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Issues with Strategy Implementation

The document discusses strategy formulation and implementation, highlighting the importance of aligning organizational culture, behavior, and structure with strategic goals. It identifies major issues such as cultural resistance, behavioral challenges, and inflexible structures, illustrated by examples from Walmart and Starbucks. The conclusion emphasizes that successful strategy implementation requires addressing these challenges to foster innovation and adaptability.

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sarthakkapoor2003
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2 views

Issues with Strategy Implementation

The document discusses strategy formulation and implementation, highlighting the importance of aligning organizational culture, behavior, and structure with strategic goals. It identifies major issues such as cultural resistance, behavioral challenges, and inflexible structures, illustrated by examples from Walmart and Starbucks. The conclusion emphasizes that successful strategy implementation requires addressing these challenges to foster innovation and adaptability.

Uploaded by

sarthakkapoor2003
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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What Is Strategy

Formulation and Implementation?

• Strategy formulation involves planning and deciding on


the actions needed to achieve strategic goals.
• Implementation focuses on the execution of these plans.
• Success in implementation depends on aligning
organizational resources, behavior, and actions with the
formulated strategy.
Major Issues in Strategy Implementation

• Organizational Culture
• Behavioral factors
• Organization Structure
Issues in Strategy
Implementation
Organizational Culture:

•Cultural Resistance: The values and beliefs


of the organization might not align with
the strategic goals, causing friction.

•Change Management: Leaders must


cultivate a culture that embraces change
and supports strategic initiatives.

•Employee Engagement: Involving


employees in the strategy process helps
reduce resistance and ensures better
alignment.
Issues in Strategy Implementation
Example :
Walmart's Cultural Issue in Germany
(1990s)

Scenario: Walmart expanded into


Germany in the 1990s, aiming to replicate
its U.S. business model and culture.

Cultural Issue: Walmart's practices, such


as cheerful greetings and a top-down
management style, clashed with Germany's
more formal work culture and employee
expectations of involvement in decision-
making.
Issues in Strategy Implementation

Impact:
• Employee dissatisfaction
• Poor customer reception
• Operational inefficiencies
A1:K501
• Walmart exited the market after
financial losses

Lesson: Global strategies must adapt to


local cultures to ensure successful
implementation and avoid costly failures.
Issues in Strategy Implementation
Behavioural Issues:

•Resistance to Change: Employees may resist new


strategies if they feel threatened by changes in roles,
structures, or processes.

•Communication Barriers: Poor communication of the


strategy leads to misunderstandings and lack of
alignment across departments.

•Leadership Challenges: Ineffective leadership can prevent


employees from embracing and implementing strategic
changes.
Issues in Strategy Implementation

Example :
Starbucks’ Racial Bias Incident (2018)

Scenario: Two Black men were arrested at a


Starbucks in Philadelphia for sitting in the
store without making a purchase, prompting
allegations of racial bias in the company’s
practices.

Issue: The incident highlighted systemic


racial bias and led to public outcry against
Starbucks' treatment of customers.
Issues in Strategy Implementation

Impact:
• Backlash from the community
• Negative media coverage
• Loss of customer trust

Response: Starbucks closed stores for a day to


conduct racial bias training for employees.

Lesson: Prioritizing inclusivity and educating


employees on diversity and implicit bias is
essential to prevent discriminatory behaviours.
Issues in Strategy
Implementation
Organizational Structure:

•Inflexible Structures: Rigid structures create


barriers to adapting to new strategies.

•Alignment with Strategy: The organization must


be structured in a way that supports the
successful execution of the strategy.

•Coordination Challenges: Different departments


or divisions may struggle to coordinate efforts if
the structure is not conducive to communication
and collaboration.
Issues in Strategy
Implementation
Example:
Nokia's Decline Due to Organizational Structure
Issues

Scenario: Nokia was a market leader in mobile


phones in the early 2000s but struggled to adapt
as smartphones gained popularity.

Issue: Nokia’s rigid organizational structure


created silos, hindering communication and
collaboration. This led to a focus on hardware
over software, causing a lack of investment in app
ecosystems crucial for smartphone success.
Issues in Strategy Implementation

Impact:
•Loss of Market Share: Competitors like Apple and
Samsung surged ahead with innovative
smartphones.
•Stagnant Innovation: Bureaucracy stifled
creativity, resulting in outdated products.
•Declining Reputation: Decreased sales and brand
loyalty as consumer preferences shifted.
Issues in Strategy Implementation

Response: In 2011, Nokia partnered with


Microsoft to use Windows Phone, but the
collaboration failed to regain market share,
leading to the sale of Nokia's mobile division to
Microsoft in 2014.

Lesson: Nokia's decline emphasizes the need for a


flexible and collaborative organizational structure
to foster innovation and adaptability in a rapidly
changing market.
Conclusion

Successful strategy implementation often faces challenges from behavioral


issues, organizational structure, and organizational culture.
•Behavioural Resistance: Employees may feel threatened by changes in roles or
processes, leading to resistance. For example, introducing new technologies may
result in fear of job loss.
•Communication Barriers: When strategies are not clearly communicated,
confusion and misalignment arise across departments, causing delays in execution.
•Leadership Challenges: Ineffective leadership can demotivate teams and hinder
progress, as leaders fail to inspire or engage employees during strategic changes.
Thank You
Created By :
Bhavya Arora ,
Aditya Nair ,
Kshitij Kapoor ,
Aditya Singhal

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