Explaining the Implementation Imperative: Why Effective Implementation May Be Useful Even with Bad Strategy

47 Pages Posted: 26 Aug 2013 Last revised: 30 Sep 2013

Date Written: July 2013

Abstract

We propose a theory that explains why the relentless pursuit of effective implementation – the ability to get employees to take actions believed necessary to execute a strategy – may be useful even in a world in which the strategies being implemented are far from optimal. In keeping with typical models of organizational adaptation, we formulate a computational model in which an organization’s strategy adapts based on performance feedback. However, the distinctive feature of our approach is that we abandon the “organization as a unitary actor” assumption, and model a separation of beliefs and actions. In our models, the strategy believed to be optimal by a manager is imperfectly implemented by an employee. The central insight is that when there is a separation of belief and action, effective implementation has benefits beyond the well-known effect of enabling exploitation of good strategies. It also enables the discovery of better strategies by allowing more effective learning from feedback on the value of current strategies.

Keywords: implementation, execution, organization design, learning, bandit, simulation

Suggested Citation

Lee, Eucman and Puranam, Phanish, Explaining the Implementation Imperative: Why Effective Implementation May Be Useful Even with Bad Strategy (July 2013). INSEAD Working Paper No. 2013/103/STR. Available at SSRN: https://ssrn.com/abstract=2315819 or http://dx.doi.org/10.2139/ssrn.2315819

Eucman Lee (Contact Author)

Nanyang Business School ( email )

Nanyang Crescent #06-02 Singapore 637819
Singapore, 637819
Singapore

Phanish Puranam

INSEAD ( email )

1 Ayer Rajah Avenue
Singapore, 138676
Singapore

HOME PAGE: http://www.insead.edu/facultyresearch/faculty/profiles/ppuranam/

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