Strategic Implementation and Control: A Comprehensive Guide for MNG3702 Students, Exams of Nursing

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Strategic Implementation and Control

IIIB (University of South Africa)

MNG3702: Strategic Implementation

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:

1. Recruitment process : employ people that support the companies direction
2. Training & development : knowledge, skills & attitudes of employees match the direction of the business
3. Policies & procedures : changes might need new policies to replace old ones
4. Cascading objectives : used as a framework for setting
5. Reward systems : tailored to reward behaviors & achievements and support strategic direction Strategic initiatives tı key projects focused on achieving specific objective or improving performance in order to achieve a performance target Enablers of strategy deployment SD is underpinned by 3 enablers: Communication of strategy 4 main objectives: I. Ensure everyone knows what the strategy is & how it will affect them II. Resolve ambiguity & uncertainty III. Explain assumptions & judgements that were made during the analysis process & explain decisions made IV. Ensure coordination Ability to learn & adapt Strategic direction is developed, implemented & repeatedly and continuously modified in response to changes in environment Success comes from having necessary discipline to change when it’s not working & change the strategy without abandoning the vision of the business Experimenting is a key to making adjustments successful 3basic components: a) Conducting the experiment b) Studying the success or failure of the experiment c) Transferring lessons learnt to the business Allocation of resources When requesting funds, business must take the following into account: o Extent to which the proposed resources contribute towards the mission & objectives o Extent to which they support strategic direction & key initiatives o Risk associated with the proposal Successful implementation of strategic iniatives Successful alignment Successful alignment of individual of organisational behaviour with units with strategic strategic direction direction

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.

RESOURCES AND CAPABILITIES IN 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:

1. Human resources – knowledge, trust, managerial capabilities
2. Innovation resources – ideas, scientific capabilities, capacity to innovate
3. Reputational resources – brand name, reputation, perceptions, reliability The human resources are the source of knowledge& this can be a valuable contributor to CA and uniqueness. But some knowledge is public (private knowledge is valuable) Can be explicit or tacit tı can be taught and conveyed with ease tı gained through experience, insight and intuition & is difficult to share Capabilities tı Organization specific clusters of activities developed through complex interactions between tangible & intangible resources over time & reflect what an organization excels at compared to others (what can be done very well) Characteristics: ●valuable across various products & markets ● embedded in routines ● tactic Dynamic capabilities: geared towards effecting & driving organizational change – essentially strategic & define the firm’s path of evolution & development (absorptive capacity – ability to acquire, assimilate & use external info) Carefully developed capabilities form the basis of competitive advantage & are primary differentiators of organizations from their competitors Core competencies Distinctive capabilities tı Capabilities that distinguish an organization from others in the industry & form the basis of its competitive advantage, strategy & performance Involves the combination of various resources & capabilities and development takes place over a long period of time and is a process of accumulation & learning how to use a unique combination of resources & capabilities Their complex coordination, integration & harmonization across production skills, technologies & capabilities make core competencies hard to imitate Marketing budget

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:

1. Produce P/S that are superior is value allowing them to charge premium prices or retain customers for longer
2. Produce P/S at a lower cost enabling a much higher profit margin For differentiators, CA is achieved through combining resources, capabilities & core competencies to produce high quality P/S These positions can be achieved through different capabilities: ➢ Ability to produce high quality products : when the there is a higher brand value or more reliable & durable ➢ Ability to innovate : spend more than competitors on research & development (can be technology, design, marketing admin, operational systems, techniques) ➢ Responsiveness to customers : customer response must be superior to competition ➢ Efficiency : transforming inputs into outputs | efficiency = output/input Product efficiencies can be achieved through: Economies of scale Economies of learning Designing products for more economical production Reducing unnecessary costs Leveraging location advantages Sustainable CA This is determined by the durability of the relevant resources & capabilities and how inimitable they are Durability: length of time over which a capability is relevant & can contribute to CA of a firm Capturing the value generated by resources & capabilities Appropriability: if a firm cannot capture sufficient value to justify its investment in developing unique resources & capabilities, it will not be able to achieve CA Resources & capabilities are valuable when they enable firms to deliver P/S to customers at a price they’re willing to pay Their value is indirectly determined by: ⟶ External environment ⟶ Changes in the external environment ⟶ Differences in resources of organisations ⟶ Value – lower level production costs than rivals OR increased revenue For resources and capabilities to be the basis of CA as well as ensuring superior profitability: following are NB: ▪ R&C must be inherently valuable ▪ R&C should enable the firm to address market segments

▪ 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:

1. establishing standards and targets
2. creating, measuring and monitoring systems
3. comparing actual performance against targets
4. evaluating results and taking corrective action where necessary. For effective strategic control, all aspects of the strategic management process need to be evaluated in terms of the managerial decisions on which the strategic decisions were based. These include assumptions regarding mission; long- term objectives; the outcomes of internal and external analyses that may call for review; changing environmental conditions as well as changing internal conditions regarding the organisation’s strengths and weaknesses. Types of strategic change o adaption : change lodged within the current business model & within the current culture - aim to realign strategy o reconstruction : does not fundamentally alter the culture but may involve disruption o revolution : requires rapid & major strategic and cultural transformation o evolution : requires cultural change but happens over time & is most difficult Context in which change occurs An effective strategic leader will recognize when change is needed and in most forms change occurs to align the culture of the firm with the strategies. Clear considerations of contextual elements need to precede the formulation of management strategies which will deal with change This includes:

• Time (how quickly is change needed)
• Scope (how much change is required)
• Preservation (what resources and characteristics need to be maintained)
• Diversity (how homogeneous are staff groups and divisions within the firm)
• Capability (what is the managerial and personal capability to implement change)
• Capacity (what change resources are available)
• Readiness (how ready is the workforce for change)
• Power (what power does the change leader have to impose change) THE REASONS FOR IMPLEMENTATION FAILURE Successful strategy implementation: implementation that (1) achieves the desired outcomes (strategic objectives), (2) completes all strategic initiatives successfully & (3) is acceptable to all stakeholders (does not entail doubtful means) Implementation failure accordingly means that a new strategy was formulated but was not implemented, or was implemented in such a way that the implementation was incomplete, strategic objectives were not attained, or the implementation was unacceptable to key stakeholders. Strategy implementation failure may start with the strategy formulation process. If strategic objectives are too complex or poorly understood, lack consistency and do not provide clear future direction to members of the organisation that have to implement them, it is unlikely that implementation will be successful. Apart from deficiencies in any one of the above attributes, poor or ineffective alignment is regarded as a major reason for implementation failure. Implementation failure can thus result from poor change management and the resulting misalignment of the various elements of the organisation.

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:

• Current behaviours have to be examined & employees have to be shown how necessary change is, and how the status quo is hindering organisational growth.
• Employees have to be informed of the imminent change, why it is necessary, what it will entail and how it will benefit them Step 2: Changing Is the most difficult phase of the change process. During this phase, employees need to start learning the new behaviours required of them, and they require a lot of support. This phase is characterised by o employees acquiring new knowledge, skills and attitudes (training) o organisational structures and systems changing o communication throughout to keep the momentum (reminding employees why it’s needed & how it will benefit) Step 3: Freezing It has to be solidified & entrenched in the organisation. This is essential to ensure that employees do not simply revert back to their old ways of doing things. The change should be made part of the performance management and reward systems of the organisation. The change model of John Kotter Step 1: Establishing a sense of urgency This phase requires leaders to establish a need for change and create a sense of urgency around the need for change. In terms of strategy implementation, not changing would be a threat to the continued success of the organisation, and employees will have to be convinced of that to create a sense of urgency. Step 2: Creating the guiding coalition The guiding coalition: group of individuals with the knowledge, skills & attitudes to drive the change in the organisation. A key role is to create & implement a roadmap for change. It should be a mix of people who complement each other. Step 3: Developing a change vision The purpose of this is to create a compelling vision for change that employees can buy into & that will mobilise them for change. Ideally a change vision will emphasise the need for change and the aspirations of the organisation. It should: ⟶ provide a clear, compelling view of the future ⟶ appeal to the long-term interests of stakeholders ⟶ be feasible, containing realistic & attainable goals ⟶ be focused and clear enough to provide guidance in decision making ⟶ be easy to communicate and explain Step 4: Communicating the vision for buy-in

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

• proving that the new way is better
• achieving visible success
• accepting that some people may not accept the change and moving on - reinforcing new norms and values with incentives, rewards and promotions - reinforcing the culture with every new employee PRECONDITIONS FOR EFFECTIVE CHANGE *Chapter 1 & 2 in the e-book by William Q Judge, Focusing on organisational change (available at http://open.umn.edu/opentextbooks/BookDetail.aspx?bookId=128 )

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:

• People : form part of more than 1community or be in a position to act as brokers
• Artifacts : documents, tools, processes & discourses may act as bridges
• Interaction : means of exchanging info directly Collaboration Collaborations are becoming more and more common, but requires a specific mindset, firms that cannot or will not trust their partners won’t be able to learn Knowledge management 4phases:

1. The discovery of knowledge
2. Capturing the knowledge in a way that enables it to be shared
3. Sharing knowledge throughout the organization
4. Applying knowledge to solve business problems & make decisions

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:

• what leaders measure
• how they react to critical incidents
• how they allocate resources
  • how they reward and allocate status
  • how they recruit, promote and “excommunicate” members of the organisation In addition to these embedding mechanisms, leaders can also use structural mechanisms, such as: o organisational structures and systems o procedures o rituals o physical spaces and other physical artefacts o stories o statements How leaders handle structural mechanisms also plays a key role in shaping organisational culture.

• effective sharing, monitoring & controlling of relevant, timely & accurate info BASIC STRUCTURAL TYPES Structural alternatives Decentralized: NB decisions are made by middle to lower management Advantages ✓ workload of top managers is reduced ✓ decision making improves (closer to the action, saves time) ✓ improved morale & initiative at lower levels ✓ decision making is faster & more flexible ✓ fosters a competitive climate within the firm Disadvantages 8 danger of loss of control 8 danger of duplicating tasks 8 requires more extensive & expensive training 8 demands sophisticated planning & reporting methods Centralized: all major decisions made by top management When deciding to centralize or decentralize – following must be considered: external environment : more complex & volatile, more tendency to decentralize history of the organization : often follow the history of the firm but it may be necessary to re-engineer nature of decision : the riskier, higher costs involved or higher the potential impact; more weight for centralized strategy of the firm : big firms that obtain new P/S through research & development = decentralized & firms in more predictable industries = centralized skills & maturity of lower-level managers : if lower-level managers are not mature/responsible enough = centralized & V.V. size & growth rate of firm : larger & more complex a firm, greater need for decentralization Structural forms Entrepreneurial structure Typically around owner-manager Entirely centralized with no division of responsibility – all power, responsibility & authority lie with the owner-manger A: Enables the founder to control growth & development D: they may not have sufficient knowledge in certain areas Only appropriate up to a certain size firm Functional structure Activities belong to each management function are grouped together into a department - often used by firms with a single-product focus To build CA in P/S these firms require well-defined skills & areas of specialization (allows personnel to focus on their area of expertise) Poses major challenges in terms of co-ordination of the departments & people may view the firm solely from their own perspective A: control resides in strategic leaders, lower costs, clear relationships, simple lines of authority & control D: may experience succession & coordination problems Divisional structure Can be product groups or geographic regions Divisions are likely to be seen as individual profit centres for planning & control purposes Decision making = decentralized Is appropriate when a company grows in size, operates in a turbulent environment, offers diverse P/S, employs a variety of production processes or is international A: profit responsibility is decentralized D: conflict may arise between divisions in their competition for limited resources, efforts & resources may be duplicated & evaluation of performance may be difficult Holding company structure

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:

1. a globally centralized firm, remote from its global markets, but relying on exporting
2. manufacturing plants located close to the firms markets in order to satisfy local needs & preferences
3. centralization of the manufacturing of key components
4. an integrated global structure with production locations chosen on resource or cost
5. a global network through strategic alliances Network structure An interrelationship between different firms The network firm performs the core activities itself but subcontract some non-core operations to other firms D: coordination of partners activities to ensure that they contribute to the network firms goals & mission New venture units Groups of employees who volunteer to develop new products or ventures for the firm When the project is done, it can be adopted into any of the following firm structures:

• new P/V becomes part of traditional structure = functional or product
• new P is developed into a new department
• new P grow into divisions Virtual network structure When it is no longer necessary for the firm to have all employees, teams, departments & contractors in 1 office IT enables the firm to integrate internal employees, teams & departments with the external network to achieve goals Fits a rapidly changing environment A: provides flexibility & efficiency because partnerships & relationships with other firms can be formed or disbanded as needed D: the levels of reciprocal & sequential interdependence are much higher than those of the network organization Ambidextrous organisations This refers to the ability to be equally good at exploiting existing opportunities using existing capabilities while exploring and searching for new opportunities & new capabilities. In most organisations, the existing way of doing things tends to dominate management thinking, which makes it very difficult for them to be truly innovative & to develop new capabilities. Companies that are successful at both exploiting existing opportunities & exploring new opportunities separate their new, exploratory units from their traditional, exploitative ones, allowing for different processes, structures & cultures. At the same time, they maintain tight links across units at the senior executive level. Organisations will find it very hard to harbour activities that are disruptive to their existing business in the existing organisation – the dominant management logic will simply suppress those innovations and new ways of doing business. But it would be better to harbour such ideas & activities in a spinoff business that is not fully under the control of the old business & that is permitted to explore and be innovative INFLUENCES ON ORGANISATIONAL DESIGN The following factors are NB when deciding on how to structure the firm: ⟶ the current business architecture : firms are generally inert until there are forces that necessitate change ⟶ the strategy : the plan for the future & implementing these plans may need change

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:

• developing strategic initiatives by translating strategic goals into strategic initiatives
• prioritizing SI
• defining & approving strategic initiatives
• aligning individual behavior
• strategic initiative reporting & management Translating goals into strategic initiatives This is the first task when translating SG into specific initiatives that the firm will undertake. The purpose is to create a detailed roadmap that aligns the day-to-day activities of the firm with the SD BS is a handy mechanism in this process The recommended method is to develop goals → define performance measures → set targets →identify SI Goals: outline 10-15 key strategic goals for next 3-5yrs Measures: how progress will be tracked Initiatives: projects that will result in + changes Initiatives must be clearly described during the implementation process To do this, it is NB to define the following elements:
• Deliverables : what will be the results? How will success be measured?
• Initiative leader & team : who is responsible & involved in the work?
• Key activities : what action steps need to be undertaken to achieve the deliverable?
• Resource requirements : what investments will be needed?
• Interdependencies : how will the initiative impact other areas of the firm?
• Milestones : what are the major events, accomplishments or key decision points that are anticipated?
• Performance metrics : what will you measure to gauge progress on your initiative?
• Timeline : when will it begin and end?

Process of identifying strategic priorities:

1. Identify the potential strategic initiatives associated with each strategic goal
2. Explain that the outcome of each initiative will be
3. Identify key people that will be responsible for each initiative
4. Identify resources that will be required to complete the initiative
5. Identify interdependencies with other units & support functions
6. Specify the duration Prioritizing strategic initiatives Firms must identify strategic initiative candidates & prioritize them based on strategic impact Rather than depending on individuals to make the decision, it is better to put together a multidisciplinary workshop or panel using clear selection criteria Good descriptions of the impacts of the initiatives will assist in understanding the trade-offs in the prioritization process To ensure everyone has an understanding of each of the initiatives, leaders should provide an overview & should include the following: ▪ Description ▪ How it supports the agenda ▪ Expected impact Rating initiatives ▪ Capital & resource requirements ▪ HR requirements ▪ Revenues & expenses CatA: committed CatB: high strategic impact CatC: medium strategic impacts CatD: low impact Defining and approving strategic initiatives Only a few NB projects should be selected (Cat A&B). selected initiatives should be considered holistically to ensure they address the vision of the firm & five different execs an outline of how their work connects to the work of others. Communicating strategic initiatives Ensure all employees are aware of the initiatives. Deployment may require that employees have to do things differently in future & to get them on board requires that they understand why the change was required & what they must do differently Also NB to link SI with individual performance agreements so there is a relation between individual behavior & SI Strategic initiatives reporting & management Firms that are effective at SD have effective processes in place for systematically measuring & evaluating progress towards their goals. These processes help to remain focused as they execute their strategies, all the time learning & adjusting as they go There may also be a need to report to the board & senior management specifically on progress, & in this regard executive dashboards that provide a quick summary of progress will be most useful. Identifying, selecting, managing and resourcing strategic initiatives Any formulated strategy may lead to the identification of a host of possible strategic initiatives. Strategic initiatives: initiatives that are not part of the operations of the organisation, but are intended to permeate the strategy through the organisation. Typical strategic initiatives include:

• SI to align culture, structure and systems with strategy.
• SI to ensure that a strategy is enabled.
• SI to align organisational units and individual behaviour with strategy ①Project portfolio Firms cannot take on every potential strategic initiative, & will have to make choices with regard to the projects it will allocate resources to. The selected strategic initiatives form the portfolio of projects that the organisation will resource & track. The purpose of selecting the portfolio is to have a selected set of projects with a better chance of success rather than trying to spread resources too thinly & failing at most projects or initiatives. ②Programme management The programme manager will accordingly be responsible for overseeing and coordinating the efforts of several projects & their project managers. Programme managers are key agents of change & take responsibility for coordinating the actions of project managers, project teams, functional managers & teams, suppliers & operational staff to ensure that projects