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A detailed overview of strategic implementation and control, covering key concepts such as translating long-term objectives into annual objectives, aligning organizational units with strategic direction, and the role of organizational culture and leadership in strategy implementation. It also explores the importance of communication, learning, and resource allocation in successful strategy deployment. Particularly useful for students enrolled in mng3702 at the university of south africa.
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Learning unit 1: Introduction to strategy implementation TRANSLATING LONG-TERM OBJECTIVES INTO ANNUAL OBJECTIVES FUNCTIONAL STRATEGIES AND TACTICS IN STRATEGY IMPLEMENTATION Strategy deployment objectives lower down the organization Aligning organizational units with strategic direction Corporate, business & functional dimensions all need to be aligned & support eachother for success Mobilization: corporate, business & functional dimensions are awakened & kept moving until they find their place Strategic plan = cup that provides structure Strategy deployment = act of filling the cup with whatever is needed Aligning individual behavior with strategic direction 5 tools:
III. Strategic leaders open new horizons To uncover possibilities beyond the mundane and open new horizons and directions for their firms, strategic leaders are expected to look beyond the obvious to see patterns, interpret different events and synthesize various outputs to gain new insight. These leaders will work with all stakeholders and understand how their work interweaves with that of their colleagues and relevant stakeholders to create opportunities for innovative practice. Opening new horizons means helping others see beyond established orthodox means and experimenting with new, exciting and more effective ways of meeting customer needs. IV. Strategic leaders reach out to stakeholders Strategic leaders value the input of stakeholders and understand their importance when it comes to implementing new strategies so they use proactive communication and frequent engagements to build trust and get their support. They are sensitive to different cultures and cross-cultural issues, and respectfully confront issues and have perspectives that may differ from dominant thinking. Strategic leaders need to be skilled at managing conflict positively and at framing dynamic relationships in ways that are productive. V. Strategic leaders are fit to lead Strategic leaders are confronted by various obstacles and environmental changes that pose threats and risks for the firm. These changes create increased levels of anxiety and stress so to deal with this they need to be flexible, reliable and resourceful. Being fit to lead is also about being mentally prepared to exploit opportunities which arise expectantly, to cope with uncertainty and make things happen with limited resources. Strategic leaders need to manage their physical and mental wellbeing. VI. Strategic leaders do the ‘next’ right thing and learn from experiences Strategic thinkers need to insist on multiple options and should not get locked into simplistic yes/no choices. They recognize the importance of balancing precision with speed, consider the tradeoff involved and take both short and long term goals into account. Successful leaders recognize the importance of organizational learning and consider lessons learned from both successful and unsuccessful goals to be important for future decisions. ORGANISATIONAL STRUCTURE AND STRATEGY IMPLEMENTATION Organisational design: process of deciding how an organisation should create, use and combine organisational structure, control systems & organisational culture to pursue its business model and long-term objectives. Organisational structure: the means through which a company assigns employees to specific tasks and roles and specifies how these tasks and roles are linked together to increase efficiency, quality, innovation & responsiveness. The purpose of organisational structure is to coordinate & integrate the efforts of employees at all levels − corporate, business and functional – and across an organisation’s functions and business units so that all levels work together in a way that allows the organisation to achieve its long-term objectives. Structures traditionally adopted by organisations, depending on their specific requirements: Simple organisational structure - includes an owner & a few employees, in which management tasks, responsibilities and communication are highly informal. Functional organisation structure - necessary to have different people handling different tasks (marketing, finance, operations), thus working in functional groups which are relatively more formal and require formal planning, organisation, coordination and control. Divisional structures - occur when an organisation diversifies its product or service lines, and serves a number of geographic areas and heterogeneous customer groups, resulting in functional structures becoming inadequate. Matrix organisational structures- characterised by dual channels of authority, performance responsibility, evaluation and control, and are largely adopted by large, project-oriented organisations. POLICIES, SYSTEMS AND PROCEDURES IN STRATEGY IMPLEMENTATION Policies: specific guidelines, methods, procedures, rules, forms and administrative practices established to support and encourage work toward stated goals Policies are characterised by setting boundaries, constraints and limits on all kinds of administrative actions. They clarify what can and cannot be done in pursuit of an organisation’s objectives, simplify decision-making, and promote delegation of decision-making to appropriate managerial levels. Policies can either assist or block good strategy implementation.
An organisation’s strategy will require either to exploit existing capabilities, or to explore and develop new capabilities, or to do both. A new strategy will undoubtedly require additional resources and capabilities − or a reallocation of current resources from existing low-opportunity activities to new, potentially high-opportunity activities and strategic priority areas. Planning and budgeting for additional resources and capabilities must occur early in or concurrently with the strategy formulation process. Resources and capabilities Resources Resources are grouped into 5 categories: A. Financial capital: organizations ability to generate funds, internally or through loans & investments B. Physical capital: operational & manufacturing equipment, location & access to raw materials C. Human capital: knowledge, management & employee insight, intellect, relationships, training & experience D. Organizational capital: reporting structure & management, planning, coordinating, controlling & networks E. Technological capital: ICT systems Tangible resources These are physical, observable, quantifiable assets, equipment, money, structures, technology & patents. Can also be any of the above 5 Intangible resources Are subsets of the strategic resources of an organization & includes knowledge, intellectual-human-structural-customer- organisational-innovation & process capital 3 types:
Management info function : linking a comprehensive, integrated management info system with decision making Operations function : continuous improvement in manufacturing & speed of response Research & development function : innovative new product development Classification of capabilities & core competencies through value chain analysis The main aim function of an organization is to add value successfully in the process of producing P/S Activities are divided into 5 primary & 4 support categories Primary activities Capabilities Inbound logistics Receiving, storing & distributing inputs for manufacturing Purchasing, material & inventory control Operations Activities that transform inputs into final products Design & product development, quality control, assembly Outbound logistics Collecting, storing & distributing of P/S to customers Distribution coord, processes of warehousing, dealer relationships Marketing & sales Marketing, sales, purchasing of P/S of a firm Innovative promo’s & advertising, motivated sales force Customer service Everything involved in improving & maintaining product value Parts, warranty, servicing, quantity & training of employees Support activities Capabilities Admin & infrastructure Support the value chain, general management, planning, information systems, legal issues, quality management Risk management & integration of value chain HR management Appointment, development & retention of employees, compensation & training Training, skills development, recruitment, retention Procurement Purchasing Inventory & database management Technology development All technology related to operations & management Integrated management info systems, technology-managed design & manufacturing Contribution of resources & capabilities towards CA CA exists when a firm is more profitable than its competition – this is done in 2 ways:
▪ R&C should enable the firm to identify & address any unmet needs of the customer THE IMPORTANCE OF STRATEGIC CONTROL Managers choose and implement strategies to pursue the organisation’s vision and strategic objectives, and in doing so create value for customers and profit for the organisation. Strategic control allows management to monitor and evaluate whether their strategy is performing as intended, whether it needs to be improved and, if so, how it can be improved. Strategic control: management efforts to track a strategy as it is being implemented, detect problems or changes in its underlying premises, and make necessary adjustments Strategies are future-oriented, only to be accomplished several years into a distant and relatively uncertain future. It is therefore essential that management systematically monitor, review, evaluate and control the implementation of the strategy as well as its performance over time. An effective strategic control process involves the following four steps:
Current state Strategic^ change required Desired future state (strategic direction) Measurement & control a) Communicating the need for organisational change : Members need to understand the reason for change, the nature and the impact. Effective communication can reduce confusion & uncertainty and guide thinking & actions b) Mobilising others to accept change : Leaders need to mobilise staff members to accept & adopt proposed change initiatives into their daily routine. This can be challenging. Leaders need to create a coalition. c) Evaluating change project implementation : Leaders have a role in evaluating the content of the change. They need to assess both new processes & procedures that have been proposed & the impact on performance. And evaluate the extent to which the organisation members are performing the routines, practices or behaviours. The change model of Kurt Lewin This is one of the oldest and most widely known planned change models, and has been around since 1947. The model quite simply describes planned change as a three-step process: Step 1: Unfreezing Most individuals will naturally resist change and will be inclined to maintain the status quo (the current state). For this reason, actively “unfreezing” the status quo and readying the organisation for change is required. Entails 2 critical steps:
The change needs to be communicated consistently & on every platform so employees understand the change, why it’s happening & how it will be beneficial. Leaders “walking and talking” the change is more powerful than any other communication tool. Step 5: Empowering broad-based action The purpose of this is to ensure that existing and potential barriers to change are removed, and that those responsible for driving change are empowered to do so. Barriers may include structural barriers (systems that are not aligned) & human barriers (resistance to change or lack of skills) Step 6: Generating short-term wins Large-scale change, such as that needed for strategy implementation, can be a long & hard process. To keep the enthusiasm and momentum going, it is NB to show some short-term results (setting performance goals that are aligned with the change, widely acknowledging and celebrating the attainment of such goals) Step 7: Never letting up It is vital to ensure that the change process never stops & that the momentum is maintained. If this step is executed correctly and the change process is successful = new projects being initiated, efforts being made to keep urgency levels high, & employees increasingly being empowered. Step 8: Incorporating changes into the culture In order to instill the change in the culture of the organisation, it must become part of the shared values and beliefs of the organisation. This could be accomplished by
BARRIERS TO STRATEGIC CHANGE Death by planning - executives spend most of their time on planning, teams are constituted to examine the problems where meetings become debates and result in paralysis & the focus is on discourse instead of actual delivery of change Loss of focus - change can take time over many years then initiatives are seen as rituals & change program was never clearly communicated Reinterpretation - existing paradigm is so strong that change initiatives are reinterpreted according to old paradigm to fit within the expected norms of behavior & conduct Disconnectedness - organisational members affected by change may not see the change as relevant to their realities Behavioral compliance - some people comply with change despite not buying into the change programme Misreading scrutiny & resistance - some people resist change but if concerns are ignored it could increase resistance Broken agreements & violations of trust - if leaders fail to honour undertakings, they will lose trust & respect & ↑ resistance Leadership reasons Top leadership work towards the change they think is required, but will be undermined by the rest of the organisation or by the owners of the company, who do not have the same view. Widespread communication & participation is critical. A lack of trust between leaders & other factions in the organisation (unions), may have a - effect. Structural reasons Where the structure does not support the change required, the change programme could fail. (the managers in the organisation may not have the skills & mind-set required). Large-scale restructuring & the appointment of new managers with the right mind-set will be required. Cultural reasons Where the change requires a paradigm shift that is far removed from the current paradigm, changing the culture of the organisation may be too difficult or too time-consuming. This may lead to the failure of the change programme. It may also lead to other consequences that will affect the outcome of the change programme: ● The existing paradigm may be so strong that change initiatives are simply reinterpreted to fit in ● Members of the organisation may feel disconnected from the change & not see it as relevant to them ● Some people may comply with the changes even if they do not believe in the change
I. Acquisition of external info: refers to the ability of a firm to acquire relevant info from external environment II. Assimilation of acquired info: ability to analyse & make sense of the info III. Transformation of knowledge: ability of the firm to combine new knowledge with existing & develop new sights IV. Applying new knowledge: organisations use transformed knowledge & new insights to improve their business ops & develop new innovations and business ventures KNOWLEDGE MANAGEMENT AND ORGANISATIONAL LEARNING BECOMING A LEARNING ORGANISATION Leadership commitment to learning Leaders should demonstrate their own commitment by being models of learning, championing learning & using learning strategically for business results Building shared visions Vision cannot be dictated, employees need to believe – they bind a firm through good and bad NB to empower people towards a collective vision by distributing responsibility so people are motivated to learn Encouraging diversity People from similar backgrounds tend to see things similarly, so diversity is encouraged to get different views & effect change Encouraging double-loop learning Single-loop learning: individuals strive to achieve a goal & when they don't succeed, evaluate what went wrong- try another strategy, fail again, evaluate again - & so on until ideas are finished. This may push one to question the fundamental elements governing the situation = double-loop learning. Until they are prepared to challenge the mental models, change cannot occur. Developing systems thinking abilities tı as an organization, we understand how we are connected to the world, how we fit into our environment, how we are influenced by it & how we can influence it in turn Requires people to be assisted to see the effect of their work on the entire firm Encouraging individual and team learning Learning should be designed into work so people can be trained on the job while ample opportunities should be provided for growth & education (enrich experiences through sabbaticals, rehearsing as a team for future scenarios) Legitimizing dissent Everyone should contribute ideas and employees encouraged to question business practices & assumptions Dialogue and debate is very NB Encouraging experimentation Without failure there is no learning. Experimentation lets one see failures for what they are – learning opportunities. Establishing communities of practice tı building blocks of leaning systems. Has 3 elements: Joint enterprise : CoP must have a shared understanding of what the community is about and how to contribute to it Relationships of mutuality : members must be accepted & trusted & able to interact Shared repertoire : of stories, language, routines, rituals & processes and knowledge of how to use them properly This can happen in the following way:
Knowledge acquisition Existing knowledge is constantly supplemented by new knowledge (internal & external scanning) & from new employees Knowledge This is all the info in the organization, consisting of both new & old knowledge, which is constantly being added to Capturing knowledge Some training is explicit & easy to capture (training/product manuals) but some is harder. It’s impossible to capture all unspoken knowledge from a project Organizing knowledge Consolidate the knowledge & capture it in a format & language that is usable throughout the organization Sharing knowledge Knowledge has little value unless its shared across departments Using knowledge K must be used in a business setting to solve problems, improve business performance & deal effectively with opportunities & threats in the external environment Knowledge management systems IT is NB to enable processes while being populated & enabled. Many different technologies can be used Learning unit 4: Aligning organisational culture, leadership and strategy Organisational culture (pg2) Instilling an organisational culture that supports good strategy implementation Culture is a key factor to be considered during strategic planning and strategy implementation. A strong-culture organisation is where values and norms are so deeply embedded that change can be endured. In contrast, weak-culture organisations lack these same values and principles, have no or minimal employee allegiance, and lack leverage in terms of employee motivation for strategy implementation to succeed. Key advantages that an organisation gains when its culture is grounded in agreed actions, behaviours and work practices: i. Organisational culture can be matched with strategy implementation requirements. ii. Strong group norms are used to create peer pressure to shape positive behaviour. iii. An organisational culture that is consistent with implementation requirements can energise employees, deepen commitment and enhance productivity. Leadership excellence and a strong and supportive organisational culture promote good performance as a result of shared values and behaviours. Shaping organisational culture Leaders play an invaluable role in shaping culture in the organisation. We see leadership as the source of the organisation’s beliefs and values. The most central issue for leaders is to understand the deeper levels of organisational culture and to deal with the anxiety that sprouts from assumptions being challenged Organisational cultures spring from three sources: ⟶ the values, beliefs and assumptions of the founders of the organisation (this is the most NB source of culture) ⟶ the learning and experience of group members ⟶ new beliefs introduced by new leaders or other members of the organisation Leaders transmit and shape organisational culture by way of certain embedding mechanisms, which may include:
The operations of the various individual companies are largely independent Appropriate for firms pursuing a restructuring strategy, buying, selling or taking over other firms A: low overhead costs & holding company can finance subsidiaries, risks are spread D: no centralized skills to support the firm, no synergy & possible lack of culture and control Matrix structure Combines the advantages of decentralization with coordination Appropriate in large, multiproduct, multinational organizations with interrelationships & interdependencies A: decisions can be decentralized within a large firm, makes use of scarce skills & resources, enables control over growth D: difficult to implement & can cause confusion, high overhead costs and decision making can be slow Global structure 5 possible:
b. PM requires a project team to set the scope, develop a schedule, obtain resources, implement the phases & track progress b) process maturity for these process methodologies Many firms do PM at a tactical level but not many do it successfully at the level of strategic deployment. Maturity is best viewed on a scale where ‘no formal approach’ is the bottom of the scale & ‘best-in-class performance’ is at the top. Lower the level of maturity, the less the chance of successfully using PM in deployment c) executive sponsorship for project-based work Role= overcome obstacles, maintain visibility for the project & help with investing Transition Is where the firms strategic efforts succeed or fail & result in achievements or not 2 types of transitional arrangement Existing systems & processes have to be maintained & continuously improved upon in order to reap the benefits SD process is about finding those breakthrough changes that will really alter the game & ensure a step- up in performance Control is very NB to ensure that strategic metrics of the firm are being achieved Managing strategic initiatives Strategic leadership is multifunctional, involves managing through others & helps firms cope with change that's seems to be increasing exponentially in the global business environment Requires the ability to accommodate & integrate both internal & external environments of the firm & to manage & engage in complex information processing. Leadership practices for BoD in strategy deployment include the following: ❖ ensuring a steady flow of strategic initiatives & projects to achieve the strategic objectives ❖ developing decision frameworks for selecting strategic portfolio investments & for terminating unsuccessful initiatives ❖ regular evaluation of the progress of strategy deployment Management is required in SD process for planning & directing activities, Monitoring & taking corrective action where necessary. Management involved carry out this process by developing and communicating with people & managing and organizing resources The process of managing strategic initiatives consists of:
Process of identifying strategic priorities: