Ch 40 Strategic implementation (A Level)

Question 1

Define strategic implementation

Answer 1

the process of allocating and controlling resources to support the chosen strategies

Question 2

What factors strategic implementation aims to ensure?

Answer 2

appropriate organisational structure to deal with the change
adequate resources
well motivated staff
a leadership stye and organisational culture that allow change to be implemented with wide ranging support
control and review systems to monitor the firm’s progress towards the objectives

Question 3

Define business plan

Answer 3

a written document that describes a business, its objectives and strategies, the market it is in and its financial forecasts

Question 4

Content of business plan

Answer 4

Executive summary - overview of the business and strategies
description of the business opportunity - details of the entrepreneur; what is going to be sold, why and whom
marketing and sales strategy - details of why the entrepreneur thinks customers will buy what and how business plans to sell them
management and personnel - the skills and experience of the entrepreneur and the people he/she intends to recruit
financial forecasts - the future projection of sales, profit and cash flow for at least one year ahead

Question 5

Importance of business plans

Answer 5

To obtain finance for a start up - potential investors and creditors will not provide finance unless clear details abt the business proposal are presented
Clear sense of purpose, direction for strategies, improvement and recruitment
Financial and other forecass can be used as targets tat the business should aim for => compare to check on progress
Rewrite and adapt it to accomodate new/revised strategies
Acts a budgets and control benchmarks
Updated version can be used to apply for additional funding

Question 6

Define corporate plan

Answer 6

a methodical plan containing details of the organisation’s central objectives and the strategies to be followed to achieve them

Question 7

What is included in the corporate plan?

Answer 7

overall objectives of the organisation within a time frame
strategy used to attempt to meet these objectives (can use the Ansoff matrix)
the main objectives for the key departments of the business derived from the overall objective

Question 8

Benefits of corporate plan

Answer 8

Clear focus and sense of purpose for what they are trying to achieve
Easier to communicate and distribute this purpose to focus all managers and staff in the organisation
Control and review for improvements
Forcing to consider the strengths and weaknesses in relation to its environment and to think abt how all of the different functional department interrelate

Question 9

Limitations of corporate plan

Answer 9

Can be made obsolete by rapid and unexpeced internal/external changes
Cannot forsee some events
Time consuming
Must be adapted and updated
Can be sometimes inflexible
For a large multinational company, it is unrealistic to think that all employees will identify with the long-term objectives of the business

Question 10

Internal influences on corporate plan

Answer 10

financial resources
operating capacity
managerial skills and experience
staff numbers and skills
culture of the organisation

Question 11

External influences on corporate plan

Answer 11

macro-economic conditions
central bank and government economic policy changes
likely technological changes
competitor’s actions

Question 12

Define corporate culture

Answer 12

the values, attitudes, and beliefs of the people working in an organisation that control the way they interact with each other and with external stakeholder groups

Question 13

Define power culture

Answer 13

concentrating power among just a few people
associated with autocratic leadership
swift decisions are made
used in response to a crisis, as it is important to make decisions quickly

Question 14

Define role culture

Answer 14

each member of staf has a clearly defined job title and role
used where stability is needed
associated with burreaucratic organisations
operate within rules with little creativity
has clear delegated authority
power and influence come from a person’s position

Question 15

Define task culture

Answer 15

based on cooperation and teamwork
used where product life cycles are short and, therefore, there is a need to be adaptable
groups are formed to solve particular problems
lines of communication similar to a matrix structure
each team usually have a distinctive culture b/c they have been empowered to make decisions
encouraged to be creative

Question 16

Define person culture

Answer 16

when individuals are given the freedom to express themselves fully and make decisions for themselves
may be some conflict beyween individual goals and those of the organissation
creative type
used where an organisation has individuals working abroad on their own. In this case, it is important that the individuals are able to make decisions without referring everything back to governors.
or used when creative solutions/innovations are needed to out compete competitors

Question 17

Define entrepreneurial culture

Answer 17

encourages mgmt and workers to take risks, to come up with new ideas and test out new business ventures
used in a highly competitive industry where it may be necessary to encourage risk taking in order to gain a competitive edge
failure is not necessarily criticised as it is considered an inevitable consequence of showing risk taking

Question 18

Reasons for changing organisational culture

Answer 18

A traditional family which has favoured family members converts into a plc as new investors demand more transparency and recognition of natural talent from recruited employees
A product-led business needs to respond to changing market conditions by encouraging more staff involvement (task culture)
A recently privatised business formerly run on burreaucratic principles needs to be more customer focused => entrepreneurial
A merger or takeover => adapt its culture to ensure consistency
Declining profits and market share may be consequences of poorly motivated staff -> person culture
A business which has suffered losses due to a culture that encourages risk taking (e.g. many banks in the UK and USA in the years before 2008). In this situation a role culture may be more appropriate as this does not encourage creativity and people in the organisation operate within the rules. It is a more bureaucratic approach.

A business that is suffering from a high labour turnover − a person-based culture might help to motivate employees by giving them more responsibility and the freedom to express themselves.

Question 19

Why expansion are less likely to be successful when 2 businesses merge?

Answer 19

The cultures of the merged businesses will confl ict and this leads to conflict at all levels of the new organisation.
The firms have different ways of operating. For example, if a business with a power culture merges with a business that has a person culture, the role of the individual is very different. Autocratic leaders in the first business would fight to maintain their power, whilst employees in the second business would resist any loss of freedom to express themselves fully.
Conflict will cause inefficiency in decision making.
The merged business will not share the same values.
If cultures are different, there will be no synergy between the merged businesses.

Question 20

Problems of changing organisational culture

Answer 20

changing the way people think and react to problem situations
directly challenging the way things have been done for years
involve substantial changes of personnel, job descriptions, communications methods and working practices
time consuming
collective efforts from everyone

Question 21

Best way to bring about change to an organisation’s culture

Answer 21

Concentrate on positive aspects of the business and how it currently operates and enlarge on these
Obtain full commitment of the people at the top of the business and all key personnel
Establish new objectives and a mission statement that accurately reflect the new values and attitudes to be adopted
Encourage bottom up participation of workers when defining exisiting problems or devising new solutions
Train staff and new procedures and new ways of working to reflect the changed value system (explain why it will benefit them)
Change the staff reward system to ensure that appropriate behaviours are encouraged

Question 22

How does a corporation’s culture affect strategic implementation?

Answer 22

Strong culture encourages fast and effective implementation since everyone shares the same value
In weak culture, employees may have not agreed set of beliefs => form their own groupss that are based on individual interests which might conflict with the interest of the whole organisation
Power culture, for instance, can stir up resistance to change => difficult to implement which contrasts with person/task culture that emphasises on active participation of all staff

Question 23

Evaluation of the importance of corporate culture

Answer 23

Values of a business establish the norms of behaviour of staff
Culture determines the way in which managers and workers treat each other
A distinctive organisational culture can suport a business’ brand image and relationships with custimers
Strategy is just the headline on the company’s story – culture needs a clearly understood common language to embrace and tell the story that includes mission, vision, values, and clear expectations

Strategy is about intent and ingenuity and culture determines and measures desire, engagement, and execution => When culture embraces strategy, execution is scalable, repeatable and sustainable

Question 24

Define change management

Answer 24

planning, implementing, controlling and reviewing the movement of an organisation from its current state to a new one

Question 25

Types of change

Answer 25

Evolutionary/incremental changes that occur slowly over time

Dramatic/revolutionary changes that are usually unanticipated

Question 26

Causes of change

Answer 26

Technological advances leading to new products and new processes
Macro-economic changes - fiscal policies, interest rates, fluctuations in the business cycle
Legal changes (changes to what can be sold)
Competitors

Question 27

Managing technological changes

Answer 27

staff retraining
purchase of new equipment
additions to product portfolio/ other products to be dropped
need for quicker product development => new organisational structures and teams

Question 28

Managing macro economic changes

Answer 28

flexible production systems include staff flexibility
explain need for extra capacity or rationalisation
deal with staff cutbacks in a way that encourages remaining ones to accept change

Question 29

Managing legal changes

Answer 29

staff retraining on company policy

flexible working hours and practices

Question 30

Managing competitor’s actions (more like responding)

Answer 30

Encourages new ideas from staff
increase efficiency by staff accepting the need to change production methods
ensure resources are available to meet the challenge

Question 31

Steps of introducing change

Answer 31

Where are we now and why is change neeeded
New vision and objectives
Ensure resouces are in place to enable change to happen
Give maximum warning of the change
Involve staff in the plan for change and its implementation
Communicate
Introduce initial changes that bring quick results
Focus on training
Sell the benefits to staff and other stakeholders
Always rmb the effects on individuals
Check on how individuals are coping and provide support if needed

Question 32

What does leading change mean?

Answer 32

dynamic leaders who will get rid of corporate inertia (complacency to change) and away from resistance to change
motivation of staff at all levels of the organisation so that change is looked upon as an positive force
ensuring that acceptance of change is part of the culture of the organisation
visible support of all senior managers who will help the change process to be accepted

Question 33

Define project champion

Answer 33

a person assigned to support and drive a project forward who explains the benefits of change and assists and supports the team putting change into practice

Question 34

Quality of a project champion

Answer 34

• Diplomacy – as senior managers are opposed to the new IT system, the project champion must be able to encourage them to accept the change. The champion must be a skilled relationship manager and bridge builder.
• Strong communication skills – s/he must act as a conduit for keeping stakeholders informed of the project’s status. S/he must also be able to ensure that everyone understands the project goals.
• People-management skills – the project champion has to be able to influence and motivate people.
• Drive and enthusiasm – the project champion must be able to push the project forward.
• Problem-solving skills – the project champion has to remove as many obstacles as possible.

Question 35

Define project groups

Answer 35

are created by an organisaton to address a problem that requires input from different specialists

Question 36

How to promote change?

Answer 36

establish a sense of urgency
create an effective project team to lead the change
develop a vision and a strategy for change
communicate this change of vision
empower people to take actions
generate short term gains from change that benefit as many people as possible
consolidate these gains and produce even more change
build change into the culture of the organisation to build up damaging resistance that could increase chance of failures

Question 37

What would be the resistances to strategic change?

Answer 37

Fear of the unknown: change means uncertainty
Fear of failure
Losing something of value: lose status/job security
False beliefs about the need for change
Lack of trust
Inertia

Question 38

Define contingency plan

Answer 38

preparing an organisation’s resources for unlikely events

Question 39

Key steps in contingency planning

Answer 39

identify the potential disasters that could affect the business
assess the likelihood of these occurring
minimise the potential impact of crises
plan for continued operations of the business

Question 40

Benefits of contingency planning

Answer 40

reassures staff, customers and local residents that concerns for safety are a priority
minimises negative impact on customers and suppliers in the event of a major disaster
public relations repsonse is much more likely to be speedy and appropriate, with senior managers being used to promote what the company intends to do, by when and how

Question 41

Limitations of contingency planning

Answer 41

costly and time consuming - not just the planning process but the need to train staff and have practice dry runs of what to do in the event of emergency
needs to be constantly updated as the number and range of potential disasters can change over time
staff training increases if labour turnover is high
avoiding disasters is still better than planning for what to do if they occur