Strategic implementation and evaluation (09)

Question 1

What is Strategic implementation?

Answer 1

Strategic implementation is the process of planning, allocating and controlling resources to support the chosen strategy.

Question 2

What is Organisational design?

Answer 2

Organisational design is the process of creating, implementing, monitoring, and modifying the structure, processes and procedures of an organisation.

The key components of organisational design are organisational structure and
organisational culture.

The goal is to design an organisation that allows managers to effectively translate their chosen strategy into a realised one.

Question 3

What is Organisational Structure?

Answer 3

An organisational structure is the internal, formal framework of a business that shows the way in which management is linked together and how authority is transmitted.

Question 4

What are the elements of an Organisational Structure?

Answer 4

-Hierarchy of authority
-Span of control
-Authority, Responsibility, Delegation
-Degree of centralisation

Question 5

Note:

In general, there are two approaches to organisational structure, the MECHANISTIC approach and the ORGANIC approach.

Question 6

Mechanistic approach

Answer 6

Organisational structures with a mechanistic approach are highly formalised; many rules and regulations are in place to govern employee behaviour and work.

The mechanistic approach allow for standardisation and economies of scale, and are often used when a business pursues cost leadership strategy at strategic level.

Question 7

Organic approach

Answer 7

Organisational structures with an organic approach are flexible and authority is decentralised and there are fewer rules and procedures.

The organic approach tends to result in fluid and flexible information flow among employees, faster decision-making, higher employee motivation, and creativity.

The organic approach typically exhibits a higher rate of entrepreneurial behaviours and innovation, and allows businesses to foster Research and Development, as well as marketing as a core competency.

Businesses that pursue a differentiation strategy at business-level frequently uses an organic approach.

Question 8

What is a Functional Structure?

Answer 8

A functional structure is recommended when a business has a
fairly narrow focus in terms of product offerings combined with a small geographical reach.

It matches well with business-level strategies such as cost leadership and differentiation.

Question 9

What is a Divisional Structure?

Answer 9

When a business diversifies into different product lines, geographies or industries, it could adopt the divisional structure, whereby each
product line, geographic location or industry is a division on its own, led by a CEO (or equivalent General Manager) who is responsible for the division’s business strategy and its day-to-day operations.

Businesses using the divisional structure in a product or geographic diversification strategy tend to concentrate decision-making at the top. Doing so allows better synergy and helps the corporate headquarters to leverage and transfer core competencies across the different divisions.

A business that uses the divisional structure in industrial diversification is likely to decentralise decision-making so that divisional heads could respond to circumstances that are specific to the industry.

A business that integrates vertically with its customers or suppliers is also likely to adopt a divisional structure where the supplier or customer forms a separate division.

Question 10

What is a Matrix Structure?

Answer 10

A conglomerate that deals in multiple industries in more than one
country is likely to adopt the matrix structure.

In this structure, the business could be organised into the various industries along the horizontal axis, with a second dimension of organisational structure in terms of countries or regions along the vertical axis, each of which would house a full set of functional activities.

This structure also promotes knowledge sharing as it allows separate areas of knowledge
to be integrated across industrial boundaries. This matrix structure is more advanced as compared to the conventional matrix structure where cross-functional teams work on different projects.

full detail on pg4 PU3 09 notes

Question 11

What are the benefits of having a strong culture?

Answer 11

Strong culture promotes and facilitates successful strategy implementation while weak culture does not.

In businesses with weak cultures, employees may have no
agreed set of beliefs and there is no pride in ownership of work. They may form their own groups within the business that are based around cultures that conflict with the weakly expressed business culture. Such situations provide little or no assistance to strategic implementation.

Question 12

Note:

It is important for businesses to have a positive culture as it motivates and energises
employees by appealing to their higher ideals.

By internalising the values and norms of the business, employees will feel they are part of a larger, meaningful community attempting to accomplish important things.

When employees are intrinsically motivated this way, the business can rely on fewer levels of hierarchy, and hence close monitoring and supervision is not needed as much.

Motivating through inspiring values allows businesses to tap on employees’ emotions so they use both their heads and hearts when making business decisions.

Answer 12

Strong organisational cultures that are strategically relevant, therefore align employees’ behaviours more
fully with strategic objectives.

They also strengthen employee commitment, engagement and effort.

Effective alignment in turn allows the business to develop and refine its core competencies, which can form the basis for competitive advantage.

Question 13

What is Strategic Leadership?

Answer 13

Strategic leadership pertains to
executives’ use of power and influence to direct the activities of others when pursuing business objectives.

Question 14

What are the roles of a strategic leader?

Answer 14

-Envision future strategy
-Aligning the business to deliver strategy
-Embodying change

Question 15

What are the strategy and leadership types?

Answer 15

-Direction by autocratic leaders
-Persuasion by democratic leaders
-Participation by paternalistic leaders
-Collaboration by laissez-faire leaders
-Situational leaders

Question 16

What are the things to consider in communicating a strategy to employees?

Answer 16

-Focus:

Communications should focus on the key issues that the strategy
addresses and its key components.

If top management cannot show they are
clear on this, it cannot be expected that employees would be.

It is also helpful to avoid unnecessary detail or complex language.
-Medium:

Medium such as emails, newsletters and the intranet can ensure all
employees receive the same message promptly, helping to avoid damaging
uncertainty and rumour-mongering.

However, face-to-face communications are important to demonstrate the personal touch of managers in interacting with concerned employees.

-Employee engagement:

-Impact:

Communications should be impactful, with powerful and memorable words and visuals.

A strong ‘storyline’ can help by encapsulating the journey ahead and new futures imagined for the business and its customers.

Question 17

What is Change management?

Answer 17

Change management refers to the planning, implementing, controlling and reviewing the
movement of a business from its current state to a new one.

Question 18

What are the reasons for change?

Answer 18

-Technological advancements
-Macroeconomic changes
-Legal changes
-Actions of competitors

Question 19

What are some reasons as to why managers and employees may resent and resist strategic change?

Answer 19

-Fear of the unknown

-Fear of failure:
The changes may require new skills and abilities that, despite
training, may be beyond the capabilities of employees.

-Losing something of value:
Employees could lose status or job security as a result of change, and they are unsure how the change would affect them exactly.

-False beliefs about the need for change:
To put themselves at ease and to avoid
the risks of change, some employees force themselves into believing that the
existing system is good enough and will work out in the future without the need
for any radical change.

-Lack of trust

-Inertia:
Many employees suffer from inertia or reluctance to change and try to
maintain the status quo. Change often requires considerable effort, so the fear
of having to work harder to introduce it may cause resistance.

Question 20

What are the methods to manage and overcome employee’s resistance to change?

Answer 20

-Education and communication:
The management must provide adequate information and ensure that the change
is communicated to all employees involved.

-Participation and involvement:
The management could reduce resistance by allowing employees who are affected
by the change to participate in the planning and implementing of the change.

This increases the understanding of the change and its necessity, and allows employees
to offer their own ideas in making it successful.

As the employees are involved in the development of the solution from an early stage, it develops commitment to
the decision made as they have a personal stake in its success.
-Facilitation and support:
Encouragement and help from the manager and co-workers often reduces the fear
and anxiety experienced by employees affected by the change.
-Negotiation:
The management could negotiate with employees who resist the change and come
to an agreement. This is useful in overcoming resistance from a group of employees
who perceive they would lose significantly as a result of the change, but are
sufficiently powerful as a group to resist and influence other employees.

Question 21

What are some ways to measure the success of the strategy?

Answer 21

-Employee motivation and engagement
-Market share and growth
-Productivity and efficiency
-Return on investment

Question 22

What are some indicators of an increase in employee motivation and engagement?

Answer 22

-Employee turnover and absenteeism rates have reduced or remained the same
-Scores in employee engagement surveys have improved
-There is no new breach of tripartite guidelines
-Complaints to the trade union has reduced or remained the same

Question 23

What are some indicators of an increase in market share and growth?

Answer 23

-Sales revenue or volume has increased
-Market share has increased
-A newly launched product received favourable reviews from consumer reports and blogs
-An existing product is well received when launched in a new country or region

Question 24

What are some indicators of an improvement in productivity and efficiency?

Answer 24

-Increased in volume of output
-Reduction in waste produced
-Production at full or near-maximum capacity
-Product recall or customer complaints due to poor quality is reduced
-Inventory storage costs are reduced and/or no out-of-stock situations

Question 25

What are some indicators of higher returns on investments to shareholders?

Answer 25

-Absolute profits have increased significantly
-Financial ratios have improved
-Financing costs have reduced
-There is no liquidity or cash flow problems

Question 26

SUMMARY

Answer 26

In summary, the following are covered in this topic:
1. Strategic implementation is the process of planning, allocating and controlling
resources to support the chosen strategy.

2. Organisational design is the process of creating, implementing, monitoring, and
   modifying the structure, processes and procedures of an organisation.
3. The management will need to consider and assess the appropriateness of the
   existing organisational structure in supporting strategic implementation, and
   propose a new one, if necessary.
4. Organisational culture, also known as corporate culture, describes the
   collectively shared values and norms of the organisation’s members.
5. A positive organisational culture influences employee behaviour and can
   develop into a source of competitive advantage.
6. Strategic leadership pertains to executives’ use of power and influence to direct
   the activities of others when pursuing business objectives.
7. The leadership style adopted by the strategic leader will influence employees’
   acceptance of the strategic direction of the business.
8. The way the strategic leader communicates any change in strategy will
   determine how well employees accept and support the change.
9. Change management refers to the planning, implementing, controlling and
   reviewing the movement of a business from its current state to a new one.
10. The management will need to understand why employees resist change and
    manage this resistance accordingly.
11. The effectiveness and success of a strategy can be measured by increased
    employee motivation and engagement, an increase in market share and growth,
    an improvement in productivity and efficiency, and a higher return on
    investment.