31 terms

Strategy Implementation

This is for implementing strategy of an organisation.
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Explain what strategy implementation entails
•Strategy implementation is the phase where strategic thoughts are operationalized and turned into action.
•It is an internal, operations-driven activity.
•It requires motivation and leadership skills.
•It is not well structured, rational and controlled.
•It is the responsibility of all levels of management, from supervisor level to the board of directors.
Briefly describe strategy implementation
Strategy implementation deals with translating thoughts, or the strategic plan, into action. It is the phase in the strategic management process in which management aligns or matches leadership, organizational culture, organizational structures, reward systems and resource allocation with the chosen strategies.
Describe the drivers of strategy implementation
•Leadership
•Organisational culture
•Reward system
•Organisational structure (design)
•Resource allocation
Describe the instruments of strategy implementation
•short-term objectives
•functional tactics
•policies
Give reasons why leadership is an important driver of strategy implementation
The required organisational change does not occur spontaneously, nor does a strategy implement itself. Somewhere in the organisation someone must have a vision of the ideal state and be willing to guide the organisation to the achievement of this vision through successful strategy implementation. Such a person is a strategic leader. Strategic leadership drives strategic change, and strong leadership is perhaps the most important "tool" that a strategist can have in the implementation toolkit to give direction and purpose to integrated strategy formulation, implementation and control.
Self- awareness
Extent to which an individual is aware of their emotions, strengths, weaknesses, needs and drives. Are not unrealistic about their own capabilities and are not overly critical; they recognise how their feelings and emotions affect both them and other people, and affect their job performance. Understands his or her own goals. Assess themselves critically, are self-confident and often have a self-deprecating sense of humour.
Self- regulation
Extent to which people are in control of their emotions, feelings and impulses. May have bad moods and emotional impulses, but find ways to control their emotions and even to channel them in useful ways. Are reasonable, thoughtful, self-reflecting, comfortable with ambiguity, open to change and able to create an environment of trust and fairness.
Motivation
Deep desire to achieve for the sake of achievement. Have a passion for their work, thrive on creative challenges and enjoy constantly learning. Have a lot of energy, are optimistic even during setbacks. Committed to the organisation and to their jobs.
Empathy
Extent that a leader can thoughtfully consider employees feelings in the process of making decisions. Able to sense and understand the viewpoints of his or her team. Plays a role in managing cultural diversity. Has a deep understanding of the existence, importance and complexity of cultural and racial differences.
Social skills
Friendliness with the purpose of leading people in the desired direction. Able to establish rapport with anybody. Able to network and interact with a wide circle of acquaintances. Capable of managing teams. Able to build relationships throughout the organisation.
Emotional intelligence
Emotional intelligence includes aspects such as self-awareness, self-regulation, motivation, empathy and social skills.
Strategic leadership
Strategic leadership is the ability to anticipate, envision, and maintain flexibility and to empower others to create strategic change as necessary; to articulate a strategic vision for the organization and to motivate others to buy into the vision. Strategic leadership involves managing through others and influencing human behavior in order to achieve goals.
Tasks of a strategic leader
•The development and communication of an appropriate vision and strategic direction
•The motivation of employees
•The design of reward systems and organizational structure
•The development of strategic and operational control systems
•The development of organizational culture
•Incorporation of good corporate governance principles into the organization
Dimensions of leadership according to the King II report
•Efficiency
•Probity
•Responsibility
•Transparency and accountability
Share options
Link individual rewards to organisational performance. If the organisation does well, the share price increases and shareholders are rewarded. Encourages innovation. Disadvantage is that share price performance are affected by the prevailing market conditions, they also provide unlimited upside potential yet opportunity costs are only incurred on the down side- this may cause executives to take undue risks.
Restricted share plan
Uses company shares as an incentive for executives; however the shares may not be sold for a certain period of time. Helps in the prevention of strategy formulators leaving for completion of the implementation of the strategy.
Golden handcuffs
Cash bonuses are deferred in a series of annual instalments, should the executive leave the company before a certain time, compensation is forfeited.
Golden parachute
An executive retains a substantial cash bonus regardless of whether the executive quits, resigns or is fired. Disadvantage is that the executive is compensated regardless of failure.
Cash bonuses
More widespread in organisations. Calculated using accounting measures. Disadvantage is that management may focus on short-term profits to ensure bonuses, sacrificing investments in training and future growth
Structure follows strategy
•Structure follows strategy is a concept used to confirm or emphasis that a change in the chosen strategy necessitates a change in structure.
•When there is not a tight fit between strategy and structure, the organisations performance will decline, as it experiences administrative problems, conflicting priorities and resource allocation problems to name a few.
Explain what the structures encompass
An organisational structure is the framework within which the strategic process must operate to achieve the organisation's goals. The organisational structure aids in identifying the tasks necessary for strategy implementation, groups them together and ensures coordination of these tasks across the organisation so that the strategic goals of the organisation can be reached. Furthermore, an organisational structure specifies who is responsible for the specific tasks.
Identify the different resources of an organisation
Tangible resources are often described as the resources "that you can touch or feel or see". Examples include property, land, buildings, manufacturing plants, equipment, patents, shares and so forth.
Intangible resources cannot "be seen or touched", yet often for the core of an organisation's competitive advantages. Examples include skills, talent, experience and knowledge of employees and other stakeholders; relationships; culture; leadership; teamwork etc.
Tangible resources
Are often described as the resources "that you can touch or feel or see". Examples include property, land, buildings, manufacturing plants, equipment, patents, shares and so forth.
Intangible resources
Cannot "be seen or touched", yet often for the core of an organisation's competitive advantages. Examples include skills, talent, experience and knowledge of employees and other stakeholders; relationships; culture; leadership; teamwork etc.
Master budget
The master budget of an organisation includes all those activities whose monitoring is judged to be important for the survival of the organisation. Among these activities are sales, manufacturing, administrative activities, investment and cash management.
Projected sales are the foundation of budgeting. Forecasting sales is critical because all other budgeted activities depend on these forecasts.
Long-term goals
(sometimes called long-term objectives) are determined in line with the organisation's vision. These goals are strategic in nature and reflect the organisation's specific direction on a high level. Strategic goals / long-term goals are the basis for more specific tactical goals a.k.a short-term of functional goals.
Short-term goals
Are defined as measurable outcomes that are achievable or intended to be achieved in one year or less. They are specific, usually quantitative, results that operating managers set out to achieve in the immediate future (Pearce & Robinson, 2007:293).
Policies
The specific guidelines, methods, procedures, rules , forms and administrative practices that direct the thinking, decisions and actions of managers and employees in strategy implementation
Strategic control
Provides feedback on formulation and implementation phases of the strategic management process. This feedback indicates the adjustments the organisation will need to make in order to align itself better with its environment and improve the likelihood of successful strategy implementation
Four perspectives of BSC
Financial, customer, learning and growth and internal business process
Benchmarking
Is the comparison of selected performance measures or operational processes against some challenging yardsticks
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