Strategic Management Decisions and 3 effective approaches to Sustainable Competitive Advantage

Strategic Management
Strategic management is a system of decisions about the organization's strategic positioning, capabilities, and strategic direction - vision, mission, and values; and how best to adapt to or respond to changes in the environment to capitalize on opportunities while mitigating risks. Strategic management process involves ongoing planning, organizing, directing, and monitoring development and enhancement of organizational strategic assets and resources, and strategy to better adapt or respond to changes in external environment circumstances as well as internal environment factors.

Strategic management decisions link rhetoric (what people say), choices (what people decide and are willing to pay for), and actions (what people do) in shaping the nature and direction of an organization. Strategic management decisions can be categorized into stages such as analysis of external and internal environments, strategic issues diagnosis, strategy formulation, implementation and execution monitoring and control of organizational change. Strategic management involves the establishment of long-term goals and objectives that reflect the vision, mission and values of the organization in areas such as profitability, productivity, competitive position, employee involvement, employee relations, technological leadership, and public responsibility (corporate social responsibility).

Formulation
Implementation
Execution
Evaluation
Strategic Decisions

Strategy Formulation
Strategy formulation is the process of using available knowledge to document the intended direction of a business and the strategies crafted to reach its goals. Successful strategy formulation involves crafting a set of good strategic options, and a clear set of recommendations for the selected strategic alternative (strategic options). Those recommendations revise, as necessary, the organization's mission, its supply of resources and objectives in meeting the expectations of the stakeholders.

Crafting a strategy is  a creative decision-making process, involving generating ideas about what new solutions/products the business should offer, and in which markets to operate in order to survive, grow and thrive. It is a decision making process informed by SWOT analysis - a synthesis of the results of the analyses of the organization's external environment, internal environment, and industry to identify any opportunities and/or threats based on established strengths and weaknesses.

Visioning
This is setting the high-level direction of the organization - namely the vision, mission and core values of the organization. Mission-vision Formulation involves reevaluating of the organization's mission-vision, including broad statements about its purpose, philosophy, and goals. In stating what the organization hopes to become, it is essential to view this in abstract terms as the satisfaction of the needs of significant groups which cooperate to ensure the organization's continued existence. These groups may include: customers, managers, employees, stockholders, and owners. The key to organization success is its ability to identify the important needs of each of these groups to establish some balance among them, and work out a set of operating policies which permits their satisfaction. This set of policies, as a pattern, identifies what the organization is trying to become. A policy states how goals are to be attained. It tells people what they should and should not do in order to contribute to achievement of corporate goals. Corporate level goals are indications of what the organization as a whole is trying to achieve and to become.

Mission Statement
This is a statement of what the organization seeks to do and to achieve for its stakeholders. Mission statement also have stated goals - what the organization aspires to be for its stakeholders. Mission clarifies the long-term future direction of the company and its strategic intent. The mission statement describes the purpose and reason for the organization to exist. A mission statement establishes the organization's future course and outlines who we are, what we do, and where the organization needs to be headed - in effect, setting the organization with a sense of purpose, providing long-term direction, and establishing a clear mission to be achieved.

In stating what the organization hopes to achieve, it is necessary to state what it hopes to do with respect to its environment - external "systems" such as markets, industry, the economy, the community, and other social systems. In each case there are unique relationships to observe (e.g., with competitors, municipal leaders, congress, etc.).

Vision Statement
The vision statement usually describes some broad set of goals - what the organization aspires to look like in the future. Developing a vision requires senior management to develop carefully reasoned answer to the question: "what is our vision for the company - what are we trying to do and to become?"  - This question pushes managers to consider what the company's business character is, and should be, and to develop a clear picture of where the company needs to be headed over the next 5-10 years. The vision statement describes some broad goals - what the organization aspires to look like in the future.

Values Formulation
Core values define the organization in terms of the principles nd values the leaders will follow in carrying out the activities of the organization. Every organization has values, and these values should be coherent with the strategy. The Core Values are the strong enduring beliefs and principles that the company uses as foundation for its decisions; they determine how people will behave and how they think in carrying out their job functions. These values are shared by the Board and staff, strongly held and not easily changed. Values assessment involves looking into the personal values of the members of the organization, organization values, and the organization's operating philosophy. They are the essence of the company’s culture and expression of its “personality”.

Crafting Organizational Strategy
Crafting strategy brings into play the critical managerial issue of how to achieve the targeted results in light of the organization's situation and prospects. The process of identifying the best strategy (option) - courses of action - require people to think strategically (plan) then apply that thought to actions. This involves generating strategic options that will give the organization sustainable competitive advantage in achieving its mission and long-term goals and objectives.

Competitive advantage is what makes an entity's products - goods and services - more desirable to customers than that of any competitor. Competitive advantage can be broken down into comparative advantage and differential advantage.

Comparative advantage - This is a firm's ability to produce goods or services more efficiently than its competitors, which leads to greater profit margins. Some factors that can create comparative advantage include: geographic location, economies of scale, efficient internal systems, etc.
Differential advantage - A differential advantage is when a form's products - goods or services- differ from its competitors' offering and are seen to be superior.

Competitive advantage can be attributed to a variety of factors including: cost structure, branding, quality of product offering, distribution network, intellectual property, and customer service.

Crafting an organizational strategy is an exercise in entrepreneurship, searching for opportunities to (1) do new things, or (2) do existing things in new and better ways. It is primarily an intellectual and creative act involving developing strategies to known strategic problems identified and defined by the strategic issues agenda and events. The organization strategy is conceptualized as a hierarchy of layered strategies comprising corporate, business and operations strategy, each layer in the hierarchy having a relationship to functional strategy that contributes to and reenforces the layer.

Corporate Strategy
Corporate strategy is about strategic decisions about determining overall scope and direction of a company and the way in which its various units work together to attain particular goals. These decisions include decisions about scope (product scope, international scope and vertical scope), direction, and resource allocation.

Corporate strategy is concerned with addressing key corporate strategy issues, and focuses the organization as a whole. These key issues include:

What is the firm's overall orientation towards growth, stability and Retrenchment (directional strategy)?
What are the industries and markets in which the firm competes through its products and business units (portfolio analysis)?
What is the manner in which management coordinates activities and transfers resources and cultivates capabilities among product lines and business units (Parenting strategy)?

Corporate strategy issues are unresolved questions needing a decision. or waiting for some clarifying future event. Corporate-level strategy decisions on direction strategy can be grouped into a set of grand strategies (options), each with potential sub-options (pathways) through which the grand strategy is accomplished. The types of grand strategies include:

Growth Strategy Option - Growth strategy option implies expanding the number of markets served, the products - goods and services - offered through current or new business. The growth strategy option aims to achieve considerable business growth in the areas of revenue, market share, etc., through types of growth strategies including Horizontal Integration, Vertical Integration, Diversification, and Market penetration. Growth for example, may be achieved through pathways such as concentration - where the company is still focusing on its core business and builds it out; through diversification - where the company decides to diversify based on a number of different approaches; product expansion - creating new products; market expansion - reaching new audiences (market development).
Stability Strategy Option - The stability strategy option implies a state of status quo, or rather a state where the activity level is significantly lower than in that of the growth stage. Stability strategies are geared towards getting "more" out of the existing business (i.e., profitability driven strategy) because the current situation already works well for the organization. This strategy assumes your company is doing well under its current business model. Since the pathway to growth is uncertain, employing a stability strategy to ensure incremental progress that still bring in revenue is a viable approach.
Renewal Strategy Option - When an organization faces a challenging circumstances part of the corporate strategy will involve retrenchment or turnaround. Retrenchment requires you to strongly consider switching your business model. These approaches could include selling (exiting) part of the business or spinning it off.This set of strategies is almost the opposite of status-quo or growth strategies. It is a defensive strategy where the main objective is to change the negative trajectory and improve the company's position either through aggressive changes or "cutting off" the parts that pull it down.
Re-invention Strategy - Re-invention strategies often include taking the existing company which has not changed for decades and reinventing them. Here one can distinguish between evolutionary strategies and revolutionary strategies.

Corporate-level strategy addresses the entire strategic scope of the firm. It is a "big picture" view the organization and includes deciding in which product - goods or service - markets to compete, and in which geographic regions to compete.

Business Strategy
Business strategy is a clear set of plans, actions, and goals that outlines how a business will compete in a particular market, or markets, and with product, or a number of products and services. Business strategy is concerned with decisions and choices regarding competitors, the nature of competition, and competitive advantage. Business strategy is concerned strategic issues such as:

What is the mission? What do we sell?
Who should be the customers that define our target market/audience?
What should be the value proposition that differentiates our products and services with those customers? How to compete?
What are strategic business objectives of the firm?
How do we compete?

Business strategy is a system of decisions that are aimed at shaping both the long-term competitive strategy of the company. Business strategy is intended to help organizations reach their business objectives with the vision and mission serving as the direction for the business and values guiding decision making. Business strategy by identifying clear plan for how an organization will reach its goals, allows you to focus on capitalizing your strengths, using them as competitive advantage that makes your company unique in the market place.

The type of business competitive strategy option may include:

Cost Leadership - This is a cost advantage strategy where the organization is trying to be the lowest cost producer. In many industries high capital costs limit competitors. This is not true in professional services, this usually means lowering the cost of talent by using professionals from countries or regions with lower wages or employing more automation in the firms business process.
Differentiation Leadership - This is a differentiation strategy. With differentiation strategy an organization is attempting to establish and maintain meaningful differences between the firm and its competitors.
Focus Strategy - This is a specialization strategy. The focus dimension of a competitive strategy recognizes that either a cost advantage or differentiation strategy can be applied to a very broad market or a more narrow (niche) market.

An effective competitive strategy will help a firm develop, enhance, and exploit one or more competitive advantages based on differential advantage.

Business strategy is a tool to help organizations define the methods and tactics (function actions) they need to take within their company to reach their business goals. A business strategy helps different functional departments work together, ensuring departmental decisions support the overall direction of the company. Without following business strategy such as any of the ones mentioned above, it becomes very difficult for firms to sustain competitive advantage in competitive industry. For example, having a lower cost structure, or greater expertise are common examples of competitive strategy in the professional services. Business strategies act as a foundation for developing operations and functional strategies.

Operations Strategy
Operations strategy is a system of decisions that are aimed at shaping both the long-term capabilities of operations and their contribution to the overall strategy achievement. Operations strategy consists of a series of decisions that organizations make in order to implement competitive business strategies. These decisions relate to key strategic issues including:

How to contribute to the strategic objectives?
How to manage the organization's resources that create and deliver value?
What capabilities do we need?

Answers to the questions above inform operations strategy development decisions.

Operations Strategy Formulation
Operations Strategy design is concerned with some very broad questions regarding structure, and infrastructure - how major resources should be configured in order to achieve the firm's corporate objectives. To develop operations strategy management should give due consideration to the requirements mandated by corporate and business strategy, market requirements, as well as competitive priorities and how you will handle them.

Operations strategy views/perspectives capture the design decisions in formulating operations strategy; these perspectives include.

Market Requirements - This perspective is concerned with "what the market positioning of the organization requires operations to do". Addressing the appropriate needs of customers through product offering, and attracting customers as compared to competitors, are the the main concepts that influence performance objectives decisions. The Market Requirements perspective translates market requirements into performance objectives such as quality, speed, dependability, flexibility, and cost. Performance objectives are the main device used to understand market requirements. These objective measures represent the various aspects of performance in which the market requirements can be expressed.
Operations Resources - This perspective is concerned with "what operations resources can do"; and covers an organization's assets, processes, and capabilities. This perspective involves moving from a broad understanding of what resources, processes and capabilities an operation may possess within its resources through to identification of key decisions that operations managers will need to take in order to exploit, build on and develop these capabilities. The Resource-Based View of the firm (Penrose, Barney, 1991; Peteraf, 1993) emphasizes the organizational capabilities that underlie a firm's ability to excel in achieving its competitive priorities. Critical to this is a firm's unique combination of resources and organizational capabilities; the potential for competitive advantage is related to the extent to which they are valuable, rare, inimitable, and non-substitutable. In the Resource-Based View of the firm, operations strategy design deals with and addresses some very broad questions regarding how major resources should be configured in order to achieve the firm's corporate objectives. Some of the issues include: long-term decisions regarding "structure" - the physical attributes of operations such as capacity to produce, facility location, process technology, and supply networks; and "infrastructure" - the people, systems, and software.
Top-Down - The top-don perspective defines the impact of corporate strategy and objectives on business strategy and objectives and in turn their influence on operations strategy. This is a representation of top-down reflection of "what the business wants operations to do"; and comes down from business strategy.
Bottoms-up - This perspective is concerned with "what day-to-day experience suggests operations should do". It comes from within operations to improve Resources and Capabilities and inform decisions to the question "on what should be the capabilities that make our business better than any other in delivering that value proposition?". The bottom-up perspective describes the day-to-day experience of providing products - goods and services - to the market and the problems and solutions revealed, which become formalized into operations strategy. This is bottom-up activity where operations improvements cumulatively build strategy.

These decisions are influenced by the objectives mandated by corporate and business strategy, and the current operations capabilities. Operations strategy has a vertical relationship with overall business/corporate strategy and has a horizontal relationship with other functional strategies, such as marketing, sales, finance, IT, and HR.

Performance Objectives
The goals or purpose of most organizations is the efficient production of goods and/or services. To do this, they have to procure resources, convert them into outputs and distribute them to their intended users. Performance objectives are broad performance measures that provide a device for understanding market requirements. The operations performance objectives include:

Price/Cost - A firm competing on price basis is able to provide consumers with an in-demand product/service at a price that is competitively lower than that offered by firms producing the same or similar goods/services.
Quality - A firm competing on this basis offer products or services that are superior to the competitors on one or more dimensions such as: Performance - a product's primary operating characteristics; Conformance - the degree to which a product's design and operating characteristics meet predetermined standards; Features - the bells and whistles of a product; Durability - mean time until replacement (how long does the product last before it is worn out); Reliability - a product's mean time until failure or between failure; Serviceability - the speed, courtesy, competence, and ease of repair; Aesthetics - a product's looks, feel, smell, sound, or taste are aesthetic qualities; Perceived Quality - this is usually inferred from various tangible and intangible aspects of the product.
Service -A firm competing on Service basis can define this in a number of ways such as: Superior Customer Service; Rapid delivery; On-time Delivery; Convenient Location.
Flexibility - A firm competing on flexibility basis depends on their ability to provide either flexibility of product or volume.
Trade-offs - Competing on one (1) or two (2) distinctive competencies at the necessary expense of the others.

Quality - The quality objective is considered to measure how well a product conforms to certain specifications. It is also how desirable the features of the product are; how reliable the product is; how durable it is; how easily it can be serviced; how well it performs its intended function; and how much the customer believes in its value.
Speed - The speed objective measures how fast a company can deliver its products and generate sales quotes. The objective will be concerned with such issues as: the time that it takes to produce one or more products of the company or the time that it takes to research a new product and develop it.
Dependability - This objective is a measure of company dependability and/or product dependability. Organization dependability objective is measure of how dependable the company is when it comes to timely delivery of products to customers, in accordance with planned prices and costs. Product dependability objective is a measure of the product's ability to function in an intended way consistently over a reasonable period of time. "Dependability" could also mean a proportion of services or goods delivered late, average lateness, proportion delivered early, etc.
Flexibility - He flexible operations objective is a measure of operations that can configure their product lines to deal with various requirements and to also adjust these product lines quickly to new requirements. The latter is also closely related to the speed objective.
Cost - The variation in costs objective looks at how much variation exists in the unit ost of a product as measured by changes in a variety of factors including: the volume and the variety of products.

Each of the performance objectives can be thought of as bundles of issues that will need separating out. Some of these objectives are more important for some operations than others. One well-known method of distinguishing between the importance of performance objectives is classifying them as order winners or qualifiers.

Competitive Priorities
Competitive priorities are the characteristics of the firm or things that it does better than other service firms (e.g., low cost, quality, service, or flexibility). The firm's competitive priority(s) must be both an order qualifier and an order winner.

The order qualifier is a characteristic that the service must possess in order to compete in the market. If the firm lacks this then the consumer will not even consider purchasing the firm's service. Qualifiers are the "givens" of doing business. No matter how well an organization performs at its qualifiers, it is not going to gain great competitive benefit.
The order winner is the characteristic that will cause the consumer to purchase the firm's service over its competitors. The good/service concept then is the set of competitive priorities that the target market values. Order Winners are performance objectives that clearly gain more business for the company as its performance in these areas improve.

If however, a company fails to meet the expectations of the market in a qualifying performance objective, it will suffer disadvantage in the marketplace. Analyzing markets starts with executive opinion of market order-winners and order-qualifiers, and then testing them with data showing actual demands for different customers, orders and products.

General Operations Strategies
Some examples of General Operations Strategy types include:

Customer-Driven Strategies - These are market based strategies that enable the organization to meet the needs and desires of a target market. These strategies must allow a company to evaluate and adapt to changing environments, continuously enhancing core competencies, and developing new strengths on an ongoing basis.
Core Competencies - Core competencies are the strengths and resources within a company. Core competency based strategies are resource-based strategies, and may include having well-trained staff, optimal business locations, and marketing and financial strengths. By identifying its core competencies a company can develop processes such as customer satisfaction, product development, and building professional relationships with stakeholders.
Competitive Priorities - Competitive priorities are defined as the dimensions that a firm's production system must possess to support the demands of the markets in which the firm wishes to compete. There are five common groups of competitive priorities namely cost, quality, time, flexibility and innovation.
Product and Service Development - Strategies behind the development of products - goods and service - should consider design, innovation, and added value. When developing a product - good or service - a company should consider the wants and needs of its customers, how it stands against the competition, and how its technical measures relate to its customers' needs. Companies should consider packaging services with immediately observable and psychological benefits and support services.

Operations strategy provides the ability to improve a firm's products - goods and services - and processes. Operations strategy's role is to provide a plan for the operations function so that it makes the best use of its resources. Operations strategy focuses on maximizing the efficiency and effectiveness of production of service or goods while minimizing operating costs through the Operations System design.

Strategic Choice
Strategic choiceis the mental process of selecting the best or most appropriate strategy from the stock of alternatives that serves the company's objectives. This choice takes place in a frame work of reference made up of variety of elements and the choice made is the product of the basic elements that work in the frame work. The basic elements may be some combination of factors such as: execution capacity, distinctive competencies, decision making styles, governmental policies, competitors' reactions, time dimension, information constraints, etc.

Strategy Statement
The strategy statement describes what the organization's competitive game plan will be. A strategy statement communicates the company's intended strategy to everyone within the organization. A well written strategy statement will help employees and the organization to understand their roles when executing the company's strategy.

Strategy Testing
Each strategy option has to pass through the following tests:

Aligned - in that it conforms to strategic intent. This answers the question "Does this option take us towards where we want to go?"
Feasible - in that the capabilities and resources necessary for success can be made available. This answers the question "Will it work?"
Acceptable - in that it will win the approval of both those who will have to approve it and those who will have to implement it. This answers the question "Will this option be acceptable?"

Any strategy has to pass all three (3) tests to be viable. if more than one strategic option passes these tests, they may have to be compared with each other to choose the 'best'.

Strategic Goals and Objectives
The Organizational "Official" goals statements are described in an organization's public statements such as corporate charter, mission statements and annual reports. Some examples of organization official goals include:

Mission Goals - The mission statement is a general statement on how you will achieve your vision. The mission goals are statements of what needs to be accomplished to implement the mission and values. Mission Objectives are specific actions and timelines for achieving the mission goals.
Corporate goals - These are statements of what needs to be accomplished to implement the corporate strategy. Corporate goals set expectations for employees, investors, and customers. Corporate goals typically include customer loyalty, profit, growth, leadership and commitment to employees, customers and the community. Corporate objectives are specific actions and timelines for achieving the corporate goals. Examples include: maximizing shareholder wealth, increasing market share, expanding current product lines, improving employee retention, etc. Corporate objectives are specific actions and timelines for achieving the corporate goals.
Business Goals - These are statements of what needs to be accomplished to implement the business strategy. Business goals .

Official goals help build the organization's public image and reputation; and help communicate the general purpose of the organization and describe what the organization would like or hopes to achieve.

Strategy Implementation
Strategy implementation is one of the three (3) co-incident determinants of the strategic management process including: analysis to identify potential areas for improvement, strategy formulation and strategy evaluation. Strategy implementation is about planning - investment decisions and plans - to build a capable organization that can make the formulated strategy work as intended, and execution of those plans to realize the actual strategy.

Strategy implementation is all about “how” the activities will be carried out, “who” will perform them, “when” and how often will they be performed, and “where” will the activities be conducted. And it does not refer only to the installation or application of new strategies but also to existing strategies that have always worked well in the past years, and are still expected to yield excellent results in the coming periods. Reinforcing these strategies is also a part of strategy implementation. Strategy Implementation consists of all the decisions and actions, and plans required to turn strategic choices into reality.

Strategies are implemented through broad, long-term cross organizational initiatives, as well as management directives, goal setting, policy changes, hiring decisions, and organizational modifications. A strategy is fully implemented, if the corporate strategy is fully implemented, i.e., the corporation has the capabilities, comparative (enterprise) advantage, and business portfolio it wants; and the business business strategy is fully implemented, i.e., the business unit has the customers, value proposition, and skills it has chosen to have. In practice a strategy is never fully implemented since the environment factors on which strategy assumptions were based are in constant flux.

There are two (2) parts to implementing a strategy; both parts require that an appropriate operations infrastructure is in place. The two (2) parts involve consideration of a number of important points relevant to strategy execution such as:

Activation of lower decisions - This involves the cascading of decisions and actions through out the organization. The process entails translating the organization's strategic goals into annual objectives and the actions needed over the next one or two years to implement the major proposed key objectives. The objectives are then assigned to organization (functional) units with the right competencies and capability (as defined by their functional strategies) to ensure success implementation of the selected strategic choices.
Controlling Results - This involves monitoring performance to make sure the planned results are actually achieved. It involves the implementation of performance control systems.

Implementation means the strategic plans are carried out and translated into positive actions. Managers and employees throughout the organization should participate early and directly in strategy-implementation decisions such as.

Establish Organization Structure - Determine and define Roles, Responsibilities and Relationships that build an organization for achieving those goals and objectives. Set expectations among your team, and clearly communicate your implementation plan, so there’s no confusion. Document all the resources available including employees, teams, and departments that will be involved.
Cascade Strategy - Translating the selected strategic choices into organizational methods (functional strategies). This involves translating the organization's strategic goals into annual objectives and the actions needed over the next one or two years to implement the major proposed key objectives. The objectives are then assigned to organization units with the right competencies and capability (as defined by their functional strategies) to ensure successful implementation of the selected strategic choices.
Delegate the work - Develop action plans to help determine "what" specific actions or activities need to be carried out by "who", and "when" in order to achieve a goal within the constraints defined by the objective statements. An action plan gives a time table for implementing a strategy.
Establishing strategy-supportive policies and procedures - The organizational policies and operating procedures/work procedures must have conformity with strategy. Strategy-supportive policies are essential, as they provide useful guides for decision making. Similarly, strategy-supportive work procedures or work practices are unavoidable as any deviation from the existing ones may create resistance from employees.
Design Strategy-Supportive Reward Systems - The Reward and motivation systems in the company need to be such that they promote better strategy implementation.
Design Strategic Control Systems - This involves managers selecting a strategy to implement and appropriate organization structure then creating control systems to evaluate and monitor the progress of activities directed towards implementing the strategies. This provides managers with the tools to regulate and govern their activities. Managers adopt corrective actions through adjustments in the strategy if variations are detected. Strategic controls can be both proactive and reactive.
Build a strategy-supportive culture - Strategy implementation is made relatively easy when the corporate culture is compatible with the strategy. When the corporate culture does not fit the strategy either the factors/aspects of the culture is changed or the strategy id modified. Managers face real challenges in changing corporate culture.
Execute the plan - Monitor progress and performance, and provide continued support.
Take corrective action - Adjust or revise as necessary. Implementation is an iterative process, so the work doesn’t stop as soon as you think you’ve reached your goal. Processes can change mid-course, and unforeseen issues or challenges can arise. Sometimes, your original goals will need to shift as the nature of the project itself changes.
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The implementation plan is a complex mix of decisions and activities on managing people, strategy, and operations in creating "fits" between the ways things are done and what it takes for effective strategy execution to make the strategy work as intended. Strategy implementation from a strategy content perspective involves implementation of corporate, business and operations strategy reenforced bby the implementation of the relevant functional strategies.

Implementing Corporate Strategy
Corporate strategy at its core concerns itself with the entirety of a business, where decisions are made in regard to its overall growth and direction. Corporate strategy implementation entails making corporate strategy operational by translating corporate level strategy goals into programs and projects that accomplish those goals. If the corporation has the capabilities, enterprise advantage, and business portfolio it wants its corporate strategy is fully implemented.

The pillars of corporate strategy include; allocation of resources, organization (structure) design, portfolio management, and strategic trade-offs. Implementing corporate strategy involves:

Understand the strategic goals - Understand the goals in terms of various strategic initiatives that the goals really represent to establish the business portfolio the organization wants.
Translate Goals into major programs - Translate goals into major initiatives at the beginning of operational planning. This is accomplished mapping the goals into chunks of work.
Map programs to Organizational Structure - With grouping of initiatives into programs completed, the question is "How do initiatives impact the organization?" Profit and Loss accountability, organizational structure and resource control must be understood with respect to how they relate to strategy programs. Where will resources need to be shared? How will program funding affect budgets across the organization's structure?
Define Accountability for the programs - Accountability must be clear in terms of time frames. RACI models can aid in mapping out Responsibility, Accountability, Consult and Inform roles relative to the programs or initiatives supporting the plans.
Break programs down into projects - Operations planning is about execution, so estimating work effort and time to complete correctly, for chunks of work is important. Programs are too unwieldy to be estimated and managed without breaking down the effort into smaller chunks, i.e., projects.

Corporate-level strategy is an action taken to gain a comparative advantage through the selection and management of combination of businesses competing in several industries or product markets. For multi-business firms, the resource-allocation process - how cash, staffing, equipment, and other resources are distributed - is established at the corporate level. Corporate strategy entails a clearly defined, long-term vision that organizations set, seeking to create corporate value and motivate the workforce to implement the proper actions to achieve customer satisfaction. When clearly defined, a corporate strategy will work to establish the overall value of a business, set strategic goals and motivate employees to achieve them.

Implementing Business Strategy
Business level strategy at its core is concerned with the actions and decisions a company plans to take to reach its goals and objectives.
Implementing business competitive strategy may involve the following:

Assess Business situation - Give due consideration to your business situation and make sure your competitive strategy is developed in the context of that business situation. Is the company a mature firm with well-developed brand and reputation for stability, or a brand new startup? What are your business imperatives? Do you need to grow in size or maximize profitability? These kinds of business objectives shape whats possible and what's optimal.
Research target markets and competitive environment - There are two (2) types of research of relevance here; research on your target markets and research on the competitive environment. This type of research offers you the opportunity to understand how your firm is, or could be different from competitors in ways that are meaningful to your potential clients/customers.
Identify Current or potential sources of competitive advantage - In the research step,you may have identified some likely potential advantages; you may consider these and add additional ones for evaluation. Evaluation involves applying the following tests: is the potential advantage true? i.e., is it grounded in reality?; id it relevant?; and is it provable? Is there objective support for your claim?
Validate your Competitive Strategy - The choices of competitive strategy are high stake strategic decisions; it is prudent to validate your selection of advantages before implementing them.
Develop your competitive strategy - There are two (2) types of implementation cases an organization might need to consider:

Type 1 - Some competitive advantage may already have been fully implemented in your company, or you are planning on. In those cases your task is to focus on communicating those advantages to the market place. This element of the plan is called marketing or building brand strategy and focuses on target audiences, messages, communications techniques, budget and schedule.
Type 2 - You are planning to implement a new strategy that involves developing a completely new characteristic of the organization; it involves planning how (tactics) this is going to happen. Does it involve new hires? Training existing staff? Changing policies and procedures? Acquisitions? These sort of organizational changes do not happen on their own. They must be planned for and deliberately implemented.

The business strategy is fully implemented, if the business unit has the customers, value proposition and skills it has chosen to have.

Implementing Operations Strategy
Operations strategy refers to the methods companies use to reach their objectives. Developing operations strategies enables an organization to examine and implement effective and efficient systems for using resources, personnel and work processes. Service-oriented companies also use basic operations strategies to link long- and short-term corporate decisions and create an effective management team.

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Operations Infrastructure
The operations infrastructure consists of the following: organizational structure and the systems, human resources, culture and resources to support it. Within this framework managers have to consider:

the way operations function fits into the broader organization.
support systems such as information, communication, financial, control and other support systems.
internal policies, methods and culture that support the implementation.
budgets and resources for operations.
integrated supply chains to ensure the flow of materials.
motivation of people to pursue targets.
leadership to drive implementation forward and to continually look for improvements.

The appropriate operations infrastructure needed to support an operations strategy has to be in place for strategy implementation to begin.

Organization Structure
An organizational structure divides the organization into distinct parts, and defines the relationships between those parts. The structure shows who has responsibility for what,who has authority over whom, and who reports to whom. The main options are: functional structure, product structure, hybrid structure combining the two, some time of matrix structure, or self-managed groups.

Support Systems
These are systems that support the organizational structure; they include:system of accounts, communication systems, information systems, order processing systems, customer relations systems, and other basic systems that support operations. These systems basically collect data, analyze the data and move the results around the organization to inform management decisions and actions.

Human Resources and Staffing
The human resources aspects of the organization as a system involve decisions and actions about staffing and staff levels, job responsibilities, employment conditions, motivation, etc.

Organizational Culture
Organizational culture is an intangible aspect of the the organization as system. It is defined by the values and norms,beliefs and assumptions, and influences the way people within the organization think and behave.

Implementation Conceptual Model
Implementation intentions are modeled as action goals in the action plans that specify an anticipated critical situation linked to it and to an instrumental goal-directed response. Implementation intentions (plans) have the structure of "If situation X is encountered, then I will perform the goal-directed response Y!". Holding an implementation intention commits an individual to perform the specified goal-directed response (action) once the critical situation is encountered. The choices to pursue an implementation intentions (plans) that specify an anticipated critical situation linked to it and to an instrumental goal-directed response. Both strategy formulation and implementation intentions (goals models) are set in an act of willing. The former specifies the intentions to meet a goal or standard; the latter refers to the intention to perform a plan. Commonly, implementation intentions are formed in the service of goal intentions, because they specify the where, when, and how of respective goal-directed responses.

A plan specifies a set of goals and objectives that need to be achieved to successfully satisfy the intended goals of the plan. The goals of the plan are assigned to functional areas (that define key organizational capabilities) or departments and then cascaded to the resources in key capability areas for implementation and execution. The cascade within a particular capability area terminates when the organization unit that abstracts that area reaches individual or team of individual resources that fill the relevant positions in the organization unit. The cascading process is based on goal refinement techniques. The goal refinement network model that represents the cascaded goals can be elaborated by associating with each cascaded goal element assigned to a position filled by resources responsible for employing the means to be employed in accomplishing actions/tasks/activities to achieve the specified goals and objectives. Goal refinement and elaboration decisions are critical and decisive in the planning process as alternative actor assignments define alternative system proposals. A prioritized implementation time schedule and budgets can be generated from the planning model.

Action Plans
The action plans are schedules for actions to be taken, and policies and procedures that guide resource allocation and prioritization decisions. The implementation plan defines the responsibility of top, middle and lower level managers focused on the creation of new strategic assets and/or enhancement and strengthening existing strategic assets needed by the entity in order to build an organization capable of carrying out the strategy and maintaining its ability to achieve future outcomes. The basic elements of the action plan are a list of activities needed for implementation, and time table showing when, responsibilities for each activity, time table of activities, budgeted costs, expected flow of funds, resources needed, etc.

Operations Plans
The Operations Plan describes milestones, conditions for success and explains how or what portions of a strategic plan will be put into operation during a given operations period. The operations plan is a basic tool that directs the day-to-day activities of organizational staff. An operational plan addresses four basic questions: Where are we now? Where do we want to be? How do we get there? How do we measure our progress?

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Objectives are statements of future conditions, that a manager hopes to achieve. All sets of objectives have three characteristics: priority, timing, and measurement. The phrase priority of objectives implies that at a given time, accomplishing one objective is more important than accomplishing others. Time dimensions imply that an organization's activities are guide by different objectives, depending on the duration of the action being planned. Effective planning requires measurement of objectives. A variety of measurements exists to quantify objectives in the eight areas that management expert Peter Drucker suggests: market standing, innovations, productivity, physical and financial resources, profitability, manager performance and responsibility, worker performance and attitude, social responsibility.

Resources are constraints on the course of action. It also involves budgeting - identifying the sources and levels of resources that can be committed to the courses of action. Management can select the type of budget that best suits the planning needs of the organization.
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The evaluation is based on a set of selection criteria/factors that ensures the chosen strategies will be effective. A viable strategy is defined in terms of the degree to which the strategy meets those criteria i.e.,:

Consistency - The strategy must not represent mutually inconsistent goals and policies.
Suitability (Appropriateness) - Is the strategy consistent with the organization's mission, values, and operating principles? Does it fit with the vision and mission?
Consonance - The strategy must represent adaptive response to the external environment and to the critical changes occurring within it as defined by the SWOT Analysis information..
Advantage - The strategy must provide for the creation and/or maintenance of a competitive advantage in the selected areas of activity.
Flexibility - Can it be adapted and changed as needed?
Cost-Benefit - Is the strategy likely to lead to sufficient benefits to justify the costs in time and other resources?
Timing - Can and should the organization implement this strategy at this time, given external factors and competing demands?

The whole point about strategy is that the critical factors determining its quality are often not directly observable or simply measured; and by the time strategic opportunities/threats do directly affect operating results, it may well be too late for an effective response.

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Strategic Objectives
A strategic objective is a business need that is defined in quantifiable and measurable terms. Strategic objectives are big-picture performance indicators (goals) for a company, and they describe what the company will do to try and fulfill its mission. The business need must be bound by both a baseline and a target (how much?), as well as time (by when?). We must know the level of improvement required and how much time we have to achieve the established targets. An objective is an outcome measure, not the measure of a process designed to achieve the outcome. If you can’t establish baseline or target numbers, it’s a sign that your objectives aren’t really goals. In reality, they are strategies or tactics. Strategic and operational planning most often use time, dollars, percentages, and numerical counts to measure strategic goals/objectives. Strategic objectives are typically a type of performance goals - for example, launch a new product, increase profitability, grow market share for the company's product, etc.

Developing Strategic Options

Pattern of Decisions
In effect, strategy as an idea, is a pattern of strategic decisions (options) that management has to consider, along the dimensions of the strategy hierarchy. such as:.

Options for Markets and Products

Market and Product - Market Penetration, Market Development, Product Development, or Diversification (related or unrelated). While research may measure how successful different forms of market or product development are in general, the management choice has to focus on the relative attractiveness of available options.

Options for Building Resources, Capabilities, and Competences

Strategic assessment might have identified the strengths and weaknesses in existing resources and capabilities in comparison to competitors; this may lead to identifying improvements to shore up existing weaknesses, or to build on existing strengths.
It is also likely that potential product/market options will require supporting changes in resources and capabilities.

The time-scales for developing resources and capabilities may be very long, and may be longer than the time-scale for market entry.

Strategy Execution
Strategy execution is one of the three (3) co-incident determinants of the strategic management process including strategy formulation and strategy implementation. Strategy execution takes place within the context of strategy implementation, and is a change control process involving a series of integrated decisions/actions that take place over time, and inextricably changes the organization and its relationship with its environments.

Execution System
The system enables the effective management of the strategy-producing value chain. The execution view of the system of managing an organization's strategic management process - formulating a strategy, implementing the strategy - translating the strategic choice(s) into objectives organized around strategic themes, goals and initiatives that will enable management to develop action plans for implementation, and successful execution of the plan.

Execution involves the decisions and activities the organization undertakes in order to turn the implemented strategy into commercial success. These decisions and activities encompass the thousands of decisions and actions taken every day by executive, middle and line managers, and employees acting according to information they may have, and their own self-interest as influenced by organizational culture, and constrained by organizational policies and procedures. These strategic decisions have to be timely - this refers to "when" in the evolution of changes in the organization the decisions are made, rather than how much time the decision maker has to make the decision. Successful execution is the best possible results a strategy and its implementation will allow in the actual realized strategy.

A realized strategy is the strategy that an organization actually follows. Realized strategies are a product of a firm’s intended strategy (i.e., what the firm planned to do), the firm’s deliberate strategy (i.e., the parts of the intended strategy that the firm continues to pursue over time), and its emergent strategy (i.e., what the firm did in reaction to unexpected opportunities and challenges).

Execution Process
Strategy execution involves the decisions and activities the organization undertakes in order to turn the implemented strategy into commercial success. These decisions and activities encompass the thousands of decisions and actions taken every day by executive, middle and line managers, and employees acting according to information they may have, and their own self-interest as influenced by organizational culture, and constrained by organizational policies and procedures.

The strategy execution process is comprised of both top-down and bottom-up activities:

T0p-Down Direction - The whole process starts with establishing Corporate Strategy goals, posing questions about business portfolios, and investment decisions, such as "Where?", "How much?" and "What kind of?". Then it follows Business Strategy identifying how to compete in specific markets and industries, trying to find coherent answers to a generic question "How?", and with which generic strategy to compete. And finally, the Operations Strategy comes, that should provide the right answer to a specific question "How?" ("Which way to compete?"), to deliver the highest result from the sum of basic performance objectives - speed, quality, dependability and flexibility at appropriate cost.
Bottom-up Perspective - Operations Strategy strives to improve these objectives, supports and reinforces the final outcome of Business Strategy - to achieve sustainable competitive advantage that in turn, contributes to achieve superior economic returns on a corporate level. Based on the results of Business Strategy, corporate strategists/owners may decide on entering/leaving markets, enlarging/shortening the value chains or pursuing business diversification.

Once the dyadic information flow is completed, further refinement of the whole process might start again, based on the outcome of this process.

Strategy Execution Management
Strategy execution management facilitates systematic planning, performance measurement standards, monitoring, evaluation of performance and corrective action of strategic initiatives. Strategy execution management involves control of execution. It is the constant monitoring of the progress of the strategy, its implementation and assessing whether the planned results are being achieved. A firm’s successive strategies are greatly affected by its past history of implemented and executed strategies which determine its current state, emergent strategy, and actual/realized strategy. It is important to reexamine past assumptions, and compare actual results with earlier hypotheses.

The levels of control may include: strategic control, operational control and tactical control. Strategic control always comes first, followed by operations then tactics.

Strategic Control
After a strategy is selected, it is implemented over time so as to guide a firm within a changing environment. Managers want to know if the company is headed in the right direction and if current company trends and changes are keeping them on that right path. To answer this question requires the implementation of strategic control. Strategic control is required to steer the company towards its long term strategic direction and avoid pitfalls and obstacles. Strategic control involves monitoring a strategy as it is being implemented, evaluating deviations, and making necessary adjustments.

Strategic control may involve:

The reassessment of a strategy due to an immediate, unforeseen event. For example, if a company’s main product is becoming obsolete, the company must immediately reassess its strategy.
Monitoring the progress of strategy Implementing, which often involves a series of activities that occur over a long period time, at various milestones, or intervals at . Managers can effectively monitor the progress of a strategy at various milestones, or intervals to determine whether the overall strategy is unfolding as planned.
Monitoring internal and external events. Multiple sources of information are needed to monitor events. These sources include conversations with customers, articles in trade magazines and journals, activity at trade conferences, and observations of your own or another company’s operations. For example, Toyota gives tours of its plants and shares the “Toyota Way” even with competitors.

The errors associated with strategic control are usually major, such as failing to anticipate customers’ reaction to a competitor’s new product. BlackBerry had a strong position in the business cell phone market and did not quickly see that its business customers were switching to the iPhone. BlackBerry could not recover.

Strategic control is concerned with tracking the strategy as it is being implemented, detecting problems or changes in the premises and making necessary adjustments. Strategic control is related to that aspect of strategic management through which an organization ensures whether it is achieving its objectives contemplated in the strategic action. If not, what corrective actions are required for strategic effectiveness.

Operational Control
Operational control involves control over intermediate-term operations and processes but not business strategies. Operational control systems ensure that activities are consistent with established plans. Mid-level management uses operational controls for intermediate-term decisions, typically over one to two years. When performance does not meet standards, managers enforce corrective actions, which may include training, discipline, motivation, or termination.

Unlike strategic control, operational control focuses more on internal sources of information and affects smaller units or aspects of the organization, such as production levels or the choice of equipment. Errors in operational control might mean failing to complete projects on time. For example, if salespeople are not trained on time, sales revenue may fall.

Tactical Control
Tactical control emphasizes the current operations of an organization. Managers determine what the various parts of the organization must do for the organization to be successful in the near future (one year or less).
For example, a marketing strategy for a wholesale bakery might be an e-commerce solution for targeted customers, such as restaurants. Tactical control may involve regularly meeting with the marketing team to review results and would involve creating the steps needed to complete agreed-upon processes.

For example, tactics for the bakery strategy may include the following:

building a list of local restaurants, hotels, and grocery stores
outlining how the bakery website can be used to receive orders
personally visiting local executive chefs for follow-up
monitoring the response to determine whether the sales target is met

Exercising Control
In order to exercise control, managers have to take the following steps:

Setting performance standards - Every function in the organizations begins with plans which specify objectives or targets to be achieved. In the light of these, standards are established which are criteria against which actual results are measured.
Measuring actual performance,
Analyzing variance, and
Taking corrective actions.

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Role of Control Systems
A control system monitors the performance of operations and adjusts the strategy to improve performance. There are five (5) parts to a control system, including:

Review the goals, objectives and constraints of the operations strategy,
Monitor conditions and changes in the operations and their environment,
Measure actual performance in key areas,
Compare actual performance with plans from the strategy and identify gaps,
Adjust the strategy to improve performance, moving or adding resources, revising plans, or in the extreme changing the whole strategy,

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Strategy Execution - process for executing the strategic choices by means of budgeted resource allocations; focus on getting the work of the business done efficiently and effectively;

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Successful execution involves decisions about:

Strategy - This is a hypothesis (educated guess) of the intended approach/means to accomplish specified actions/tasks that contribute to desired goals and objectives. Strategy is achieved through the constant interplay between doing, planning and evaluation in closing the performance gap.
Structure -
Coordination -
Information Sharing -
Incentives and Controls - []

These decisions take place within the organizational context of power, culture, leadership and the ability to manage change.

Enacting Organization System Instance
Organizations as social systems exist in the real world through people who are members of the organization and some physical structures (such as offices and facilities). Enacting an organization involves translation from the abstract model of the formal definition to concrete system elements, such as assigning individual actors (people) to positions in the organization structure (for example, organized around functional areas) in specific locations and facilities. The assignment of actors to positions is formally made through the signing of legal contracts (created and regulated through organization policies) with the actors. The signature of this contract represents a conveyance of the goals of the position to the actor(s) who are assuming that position, i.e., the goals of the position are expected to be executed by the actor(s) enacting that position.

Strategy execution is the process of translating strategy into the best business results possible, within the framework of its implementation.

Strategy Execution Tasks
Strategy execution is a systematic way of exposing reality and acting on it. It involves decisions made every day by employees acting, according to the information they have and their own self-interest, within the context of strategy implementation, and activities undertaken at all levels in the organization involving top management, middle management, and front-line managers and workers to turn implemented strategy into commercial/social success. The strategy execution decisions have to be timely. Timeliness refers to "when" in the evolution of changes in the organization the decisions are made, rather than how much time the decision maker has to make the decision.
Strategy execution step-by-step task view includes:

Visualize the Strategy - Visualization of the strategy enables shared understanding of what the strategy is. An effective way to visualize the strategy to improve understanding is an illustration that shows the important elements of the strategy and how each related to one another and to the mission goals. Frameworks such as the Strategy Map by Kaplan and Norton, etc. help in this regard.
Measure the Strategy - The key goals elements of the strategy should be assigned an easily understood performance measure. The full set of strategic performance measures can be organized into a Balanced Scorecard based dashboard to help managers determine the progress or lack there of of the strategy execution.
Report Progress, Compare and Learn - Your strategy is a hypothesis, its your best estimate of the route to success. It is essential to check your hypothesis at the end of an execution cycle (just like budgets are reviewed monthly to ensure financial commitments are being kept), to ensure the strategy is producing results, versus controlling performance. Compare your initial strategic assumptions with what you have learnt from the reality of the results from the completed execution cycle. In addition, look back at your Strategy Execution Capability as well to ensure it is supportive of your strategy.
Make Decisions and Update strategy - Strategy execution is much like sailing a boat toward a planned destination. A defined course and full complement of navigational charts will not eliminate the need to remain vigilant, to assess the environment, and to make corrections as conditions change while on the journey. As part of the regular reporting process leaders must make ongoing strategic decisions and update the strategy to keep it current and on course. A company needs to update its strategy based on changes in its competitive environment and on the strategy execution feedback from reporting on the previous cycle, as well as update and fine tune your execution capabilities if necessary..
Manage Initiatives - This is about selecting, prioritizing, and executing the right initiatives - those actions/plans - that will lead to achieving specific strategic objectives or closing objective performance gap. Strategic initiatives are new plans or actions to improve strategic asset or solve a strategic problem.
Manage Projects - Develop a capability in project management to coordinate and control - monitor and report progress - the execution of critical strategic projects focused on improving an organization's delivery on its mission. These projects statements include scope, budget, and start/end dates.
Communicate Strategy - Leaders must communicate their visualized strategy to the workforce in a way that will help them understand not only what needs to be done, but why.
Align Workforce Individual Roles - Set individual performance goals and objectives for managers and employees. Make to link all individual objectives with the strategy at the organization level. Aligning Individual Roles - Senior leadership must ensure that employees at all levels can articulate and evaluate their personal contribution towards achieving specific strategic goals.
Reward Performance - After explaining the strategy and aligning the workforce to it, senior managers must institute the incentives that drive behaviors consistent with the strategy. Monitor and coach regularly to motivate and provide feedback in the right way.
Evaluate Performance - Most organizations conduct a formal performance evaluation and review at the end of the individual performance management cycle. The evaluation should answer the basic question; "have the individual performance objectives been achieved?"

Strategy execution is the continuous process of closing the gap between where the company is, and what the strategy calls for. This results in a company's actual strategy - typically a combination of (1) planned - deliberate and purposeful actions and (2) emergent - as-needed reactions to unanticipated developments and fresh competitive pressures.

Execution Building Blocks
The ideal execution process for each organization is different, but all include some basic and fundamental building blocks that enable executive management to influence the actions of employees in all areas of the organization that result in effective execution of intended and emergent strategy. These building blocks include:

Clarifying decision rights and norms - How decisions are made; How people instinctively act or take action.
Designing Information flows and Mindsets - How data and knowledge are processed; How people make sense of their work and environment.
Motivators and Commitments (Aligning motivations of employees with organization purpose) - How people are encouraged to perform; How people are inspired to contribute.
Aligning Organizational Structure and Network to Strategy - How work and responsibilities are allocated; How connections are made beyond the organizational chart.
Allocation of resources - This is a set of basic activities in implementation that refers to both financial and non-financial resources that are (a) available to the organization and (b) are lacking but required for strategy implementation. How much funding would be needed to support implementation, covering the cost and expenses that must be incurred in the execution of the strategies? Another resource is time - Is there more than enough time to see the strategy throughout its implementation?

These building blocks are inextricably linked in a coherent system.

Strategy Execution as a System
Strategy execution system is a social-technical system that provide the framework to integrates strategic decisions and actions such as:

Strategic decisions, and actions taken resulting from those decisions.
Operations management decisions and activities performed resulting from decisions.
Observing the outputs and outcomes of strategic actions through reporting and monitoring environment changes.
Diagnosing the issues resulting from the patterns of organization behavior effected by organization outputs.
Timely adaptation to changes in environment and timely response to any identified opportunities or threats to achieving the mission objectives and strategic goals.

Successful execution is the best possible results a strategy and its implementation will allow in the actual realized strategy that closes the strategy-to-performance ('strategy-execution') gap.

A company's actual strategy is typically a combination of (1) planned - deliberate and purposeful actions and (2) emergent - as-needed reactions to unanticipated developments and fresh competitive pressures.

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Execution
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Integrating Functional Strategies - Identify and give due consideration to the cross-functional implications of strategy at implementation when the critical issues of strategy are appraised. [Horizontal Integration]
Develop Tactical plans for functional areas such as marketing, production, personnel, finance, and plant facilities. Implementation requires outstanding collaboration between all members of the various groups throughout the whole organization from top management to line workers.
Developing budgets that steer resources into those internal activities critical to strategic success.
Finalizing strategic plan with input from all invested parties.
Aligning the budget to annual goals.
Producing various versions of the plan for each group.
Establishing a system for tracking and monitoring the plan.
Establishing a performance management and reward system.
Presenting the plan to the entire organization.
Building annual department plans around the corporate plan.

The role of managers is to guide the organization towards goal accomplishment. Managers are responsible for combining and utilizing organizational resources to ensure their organizations achieve their purposes.

Strategy Evaluation and Control
Strategy evaluation involves the assessment of performance measures collected through monitoring of projects and programs to determine the effectiveness of a strategy in meeting strategic objectives. Performance Evaluation entails the process of evaluating the performance of a strategy, reviewing new developments and initiating corrective action to make adjustments in long-term direction, objectives, strategy, or implementation in light of actual experience, changing conditions, new ideas, and new opportunities.

An effective evaluation of the strategy begins with defining the parameters to be measured; these parameters should mirror the goals set in the direction setting stage of the strategic management function. To evaluate performance, firms' need to establish a set of "desired" outcomes as well as the metrics they will use to monitor how well their organizations delivered against those outcomes. Those outcomes may include: achieving certain levels of productivity, revenues, profits, market share, market penetration, customer satisfaction, etc.

Evaluation and Review
Management Control is the process for tracking a strategy as it's executed, detecting problems or changes in its underlying premises, and reporting to appropriate management levels.

Strategy evaluation ensures that all key supporting elements of the business systems including Measures and Rewards, Structures and Processes, Culture and People are aligned behind the chosen strategies and hinged on the mission, vision, values and critical success factors (CSF) of the organization. The evaluation and control process is concerned with defining, attaining, and presenting constructive information for reviewing alternatives to the analyzed action plan.

This is a process for making necessary adjustments based on monitoring and control information and strategy performance review.

Types of Strategy Controls
Strategic control is concerned with tracking the strategy as it is being implemented, detecting problems or changes in the premises and making necessary adjustments. Strategic control is related to that aspect of strategic management through which an organization ensures whether it is achieving its objectives contemplated in the strategic action. If not, what corrective actions are required for strategic effectiveness. Strategic control involve actions that may include performance measurements, monitoring, consistent review of internal and external issues and factors, and making corrective actions when necessary.

The types of strategic control techniques include:

Premise Control - Every strategy is founded on certain assumptions relating to environmental and organizational forces. Premise control serves to test continuously these assumptions to determine whether they are still valid or not. This facilitates the strategists to take necessary corrective action at the right time than just pulling on with the strategy based on vitiated or invalid postulations.
Implementation Control - In order to implement a chosen strategy, there is need for preparing quite good number of plans, programs and projects. The purpose of implementation control is to evaluate as to whether these plans, programs and projects are actually guiding the organization towards its pre-determined goals or not. This type of control is a step-by-step assessment of implementation activities. It focuses on the incremental actions and phases of strategic implementation, and monitors events and results as they unfold. Is each action or project happening as planned? Are the proper resources and funds being allocated for each step? There are two (2) basic types of implementation control:

Monitoring Strategic Thrusts -This is the assessment of specific projects or thrusts that have been created to drive the larger strategy;
Reviewing Milestones - During strategic planning, you likely identified important points in the implementation process. When these milestones are reached, your organization will reassess the strategy and its relevance. Milestones could be based on timeframes, such as the end of a quarter, or on significant actions, such as large budget or resource allocations. Implementation control can also take place via operational control systems, like budgets, schedules, and key performance indicators.

Strategic Surveillance - If premise and implementation strategic controls are more specific by nature, strategic surveillance, is more generalized and overriding control which is designed to monitor a broad range of events both inside and outside the organization which are likely to threaten the very course of a firm’s strategy. They allow the organization to monitor a broad range of events and conditions inside and outside the company that are likely threaten the successful achievement of the firm's strategic objectives. This provides the opportunity to uncover important, yet unanticipated information.
Special Alert Control - When something unexpected happens, a special alert control is mobilized. This is a reactive process, designed to execute a fast and thorough strategy assessment in the wake of an extreme event that impacts an organization. The event could be anything from a natural disaster or product recall to a competitor acquisition. In some cases, a special alert control calls for the formation of a crisis team—usually comprising members of the strategic planning and leadership teams—and in others, it merely means activating a predetermined contingency plan.

The implementation evaluation method assists managers in deciding whether or not the chosen strategies are steering the organization in the right direction towards achieving the strategic objectives and mission, It provides an intuitive and model-driven approach to assess the execution feasibility of the chosen strategy implementation.

Leadership climate is the emotional tone set or climate created by leaders within the work environment. The Leadership Climate Indicator is completed by employees who assess the climate created by individual line managers, as well as the climate created by groups of leaders such as senior leadership teams.

Evaluating Implemented Strategy
Strategy evaluation ensures that all key supporting elements of the business systems including Measures and Rewards, Structures and Processes, Culture and People are aligned behind the chosen strategies and hinged on the mission, vision, values and critical success factors (CSF) of the organization. The evaluation and control process is concerned with defining, attaining, and presenting constructive information for reviewing alternatives to the analyzed action plan.

The evaluation method is comprised of the activities defined by the process steps below.

Evaluation Process Steps

Define the strategy to evaluate - Managers need to specify the implemented strategy and the progress results that need to be evaluated. Such results have to be objectively measurable and consistent; and can be defined using goals modeling.
Outline Predetermined Standards - Managers need to outline standards according to the chosen implemented strategy. These standards often consist of a tolerance of range which defines adequate variations.
Obtain data to Map Out Onto Set Standards - Data to obtain consists of results from the actions taken on the chosen strategies.
Measure Performance - Assess the performance of the mapped out data.
Performance Match Standards -if the performance of the identified strategy achieves the standards within the tolerance range then the process stops here; otherwise, Take Corrective Action.
Take Corrective Action - The performance measured does not achieve the standards; managers must take necessary actions to resolve and amend the implementation Process.

Strategic Management Decisions
Strategic decisions are the decisions that are concerned with whole environment in which the firm operates, the entire resources and the people who form the company and the interface between the two. Strategic decision making are decisions that are made according to a company's goals or mission. These decisions could take the company into new directions that may or may not succeed.

Most part of strategic management is done through strategic decision-making. Strategic decisions are related to the contribution to the organizational objectives and goals significantly. They determine the direction and destination of the organization.

The characteristics of strategic management decisions can be categorized into hierarchy including:

Concerned with Scope of an organization's activity - Strategic decisions are concerned with the scope of an organization’s activities. The activities vary from company to company.
Matching activities with environment - Strategic decisions are concerned with matching activities of the organization to the internal and external environment in which it operates. In fact, strategies are formulated, evaluated and the best among the alternatives based on the environmental threats and opportunity — analysis (ETOP) and strength, weakness, opportunities and threats (SWOT) analysis.
Matching of activities with Resource Capability - Strategic decisions are concerned with matching of organization's activities with its resource capability. Strategy analysis and choice is based not only on the opportunities and threats of the environment but also on the resource base of the organization. The resource base includes financial, human, material and informational resources.
Matching of activities with resource base - Strategic decisions have major resource implications for an organization. Basically, the organization, while formulating a strategy, should be based on the available resources. The organizations, then, search for the opportunities provided by the environment which would match with the resource base to a greater extent.
Affects Operational Decisions - Strategic decisions affect operational decisions, strategic decisions are the basis for formulating and making operational decisions.
Organizational values affect the nature and magnitude of strategies - The strategies of organization will also be affected by the values and expectations of the strategic decision-makers in addition to the environmental forces and resources base, for example, the managing director, general managers and other strategists have the power to formulate strategies. The values and expectations of these strategists affect the nature and magnitude of the strategies.
Affects long-term direction of company - Strategic decisions are likely to affect the long-term direction of the company. Strategies are formulated to achieve the company’s mission and objectives which determine the long run direction of the company.

Strategic decisions are made by the top level management and by the strategists whereas the operational decisions are made by the managers at lower levels. Strategic decisions are long-term and are considered where the future planning and growth is concerned. Strategic decisions are taken in accordance with the organization's mission and vision.

Corporate Strategy Decisions
The focus of corporate strategy is on how to manage resources, risk and return across a firm to create comparative advantage as opposed to looking at competitive advantage in business strategy. Comparative advantage does not imply better products - goods and services; it only shows the firm can offer products with comparable quality to competitors at lower prices.

The corporate strategy decisions may include decisions in the following areas:

What businesses - business portfolio - should the company be in?
What should be the company's core competency that gives it comparative advantage (enterprise advantage) in adding value to its individual businesses? What should be the capabilities that distinguish the company?
What is our grand-strategy?
How to allocate cash?

Corporate-level strategy decisions addresses the entire strategic scope of the firm.

Some examples of corporate strategy-level decisions may include:

What business to enter?
What grand strategy to follow?
What should be the company's comparative advantage?
Resource allocation strategy?

These decisions and choices determine the long-term orientation of the organization's development and corporate activities that evaluate current positions and identifies investment priorities for the businesses.

Business and Competitive Strategy Decisions
Business strategy is a tool to help organizations define the methods and tactics (function actions) they need to take within their company to reach their business goals. Some examples of business strategic options include:

Product differentiation - This type of differentiation strategy may be based on innovative technology, pricing, features and design. Companies can differentiate their products by highlighting the fact that they have superior technology, features, pricing, or styling. With differentiation strategy, firms target to achieve market leadership.
Improve customer experience - Customer experience refers to the sum of all interactions a customer has with a business, both pre and post sales. The customer experience strategy defines the actionable plans in place to deliver a positive, meaningful experience across those interactions.
Pricing - When it comes to pricing strategy, businesses can differentiate either by keeping their prices low to attract more customers, or give the products aspiration value by pricing them beyond what most ordinary customers could afford.
Cross-sell more products - Focus on selling additional products to the same customer.
Improve customer retention - This strategy requires you to identify key tactics and projects to retain your customers.
Grow sales from new products - This strategy involves introducing new products into the market and updated products that are able to keep up with trends. It requires the company to invest in research and development in order to constantly innovate.
Technological advantage - Obtaining a technological advantage to achieve better sales, improved productivity or even market domination.

A business strategy helps different functional departments work together, ensuring departmental decisions support the overall direction of the company. Without following business strategy such as any of the ones mentioned above, it becomes very difficult for firms to sustain competitive advantage in competitive industry. For example, having a lower cost structure, or greater expertise are common examples of competitive strategy in the professional services. Business strategies act as a foundation for developing operations and functional strategies.

Operations Strategy Decisions
Strategic decisions in operations management are the decisions that are concerned with whole environment in which the firm operates, the entire resources and the people who form the company and the interface between the two. One way of categorizing the various decisions that typically comprise an operations strategy is to consider those that are structural, in that they define the overall tangible shape and architecture (e.g., capacity, technology type) of the operation, and those that are infrastructural, in that they relate to the people, systems, and culture that tie together the operations activities.

Structural decisions:
Structural decisions define the overall tangible shape and architecture (e.g., capacity, technology type) of the operation. Structural elements decisions are grouped as capacity, location, integration/networking, and technology.

Location Strategy - This related to decisions as to how near the company and its products should be to the consumers, suppliers, and talent while taking into consideration costs, infrastructure, logistics, and government.
Layout Strategy - This relates to integrating capacity needs, personnel levels, inventory requirements, and technology in order to ensure that material, people, and information efficiently flow through the company.
Maintenance - It relates to decisions about the capacity of the company's facilities, production demands, and personnel that are necessary in order to maintain a reliable and stable production process.
Forecasting and Capacity Planning - What does the short-term and long-term schedules look like? How much can we make in what period of time?

Infrastructure Decisions:
These are divided into four categories; planning & control, inventory management, capacity management, and supply chain management. Examples include:

Process Capacity and Design - This defines how the product - good or service - is produced (i.e., the production processes utilized and the specific technology, quality, human resource, and capital investments that the management will undertaken order to determine majority of the company's basic cost structure.
Product Design - This involves designing the products and services to be offered . For instance, product designs normally determine the lowest volume of costs and higher grade of quality as well as other features such as sustainability and human resources required.
Quality Management - This defines the expected quality from the consumers view point as well as established policies and procedures that the company intends to adopt towards attaining such quality levels.
Human Resources and Job Design - This relates to decisions on how to recruit, motivate and retain the staff with necessary skills and talents.
Supply Chain Management - This relates to decisions on how to integrate supply chain into the company's operations and strategy It includes decisions on what will be purchased when it will be purchased, whom it will be purchased from and the conditions for such purchases. Procurement is the process of getting the goods and materials your company needs.
Inventory Management - This relates to decisions about inventory ordering and holding, and how to optimize the process in order to ensure consumers' satisfaction, enhanced supplier capabilities and effective production schedule.
Scheduling - This relates to the decisions on how to determine and implement both intermediate and short-term schedules that can be utilized effectively and efficiently by both the personnel and facilities in the course of meeting consumers' demands.
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