Making Strategy Work: A Literature Review on the Factors influencing Strategy Implementation

Strategy3Making Strategy Work:
A Literature Review on the Factors influencing
Strategy Implementation

Yang Li1, Sun Guohui1, Martin J. Eppler2
1 Business School, Central University of Finance and Economics, Beijing, China
2 Institute of Corporate Communication, University of Lugano (USI), Lugano, Switzerland

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.

Introduction
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.

Making Strategy Work: A Literature Review on the Factors influencing Strategy Implementation

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