ICA Working Paper 2/2008
Making Strategy Work: A Literature Review on the Factors influencing Strategy Implementation Yang Li1, Sun Guohui1, Martin J. Eppler2
Business School, Central University of Finance and Economics, Beijing, China
Institute of Corporate Communication, University of Lugano (USI), Lugano, Switzerland
Yang li: Email: email@example.com Tel: +86-010-62289680 Address: Business School, Central University of Finance and Economics, No.39 Xueyuan Nanlu, Haidian District, Beijing 100081, China Sun Guohui: Email: firstname.lastname@example.org Fax: +86-010-62288081 Tel: +86-010-62288113 Address: Business School, Central University of Finance and Economics, No.39 Xueyuan Nanlu, Haidian District, Beijing 100081, China
Martin J. Eppler: Email: email@example.com Fax: +41 586664647 Address: Institute of Corporate Communication, University of Lugano (USI), Via Buffi 13, 6900 Lugano, Switzerland.
Making Strategy Work: A Literature Review on the Factors Influencing Strategy Implementation Abstract
Although numerous studies acknowledge that strategies frequently fail not because of inadequate strategy formulation, but because of insufficient implementation, strategy implementation has received less research attention than strategy formulation. In this study, we review the factors that enable or impede effective strategy implementation, and survey the state-of-the-art in this domain. We highlight how strategy implementation has been researched so far – and in which contexts – and how this field may be moved forward. As a result of our literature analysis, spanning the last twenty-four years, we find nine crucial factors for strategy implementation that are frequently discussed in the literature as well as two approaches of aggregating and relating relevant factors. We find several important research needs regarding these factors and outline how they could be addressed.
Keywords Implementation factors, implementation phases, strategy communication, strategy implementation, strategy execution, strategic management
Acknowledgement The China Scholarship Council provided financial support for this study.
Although formulating a consistent strategy is a difficult task for any management team, making that strategy work – implementing it throughout the organization – is even more difficult (Hrebiniak, 2006). A myriad of factors can potentially affect the process by which strategic plans are turned into organizational action. Unlike strategy formulation, strategy implementation is often seen as something of a craft, rather than a science, and its research history has previously been described as fragmented and eclectic (Noble, 1999b). It is thus not surprising that, after a comprehensive strategy or single strategic decision has been formulated, significant difficulties usually arise during the subsequent implementation process. The best-formulated strategies may fail to produce superior performance for the firm if they are not successfully implemented, as Noble (1999b) notes. Results from several surveys have confirmed this view: An Economist survey found that a discouraging 57 percent of firms were unsuccessful at executing strategic initiatives over the past three years, according to a survey of 276 senior operating executives in 2004 (Allio, 2005). According to the White Paper of Strategy Implementation of Chinese Corporations in 2006, strategy implementation has become “the most significant management challenge which all kinds of corporations face at the moment”. The survey reported in that white paper indicates that 83 percent of the surveyed companies failed to implement their strategy smoothly, and only 17 percent felt that they had a consistent strategy implementation process. It is thus obvious that strategy implementation is a key challenge for today‟s organizations. There are many (soft, hard and mixed) factors that influence the success of strategy...
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