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Business Studies A2 > Unit 6. Chapter 37. Strategic Implementation > Flashcards

Unit 6. Chapter 37. Strategic Implementation Flashcards

1
Q

strategic implementation

A

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

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2
Q

Factors for successful strategic implementation

A
  • appropriate organisational structure to deal with the change
  • adequate resources to make the change happen
  • well-motivated staff who want the change
  • a leadership style and organisational culture that allow change with wide-range support
  • control and review systems to monitor the firm’s progress towards the desired final objectives.
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3
Q

Business Plan

A

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

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4
Q

Contents of a typical business plan for a new business

A
  • the executive summary - overview of new business and its strategies
  • description of the business opportunity - details of entrepreneur, products, customers, why
  • marketing and sales strategy - how to sell
  • management team and personnel - skills and experience of the entrepreneur and the people he/she intends to recruit
  • operations - premises, production facilities, IT systems
  • financial forecasts - future projections of sales, profit and cash flow (one year ahead at least)
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5
Q

Importance of business plans

A
  • New business: obtain finance for the start-up: Potential investors or creditors will not provide finance unless clear details about the business proposal have been written down clearly.
  • Clear sense of purpose, direction, marketing strategies and what employees to recruit, the chances of success will be much improved.
  • Financial and other forecasts contained in the plan -> targets that the business should aim for.’
  • Existing business:
    + Rewrite and adapt it to accommodate new/ revised strategies
    + Original financial forecasts can act as budgets and control benchmarks.
    + Updated ver: additional funding or to attract additional partners or to supply data for the experts if going public becomes an option.
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6
Q

Corporate plan

A

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

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7
Q

Contents of corporate plan

A
  1. The overall objectives within a given time frame (3 or 4 yrs):
    - profit target, sales growth, market share target
  2. The strategies to be used to attempt to meet these objectives:
    - market penetration: increase sales of existing products
    - market development: develop new markets for existing products
    - product development: research and develop new products for existing markets
    - diversify: new products for new markets
  3. The main objectives for the key departments of the business derived from the overall objective.
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8
Q

Potential benefits of corporate plans

A
  • Several years ahead: senior managers have a clear focus and sense of purpose for what they are trying to achieve and the means they should use to reach these aims.
  • Communicate to all managers and staff about the purpose and focus -> very important for corporate plans to be effective.
  • Control and review: original objectives can be compared with actual outcomes to see how well the business’s performance matched its aims.
  • Forcing senior managers to consider the organisation’s strengths and weaknesses in relation to its evironment + to think about how all of the different functional departments of the firm interrelate
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9
Q

Potential limitations of corporate plans

A
  • Obsolete by rapid and unexpected internal or external changes
  • Inflexibility will be punished.
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10
Q

The value of corporate plans

A
  • Potential investors
  • Major lenders
  • Other stakeholder groups. e.g. government if requesting development grants for expanding into an area of high unemployment.
  • All staff - specific and tangible objectives for all departments, sections and individuals
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11
Q

Main influences on a corporate plan

A

Internal:

  • financial resources
  • operating capacity
  • managerial skills and experience - this may be a major constraint on the plan’s success, especially if the diversification strategy is chosen.
  • staff numbers and skills - workforce planning is the key factor in the success of any corporate plan
  • culture of the organisation

External:

  • macro-economic conditions - recession?
  • central bank and government economic policy changes
  • technological changes
  • competitors’actions
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12
Q

Corporate culture

A

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.

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13
Q

Main types of corporate culture

A
  • Power culture
  • Role culture
  • Task culture
  • Person culture
  • Entrepreneurial culture
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14
Q

Power culture

A

concentrating power among just a few ppl

  • autocratic leadership
  • power is at the centre of the organisation
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15
Q

Role culture

A

each member of staff has clearly defined job title and role.

  • bureaucratic organisations
  • little creativity
  • clear delegated authority
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16
Q

Task culture

A

this is based on co-operation and teamwork.

  • lines of communication similar to a matrix structure.
  • develop a distinctive culture because they have been empowered to take decisions
  • creative
17
Q

Person culture

A

when individuals are given the freedom to express themselves fully and make decisions for themselves.

  • may be some conflict between individual goals
  • most creative
18
Q

Entrepreneurial culture

A

this encourages management and workers to take risks, to come up with new ideas and test out new business ventures.

19
Q

Possible reasons for changing organisational culture

A
  1. New investors demand more transparency and recognition of natural talent from recruited employees. -> plc
  2. Respond to changing market conditions -> encourge more staff involvement (task culture)
  3. Privatised business formerly run on bureaucratic principles needs to become more profit oriented and customer focused -> entrepreneurial culture
  4. Declining profits and market share (poorly motivated staff and lack of interest in quality and customer service) -> person-based culture might help.
20
Q

Problems of changing organisational culture

A
  • take several years
  • change the way ppl think and react to problem situations
  • substantial changes of personnel, job descriptions, communication methods and working practices.
21
Q

Key common elements to solve problems of changing organisational culture

A
  • Concentrate on the positive aspects of the business and how it currently operates, and enlarge on these.
  • Obtain the full commitment of people at the top of the business and all key personnel. If they cannot change -> replace.
  • Establish new objectives and a mission statement that accurately reflect the new values and attitudes.
  • Participation of workers when defining existing problems or devising new solutions. -> opportunity to propose alt. ways of working.
  • Train staff in new procedures and new ways of working.
  • Change the staff reward system to avoid rewarding success in the old ways.
22
Q

How does a corporation’s culture affect strategic implementation?

A

For example:

  • Power culture: take it or leave it attitude -> stir up resentment and resistance to change and cooperation of the workforce is most unlikely to be obtained in the future.
  • Task or person-based cultures: encourage active participation in implementing major strategic change. two-way communication could lead to staff willingly accepting change.
  • Strong culture ( widespread sharing of common belies, practices and norms) -> promotes and facilitates successful strategy implementation. Everyone accepted what the business stands for -> energises people to promote successful strategy implementation.
  • Weak cultures (employees may have no agreed set of beliefs and there is no pride in ownership of work) -> conflict, no assistance to strategic implementation.
23
Q

Evaluating the importance of corporate culture

A
  • The values of a business establish the norms of behaviour of staff
  • Determines the way in which company managers and workers treat each other.
  • Distinctive organisational culture can support a business’s brand image and relationships with customers.
  • Determines the type of strategic decisions that are taken.
  • Clearly linked to the economic performance and long-term success of organisations. Business dedicated to continuous improvement with staff involvement have been shown to be more profitable in the long term.
24
Q

Change management

A

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

25
Q

Change - techniques for implementing, managing and controlling change

A
  1. Understand what change means
  2. Recognise the major cause of change
  3. Understand the stages of the change process
  4. Lead change, not just manage it
  5. Project champions
  6. Product groups or teams
26
Q
  1. Understand what change means
A
  • accelerating and ongoing process.
  • Firms need to be able to cope with dramatic one-off changes as well as more gradual evolutionary change:
    + Evolutionary/ incremental change occurs quite slowly over time. can be anticipated or unexpected. (easiest to manage)
    + Dramatic/ revolutionary change (if unanticipated) causes more problem.
27
Q

business process re-engineering

A

fundamentally rethinking and re-designing the processes of a business to achieve a dramatic improvement in performance.

28
Q
  1. Recognise the major causes of change
A
  1. Technological advances
    - new products & processes
    - > need for staff training, purchase new equipment, additions to product portfolio, quicker product development (new organisational structures
  2. Macro-economic changes
    - fiscal policy, interest rates, fluctuations in the business cycle
    - changes in consumers’ disposable incomes -> demand patterns
    - boom or recession conditions - extra capacity or rationalisation
    - > flexible production systems, deal with staff cutbacks
  3. Legal changes
    - changes to what can be sold or when
    - > staff training on company policy, flexible working hours and practices
  4. Competitors’ actions
    - new products, lower prices, higher promotion budget
    - > encourage new ideas from staff, increase efficiency, ensure resources are available.
29
Q
  1. Understand the stages of the change process
A
  • Where are we now and why is change necessary?
  • New vision and objectives
  • Ensure resources are in place to enable change to happen
  • Give max 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 -> staff feel that they are able to make a real contribution to the changed organisation
  • Sell the benefits -> staff and other stakeholders may benefit directly
  • Always remember the effects on individuals -> soft HRM, staff loyalty
  • Check on how individuals are coping and remember to support them
30
Q
  1. Lead change, not just manage it
A

Leading change means

  • dynamic leaders: shake an organisation out of its complacency and away from resistance to change
  • motivation of staff at all levels: change is looked upon a positive force that could improve people’s lives -> change behaviour.
  • ensuring that acceptance of change is part of the culture
  • visible support of all senior managers who will help the change process to be accepted at all levels and within all departments
31
Q
  1. Project champion
A

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.

32
Q
  1. Project groups
A

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

33
Q

Promoting change

A

According to John Kotter, 8 best ways to promote:

  • establish a sense of urgency
  • create and effective project team to lead the change
  • develop a vision and a strategy for change
  • communicate this change vision
  • empower people to take action
  • 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 so that it becomes a natural process.
34
Q

Resistance to strategic change

A
  • Fear of unknown: uncertainty, increased anxiety
  • Fear of failure: new skills and abilities required
  • Losing something of value: lose status or job security
  • False beliefs about the need for change: avoid the risks of change
  • Lack of trust: past experiences
  • Inertia: fear of having to work harder.
35
Q

Contigency plan

A

preparing an organisation’s resources for unlikely events

  1. Identify the potential disasters that could affect the business
  2. Assess the likelihood of these occuring
  3. Minimise the potential impact of crises
  4. Plan for continued operations of the business
36
Q

Benefits of contigency planning

A
  1. Reassures staff, customers and local residents that concerns for safety are a priority
  2. Minimise negative impact on customers and suppliers in the event of a major disaster
  3. Public relations response 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 now.
37
Q

Limitations of contigency planning

A
  1. Costly and time consuming - planning process, need to train staff, practice dry runs: fire, IT failure, terrorist attack, accident involving company vehicles.
  2. needs to be constantly updated as the number and range of potential disasters can change over time
  3. staff training needs increase if labour turnover is high
  4. avoiding disasters is still better than planning for what to do if they occur.

Business Studies A2 (16 decks)

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