Difference between strategy formulation implementation

Strategy Formulation:

  • Strategy formulation is positioning forces before the action.
  • It focus on effectiveness.
  • It is primarily an intellectual process.
  • It requires good initiative and analytical skills.
  • It requires co-ordination among a few individuals.

Strategy Implementation:

  • Strategy implementation is managing forces during the action.
  • It focuses on efficiency.
  • It is primarily an operational process.
  • It requires special motivation and leadership skills.
  • It requires co-ordination among many persons.

Implementing strategies requires such actions as altering sales territories, adding new departments, closing facilities, hiring new employees, changing an organization’s pricing strategies, developing financial budgets formulating new employee benefits, establishing cost-control procedures, changing adverting strategies, building new facilities, transferring managers among divisions, and building a better computer information system.

Strategy-formulation concepts and tools do not differ vastly for small, large or non-profit organizations. However, strategy implementation varies substantially among different types and sizes of organizations.

HRM  supplies the  company with a competent and willing work force which is responsible for executing strategies.

  1. Encouragement of pro-active rather re-active Behavior: Being pro-active means that the firms has a vision of where it wants to go 10 years hence, and has human resources who help it reach there. Being reactive means confronting problems as they surface. By being reactive the firm tends to lose sight of the long-term direction. It is people who can make the firm pro-active or allow it to simply rest on past laurels.
  1. Explicit communication of Goals: Generally, every firm shall have a goal and this must be communicated to all the employees. Everyone should work towards reaching the goal. BHEL had the objectives of becoming a leader in its chosen area of heavy electrical. The goal has been spread down the line and according to the CEO, “it is clearly the zeal of people to work, systematic planning and corporate strategizing every five years that have made BHEL stand taller.” The role of HR managing formulating goals and communicating it to all is indeed crucial.
  1. Stimulation of critical thinking: Managers often depend on their personal views and experiences to solve problems make decisions. The assumptions on which they make decisions can lead to successes if they appropriate to the environment in which the firm operates. However series problems can arise if the assumptions are no longer valid. The strategic HRM process can help a firm critically examine its assumptions and determine whether the decisions that follow from those assumptions need modification or need to be held back. To strategies means to think critically. Analytical thinking helps an individual question established practices shed shibboleths, search for alternatives and arrive at rightly courses of action. By being part of strategic management process, HR manager can contribute to the critical thinking process of employees.
  1. Productivity as an HR based strategy: The more productive an organization, the better is its competitive advantage. Perhaps none of the resources used for productivity in organizations are as critical as human resources. Many of the HR functions contribute to productivity. Pay, appraisal system, training, selection and job design are HR activities that directly contribute to productivity.
  1. Quality and service are HR-based strategy:  Besides productivity, other factors which contribute to a firm’s competitive advantage are quality and customer service. Quality van come from people, and realizing this firms are spending vast sum of money on quality training. Since the early 1980s, firms have recognized the value of W. Edwards Deming’s theories as a way to improve quality. Demines 14 principles have served as the foundation for many quality improvement initiatives, first in Japan and later in other parts the globe. Delivering excellent customer service is another approach to build competitive advantage. Service begin with product design and includes interaction with customers, so that customers’ needs are met. It is the employees who matter in rendering service. As Figure: 1 shows, three of the five dimensions of service are HR related. 

  1. Proficient strategies management: Depends heavily on competent personnel, better than adequate competent capabilities and effective internal; organization. Building a capable organization is obviously always a top priority in strategy execution. As shown in fig:2 three types of organization – building actions are crucial:
  • Staffing the organization: Includes putting together a strong management team, and recruiting and retaining employees with the expertise and experience.
  • Building core competencies and competitive abilities: that will be enable effective strategy execution and then keeping the competence/capability portfolio updated as strategy and external conditions change.
  • Structuring the organization and work effort: By organizing business functions and processes, values chain activities and decision making in a manner conductive to successful strategy execution.