Recently, long term planning in most organizations has formed quite a significant part of strategic management, thus implying the uniqueness in approach that is being applied to management. Practically speaking, strategy formulation is usually interlinked with the organization’s goals or objectives. In addition, the strategy development should be coupled with its implementation. Other characteristics upon which strategic management is pegged on include environmental analysis that determines the organizational posture, the way various resources should be utilized to enhance the gaining and fulfillment of its objectives and how the strategic management will be operationalized to ensure that the sufficiency of the resultant actions and outcomes has been evaluated and implemented.
Environment, objectives, resources, and implementation therefore constitute the main characteristics of strategic management. Simply put, strategic management implies the development of goals and objectives of the organization, formulation of plans that are in line with the internal and external environment of the organization and the implementation of the laid down plans. It also incorporates not only a possible redeployment of resources, but also evaluation of results (Schulz and Johnson 58; Schilder 80).
Generally, there are three main approaches to strategic management, which include the view that is based on the market, the one based on resources, and the latest institutional economies (Pock 6), which is the point where strategic planning is interfaced with implementation of strategies (Joyce and woods 7). The implementation process in strategic management has been considered one of the most difficult for most organizations. Therefore, this work aims at explaining how implementation of strategy is affected by elements such as leadership, culture, people, management, and structure.
The implementation aspect in strategic management
Implementation is directing resources towards the attainment of strategic outcomes using management managerial and organizational tools. It refers to both administering and actuating the strategic plan. Use of new facilities, influence, adjustments in the administrative structure, and a revised reward approach are some of the tools that managers may use to see to it that the staff and resources are utilized to actuate the formulated strategy (Daft and Marcic 175).
Moreover, implementation entails complementary measures with regard to personnel. Failure in achieving success with strategies is mainly caused by improper implementation at the personnel level. The most essential measures of realization such as the new products development, decline in facilities that enhance production, production outsourcing, and establishment of foreign markets, among others are aspects of the strategies. Measures that concern the personnel are not contained in this case. This is due to the fact that participants in the strategy development put their focus on competitive merits that are visible intended. However, failure to include realization measures at the personnel level will lead to the hopeless failure of the best strategies (Grunig 20).
How leadership affects the Implementation of Strategic Management
Efficacy in strategic management means that there is a greater chance of meeting objectives and better performance of the firm can result from this. In strategic the management process, the step that is been described as the most difficult is strategy implementation. Successful implementation of strategies is influenced by the tool of strong leadership. A great difference emanates from both the leadership style and an abundance of management skills. While some leaders exhibit a style of leadership that is task oriented and directive, others dispense their successful leadership by being consultative, people-centered, and incorporative.
The skills of a manager like communication skills, social skills, administrative skills, creative skills, ability to conceptualize, and knowledge of team dynamics are very imperative. This is because they do not only affect implementation of strategies but also greatly influence the performance of the firm. For effective strategy implementation, the firm’s employees and managers ought to be galvanized at all levels to ensure that formulated strategies are turned into action.
There is no difference between a bad strategy and an excellent strategy that is poorly executed since both strategies will yield poor results. In spite of the type of strategy chosen, its formulation and implementation must be accorded careful consideration. Effective strategy implementation might face some impediments. Scarcity of resources is one of the hindrances to implementation of strategies. It is therefore prudent for a leader to prioritize their availability during times when strategies are to be implemented. Goals that employees are seeking to see attained should be aligned with the incentives and other methods of compensation. Besides, time plays a vital role in implementation of strategies. Faster initiation of actions by managers should take precedence over being cautious and rational during strategy implementation (Lussier and Achua 429).
The vicious cycle of rigidity and inaction is one of the traps that managers should avoid when it comes to strategy implementation since this hinders them from acting in a timely fashion. Another aspect that makes strategy implementation a difficult stage is that it entails dealing with individuals who have diverse degrees of motivation, commitment, and devotion. Interpersonal conflicts often emerge from these differences and may stifle both implementation attempts and performance if left unresolved. Managers are the main determinants of strategy implementation and as such, they must be able to reward employees so as to encourage them to maximize performance- a task that is difficult to execute when either the leader does not have skills or when the right employees are not available.
Another aspect that makes it difficulty to implement a strategy can be attributed to many elements that should be integrated to execute a given strategy. The decisions that leaders have to make regarding important aspects such as the yearly objectives, budgetary amount, organizational regulations and policies among others, will determine whether the strategy implementation will succeed or fail. The requirements of the chosen strategy, company’s mission, and objectives should be in line with the decisions in these areas.
A mismatch between strategy and action can be exemplified by a company that is engaging a differentiation strategy by means of innovation in an organizational structure that is both bureaucratic and hierarchical. On the other hand, a company that aims at a strategy of internal efficiency and stability with an intention of offering clients prices that are lower than its rivals is highly likely to succeed with this structure due to its firm regulations on containment. Chances of failure may also be increased by lack of fit between elements of strategy (like strategy and culture or strategy and structure).
Several factors enhance the success of Google’s strategy implementation. First, it has a leadership team and workforce that are highly talented. Secondly, its cultural strength encourages teamwork, being flexible, openness and creativity. Thirdly, its structure is not so much inclined towards corporate hierarchy. Moreover, it has a hiring policy that is aggressive and does not only favor ability over performance, but is also nondiscriminatory (Lussier and Achua 430).
How Culture affects the Implementation of Strategic Management
Culture refers to a set of vital assumptions, mainly in form of unstated beliefs and values that are commonly shared by all members of a given organization (Grant 202; Huber 207). Beliefs are assumptions regarding a certain reality. Experience produces and reinforces them. On the other hand, those assumptions regarding ideals that are attractive and worth striving for are the ones that constitute values. Corporate culture is created when beliefs, values, and norms are shared within an organization. Organizational culture manifests fewer than two levels.
First, it is through physical artifacts and secondly in form of behavior that is observable such as ceremonies, mode of dressing and slogans. Corporate culture normally emerges at the time of organizational culture but remains underneath during other times. When it emerges, it has two possible effects: to oppose the change or to support it. One of such changes may be the implementation of a certain organizational strategy (Kazmi 407).
The ability of organizations to perform strategic management is determined by whether their corporate culture is weak or strong. The behavior of managers in an organization and their decisions about how the organization relates with its environment and strategy are both affected by the corporate culture. Communication, decision making and devotion can be facilitated when the corporate culture acts as strength. However, there are cases when the corporate culture can act as a weakness. During such a time, the smooth implementation of a strategy may be obstructed through either the creation or the escalation of opposition to change. A weak corporate culture results when shared behavioral norms are few, numerous subcultures exist and traditions are rare. In such organizations, loyalty, high sense of devotion and identity are always absent among employees.
They end up becoming mere wage earners rather than members of the organization. Organizations with a weak culture have common characteristics. Examples include hostility to change, political environment within the organization bureaucracy and unwillingness to learn from the outside organizational world (Kazmi 407). Therefore, organizations with a weak cultural base are likely to augment the implementation of a certain strategy while those with a strong corporate culture will have minimal resistance hence making it easy for the organization to implement a strategy. Google is an example of companies that have a strong organizational culture that enhances innovation, teamwork, openness, and flexibility.
How People affect the Implementation of Strategic Management
Apart from organizational culture and leadership, implementation of organizational strategies is also determined by the people it employs. How people should work towards implementing any strategy is dependent on how they are rewarded, mechanisms of control, and the organizational climate. Strategic management has to look for a way of harmonizing these aspects to ensure that the strategy being followed by the organization is suitable. Therefore, people affect the implementation of organizational strategy in several ways (Hussey 45). First, it is through tasks.
A strategy requires that certain duties be performed by some individuals. Those tasks may be changed due to a change in strategy. For example, a strategy of being more customer-sensitive may call for a different undertaking of some tasks and an addition of some others. Secondly, we have individuals’ knowledge, skills, and nature already in the organization or those who are to be recruited into it to aid in strategy implementation. Apart from these people influencing the organization’s perspective towards the tasks, they may also be influenced by the tasks. Thirdly, whether people will accomplish the tasks defined by the strategy depends on the organization’s reward system (Swayne, Duncan and Ginter 436; Hill and Jones 394). In most cases, systems of reward are not in line with the strategy.
For instance, a company’s strategy may be to sell a mix of products that is most profitable. However, if the system of reward is based on the total sales value, the sales force may prefer going for volume rather than profit. Fourthly, there is control behavior. People’s duties are affected by how they are controlled. Behavior is affected more if control systems are focused on individuals rather than teamwork. Control systems to be designed properly if teamwork is the most essential aspect. The culture of the organization also determines its control system. For instance, decision-making can only be delegated if the mechanisms of control allow it. Whereas a long-term view is taken by exhortation in most organizations, controls stress on short term. Action thus tends to relate to control rather than to exhortation (Hussey 46).
Companies develop different products with strategic intention. Therefore, different companies have different product strategies. High technology companies such as Google are presented with unique challenges in their product strategies compared to other industries. Due to these challenges, implementation of product strategies becomes not only critical, but also difficult. The critical aspect is enhanced by the frequent strategic decisions that emanate from the continual technological changes.
If a technological company does not keep up with the pace of changing technology, it is likely to lag behind. However, it can use changing technology to achieve competitive advantage if it moves quickly. Implementation of product strategy in technological companies is difficult due to the complexity resulting from the technology, its rapid advancement, and the changes in competitive advantages that occur in the processes (McGrath xviii).
Besides these three factors, conditions from public agencies may either promote or impede the implementation of a company’s product strategies. Such is the case of spatial data from some companies for instance Google Earth from Google. Public sector spatial data is beneficial to both the companies and citizens. Economically, companies can benefit in two ways. First, it may be helpful in the company’s decision-making. For instance, the company may use spatial data to help locate its new branches, and link this to customer data, environmental data and transport network (Janssen 273). Secondly, market information products and services can also be created from spatial data. Examples include reports on environment, real estate products and tourism services (Tribe and Airey 108; Bidgoli 30).
Besides, public bodies have an interest in the use of spatial data. Upon realization that they are holding a resource (spatial data) with immense economic value, some of the public bodies would like to obtain additional revenue from the data in addition to the budgetary allocation they have from their respective governments. Due to the fact that some of the public bodies are no longer fiscally supported by the government, they would like to obtain revenue from spatial data. They can achieve this through two main ways.
First, conditions can be imposed on the spatial data that a public body is providing to its users like companies, nationals, and public entities. Through this, the cost of processing and compiling data may be recovered. Processing finance for other projects may also be another way out. Secondly, based on its own data, the public company may develop its own information and products, increase their value and sell it to users. For example, services like navigation, environmental reports, and maps may be hiked and sold to the users.
This may be done as a way of competition between the public agency and the private sector that offers similar products and services. Tension may arise between the private and public sector since there may be unwillingness by the public agency to pass its products and services to its private competitors, who deal in similar products with it. Due to either a monopolistic or a dominant tendency that most public agencies have, there is a risk of distortion of rivalry (Janssen 5). The public agency may respond either by selling at very low prices to the clients for its products or by selling at high prices to the rivalry. An example of such a public agency is the European Union. Ether way, the public agency would have interfered with the market and hence implementation of the company’s product strategy.
How management and structure affects implementation of strategic management
Google’s optimistic projections such as surviving recession should have made the company satisfied. However, instead of the company being idle, it will take advantage of the economic crisis to reorganize itself. Some of the cost cutting measures that the company has put in place include lowering the number of Human resource personnel and other staff members, minimizing both the perks and benefits that its employees are entitled to, reducing the rate at which new staff is being recruited, making its product line by ensuring that duplicate products have been done away with, doing away with services that have no public relevance and launching advertising for its latest products like Google Finance (Girard 220).
Although these are good strategies, the company ought to concentrate on a streamline of both its procedure and range of products. This is because the faster rate at which it has grown and acquired has resulted to difficulties in coordination that require a different remedy rather than enlargement of its departments in administration. The company is embroiled with numerous projects that serve different purposes but lack an adequate general coordination.
This is the right time for Google to integrate its products, devise an effective coordination mechanism among its departments, and come up with ways to ensure that budgets that enhance a project’s profitability are implemented. Although, for some people, these changes are long over due, they are risky too. They have the potential to cause tension in the organization between the staff and the management and between the pioneers. Agreeing on budget increases is easier than making a decision on spending cuts (Girard 220).
Staff motivation and loyalty has also been negatively affected by these cost-cutting moves. For instance, engineers are afraid that changes to Google’s business model might make it another boring firm to work in. The delicate balance between financial incentives and personal rewards could be affected by new budgetary allocation criteria that are based on profitability. The risk is further intensified by the fact that Google’s wage models have been adversely affected by the recession.
This wage models depend on stock options and sharing of profits. Most US based companies are compelled to come up with new ways of remunerating their employees due to the rapid decline of stock markets and Google should follow the same example. The task will not be easy since most companies hesitate to lower the morale of their employees by reducing wages during periods of recession (Girard 220; Great Britain Parliament 26).
The repeated success for Google sets an example to any other organization that may be interested in implementing strategies similar to those of Google. Some of the management strategies adopted by Google are not spending any costs on advertising, openness to public criticism; managerial and marketing rules can be broken at times and paying developers less than competition and yet still attracting and retaining employees. There are several strategies that Google has adopted to become one of the best-known global brands. However, taking the strategies at the face value and applying them to another organization may most likely not work (Girard 224).
It is a great challenge to find and stick on to a competitive advantage. Even in cases where some organizations achieve this, their rivals attempt to replicate and copy their strategies to success. Therefore creating a sustainable competitive advantage becomes the key goal. Such a goal is not only durable, but also difficult to be adopted by others. Even the undisputed search engine – Google still finds it a challenge and rather relies on revaluating and innovating to maintain the lead (Schermerhorn 209; Kaufman and Sternberg 147).
This is because there are no two-business organizations that are alike due to the diverse circumstances that surround their environmental contexts. Therefore, by simply copying Google, no one will come up with a successful company. To succeed, it will call for managers to ask themselves questions that were asked by the Google leaders. This will enable them obtain sufficient insight where necessary from the methods that Google applied. After this, they will be required to apply those methods to their business in manners that make them deal with the challenge at hand. Just like any other discipline, work and imagination is important for success in management. Google sets an example in innovation and the 20% rule is the most interesting of all the strategies that its leaders devised yet it becomes easy to actuate it whenever the staff is called upon to express their creativity (Girard 225).
Strategic management refers to the formulation and implementation of an organization’s resources. Implementation is administering and actuating the strategic plan. Implementation is one of the stages in strategic management that organizations find difficult. Implementation of strategies is affected by several elements in diverse ways. These elements include leadership, management, people, organizational structure, and corporate culture.
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