seen that the e!olution of research on strategy implementation is directlylinked with the e!olution of strategy research and the emphasis on implementation has

been seen to be dependent on the dominant approach (perspecti!e) guiding a researcher.

'trategic decision process

/he core of the strategy process (including implementation) in!ol!es decisions andactions. Becision making is the rational application of knowledge to a choice problem

(0imon 19=6). It in!ol!es seeking answers to ;uestions such as what are the alternati!eswhat are the conse;uences of each alternati!e how desirable are the conse;uences and

what criteria to apply to e!aluate the alternati!es. 0uch rationality is possible with highly

structured problems but with highly unstructured problemsD strategic decisionsit is not possible to get all the information and specify all the set of alternati!es.

A



In e!ent of highly unstructured problems humans are boundedly rational. /he search in

this case is local limited and attempt is to find a satisfying solution (,yert and &arch

196A). /hus strategy process would consist of decisions and the actions that are dri!en bythese decisions. /he actions are a larger set and many actions are not a result of the

strategic decisions and thus mere study of the decision making process does not co!er the

strategy process.Becision making under conditions of uncertainty or ambiguity can be achie!ed by a

political process especially in conditions where multiple groups eist with each ha!ing

their own legitimate !iews of organisational interests (absence of shared goals). In suchinstances power is eercised in the broader interests of the organisation and not for

ser!ing self interests not in line with organisational interests (pfeffer 19-1).

Literature review

0trategic management has de!eloped by contributions from researchers from the fields of

economics organisational beha!ior sociology psychology and public administration.

Researchers from each field addressed strategic management from a perspecti!e which

dominated that field for e.g. researchers from the field of economics used the rational perspecti!e while researchers from the field of organisational beha!ior used the

humanistic perspecti!e./hus research on strategy implementation has been dependent on the dominant approach

(perspecti!e) guiding a researcher. <pproaches to strategy ha!e been classified !aryingly

by different authors. /he better known classifications are

• ,hafeeCs ( 19-#) linear adapti!e and interpreti!e schools

• &int'berg et al (199-) ten schools of thought.

• >aulkner and ,ampbellCs (*$$*) rational logical incremental e!olutionary

and cultural schools of thought.

• >a5ourn ( *$$$)D mechanistic and organic

• +ut'schenreuter and kleindienst (*$$6)rationalD mechanistic cogniti!eupper echelon middle management organic and micro perspecti!es.

,hafee (19-#) based his classification on the main focus which each type is built upon.

/he linear model has planning as the key focus point. Its emphasis on methodicalse;uential and directed action indicates a rational decision making process stable

en!ironment and a more simplistic !iew of strategy with a predominant role for the top

management. /ime is !iewed as static. /he adapti!e modelCs focus is on the continuouse!aluation of the en!ironment and subse;uent organisational adaptation. n!ironment is

more dynamic emphasis is more on means and goals are more nebulous and the role of

the other le!els of management is considered more significant. /he interpreti!e modellooks at an organisation as a collection of social contracts and strategy is an organisation

wide acti!ity dri!en by shared !alues and beliefs. Becision making appear trulyconsensual tending to a political process.

&int'bergCs classification (199-) the most famous is based on what strategy is!isuali'ed as for e.g. in the design school strategy is seen as a conception while in the

entrepreneurial school it is seen more as a !ision.

/hey can be grouped together into three broad classes



1. /he first three schools are prescripti!e in nature. /hey are concerned with how

strategies should be formulated. /hey thus tell about ideal strategic beha!ior.

/hese concentrate on the beha!ior of the strategist as an indi!idual.*. /he net si consider specific aspects of the strategy formation process. /hey

describe how strategies get made. /hey concentrate on role of factors beyond the

indi!idual.A. /he last school is a combination of all the abo!e schools it seeks to be

integrati!e. It tries to cluster the strategy making process the content

organisational structures and their contets into distinct stages.>aulknerCs classification (*$$*) and +ut'schenreuter and kleindienst (*$$6) are a more

abridged !ariants of &int'bergCs classification.

>a5ourn (*$$$) takes a much more conceptual !iew of the strategy process and classifies

all approaches into two main based on how time is treated how is the flow of e!entslooked at and finally the ;uality of constructs and models.

/he mechanistic approach looks at time as discreet with the flow of e!ents being linear

se;uential directional and static and the constructs and models are well de!eloped

differentiated and emphasis is more on construct than on the relationships among theconstructs. /he organic !iew treats time as incessant and continuous with the flow of

e!ents being non linear interactional and dynamic and emphasis on the relationships between constructs which are integrati!e in nature.

It can be seen that the key parameters on which the approaches differ is the type of

strategic decision process the locus of decision making and analysis and the !iew ofstrategic change. >a5ournCs (*$$$) classification allows all the approaches to be distinctly

placed in either of the class whereby one class (mechanistic) is prescripti!e and

concentrates on the role of top indi!idual as the strategist and therefore the locus of

analysis is an indi!idual the locus of analysis can be an indi!idual or a group butrestricted to top management and !iews strategic change as episodic. /hus strategy is

more a static episodic acti!ity and therefore is not !iewed as a process but more as an

e!ent. It also distinctly segregates formulation from implementation. /he other class(organic) focuses on a more inclusi!e role for other le!els of management !iewing

participation as necessary for management of en!ironmental dynamism treats strategy as

a process. /herefore the locus of decision making can !ary from an indi!idual to a grouplocus of analysis is a group and change is seen more as incremental.

/he implications for the strategic decision making process now is dependent on the

re;uirement of en!ironmental sensing mechanisms and the organisational integrati!e

mechanisms ( such as meetings committees task forces feed back mechanisms etc)which are put in place in line with the percei!ed en!ironmental dynamism. /he type of

decision making process is not as significant as much as the patterns and utili'ation of

en!ironmental sensing and organisational integrati!e mechanisms. ;uifinality is possible based on !arious combinations of participation (from mere information

pro!ision to consultation to acti!e discussion to finally a stake in decision making) in

decision making and the management of en!ironmental dynamism.

"iterature on implementation of strategy can be categori'ed as

#



1. 0tream of literature where the predominant focus has been on content such as

literature on di!ersification inno!ation mergers and ac;uisitions and

collaborati!e strategies and their link to performance.*. 0tream which deals with organisational structure as proy for implementation

!ariables

A. "iterature on strategic consensus and role of middle le!el managers. 0tream which has attempted to de!elop frameworks for implementation of

strategy

#. /he resource allocation process literatureImplementation has to be !iewed along with strategy content. 0trategy content literature

can be grouped as those dealing with di!ersification mergers and ac;uisitions

collaborati!e strategies competiti!e strategies and inno!ations dri!en strategies.

Implementation of innovations

Inno!ation has been defined as the adoption of an internally generated or purchased

de!ice system policy program process product or ser!ice that is new to the adapting

organisation (Baft 19-*). Inno!ati!eness is adoption of multiple inno!ations (Bamanpour1991). <doption of inno!ation encompasses generation de!elopment and

implementation.< &eta analysis of studies on inno!ations (Bamanpour 1991) has shown that

speciali'ation (?imberly and !anisko 19-1) functional differentiation (representing

di!ersity of knowledge (8alridge and 8urnham 19=#)) professionalism (@ierce andBelbecc; 19==) managerial attitude towards change technical knowledge resources

(Bewar and Button 19-6) administrati!e intensity( Bamanpour 19-=) slack

resources( Rosner 196-) and eternal and internal communication (&iller and >riesen

19-*) ha!e a positi!e effect on adoption of inno!ations in organisations. ,entrali'ation(/hompson 196=) has a negati!e effect on adoption of inno!ations. >ormali'ation

managerial tenure and !ertical differentiation were found to ha!e no effect. 4hile

formali'ation and managerial tenure did not ha!e any effect on both the initiation andimplementation of inno!ations !ertical differentiation ( which represents differential of

power) had a positi!e effect on administrati!e inno!ations and a negati!e effect on

technical inno!ations( Bamanpour 1991).&echanistic organisations were found to be less conduci!e for generating inno!ations

than organic organisations. /he archetypes of these two types of organisations can be put

at the ends of an 2no inno!ati!e continually inno!ati!e) continuum on which most of

the organisations would tend to fall within the length of the continuum. Organisationswhich are more mechanistic are more appropriate for administrati!e inno!ations while

organic form is more appropriate for technical inno!ations.

"iterature on adoption of inno!ations has concentrated on indi!idual !ariables affectingthe process of adoption by way of bi!ariate relationships both at indi!idual and

organisational le!el (dobni *$$6)

Diversification strategies

Bi!ersification means associated changes in administrati!e mechanism (ramanu5am and

!aradra5an 19-9). Research on di!ersification has concentrated on the concept of

6



relatedness international di!ersification mechanisms of strategy and effects of strategy

on performance (8ergh in hand book of strategic management *$$1hitt et al).

/he link between di!ersification and performance is perhaps the most researched link inthe strategic management literature (palich et al *$$$). Bespite $ years of research the

field has yet to show consistent findings and thus consensus on key relationships is

elusi!e which lea!es the field as yet to mature (Gary *$$#). Bespite a large number ofstudies on the di!ersification performance link the results are less clear now (palich

cardinal and miller *$$$).

/he empirical studies start with that of chandler (196*) who stated that structure has to bealigned to strategy for ensuring effecti!e performance. It was rumeltCs (19=) study that

related constrained businesses show the best performance which set the trend of research

on di!ersification. amining rumeltCs results betis (19-*) concluded that the

o!errepresentation of an industry in the sample may be the cause ,hristiansen and&ontgomery (19-1) concluded that market share eplained the greater part of the results

while &ontgomery (19-#) found insignificant results after controlling for industry

structure factors. >urther stimpert and dubhan (199#) showed that low profitability led to

increased di!ersification. It can be seen that the research on di!ersification is focused oncontent rather than implementation issue despite calls for such research (hoskisson and

hitt 199$)./his conclusion is further corroborated when we look at the basis for undertaking

di!ersification o!er the period 19#$Cs till *$$$ <B.

In the 19#$Cs and 196$Cs the basis for di!ersification was abundance of generalmanagement skills in a firm and implementation was taken for granted as it was belie!ed

that ha!ing general management skills ensured implementation. +owe!er the

performance during these decades was below a!erage. In the 19=$Cs the basis was

portfolio management and focus on strategies of the firm with little focus onimplementation. /he performance was still found to be below a!erage. /he 19-$Cs saw a

shift to !alue based planning and reduce di!ersification while in the 199$Cs the emphasis

was on creation of synergies eploitation of core competencies portfolio based onmanagement style. 0uccess was found to be linked to sticking to similar businesses

(Gould and hicks *$$1Doford hand book of strategy). /he lack of focus on

implementation is e!ident and indirectly gets pro!ed when we see that performance is the best in di!ersification to related businesses only. /his further gets supported from the

empirical finding that in highly di!ersified companies there was a tendency to spin off the

unrelated businesses into independent units after which there was found to be an

impro!ement n performance of those units (0adler et al 199=). Of late there has been areali'ation that implementation may hold the key to di!ersification and performance link

(Gary *$$#)

/he di!ersification studies can be categori'ed into two streamsone which look atdi!ersification and performance link and the other which looks at relation between

di!ersification and performance using organisational structure( & form) as inter!ening

!ariable( 4hittington *$$*). /he first stream does not include implementation !ariablesin their study while the other stream tried to look at only one form of organisation as

proy for implementation !ariables. /his only highlights the fact what researchers in

strategic management ha!e been lamenting about non use of organisational and

implementation !ariables in strategy performance link studies (Bess et al 199# hoskisson

=



and hitt 199$ Ginsberg and :enkatraman 19-#) although they eplain twice as much

!ariance as other factors (+ansen and 4ernerfelt 19-9).

2ergers and ac3uisitions

&ergers and ac;uisitions continue to be used as a ma5or strategy for growth by firms o!er

the years despite e!idence that more than =$% of these do not impro!e the firmCs performance(+itt Ireland and +arrison *$$* +itt +arrison and Ireland *$$1). /he

factors cited for such a result are sluggish integration illusionary synergies managerial

hubris (barfield199-). Bi!erse cultures structures and operating systems (haspeslagh and7emison 1991) make integration of firms ac;uired or intending mergers etremely

difficult duly highlighting the added significance of effecti!e implementation of

strategies in the strategy performance link ("arson and finkelstien 1999 Gary *$$#).

Integration in mergers and ac;uisitions is facilitated when both the firms ha!e similarmanagement processes cultures systems and structures (+arrison and 0t 7ohn 199-

,artwright and 0choenberg *$$6).

'trategic alliances,ollaboration between companies has grown at a significant rate in recent years. /hey are

important ways to supplement a firms competencies and addressing competition(+arrigan 19--). 0trategic alliances are the most common form of such collaborati!e

strategies.

0trategic alliances are !oluntary arrangements between firms in!ol!ing echangesharing or co de!elopment of products technologies or ser!ices. /hey can occur as a

result of a wide range of moti!es and goals take a !ariety of forms and occur across

!ertical and hori'ontal boundaries (Gulati 199-).

/he failure rates in alliances ha!e been !ery high. Researchers ha!e attributed lack ofcooperation conflict poor information echange and opportunistic beha!ior as causes for

a relati!ely high rate of failure in alliances (Bas and /eng 199- *$$# Inkpen *$$1

kauser and 0haw *$$A). Researchers ha!e tried to eplain alliance success by looking attrust control and risk inherent in alliance outcomes. @artner cooperation which is the

resultant beha!ior of these antecedents determines the alliance performance.

<s can be seen the success of alliances is a function of management of interorganisationalcoordination which effecti!ely links it to implementation.

$esearc% on organisational structure

0tructures are essential part of strategy implementation (4hittington *$$*)mpirical studies of the strategy structureDperformance ha!e gi!en unclear or e;ui!ocal

results. /hese studies ha!e focused on the formal structure in organisations for e.g.

hoskisson (19-9) showed that relation between unrelated di!ersification and mDform oforganisational structure is positi!e while it is negati!e for !ertical integration strategies

and e;ui!ocal for related di!ersification. It was khandwala (19=A) who showed that

congruence between structure processes and systems is more important for performance(sufficient condition) than organisational fit with en!ironment (necessary condition) and

reinforced in the study by miles and snow(19=-) where organisations following

successful prospector strategies where found to ha!e organic organisational forms. /he

study by miller (19-6) was the first to emphasi'e the configurational elements when he

-



showed that it is essential to ha!e congruence between strategyDstructure and other

systems which was reinforced by @ettigrew et al (*$$*) who !iewed the elements to

represent complementariness. Organisations need to be configured as a whole and nottreat structural elements as isolated factors (?eats and o neill *$$* hand book of

strategy).

/he role of managers in achie!ing this configurational congruence is due to the fact thatmanagers are the first to notice salient differences in organisational performance can also

anticipate changes strategi'e and plan structural changes and finally implement these

changes.Research on strategy structure which started with chandlerCs monumental work (196*)

!iewing structure as a policy shifted and got obsessed with the &Dform and

di!ersification and did not look at other structural configurations with changes in

strategies as time passed by. /his obsession led to structure being !iewed moreconser!ati!ely than what chandler had defined (Gould and luchs 199A) resulting in

structure being !iewed as a proy for implementation. 4ith waning interest due to

increasingly di!erse topics holding researchers interest structure was treated as

peripheral construct as part of studies on change culture or control. Research on structurethen graduated to finding out how structures are created and adapted. /hus structure was

treated as an instrument in practice (4hittington *$$*)4hile literature in the business policy area got obsessed with one type of structure (mD

form) and one type of strategy (di!ersification) 4hittington *$$*) the organisational

beha!ior literature looked at en!ironmentDstructure adaptation lea!ing out its link to performance(Ginsberg and :enkatraman 19-#).

Research on content of strategies has either looked at strategy contentDperformance link

without considering the organisation !ariables which represent the implementation process (Ginsberg and :enkatraman 19-# Bess et al 199#) or ha!e tended to concentrate

on !ariables of specific interest such as trust (in case of strategic alliances) culture( in

mergers and ac;uisitions) or structural forms( in di!ersification) or concentrate on a listof !ariables at the indi!idual le!el( as in inno!ations) due to a predominant emphasis on

content.

'trategic consensus

/he literature on strategic consensus started as an attempt to look at factors affecting

strategy formulation at the top management le!el. 4hile ma5ority of the studies ha!e

concentrated on consensus at the top management le!el there has been a reali'ation thatconsensus needs to be looked at all le!els of managers in an organisation to eplain the

link between strategic consensus and performance (4oolridge and >loyd 199$ >loyd

and 4oolridge 199* Booley >ryell and 7udge *$$$ &arkoc'y *$$1 ?ellermanns etal *$$). +owe!er empirical testing of consensusDperformance link is besieged with

methodological problems and has tended to be in form of bi!ariate relationships

(?ellermanns et al *$$). /he importance of the strategic consensus is repeatedlystressed for de!elopment of theory about the strategy process (8ourgeois 19-# @riem

199$ @riem and Bess 199#).

9



'trategy implementation frame works and models

< sur!ey of literature (see okumus 1999 for a re!iew) allowed identification of 16frameworks or models which ha!e eclusi!ely looked at the strategy process or strategy

implementation. < summary of the salient findings of these papers is placed as anneure.

/he frameworks or models can be classified based on three ;uestions1. whether their orientation is content or process

*. whether their focus is on a partial set of !ariables Jprocess or on full set of

!ariablesJ processA. 4hether their approach is top down prescripti!e and rational process of decision

making or it is bottom up descripti!e and participati!e process of decision

making.

8ased on answers to these three ;uestions = studies look at content while 9 studies lookat the process. Out of the se!en studies looking at content two are conceptual (bourgeois

and brodwin 19- 4aterman @eters and @hilips 19-$)) while fi!e studies are empirical.

One study (7oyce and hrebiniak *$$#) looks at the complete set of !ariables is more a

prescripti!e model taking a top down approach and the four look at a partial set of!ariables such as unit capabilities and manager epertise (Roth and &orrison 199*)

matching locus of control and control mechanisms with strategy (go!indara5an 19-)implementation tactics (nutt 19-=) or fit between indi!idual !alues and !alues of

inno!ation (?lein and sorro 199*).

Of the studies which look at process - are empirical and one is a conceptual (hart 199*)which looks at the formulation part of the strategy process only. Of the eight empirical

studies four look at the entire process. Of the other four studies argyris( 19-9) looks at

learning from mistakes made during implementation of strategies ski!ington and daft

( 1991) look at structure market related ependitures communication and sanctionsmiller ( 199=) looks at implementation of strategic decisions and feurer(199#) looks at

the strategic planning system of hoshin kanri in +ewlett @ackard. In effect it can be seen

that these four studies ha!e not dealt with the entire process or set of !ariables./he four studies which ha!e looked at the full process of strategy implementation two

studies are based on one (hambrick and canella 19-9) or two case studies (okumus *$$1)

one is a cross sectional study (bromiley 199A) and the other one is a fully de!elopedmodel. /he resource allocation process model (bower and Gilbert *$$#) has been

de!eloped o!er the last thirty years through a series of empirical case studies although

literature does not consider it to be a strategy process model (okumus *$$A).

/he list of !ariables that get generated fro the frame works are

• n!ironment structure powerJ participation incenti!esJ rewards control

alignment of sub goals detailed planning resource allocation e!aluation

competenciesJ eperience learningJ training communication and eternal partners.

/he literature on the implementation frame works while listing out the !ariables affecting

the implementation process has not looked at how these !ariables interact and influenceother !ariables and how these interaction effects affect the o!erall implementation

process and the outcome (Okumus *$$A).

1$



$esource allocation process model

/he stream of literature dealing with the resource allocation process looks at the process

of resource allocation as a proy for implementation of strategy (8ower 19=$).Resource has been defined in this literature as assets tied semiDpermanently to firms and

includes tangibles and intangibles (4ernerfelt 19-).

/he central proposition is that the way the resources are allocated in the firm shapes thereali'ed strategy of the firm. Fnderstanding the resource allocation process allows one to

understand how strategy is made. /he processes that lead to strategic outcomes are

remarkably stable e!en as en!ironments change. Bespite the compleity of the processmany of the forces can be managed if they are understood.

/he process of resource allocation is intimately connected to strategy. /his process is a

comple simultaneous dynamic multile!el and multirole phenomenon. ,apital

allocation decisions were made as a part of this comple process by managers who mayha!e conflicting roles and often are at the middle le!el of the organisational hierarchy. It

also showed that structural contet shaped the strategy (8ower 19=$). /he process of

resource allocation is also influenced by the strategic contet (8urgelman 19-A).

Resource allocation is an iterati!e process (Eoda and bower 1996) and is a bottom up process. 8ounded rationality pre!ents any single indi!idual from collecting and

processing all rele!ant knowledge for an optimal decision (0imon 19=). 8ottom up process relie!es the top management of the need to collect all information and processing

it to make a decision. /his is done by distributing the decision rights to managers who

possess the rele!ant specific knowledge. >urther these managers ha!e the incenti!e todefine and support successful pro5ects to the etent they are in line with their incenti!es

and rewards. /he persistence of the process produces a conser!ati!e bias which eplains

the inertia built up. /he customers and shareholders could influence the resource

allocation process thereby influencing the selection of proposals for in!estment(,hristensen 199=). Inno!ations that fit the strategic contet were called sustaining

technologies while those that did not fit the contet were called disrupti!e technologies

and these were implemented successfully by setting up a new organisation (,hristensen199=). /his process can fail when there are institutional barriers around sources of capital

(sull 1999) when highly !olatile and uncertain in!estment decisions are made

(eisenmann *$$*) and re;uire corporate inter!ention to set it right or when the magnitudeof in!estment eceeds the authority of the managers proposing and are not willing to bear

the risk associated with the proposal (eisenmann *$$*) or when the middle managers

block proposals due to differences with the operating managers (kuemmerle 199-).

<part from the abo!e mentioned factors managerial cognition is another importantfactor. Resource allocation to disrupti!e !entures is seen when such e!ents are framed as

threats and yet were attempted to be ad5usted among the eisting strategic and structural

contet (Gilbert *$$$). /hus cogniti!e framing shapes the resource allocation process. Eormati!e functions of the resource allocation system

1. Be!elop capabilities

*. ,reate !alue for the organisation and enhance employee reputation and securityA. allow for inno!ati!e proposals to get resources to facilitate creation of eplorati!e

capabilities

11



>or effecti!e implementation of autonomous or new strategic initiati!es that are not in

line with the present strategic contet both recognition and incorporation into the

strategic contet is re;uired./he process can be changed. /op management can effect changes in the structural

contet to effect changes in the way definition and impetus is managed. 8y changing the

strategic contet and the cogniti!e frames of the managers the definition and impetus process can be managed. ternal forces (customer and capital market feedback) can also

be harnessed to effect change in the same processes.

In the whole process consensus at all le!els is implicit. <t the definition stage theinitiation may be in one department but the acceptance of the final definition is dependent

upon the influence the pro5ect will ha!e on other departments and hence their inputs will

influence it. /he final definition is thus implicitly a consensusual decision either by

participation or by imposition or a combination of both.

Reali'ed strategy becomes the key outcome !ariable in the resource allocation model.

4%e role of t%e corporate office in t%e resource allocation process

/he corporate office can inter!ene to support resource allocation to disrupti!e

inno!ations and then either spin it off as a separate organisation or re!ise the strategic

contet to incorporate the strategic implication of the disrupti!e inno!ation. It can also bere;uired when organisational politics hamper the implementation of the disrupti!e

strategy. 0imilar inter!ention will be re;uired when the en!ironmental changes re;uire

large scale changes in strategic contet or speed of decision making due to speed ofchange in en!ironment or both. ,orporate inter!ention will also be re;uired in cases

where units are working based on cooperati!e strategies or in transnational corporations.

/he resource allocation model is a process model. +owe!er it has been eclusi!ely

studied only in large manufacturing organisations and has not considered the link to performance outcomes. Its strength lies in its ability to gi!e intermediate le!el constructs

which facilitate the de!elopment of a comprehensi!e process model of strategy

implementation (8ower and Gilbert *$$#).

Befinition

Impetus

&anagerial

cognitio

n

0trategic contet

0tructural contet

Resource

allocationappro!al

,ustomers,apital mkts

The resource allocation process (Bower and Gilbert 2005)

,ustomers

Reali'ed

strategy

1*



(ro/lems associated wit% t%e researc% in t%is field

1. 0trategy implementation is still a neglected area for research (hrebiniak and 7oyce

*$$1 hut'schenreuter and kleindienst *$$6). >ormulation and implementation are complimentary and logically distinguishable

areas of strategic management research (hrebiniak and 7oyce *$$1). mpirical

research shows many implementation related !ariables are important ineplaining performance (+anson and 4ernerfelt 19-9).

Implementation of strategy directly or indirectly relates to all facets of

management. Organisations fail to implement more than #$% of their strategicdecisions (miller *$$* hambrick and canella 19-9 mint'berg 199). Bespite the

importance of implementation process the emphasis of strategic management

research has been on content or formulation (dess gupta hennart and hill 199#).

/he reasons for such paucity of research on implementation ha!e been stated to be due to the compleity and difficulty associated with it the field being less

glamorous and implementation being !iewed as a mere administrati!e eercise

an etension of the planning process (okumus and roper 1999).

*. /here is no ehausti!e and cohesi!e body of prior literature due to paucity ofresearch (noble 1999 hut'schenreuter and kleindienst *$$6).

A. /he eisting content of research on strategy implementation is widely spread andfragmented.

<lthough strategy implementation is a function of multiple !ariables that must

recei!e an integrated approach to understand the interacti!e effects howe!er theyha!e recei!ed only differentiated attention in both strategic management and

organisational beha!ior literature (hrebiniak and 7oyce *$$1)

. /here is no agreed upon and dominant frame work in strategy implementation

(hut'schenreuter and kleindienst *$$6)/his has hampered both practioners and researchers alike (noble 1999 <leander

1991). /his has resulted in lack of a starting or reference point for practioners to

use for their guidance and researchers a model to build upon. /he literature onthe implementation frame works while listing out the !ariables affecting the

implementation process has not looked at how these !ariables interact and

influence other !ariables and how these interaction effects affect the o!erallimplementation process and the outcome (Okumus *$$A).

2et%odological issues

• Implementation has to be !iewed along with strategy content. 0trategy content

literature can be grouped as those dealing with di!ersification mergers and

ac;uisitions collaborati!e strategies competiti!e strategies and inno!ations

dri!en strategies. cept literature on inno!ations which has dealt with factorsinfluencing adoption of it all other streams ha!e looked at strategy contentD

performance link without considering the organisation !ariables which represent

the implementation process (Ginsberg and :enkatraman 19-# Bess et al 199#).

• Research in strategic management has predominantly been cross sectional in

nature concentrating mostly on simple bi!ariate relationships and has been

plagued with the problems of multiple definitions of constructs (Ginsberg and

!enkatraman hut'schenreuter and kleindienst *$$6). /he use of configurations

1A



as a methodological principle offers potential to help in pro!iding more useful

eplanations of the strategy process (hut'schenreuter and kleindienst *$$6 miller

1996).

• In recent times there has been a proliferation of use of in depth single and

multiple case studies but large sur!eys still predominate. "ongitudinal studies are

rare although as a method are gaining in use (@ettigrew et al *$$*hut'schenreuter and kleindienst *$$6).

-aps in literature

/he gaps in literature concerned with implementation are1. /he need to look at strategy as an integrated and dynamic process.

Research concerning formulation and implementation is better if done together as

strategy process research. 0trategy process has been identified at !arious times as

an important facet of strategic management research (gopinath and +offman199# @ettigrew et al *$$* hitt *$$#). 0tudy of the process is study of

simultaneously occurring acti!ities and their linkages.

*. /he etension of the only process model (resource allocation model) dealing with

strategy process to include performance outcomes and test its application inser!ice and public utility organisations.

A. /here is a need for achie!ing integration of the fragmented and dispersed piecesof research on strategy implementation. /his re;uires a model which would look

at the !ariables in!ol!ed in implementation in an integrated way duly looking at

the interacti!e effects of the !ariables( hrebiniak and 7oyce *$$1 ,hakra!artyand Roderick *$$* @ettigrew et al *$$*)

. "ack of a good process model which eplains the implementation process duly

accounting for the interacti!e effects of !ariables influencing it and which would

be more practioner and researcher friendly.

.onclusion

0trategy implementation is important but difficult because implementation acti!ities takea longer time frame than formulation in!ol!es more people and greater task compleityand has a need for se;uential and simultaneous thinking on part of implementation

managers (hrebiniak and 7oyce *$$1). In !iew of these factors research into strategy

implementation is also difficult for it entails the need to look at it o!er time ( longitudinalstudies) presents conceptual and methodological challenges as it in!ol!es multiple

!ariables which interact with each other and show reciprocal causality(fa5ourn *$$$).

/opic of implementation is a neglected and o!erlooked area in strategic management

literature. @ublished research re!eals emphasis on strategy formulation. 0trategyformulation and implementation are complementary and logically distinguishable areas

of strategic management and part of the o!erall process of planning eecuting and

adapting. &ore Research on implementation has been done in organi'ational theory andde!elopment than in strategic management. Implementation research needs to be

interdisciplinary. /he importance of implementation can be gauged from the study of

7oyce (*$$$) which showed that firms with unusually high performance and firms whichturned around their performance relied upon key acti!ities of strategic direction building

a fast and effecti!e organisation establishing an adapti!e culture and eecuting against

focus of customer needs and cost (hrebiniak and 7oyce *$$1 hand book of strategy).

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Documents

Strategy Implementation and Strategy