Unit 7: Implementation of the Strategic Plan

The implementation of the strategic plan requires:

1. Redesign of the organizational structure
2. Creation or reorientation of the organizational culture
3. Creation and/or development of resources and strategic capacities
4. Alignment of administrative and operational processes towards the operation of the strategy
5. Implementation of Control Systems

Organizational structure:
The organizational structure assigns employees to specific tasks and roles to create value and specifies
how they should relate to increase the value offered to the customer.

The organizational structure responds to three basic questions:

1. How to better group tasks into roles to create distinctive capabilities and follow a particular strategy.
2. How to assign authority and responsibility to these functions.
3. How to increase the level of coordination between the functional areas as the structure evolves and
becomes more complex.

FBM vs PBM
 Administration by Functions - emphasis on the responsibilities and use of the department's budget.
 Process Management - emphasis on the results of the processes involved in the department.

Control Systems
The organizational structure establishes the hierarchies and relationships but it is necessary to make the
organization operate as agreed, for this are the Control systems.

A control system must provide administrators with:

1. A set of incentives to motivate employees to work to increase efficiency, quality, flexibility, speed,
etc.; In other words, to motivate them to generate more value.
2. Specific feedback on the organization's performance in such a way that it can be determined if the
specific objectives to achieve the vision are being achieved.

The organizational culture is the specific compilation of values, norms, beliefs and attitudes that people
and groups share in an organization and that control the way in which they interact with each other, as well
as with the participants in the company.

Processes alignment
 Satisfaction of the requirements of the internal and external clients.
 Eliminating activities that do not add value
 Consistency and predictability in processes and set as a zero-error goal.
 Seek to develop and increase the trust, authority and autonomy of those who operate the process,
bringing the decisions as close to the client.
 Ensure that the competition strategy derives more value offered to the customer.

Operation and Control of the strategy:

 The functional strategies on which the competition strategy is based are considered the company's
powerful action programs. They require large investments, that’s what master budgets are used to.
 The master budget allows you to view when and how much resources will be required, and at the
same time allows you to buy the performance obtained versus the expected one to take the
appropriate control measures.