MNG3702 - Strategic Implementation and Control IIIB (MNG3702)
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MNG3702 Additional Notes
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MNG3702 - Strategic Implementation and Control IIIB (MNG3702)
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University Of South Africa (Unisa)
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MNG3702 - Strategic Implementation and Control IIIB (MNG3702)
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MNG302B
Study Unit 1.1 The challenge of strategy implementation
Importance of strategy implementation
A review of the strategic planning process
Figure 1.1: Strategic management process. Page 5 Study Guide
What is strategy implementation
Defined as the process that turns the selected strategy into action to ensure that the stated goals
(aligned with the vision and mission) are accomplished.
For successful strategy implementation, organisations make use of various strategy
implementation drivers, namely leadership, organisational culture, reward systems,
organisational structure and recourse allocation
Strategy implementation ts the communication, interpretation, adoption and enactment of
strategic plans
Implementing the strategy also means that change in the organisation will be required.
The difference between strategic planning and strategy implementation
Strategy formulation is the intellectual or thinking phase, while implementation is the phase in
which these thoughts are operationalised and turned into action
Strategy formulation is mostly a market-driven activity with an external focus, whereas strategy
implementation is an internal, operations-driven activity
Another difference is evident in the skills required, strategy formulation requires good intuitive
and analytical skills, while implementation requires motivation and leadership skills
Strategy implementation is also not as well structured, rational and controlled as strategy
formulation
Strategy formulation takes place mostly at top and senior manager levels
Strategy implementation in contrast is the responsibility of all levels of management, from
supervisor level to the board of directors
Strategy implementation as a component of the strategic management process
Strategic management process is a dynamic, interrelated process.
Formulation decisions impact directly on strategy implementation, which in turn impact directly
on strategic control
Decisions about implementing the strategy must be anticipated and incorporated into decisions
concerning formulation
Strategy formulation and implementation are interrelated and success in both phases is
necessary for superior performance
Implementing strategy requires that management must manage the change, and it must also be
recognised that a new strategy inevitably implies change
Challenges of strategy implementation
Organisations place too much emphasis on strategic planning
It is important to remember that strategy implementation involves change
The volatile business environment in which organisations in the 21st century find themselves
Changes from outside the organisation may require organisations to adapt the chosen strategy or
strategies before their implementation is complete
Barriers to successful strategy implementation
The problems organisations often experience when attempting to implement their chosen
strategy or strategies can be attributed directly to the lack of these managerial competencies
No alignment between the organisational structure and the strategy
Information and communication systems are inadequate to report on the process with strategy
implementation
Coordination of implementation efforts was not sufficiently effective
Leadership and direction provided by top and middle managers was inadequate
Goals were not sufficiently defined and not well understood by employees
Formulators of the strategy were not involved in implementation or left before the
implementation was complete
Key changes in the responsibilities of employees were not clearly defined
, Figure 10.1 Page 263 Barriers to strategy implementation
Vision Barrier, Often the executives of an organisation are not clear themselves on exactly that
the organisation’s vision and strategy means. May not be able to convey vision and strategy
of organisation to their divisions very clearly
Management Barrier, Too often executives are focused on solving short-term problems and not
enough time is spent on strategy management
Recourse Barrier
People barrier
Strategy implementation and corporate governance
The King Report also states that is is the board’s responsibility to ensure that management not
only implements the formulated strategy, but also monitors that implementation.
In order to implement strategies successfully, an organisation much achieve consensus both
within and outside the organisation. In an organisation fails to take external stakeholders such as
regulatory agencies, environment groups and the community into consideration, strategy
implementation efforts could be seriously jeopardised if these groups have the power to block or
delay key elements of the strategy
Change - a fundamental implementation issue
The ability to manage change is fundamental to an effective organisation, with managers and all
employees being supportive of rather that resistant or hostile to the proposed change.
Four key features of change management are dissatisfaction with the present strategy, the vision
of a better alternative or desired future state, a strategy for implementing the change and
resistance to some of the new proposals of the strategy at some stage
Figure 10.2 page 266. Managing strategic change
Strategic change
Includes all the efforts and actions that are taking place to move an organisation from its present
state towards the desired future state to increase its competitive position and its profitability
Is the proactive change that must happen in organisations to achieve the clearly identified
strategic objective
Is concerned primarily with people and the tasks that they must perform in the organisation
Strategic change require a perceived need for change that organisation with either a strategic
leader of other manager who are aware of the possibilities, the necessary resources to
implement the change and lastly commitment from management and employees to support the
change
Types of strategic change
Analysed in terms of the nature of the change and the scope of the change
The nature of the change can be incremental or it can be revolutionary (fast, sudden and
disruptive)
The scope of the change refers to whether change can happen in the current organisational
setting or whether a fundamental change of strategic direction is necessary
Figure 10.3 page 267. Four strategic changes emerge
Adaptation Current organisational setting can facilitate the incremental change that must
happen in order to achieve the desired goals
Reconstruction , reconstruction of processes and policies is required to implement the new
strategy
Evolution, organisation must become learning organisation to manage change over time
Revolution, result of sudden and fast-changing conditions
Strategic issues of change
Different organisational settings will require different emphases o be put on these issues
Time, how quickly is change needed
Scope, is dramatic revolutionary change needed or only a moderate change
Diversity, the level of homogeneity in the organisation
Capacity, does have the resources to change
Readiness, employees ready for change
Capability, does employee’s and managers have the capabilities to implement change
The causes of strategic change
Environment
Technology
,Regulatory events
Business relationships
The strategic awareness and skills of managers and employees
The strategic change process
One of the most important tasks in this process is to understand and manage resistance to
change
Identifying the areas of change
New technology and operational tasks may be needed in new production or service delivery
processes
Administrative changes involve new structures, policies, budgets and reward systems
In the people area of change, it is important to match individual and corporate values
Important that the areas where change is necessary to implement the new strategy must be
identified before the management of change can be successful
Managing resistance to strategic change
Resistance to change can be regarded as the key obstacle to the successful implementation
of a new strategy
Table 10.1 page 271 presents some of the reasons why employees resist change and some
solutions that can be applied to overcome resistance to change
Ways to overcome resistance to change
Education and communication
Participation and involvement
Facilitation and support
Negotiation and agreement
Manipulation and cooptation
Giving clear direction
Explicit and implicit coercion
Power and influence
The next step in managing strategic change is persuading organisational members to support
the change
An important element in implementing the necessary change is that managers must have the
necessary power to implement the decisions that will bring about this change
Tactics that managers can use to influence the organisational employees are
Develop liaisons with other people who have power to influence organisational members
Present a positive conservative image and implement change gradually if time allows it
“Divide and rule” can sometimes be a powerful strategy
Sometimes necessary to follow an approach of compromise and being willing to give and
take
Successful managers should strike when the iron is hot
Radical changes sometimes have to be disguised as minor changes
Politically successful managers understand the organisational processes and they are
sensitive to the needs of people
Two ways in which managers can exercise control over the behaviour of employees are
Can structure the situation in such a way that employees will comply with their wishes
Can communicate with the employees in order to seek to change their perceptions so that
they see things differently and decide to do what the manager suggests
The learning organisation
Concept of a learning organisation entails to think continually about strategy and to create
synergy by sharing knowledge and ideas, and by generating actions that will contribute
positively to the whole organisation
Means that employees in the organisation accept the importance of continuous learning
Some of the important aspects of the learning approach are
Learning must be seen as a continuous process
The employees work and learn as a team
Management development and personal growth are important
Visions for the future must be shared
It must be realised that the employees skills are the most important asset of the organisation
Necessary to reconsider the organisational habit, generalisations and corporate
, interpretations that may no longer be relevant
A systems approach must be applies when analysing and viewing the business environment
The workforce must understand that they are responsible for shaping their own future over
time. In the case of a sudden change, the learning approach will not be as applicable, but it
may better equip employees to handle and adapt to change.
Study Unit 1.2 Strategy implementation approaches
Approaches to strategy implementation
The McKinsey 7-S Framework
They developed the McKinsey 7-S Framework, which describes the seven factors needed to run an
organisation in a holistic and effective way
It links the organisation’s strategy to the various factors that need to be addressed to ensure
successful strategy implementation and consequently strategic success
Figure 1.3 Study Guide page 22 shows the seven “S‘s”
Strategy, chosen strategy and way in which it intends to achieve its strategic goals and vision
Structure, way in which organisation is structured
Systems, includes systems such as reward systems, strategic control systems and operational control
systems
Style, leadership and management style
Staff, people in the organisation
Skills, organisation’s core competencies and source of competitive advantage
Shared values, the values that the organisation believes in
The “warm” issues, such as style, shared values, skills and staff refer to the people in the organisation
and to “soft” issues
“Cold” issues refer to structures, systems and strategy
Refer to figure 1.4 page 23 study guide
“cold” and “warm” issues are often in conflict in organisations, but that all of these need to be aligned
with one another to ensure successful strategy implementation. All necessary for successful strategy
implementation
Drivers and instruments of strategy implementation
The drivers of strategy implementation are leadership, organisational culture, reward systems,
organisational structure and resource allocation - concern with the people of the organisation
Instruments of strategy implementation that aid the process are short-term objectives, functional
tactics and policies
Support the process by focusing on exactly what needs to be done to ensure effective strategy
implementation
Figure 1.5 page 24 of study guide
For successful strategy implementation these drivers and instruments must be aligned with the
chosen strategy or strategies to ensure a tight fit between the strategies that are formulated and
those that are implemented
STUDY UNIT 2.1
LEADERSHIP AS A DRIVER OF
STRATEGIC IMPLEMENTATION
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