## Strategy Formulation vs. Strategy Implementation

### Key Differences

Dimension	Formulation	Implementation
Focus	Effectiveness — doing the right things	Efficiency — doing things right
Nature	Intellectual / analytical	Operational / administrative
Skills required	Conceptual, intuitive, analytical	Motivation and leadership
Coordination level	Top-level executives	Middle and lower-level executives

> A company succeeds only when formulation is sound and implementation is excellent — both halves are necessary.

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## Forward and Backward Linkages

Formulation and implementation are intertwined, not sequential silos. Changes in either phase ripple back into the other.

### Forward Linkages (Formulation → Implementation)

New or reformulated strategies drive internal changes: structure, leadership style, resource allocation.
If a new strategy is chosen, the org structure often must change to support it.
Leadership style must be adapted to the demands of the modified strategy.

### Backward Linkages (Implementation → Formulation)

Past strategic actions constrain future strategic choices.
Organizations gravitate toward strategies achievable with their current resource base plus incremental effort.
Incremental changes over time move the organization from where it is to where it wishes to be.
Note: formulation is primarily entrepreneurial (strategic decision-making); implementation is primarily administrative (strategic + operational decision-making).

### Practical Implication

When choosing a new strategy, always evaluate whether it is feasible and acceptable given the existing structure of resources. A brilliant strategy that cannot be executed is worth nothing.

Worked example

### Example 1

HQ Service Company (Missing Implementation): HQ hired a reputed consultant who recommended an aggressive expansion plan. Two years later, an internal review found that most suggestions had not even been fully considered. Lesson: The forward linkage was broken — formulation happened but implementation (putting the strategy into action, allocating resources, adapting structure) never followed.

### Example 2

ABC Ltd. / Ms. Suman — Shoe Company (Backward Linkage): Ms. Suman hired online designers for an ethnic shoe brand, expecting design versatility. She later discovered the designers excelled only at leather designs. She had to change her strategy based on the actual resources available. Lesson: This is a classic backward linkage — the implementation reality (actual resource capabilities) fed back and modified the formulated strategy.

### Example 3

Forward Linkage Illustration: A company decides to diversify into e-commerce (formulation). This forces it to restructure departments, hire tech talent, and retrain sales staff (implementation). The new strategy has a forward linkage to all these operational changes.

⚠️ Common exam mistakes

Confusing 'effectiveness' (formulation) with 'efficiency' (implementation) — effectiveness means choosing the right strategy; efficiency means executing it well.
Treating formulation and implementation as strictly sequential and independent; they are iterative and mutually constraining.
Forgetting that backward linkages exist — students often only think formulation affects implementation, not the reverse.
Stating implementation requires only 'top-level coordination' — it primarily needs middle and lower-level coordination; top level is for formulation.

Reference:

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Strategy Formulation vs. Implementation and Forward/Backward Linkages

Worked example

⚠️ Common exam mistakes