10.4 Managing Strategic Implementation Flashcards
Challenges and difficulties with implementing strategy
- Overall goals are not sufficiently understood by the workforce or perhaps the wrong targets have been set because of insufficient analysis of data
- Lack of capability of employees or training and instruction might have been inadequate
- Leadership may fail to provide adequate direction leading to an overall lack of commitment
- May be unforeseen events, perhaps problems with implementation that were not anticipated
- Changes in external environment
- Implementation may take longer than expected
Planned strategy
One that managers intend to implement using a carefully laid plan to achieve the desired position.
Emergent strategy
Unplanned strategy that develops over time and is based on the belief that change should not be seen as a series of linear events.
Strategic drift
Occurs where a business responds too slowly to changes in its external environment and results in the strategic plan no longer being appropriate.
Four phases in strategic drift:
Phase 1: Incremental change
Phase 2: Strategic drift
Phase 3: Flux
Phase 4: Transformational change or demise
Phase 1: Incremental change
- Organisation remains competitive due to incremental changes in strategy
- Changes made in line with the external environment
Phase 2: Strategic drift
- Strategic drift begins to appears
- Appears as incremental changes fail to keep up with the rate of change in the external environment
Phase 3: Flux
- State of flux in strategy now develops where the management recognises the existence of drift due to poorer performance + tries to make strategic changes
- There is no clear direction and disagreements can occur, leading to poorer performance and increased drift
Phase 4: Transformational change or demise
- Final phase where organisation either fails completely or undertakes a transformational change
- Transformational change in order to realign itself with the external environment
Causes of strategic drift:
- Technological environment: very dynamic and changes constantly
- Lagged performance: First symptoms of strategic drift may not be immediately apparent as financial results are normally reported at the end of a period
- Culture: Culture may be quite rigid in terms of values and relationships - attempts to change may be limited to what is familiar than a radical plan
- Lack of monitoring: Organisation may have insufficient monitoring of strategy - missing changes in the environment
Divorce of ownership and control
Refers to the separation of the ownership and control in a public limited company.
Ownership - Shareholders
Control - Elected board of directors
Corporate governance
Set of systems, processes and principles that ensures the organisation is governed in the best interest of all its stakeholders.
What does corporate governance involve?
- Accountability: Ensure that the management are accountable to the board of directors and in turn the board of directors is accountable for the shareholders
- Fairness: To protect shareholder’s rights, to ensure all are treated equitably and to provide redress for violations
- Transparency: ensure all matters related to finance, performance, ownership and corporate governance are communicated both accurately and in a timely manner
- Responsibility: Ensuring organisation’s comply with the relevant laws and regulations of a society
Strategy evaluation
Process of determining the effectiveness of a given strategy in achieving the organisational objectives and taking corrective action wherever required.
Strategic planning helps create value as they:
- Give purposeful directions to the organisation and outline measurable goals
- Identify and help build a competitive advantage
- Assist in making choices where resources are limited
- Save time as clear priorities are set
