Page 193 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Unit 10: Strategy Implementation

3. Bases of Individual Rewards: Reward systems should be linked to an individual’s capability, Notes
effort and job satisfaction. If rewards are geared to only one aspect, it may have a negative
effect on performance in other aspects.
4. Bases of Group Rewards: An important issue in reward systems is whether to have
individual rewards or group rewards. Rewarding individuals for effort and performance
may be difficult unless the organisational structure permits individual performance to be
isolated from that of others. Thus, for example, with respect to managerial contribution to
corporate performance, individual rewards may be beneficial and appropriate because
individual’s contribution is relatively independent of others. On the other hand, if
individual’s contributions are relatively interdependent, it would be appropriate to adopt
schemes based on group performance. Again, rewarding individuals may be necessary
where entrepreneurial or creative behaviours are sought to be encouraged. On the contrary,
if greater co-operation and team work is sought to be rewarded, group reward schemes
would be more desirable.
5. Corporate and SBU Perspectives: In multi-divisional organisations, reward systems with
a balanced approach towards corporate interests and the interests of the Strategic Business
Units (SBUs) should be designed, where business units have greater autonomy and
independence. Likewise, if the SBUs are not likely to influence corporate performance,
unit-based reward schemes would be more beneficial. But in the case of directors and
general managers, placed in the units, who have dual responsibility of achieving unit as
well as corporate objectives, due care must be taken to design balanced empowering
environment.

Task Recently ITC has launched its range of noodles –Sunfeast Yippee. The noodles
come in different flavours and shape and they are trying to position the product based on
these distinguishing features. Considering that the market is dominated by Nestlé’s Maggi,
identify the barriers they might face in the implementation of their strategy.

10.4 Model for Strategy Implementation

According to Steiner and Miner, “the implementation of policies and strategies is concerned
with the design and management of systems to achieve the best integration of people, structures,
processes and resources in reaching organisational purposes”. Implementation of strategy
therefore involves a number of interrelated decisions, choices, and a broad range of activities. It
requires an integration of people, structures, processes etc.

Mc Kinsey’s 7-S model is good at capturing the importance of all these elements in the
implementation of strategy.

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