MANAGEMENT THEORY AND PRACTICE PAPER PRESENTATION

BY AMIENS ERNEST OSEGHALE

ON STRATEGIC IMPLEMENTATION: A WEB OF MANAGEMENT PRINCIPLE

ON 24TH APRIL, 2012

AT SCHOOL OF POST-GRADUATE STUDIES BENSON IDAHOSA UNIVERSITY BENIN CITY

ABSTRACT Strategy implementation is a web of theories that transverses administrative management, system and contingency theories. In the paper, it discovered that strategy implementation is a sequence of activities and function of planning, organizing, coordinating, leading and controlling articulated by Henri Fayol (18411925). Strategy implementation by its very nature is action oriented; comprehensive in scope, demand varied skills, wild range involvement and integrated process. From the review of literatures, thrust of strategy implementation lies within organizational structure, culture and control.

INTRODUCTION The system theory of organization revealed that there is constant and continuous interaction between business organization and its environment. Our environment is not static but dynamic; to survive, maintain the relationship with its environment and remain relevant, organizations engage in strategic decision making to produce key goals and objectives. The strategic decision making process central to all organization is drawn from the domain of strategic management. The origin of strategic management is vast, Witzel (2004) asserted that the origin of strategic management has often been linked to military science; The Art of War written by Machiavelli and Sun Tzu are some publications available supporting this assertion. As an academic field, strategic management is traced to Harvard Business School; which introduced an integrative course in management in 1911. The concept has undergone metamorphoses to its present form known as strategic management. Mintzerb et. al. (1998) defined strategic management as the courses of action that are required to achieve the overall vision of organization and to remain competitive. These courses of action is also known as strategic management process. Pettigrew and Whipp (1991) categorized strategic management into three dimensions; namely content, process and context. De Wit and Meyer (2004) view the process, content and context dimensions of strategic management as the manner in which strategies are derived, the outcome from the strategic management process and the set of conditions which determines the process and content. This paper will adopt the process dimension of strategic management. Strategy analysis, strategy formulation and strategy implementation are three ongoing processes that are crucial to the strategic
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management process (De Wit & Meyer, 2004, Dess & Lumpkin, 2003). The scope of this paper is centered on strategic implementation where strategies are translated into action. This process involves the management of all other internal elements within an organization to ensure that implementation process is successful (Des & Lumpkin, 2003)

STRATEGIC IMPLEMENTATION The implementation process is one of the most important aspects of strategic management a strategy has no concrete existence without implementation (Forster & Brown, 1996). Strategy implementation is an integral component of the strategic management process and is viewed as the process that turns the formulated strategy into a series of actions and consequent results to ensure that the vision, mission, strategy and strategic objectives of the organisation are successfully achieved as planned (Thompson & Strickland 2003). Agbonifoh (2008), strategy implementation is a complex and dynamic process involving the communication of the strategy, the deployment of the strategic plan to functional area of the business, leadership implementation, structural consideration, the management of change and cultures. Beer and Eisenstat (2000) define strategy implementation as the appropriate realignment of structure, systems, leadership behavior, human resource policies, culture, values and management processes.

In the literature, several authors have identified various steps in strategy implementation; prominent among them is that of Certo and Peter (1993), they proposed a five-stage model of the strategy implementation process: i. determining how much the organization will have to change in order to implement the strategy under consideration; ii. iii. iv. v. analyzing the formal and informal structures of the organization; analyzing the "culture" of the organization; selecting an appropriate approach to implementing the strategy; implementing the strategy and evaluating the results.

From Certo and Peter (1993) model, the implementation of strategy revolves organizational change, structure, culture and control systems. According to Hill et al. (2009) the main components of the process for strategy implementation are the design of governance and ethics, the organizational structure, the organizational culture, and the organizational controls. Organisational Structure Organization structure is one of the dimensions of organizational design; it describes the internal characteristics of an organization (Kazmi, 2008). Robbins and Judge (2007) defines an organization structure as how jobs are formally divided, grouped and coordinated. Organisational structure can be grouped into vertical or horizontal structure. Vertical structure captures the formal the formal reporting relationship, span of control (kazmi, 2008) while horizontal structure is designed for
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coordination (kazmi, 2008). Child (1984 cited in kazmim 2008) opines that horizontal structure consists of design of system to ensure effective communication coordination and integration of efforts across department. The correct organizational structure is crucial to enable the organization to implement its strategy. To facilitate the achievement of the strategic and organizational objectives, organizational structure coordinates and integrates the tasks executed by all employees in the organization, i.e. employees at all levels, and across all divisions and functions (Hill et al, 2009). Robbins and Judge (2007) identified some principles of management articulated by Henri Fayol, they include work specialization, departmentalisation, chain of command, span of control, centralization and decentralization and formalization as vital element to address in designing the different type of structure such as functional, divisional, product, geographical and matrix structures. Organizational structure determines the departments and functions in an organization, it defines the hierarchy, span of control and reporting relationships, and includes the systems for

communication, coordination and integration across these divisions and functions, both vertically and horizontally (Daft, 2001). Organization are organized around two basic principle of differentiation and integration; differentiation means that the organization is composed of units that work on specialized tasks using different work methods and requiring employees with unique competencies while Integration means that the various units coordinate their work to achieve common goals. Differentiation is created through a division of labor and job

specialization and integration is accomplished through rules and to coordinate the ongoing activities of an organizations various units. There are several organization structure, the functional structure, product structure, geographic structure and matrix structure is covered in this work. These structures group employees according to common tasks to be performed; group employees by product or service in self-contained units, each responsible for its own goods or services; group functions and employees by location; and group functional and product forms simultaneously at the same level of organization respectively. Organisation Structure Functional Advantages Specialised resources are use efficiently Opportunities exist for extensive division of labour Suport skill specialization Promote high quality and technical decision making Enhance career development and training within functional area Results in simple design Increase coordination relating to each product Foster concern for customer demand Permit faster changes in a product line Develop leaders who can think across functional lines
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Disadvantages Inadequate communication between units Development of leaders who are experts in only a narrow field Coordination will become complex Functional rivalry among employees Interdepartmental conflict Little creativity and innovation

Product

Hinder efficient utilization of skills and resources Limit career mobility of personnel outside their own product lines.

Geographic

Bring production closer to raw materials and suppliers. develop expertise in solving problems unique to one location Gain an understanding of customers problems and desires It removes functional barrier It makes decision making easier

Promote conflict between each locations goals and the organizations goals; duplication of functions, to varying degrees, at each regional or individual unit location It violates the principle of unity of command and result in role conflict Results are power struggle between functional heads and project leaders.

Matrix

Organisational Culture The culture of an organisation refers to certain ways, which have evolved over time, how an organisation performs its functions and it includes the shared knowledge and competence of an organisation. Hill et al (2009) define organizational culture as the specific collection of values, norms, beliefs and attitudes that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization. Van Den Berg and Wilderom (2004) defined organisational culture can as a shared perceptions of organisational work practices within organisational units that may differ from other organisational units. Culture in an organisation determines the shared values that create how individuals react to certain situations. Since culture has an influence on the opinions and actions of employees, culture has control over how a strategy is executed. Pearce and
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Robinson (2005) organisational culture plays a major role when implementing a strategy. A strong organizational culture enhances integration and coordination within the organization. Culture gives members of the organization the ability to develop a collective identity, and guides them in their daily business relationships, execution of tasks, communication and decision making. Thompson, Gamble and Strickland (2004) asserted that the interface between culture and strategy provide companys employee with clear guidance regarding what behavior and results that conform to culturally acceptable norms. They stressed that the interface promotes employees identification with the company which make them to be committed to the vision, performance targets and the strategy fit. Organisational Control The final components of the process for strategy implementation are the organizational control systems. Organizational systems are means of integrating responsibilities to ensure that objectives of the organizations are achieved by the strategies enunciated. Control systems are special interacting elements intended to check whether appropriate strategies are being used. It provides incentives and motivation to management and other employees to pursue the right activities towards achievement of organizational goals and facilitate monitoring and evaluation of performance and progress on strategic goals. When designing an effective control system, an organization first determines the targets against which performance will be measured. Control systems should be designed at all levels in the organization, and targets have to be fit to the activities that the employees are responsible for. Moreover,
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it should be determined, which behavior is rewarded, and how these rewards relate to performance. These behaviors are measured with the control systems. Next, the organization should create means for measuring and monitoring performance. Then, performance can be compared with the established standards to evaluate whether action should be taken to better pursue attainment of strategic goals (Hill et al, 2009). Approaches to Strategy Implementation In literature, five approaches to strategy implementation have being identified, they include: commander approach, organizational change approach, collaborative approach, cultural approach and crescive approach. In commander approach; the manager will determine the best strategy either alone or with the help of a group of experts. Once the desired strategy is formulated, the

manager passes it along to subordinates who are instructed to execute the strategy. There is a major limitation in respect to employee motivation and employees who feel that they have no say in strategy formulation are unlikely to be very innovative. The organizational change approach focuses on how to get an organization to implement a strategy by focusing on the relationship between strategy and structure. This approach employs the knowledge of structure, staffing to focus attention on the organizations new priorities, planning and control systems. It is limited in use to smaller companies in stable industries; it shares similar motivational limitation stated in commander approach following its top down strategy formulation fashion. Collaborative Approach involves the management team; they brainstorm on strategy formulation and
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implementation. The participative nature of this approach makes it not prone to the two key limitations present in the previous two approaches. The cultural approach enlarges the collaborative approach by including lower levels of the company. It partially breaks down the barriers between management and workers since each member of the organization can be involved to some degree in both the formulation and implementation of the strategy. The last approach crescive approach, address strategy formulation and implementation simultaneously (crescive means increasing or growing). This approach is a bottom-up approach rather than a top-down approach since it moves upward from the workforce to management. This approach encourages middle managers to formulate several effective strategies and gives them the opportunity to carry out the implementation phase. This autonomy increases their

motivation to make the strategy succeed. Its main limitation is that resources are not available for individuals to develop good ideas.

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REFERENCES Agbonifoh B.A. (2008) Issues in Strategy Implementation in Agbonifo ed. An overview in Strategic Management, Concept, Principles and Decision. Benin City Mindex Publishing Coy Beer, M., Eisenstat, R.A., (2000) The Silent Killers of Strategy Implementation and Learning, Sloan Management Review, summer Daft, R.L., (2001) Organization Theory and Design, South-Western Thomson Learning, 7th edition, Canada De Wit B., Meyer R. (2004) Strategy: Process, Content, Context- An international Perspective. North Yorkshire: Thomson Learning Dess G., and Lumpkin G. (2003) Strategic Management: Creating Competive Advantages. Massachusetts: McGraws Hill/Irwin Forster J. and Browne M., (1996) Principle, of Strategic Management. South Melbourne, Macmilliam Education, Australia Pty Coy Hill, C.W.L., Jones, G.R., (2009) Theory of Strategic Management with cases, SouthWestern Cengage Learning, 8th edition, Canada Pearce, & Robinson. (2005). Formulation, implementation, and control of competitive Pettigrew A., and Whip R., (1991) Managing Change for Competitive Success. Oxford, Basil Blackwell strategy. (9th ed., pp 321 - 352 ). New York: McGraw-Hill. Thompson A.A, Gamble J.E & Strickland A.J. (2004). Strategy Winning in the Marketplace. New York, McGraw Hill Companies. Thompson, A.A. & Strickland, A.J. (2003) Strategic Management: Concepts and Cases, 13th edition. New York: McGraw-Hill. Van Den Berg, P. T. and Wilderom, C. P. M. (2004). Defining, Measuring, and Comparing Organisational Cultures. Applied Psychology: An International Review. 53(4), 570-582. Witzel M., (2004) The Art of Management and MilitaryScience, European Business forum, 17, 16-69 Certo C. and Peter J. P (1993) Strategic Management: Concepts and Applications Random House Business Division Robbins S. P. & Judge T.A. (2007) Organisational Behaviour,New Jersey, Prentice Hall
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Kazmi A. (2008) Strategic Management and Business Policy. New Delhi, Tata McGraw Hill Publishing Company Limited

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