Strategy that works How can managers influence the success of a strategy

Strategy that works: How can managers influence the success of a strategy?

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Table of Contents

TOC o “1-3” h z u HYPERLINK l “_Toc359422108” INTRODUCTION PAGEREF _Toc359422108 h 3

HYPERLINK l “_Toc359422109” Problem statement PAGEREF _Toc359422109 h 4

HYPERLINK l “_Toc359422110” Objectives of the research PAGEREF _Toc359422110 h 4

HYPERLINK l “_Toc359422111” Research Questions PAGEREF _Toc359422111 h 5

HYPERLINK l “_Toc359422112” LITERATURE REVIEW PAGEREF _Toc359422112 h 5

HYPERLINK l “_Toc359422113” Strategy and its importance PAGEREF _Toc359422113 h 5

HYPERLINK l “_Toc359422114” Formulation and execution process PAGEREF _Toc359422114 h 6

HYPERLINK l “_Toc359422115” Why is implementation important? PAGEREF _Toc359422115 h 7

HYPERLINK l “_Toc359422116” Implementation inhibitors PAGEREF _Toc359422116 h 7

HYPERLINK l “_Toc359422117” Success factors for strategy implementation PAGEREF _Toc359422117 h 8

HYPERLINK l “_Toc359422118” Execution Strategies PAGEREF _Toc359422118 h 8

HYPERLINK l “_Toc359422119” METHODOLOGY PAGEREF _Toc359422119 h 9

HYPERLINK l “_Toc359422120” Background PAGEREF _Toc359422120 h 9

HYPERLINK l “_Toc359422121” Action research PAGEREF _Toc359422121 h 10

HYPERLINK l “_Toc359422122” Constructive research PAGEREF _Toc359422122 h 12

HYPERLINK l “_Toc359422123” Qualitative research PAGEREF _Toc359422123 h 12

HYPERLINK l “_Toc359422124” Case study approach PAGEREF _Toc359422124 h 13

HYPERLINK l “_Toc359422125” DATA PRESENTATION PAGEREF _Toc359422125 h 14

HYPERLINK l “_Toc359422126” CONCLUSION PAGEREF _Toc359422126 h 14

HYPERLINK l “_Toc359422127” REFERENCES PAGEREF _Toc359422127 h 15

INTRODUCTIONA brilliant company strategy puts a company on a high pedestal in the competitive map. The formulation of a consistent and achievable strategy is by no means an easy undertaking, ensuring that the strategy is implemented in the organization and produces the desired results is even more difficult. The formulation may be a science guided by certain theories, but the implementation is considered a craft (Kaplan and Norton, 2001). The true value of appropriate strategy is only appreciated through the process of executing it. Kaplan and Norton (2001) point out that the quality of strategy is not as valuable as the ability to have it executed. Most business leaders have the knowledge and insight necessary to create a perfect strategy, but the process of execution eludes them. Unsuccessful implementation of strategies means that even the most promising of strategies could fail (Noble, 1999b). A survey by the economist journal found that 57% of companies failed at strategy implementation (Allio, 2005). Previous research shows that there exists a major gap in the available research on the necessary characteristics for successful strategy implementation. It is the aim of this study to examine the results of these studies and methods that previous researchers used to collect their data and come up with a guided implementation procedure based on empirical data. The examination of methods is aimed at generating a standard research method which would facilitate further research study in this field. The research methods are hoped to positively judge in this research will be implemental in the exploration of the characteristics of successful strategy implementations. It is hoped that by the end of this research, the researchers will have the ability to guide further research in the strategic management field, and more precisely in studies regarding strategy implementation.

Problem statementMany factors influence the rate of success that managers have in the implementation of a strategy. The understanding of these factors and dynamics in place during the implementation stages is the key to success.

For many executives, there is great difficulty in bridging the gap between aspirations and goal attainment. Bossidy and Charan (2002) note that these executives will often formulate great concepts for their plans but will most often than not fail to deliver. The complexity of the link between strategy formulation and operations requires a level of coordination that most managers do not understand.

It is, therefore, necessary to these executives to have a composite understanding of all the factors, and strategies that will influence the success of their strategies. Though such studies have been done in the past, they mostly focus on defining these factors rather than explain the dynamics in play during the implementation stages.

Objectives of the researchThe survival of any organisation depends on how successful the implementation of its strategy is (Kaplan & Norton, 2001). Execution of this strategy is supposed to be a disciplined logical process with a set of interconnected activities, which allows a company to choose a strategy and see it through to success (Hrebiniak, 2008). Unfortunately, there is no theory as yet that offers simple yet systematic approach to strategy execution (Frolick & Ariyachandra, 2006). Following are the objectives of this study.

Using empirical evidence, develop a framework which could be used by managers in the formulation of strategy as building blocks to give it a higher chance of success.

To achieve this, the study will have to initially address some objectives as preliminaries. These include the understanding of what drives or inhibits the execution of strategy and

To explore previous researches and mostly the various methodologies employed with an aim of identifying the research method(s) most suited to a study of this nature.

Research QuestionsHaving defined the objectives that will form the theme of the study (Chia, n.d.), the researcher will then seek to answer the following questions;

What are the characteristics of a strategy that is highly likely to succeed?

How do the factors that influence successful strategy work?

Can management be able to influence the way these factors affect strategy?

LITERATURE REVIEWDuring the review of the literature (Chia, n.d.), the researcher was aiming at defining strategy and establishing its importance to organisations. The researcher also aimed at identifying the process through which managers go while formulating and implementing the strategy, it was also important to establish certain elements of strategy execution like its importance, what inhibits it, what drives the process and the existing frameworks for the execution. It is important to point out at this stage that strategy execution and strategy implementation will mean the same thing for the purpose of this study and will be interchangeably used.

Strategy and its importanceMarkides (2004) defines strategy as the action plan formulated by the management for the running and conduction of a business’ operations. The strategy is, therefore, a roadmap which helps managers steer the business towards growth, acquiring a competitive edge and satisfaction of customers.

Being as it is, that the major role of management is to chart the course of a company, the formulation and implementation of strategy then becomes a core function of management. Strategy is what will help the company establish competitive moves and approaches and internally examine itself to emerge with continued excellence. The winning strategy will be in agreement with a company’s external environment and its internal capabilities and strengths. Miller, Einstat & Foote (2002) attribute the marketplace performance of a company to the quality of its strategy, and how proficiently these are implemented.

Formulation and execution processThe process that management uses to formulate and execute strategy can be systematically arranged into five phases, which are interconnected and integrated.

1st Phase – The formulation of a strategic vision, which stipulates the destination the company desires in terms of market, technology, products and customer satisfaction.

2nd phase – This is where the Defining the objectives of the company, which are to be used as benchmarks for the evaluation of the progress made and the company’s performance is done.

3rd Phase – The management is then required to craft a strategy that will attain the objectives and steer the organisation in the charted course.

4th Phase – The strategy should then be effectively implemented.

5th Phase – This is where critical evaluation of the progress made is done. The phase should start at the same time as the implementation. It helps in aligning the process to the long term destination defined in the initial phase while considering emerging ideas and opportunities, as well as the on the ground experiences

Every phase in the process should be handled with competence. This will lead to a well conceived strategy that will set the company apart from its peers (Thompson, Strickland & Gamble, 2008). This research has the designing of a framework, which could guide management in successful implementation of strategy as its objective.

Why is implementation important?As a component of the process of strategic management, execution is that process, which helps interpret the strategy into actions, which will ensure the successful achievement of objectives (Hrebiniak, 2008; Bossidy & Charan, 2002). Research indicates that in strategic management, the major hurdles are not in the formulation, but in the implementation of strategies and that poor execution is primarily the cause of the high incidences of failed company initiatives (Kaplan & Norton, 2008; Speculand, 2009).

Implementation inhibitorsPoor coordination, Communication breakdowns, non adherence to timeframes, parts of management not being supportive, weak systems for execution and control and staff resistance are some of the factors that have been seen to inhibit execution (Speculand, 2009).

Another inhibition to strategy execution is inherent to its very nature. Strategy being future oriented means that it puts managers will be able to balance between managing present day performance and implementing change programs for a better future. This becomes even more poignant where the reward systems are tied to the actual performance of the firm. This viewed in the backdrop of limited resources, competing priorities and stakeholders bent on getting the best performance today means only the most dedicated management can be able to strike the best balance (Franken, Edwards & Lambert, 2009). The inhibitions are numerous and will be individually examined in later sections of the paper.

Success factors for strategy implementationMarket beating performance can be attributed to the adoption and execution of the right techniques in strategic management (Laugen, 2005). Much research has been done on what characterizes a comprehensive strategic plan, but research on the right process for implementing these has only recently started interesting scholars. (Minarro-Viseras, 2005; Brown & Blackmon, 2005)

Saunders, Mann and Smith (2008) place execution approaches into process approach and prescriptive planning. The setting of goals and controls, resource allocation and employee motivation fall under prescriptive planning while behavioral change falls under the process approach.

Johnson and Scholes (2002) go ahead and isolate a combination of three elements that are critical to the implementation process. These are;

Appropriate structures and design within the organisation (Planning approach)

Appropriate allocation of resources and control mechanisms (planning approach)

Change management: managing the company’s internal politics (Process approach)

Execution StrategiesStrategic managers use several tools for analysis and to develop necessary strategies. These include SWOT and Porter’s five Forces. However, strategy implementation has few models, which have gained widespread acceptance.

Though no studies have produced benchmarks for execution, the literature has several elements and constructs, which have been seen to recur. These include communication, organisation’s values, learning and the people. Empirical studies have used the above factors to come up with strategy execution frameworks (Miller, 2002; Kaplan & Norton, 2001; Freedman, 2003). These frameworks have been criticized due to their treatment of implementation as a sequential process not considering its dynamics and complex nature (Dawson, 2003).

METHODOLOGYBackgroundThe researcher explored several previous studies, which involved management issues with the aim of understanding, which research methods had been successfully employed in the past (Chia, n.d.). Such an undertaking was important so as to avoid repeating mistakes that would invalidate the results of the study or at best not produce the required results.

In choosing the design to employ in research, one is often confronted with some structured wisdom that state that some of the research tools ought to be used in some specific level of study. The wisdom states that, for instance, the use of case studies should be limited to the initial exploration before a study, historical evidence and surveys be employed for the descriptive stages and that the only way to gather explanatory data is through experimentation (Coghlan and Brannick, 2001). The author disputes this and the argument is that evidence exists to show that these designs are more effective if employed in a mix in all steps of the research (Brockbank, 2004; Greenwood, and Levin, 2006). The phase of the research thus has no role in choosing the strategy to be employed. It is then suggested that the strategy be chosen according to the following criteria:

The nature of the questions under research

The extent to which the researcher has control over behavioural occurrences, and

The degree to which the research focuses on contemporary rather on historical issues.

The study will be carried out iteratively and attempt to build on the knowledge that existed on the field of strategy implementation. It could then be termed as a constructive and hermeneutic case study aimed at exploration of a phenomenon. Initial efforts will be on the understanding of strategy formulation. It will, therefore, be important to employ a case study approach to get to know the how and why of the change process (Brockbank, 2004).

The research will employ tools as follows:

Action researchAction research (AR) refers to the combined generation of theory and social systems change through the participation of a researcher in the social system. The term as used in this definition was first introduced in 1946 by Kurt Lewis (Elden, 1993). The proponents of this approach argue that the relevance of research should be felt by scholars as well as practitioners. Scholars find research relevant in their pursuit for the advancement of current knowledge and practitioners whose duty is to deal with the system’s problems day to day (Hall and Hammond, 2004). It has been also argued that action research’s main objective should be the production of theories towards desirable states in the future (Reason & Bradbury, 2001).

Action researchers should also aim at equipping people faced with certain problems with the competence to help themselves. This means that the output of the research should stem from being involved with an organisation’s members in a matter that genuinely concerns them.

A common misconception is that projects in management consultancy are Action Research (Heron et al., 2001). This is wrong since most of them lack in some basic principles. If these principles were to be included in the planning and implementation of these projects, then they would qualify as Action Research. AR in practice actually solves the challenges of both research and consultancy but not the other way round. AR incorporates input from researchers as well as from the practitioners and it is then an important tool for a research aimed at the understanding of formulation and implementation of strategic plans (Lomax, 2000).

One of the strengths of AR is that it does not pretend to come up with laws, which have universal application but gives case specific insights (Ladkin, 2004). It is also advantageous in that it has the characteristics of both a problem solution approach as well as a process in problem solving emerging from its specific sequence of events and its model (Heron et al., 2001).

The process aspect of AR – AR systematically assembles data aimed at some target or need of a system as a going concern.

The approach aspect – AR applies scientific methods like experiments and fact-finding to practical problems. It also collaborates with scientists and practitioners in producing action solutions.

Ladkin (2004) says that it is, however, important to distinguish between Action science and AR. Action science is a version of AR that is evolutionary; this means that it introduces the building of theories into AR. This characteristic of Action science gives it the ability to create knowledge as well as offer practical solutions.

Constructive researchThis is a normative form of research design, which normally is made up of case studies (Mason, 1996). It employs limited research tools and terminates in innovative solutions that are grounded in theory. The tool is mostly used when a need for theory grounded and innovative solution exists and when one is more concerned with the way things should be carried out towards accomplishment of a certain goal and not where one seeks to find out the status quo. Mason, (1996) explains that it draws its advantage from its ease of application, its practicability in relevance and utility, its link to theory and novelty therein and its adaptability in different environments.

Qualitative researchThis form of research is more focused on the field and case studies and deals with progressive concerns. Coghlan and Brannick (2001) recommend this arguing that it helps the researcher get involved personally in the description and interpretation of vivid experiences from his/her observations and those of the informants. It constructs rather than discovers knowledge.

It is mostly applicable where research seeks to get an understanding of a phenomenon and not explain the causal-effect relationships (Somekh, 2006). The research questions for this design have a greater relationship to the phenomena under investigation. Its strong points are the sensitivity it has for the risks inherent in subjectivity by human respondents as well as responsiveness to the design of the study. It also helps in validating the interpretations by the researcher (Friedman, 2006).

Case study approachThis is a descriptive approach, which employs both the quantitive and qualitative tools. It helps to solve the difficulty which encounters researchers in separating analysis from interpretation during the gathering of data by dealing with the procedures considered subjective (Dick, 2002). In this approach, the knowledge is not discovered, but is rather construed, and generalizations are made from the limited cases studied through a deeper phenomenon understanding. It helps in capturing the gist of the feelings by informants and easily adapts its interviews to emerging situations (Greenwood, and Levin, 2006).

This approach is mostly useful where a phenomenon is to be investigated within its context in real life and where the phenomenon to be studied is complex (Dick, 2002). The approach is also useful where the investigator wants to know the ‘why’ and the ‘how’ of an occurrence they do not exercise control over. The tool is also important on the building and testing of theories and to give a thorough description.

Friedman (2006) states that the tool is advantageous in that it employs triangulation and austerely and precisely represents empirical data collected. It also involves finding opposing explanations to those held by the researcher and grants the researcher an opportunity to independently weigh the reliability and merits of the eventual analysis. The tool also gives valid, realistic and reliable findings, and the results from it are significant.

DATA PRESENTATIONThe researcher will use appropriate statistical tools to present the results of the study. The presentation style will depend on the nature of the data to be presented and the method used in collecting it.

CONCLUSIONA framework to be used to guide the formulation of policy to help strategic management improve the success rates would be welcome to all in the field of strategic management.

This study will then conclude with the applicability of the guidelines that emerge from its empirical evidence. Not only will this guide the immediate application of the guideline but it will also be an opportunity to influence, guide and stimulate further research in the strategic management field. The research will also help in identifying the aspects that inhibit the success of the study in the hope that future strategic managers will be able to avoid the known pitfalls.

The tools to be used in carrying out this research will also be valuable to future researchers.

It is the researchers hope that during the course of the study, he will be able to come up with informed recommendations and observations that will go a long way in helping strategic managers in the course of their strategic plans execution.

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Bossidy,L., Charan, R. and Burk, G., 2002. Execution – The discipline of getting things done. London: Random House Business Books.

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