Identification of strategic factors requires systematic analysis of both external and internal environment of the firm. External environment analysis comprises of micro, and macro analysis of the business environment.' PESTEL' analysis is macro analysis. This will determine the strategic factors that indicate opportunity and threat in the business environment. The internal environment of the firm is created by the interaction of people, process and technology in the prevailing organization culture. Strategic factors of firm's strength and weakness are identifiable in all the functional areas of the firm. Say, market share, profitability, skill, productivity etc. Firm's mission leads to objectives. The integration of strategic factors, result in realization of objectives. Policies, plans and programs are required to be worked out for achievement of objectives through proper allocation of organizational resources.
While the process of formulating strategy has been mentioned by the Dattagupta, and I agree to it. I do feel that it is the leadership that effect both formulation and implementation of the strategy. If the leadership is poor, then the formulation and implementation , both will be effected. Strategy formulation is normally a top down process, as it requires to set the direction of the future. Ability of the top leaders to foresee the future direction is what is needed in the strategy. Similarly, if the the top leader is not strong in the implementation, or does not create an environment to facilitate the implementation, the whole thing will get dust in the rack.
The existing leadership style and behavior leads to set up organizational culture which in turn is considered fundamental in both strategy formulation and implementation. Strategy implementation is even more sensitive to the culture and the manner that the organization deals with resistance to change.
I agree that leadership style and behaviour have an influence on both strategy formulation and implementation. A transformational leadership style which enhances employee morale, motivation and performance in my opinion is likely to involve employees in the strategy formulation and thus increase levels of buy in. Such leadership will also foster higher levels of employee engagement lead to strategy implementation. The availability of adequate and appropriate resources such as adequate staff with required levels of competencies will also contribute to successful strategy implementation.
ONE FACTOR IS : CREATING AN EFFECTIVE LIAISON BETWEEN STRATEGY FORMULATORS AND STRATEGY IMPLEMENTORS
It is one thing to formulate a strategy and quite another to execute it. More often than not, the process of strategy formulation is an entrepreneurial activity that (among others) emphasizes effectiveness, is a rational process, requires coordination among a few individuals, and rests on a great deal of initiative and logical skills; in comparison, referring to the same small set of attributes, strategy implementation is in the main an administrative task-based activity that emphasizes efficiency, is basically an operational process, requires co-ordination among many individuals, and rests on specific motivational and leadership traits. It is not clear whether this question sets out to identify common factors that affect "both" strategy formulation and strategy implementation "at the same time"; this said, the equal focus the question places on the two processes is welcome. Much has been written on the subject of strategy formulation; but, From Strategy to Practice, available at https://www.researchgate.net/publication/266478186_From_Strategy_to_Practice, argues that the notion of strategic practice is surprisingly new; this owes to widespread perception that strategic reversals owe to strategic miscalculations; alternatively, it was too much of a good thing. However, the truth is that strategic reversals are not uncommonly failures of execution.
Article From Strategy to Practice
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