English 4010: Technical Writing in Professional
Professor Christine Stebbins
April 23, 2013
University of Wyoming
Process of Business Strategy Making and Implementation
Prepared for the individuals who are interested in making their business successful in this competitive business world
This technical document describes the process of business strategy making and implementation in a business world. This document focuses on the individual who want to run their business successfully in this competitive business world. This technical document is organized as follow: the first section introduces the definition of business strategy making and implementation, a brief background, the propose of process, it’s intended audience and the purpose of the description, prior knowledge needed to understand this technical document, a brief description of the major steps involved in strategy making and implementation, its principal of operation, special conditions needed for process to occur, and the list of major steps. Then, the second section discusses all the major steps in the process of making and implementation of strategy. Finally, the third section gives the summary and the conclusion.
The world strategy originally came from the Greek word "strategia," which means art of troop leader, office of general, command, and generalship ("Stratigy." n.d). In general, business strategy means a long term plan of action intended to accomplish a specific goal or set of goals and objectives. Overall, business strategy making and implementation means to frame and perform actions to meet proposed plans to meet organizational and departmental business objectives. Strategic planning is the outline of decisions in the organization which figures out its objectives, purposes or goals, and produces the principal policies and plans for their organization for achieving these goals. It also defines the range of business the company is to follow, the kind of economic and human organization it intends to be, and the nature of the economic and non-economic contribution it intends to make to its shareholders, employees, customers and communities.
Business policy has been in use in business from more than a decade and it has been a mandatory course in every business school. After Second World War II, a lot of changes have occurred. First, a significant change took place in technologically, socially, politically, and economically. Second, the structural and the organizational form of the business have changed. There have been huge growths in the size of the firms, as they have been expanded globally. These change in the size and the environment of the organization forced the organizations to modify the practices it has been using,
In early 1970s, a huge meeting took place, in which business student, teachers and business researchers were the participants. In that conference, they came to a conclusion that business policy should be changed to business strategy, but none the participants were able to provide the meaning of business strategy and how is it implemented. Therefore, they ended the meeting and agreed to meet next time after gathering fine ideas on what is business strategy and where and how it implemented.
On May 1977, Dan E, Schendel and Charles W. Hofer organized a conference at University of Pittsburgh. In that conference one hundred people participated including authors, industry personnel form leading industries, students and teachers representing US’s 40 universities and few other recognized personnel. In that conference they figure out tha, business strategy making and implementation not only is a new way of planning viewing the policy but also it can be used as a guile line for the direction for the future. In that conference all session were recorded for the future reference and for the benefit of the authors.
After the conference, Schendel and Hofer complied the conference paper and published a book named "Strategic Management, a new view of business policy and planning". This book is basically the first book in history for the strategic management. It talks about how strategy is made, when and where it is used. After Michael porter developed the "Five forced model", the process of "strategy making and implementation" gain popularity because it was easy to implement the strategy making and implementation process once the organization figures out its strength and weakness.
Purpose of Business Strategy Making and Implementation
Business strategies making are the roadmap for growth and success of the organization, they define what they have accomplished so far, what they want to be in certain time frame, which they are targeting to. Following are some advantages of business strategy making and implementation:
Losses from the ineffective and inefficient use of resources can be managed.
To cope with the environmental changes and offer a framework to deal with the turbulent environment.
Help an organization to understand organization’ strengths, weaknesses, opportunities, and threats.
Base on organization’s strategy better management and control can be exercised with ease.
Base on the strategic plan, the long-term, medium-term and short-term objectives, plans and controls can be made consistent with one another.
Intended Audience and Purpose of Description
This technical document is intended for all the business personnel that are responsible for their business success by using the proper process of business strategy making and implementation. Though implementation of the strategy happens in all levels of business but strategic planning is done by the upper level management team. They are also responsible for giving authority to lower levels to implement and also to supervise. Therefore, this technical document is intended to upper level management team who should have a clear idea about what they are doing and this document helps them to know what they are supposed to do.
Prior Knowledge Needed to Understand the Process
This technical document is intended for business personnel who want to run their business more effectively and efficiently. Therefore, a basic knowledge of business is expected, but this is a very simple yet a very challenging process. This means, any person with the basic business knowledge can understand this process and can implement but s/he has to be a risk taker.
Brief Description of the Process
On the next page, Figure 1, is a figure of the strategy making and implementation process, that shows a brief visual description of the process.
Source: Thompson, A.A., Peteraf, A. M., Gamble, E.J., and Strickland III, A.J. (2012). Crafting & Executing Strategy (18th ed.). New York, NY: McGraw-Hill.
Figure 1: The Strategy Making and Implementation Process
The above Figure 1 helps us to see a visual image of what is done on the business strategy making and implementation process. This process mainly consists of five main steps. First, strategic vision, mission and values are developed. Then, objectives are set. Next, strategies are crafted to achieve the objectives and move the organization along the intended path. After objectives are made, they are implemented. Finally, after a certain time of implementation, developments are monitored, performances are evaluated, and corrections are made if needed.
Principal of Operation
Strategic plans are mainly made by top level management in the organization, but they should also make sure that they involve stakeholders. None of the strategic plans are considered valid until there is approval from the certain number of stakeholders. An organization’s strategy should be made within an organizations values, as well as individual values in the organization. Moreover, organization’s strategic plans should be legal and should strictly follow the Equal Employment Opportunity law.
Special Conditions Needed for Process to Occur
An organization should have a clear vision about where they want to be in a certain time frame and how it is possible for them to get there. Therefore, to create a clear mission about their organization and line up resources and effort with the mission, to make sure the organization stays on sequence, and at the same time help to reduce waste and repetitions, strategy making and implementation is important.
List of Major Steps
The process of strategy making and implementation consists of five major steps as shown below:
Step 1: Developing a strategic vision, mission and values
Step 2: Setting objectives
Step 3: Crafting a strategy to achieve the objectives and move the company along the intended path
Step 4: Executing the strategy
Step 5: Monitoring developments, evaluating performance, and initiating correct adjustments
Steps in the Process
In this section, five major steps involved in the process of strategy planning and implementation are discussed in brief:
Step 1: Developing a Strategic Vision, Mission and Values
A strategic vision is a conceptual image of what the organization should look like in the future and how that will add importance to an organization. A strategic vision directs an organization in a particular direction, maps a strategic path for it to follow in preparing for the future, and builds commitments to the future development. Well-defined vision should be realistic, trustworthy, attractive, and adaptable.
A vision statement also helps an organization to analyze where they are now and how they did in the past. Sometimes, strategic making means changing the past plans according to the present situation. Therefor e, strategic plan should be adaptable to the changing demand of their consumers. Moreover, an origination’s mission and vision should be something that can achievable or at least near to their expectations in a certain time frame. This makes an organization’s mission and vision statement more genuine, truthful and good-looking.
Furthermore, an organization’s value drives the organization in a right or wrong direction depending on what kind of values it follows. Therefore, making good polies and rules in advance is very necessary for the organization.
Step 2: Setting Objectives
The main purpose of setting objectives is to convert the previously made mission and vision into specific performance targets. This is the step where plans are created to gradually to grasp the previously made strategic mission, or simply to make an outline of items to be accomplished within a small period, but the time frame depends on objective to objective. Well-stated and well-organized objectives are specific, measurable, and contain the dateline for accomplishment. These objectives make easier to understand and implement through all levels. These goals are valuable for an organization because of three specific reasons. They are:
They focus on efforts that are needed to achieve certain objectives and line up actions throughout the organization.
They work as benchmarks for tracking a company’s performance and success from time to time.
They motivates the employee for success, results are seen soon after the work is done, which inspires employees to greater levels of effort.
Usually, the organization’s objectives are divided into two distinct types of performance. One is financial objectives and other is strategic objectives. Financial objectives are related to financial performance that the organization has targeted to, to achieve from the organization’s mission or vision statement. For example, financial strategy could be the increase in certain annual revenue or annual increase in earnings per share. Strategic objectives are related to organization’s outcomes that indicate or measure the strength of the organizations’ in the market. Good objectives also help to figure out competitive factors and the further possibility of the organization’s expansion.
Step 3: Crafting a Strategy to Achieve the Objectives and Move the Company along the Intended Path
The strategic missions and visions are something that are done mostly by the top level executives with the consent of a certain number of shareholders who has a certain percentage of organization’s ownership. Crafting strategy on the other hand is a combined team effort of all the managers from all levels.
In this stage, an organization has to ask all the possible "how" questions and try to answer those questions to get a brief idea of what obstacles the organization might face in the future and how to overcome them. Some of the "how" questions are: how to sustain in the market, how to make the customer happy about organization’s product and services, how to survive in the market, how to compete with the rivals, how to respond to the changing market conditions, how to achieve the strategic mission and how to achieve financial and strategic objectives. The faster the environment changes it becomes more challenging for an organization to handle the business and also to maintain the market position. Therefore, crafting the strategy for every single level on every single objective is highly important. To achieve the stated earlier objectives the strategy makers should be able to make predictions about the near future, and have to be able to act accordingly or should be willing to take the risk to experiment with the new strategies to compete in the changing environment.
Step 4: Executing the Strategy
Implementation of the strategy is aimed at performing core business activities in a strategically supportive manner. In other words, in this stage plans are converted into actions. This is the hardest step out of all the strategy making and implementation process because this is the time where people can see actual products, experience the real services and perceive the quality if the organization’s products or service. Therefore, they have to be the best at what they do. For that, employees need to be motivated. To motivate employees, the organization should provide a supportive environment: raw material should be provided in a timely manner, and award the employees for their good effort. Depending on the type of strategies, internal and external changes and effectiveness of the work, the execution of the corganization’s primary strategy can take from few months to several years. The process of execution of the crafted strategies differs from the organization to organization. Some of the general processes to execute the strategy are:
Staffing: match needed skills and need of expertise
Good flow of information: every single employee in the company should understand their role and duty to carry their responsibility effectively and efficiently
Organization culture: good culture to carry responsibility legally and ethically
Making strong policies and procedure
Rewards and incentive: to motivate an employees
Make sure there is enough work to make them produce the required output
The organization is said to be successful only if they are they get the desired output in terms of customer satisfaction and organizations profit level.
Step 5: Monitoring Developments, Evaluating Performance, and Initiating Correct Adjustments
This is the starting point to analyze whether the organization should continue what it is doing, should change its mission, vision, objectives or execution strategy or should an organization completely stop to exist. Matrix figure below is an ideal graph illustration to visualize how the organization is doing in the market in terms of mission achievements and profitability.
Figure 2: Matrix map illustration
Above figure 2, shows how the business is doing and what next appropriate step can be taken to take our organization to the desired place. The stop sign represents an organization is neither achieving success in term of their mission statement no are gaining profit. Therefore, best option for the organization is not to continue their business any further. The heart sign shows that organization has been able to achieve its objective but without profit and tree shows, organization is on profit but not being able to achieve its mission. In both of these cases, a little change in implementation of strategy is required. Finally, star sign means the organization is on the best shape possible condition. There is no need of change in strategy or implementation.
The process of strategy making and implementation is introduced in this document. The definition of strategy making and implementation, the background, purpose of the process, intended audience, purpose of the description, prior knowledge needed to understand the process, brief description of the process, principal of operation, special conditions needed for the process to occur and the five major steps are also discussed.
Summary of the Major Steps
The process of business strategy making and implementation consists of five major steps developing a strategic vision, mission and values, setting objectives , crafting a strategy to achieve the objectives and move the company along the intended path, executing the strategy, monitoring developments and evaluating performance.
One Complete Process Cycle
The first step is to develop the strategic vision, mission and values which must be realistic, trustworthy, credible, and directed towards the future. The second step is dividing vision and mission statement into parts as objectives. The third step is making the strategy to achieve objectives. The fourth step is to execute the plans into actions. Finally, the fifth step is to monitor where we are and what next step is to take to achieve the success in an organization.
This technical document discusses the process of business strategy making and implementation for the business personnel who want to get success in their business by implementing simple steps mention earlier.