MODULE 5:
STRATEGIC
IMPLEMENTATION
Intended Learning Objectives
▪ Identify the best way to implement a new identified
strategy for the organization
▪ Explain the impacts of implementing changes in the
organization
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ASPECTS OF STRATEGIC
IMPLEMENTATION
INTRODUCTION
In order to successfully put into practice a strategy, an organization will need
to consider three aspects:
1. Resources – how should the strategy be resourced?
▪ This relates to the way in which the organization will obtain the requisite finance,
human resources (usually in the form of appropriately skilled employees), the
physical resources such as equipment and buildings, and intellectual or
‘intangible’ resources.
2. Configuration – how should the culture and structure of the organization
be configured to ‘fit’ the proposed strategy?
▪ it is necessary that the structure of the organization and the organizational
culture are fit for purpose so that there are no impediments to success. This is
not always the case and in many instances the structure has to be amended and
the culture changed so that there is a so-called ‘strategic fit’. 4
INTRODUCTION
3. Change – how should the changes arising from the
strategy be managed and led?
▪ Implementing strategy invariably involves changes to aspects
of the organization and how it positions itself. To successfully
implement change, managers need to consider what type of
change is envisaged and how it might be managed and led.
▪ Thus strategic implementation is involved with making
detailed decisions regarding three key aspects of strategy
relating to: resources; configuration and change.
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MATCHING STRATEGY WITH RESOURCES
▪ Once a strategic option has been settled upon (following the strategic
selection stage), management attention turns to assessing the resource
implications of the strategy. The extent to which the resource base
needs to be adjusted will, of course, depend upon the degree of change
that the proposed strategy entails.
Broadly speaking, resource planning falls into three categories:
1. Changes
- They may require, for example, a slight increase in financing to fund
modest expansion or the recruitment or retraining of some human
resources to meet a skill shortage in one or two areas. Conversely of
course, a few changes in strategy may require the disposal of some assets or a
slight reduction in the human resource base.
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MATCHING STRATEGY WITH RESOURCES
2. An increase in the resource base in order to facilitate a more substantial
program of growth. This usually entails two things:
an internal reallocation of resources
purchasing of fresh resource inputs from external suppliers
3. Reduction in the resource base in order to successfully manage decline.
If an organization finds, after a resource audit, that it has too many
resources (say too many employees, too many aircraft, too many
hotel properties in the wrong locations, etc.) then measures are put
in place to carry out some reduction. Excess capital or physical resources
can often be successfully reinvested in business areas that are in more
buoyant markets whilst excess human resources must usually be released.
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MATCHING STRATEGY WITH RESOURCES
▪ An audit process can be used to make assessments of any or
all of the resource inputs. The nature of an audit of any kind
(including resource audits) is for the purpose of checking or
testing. Resources are audited (or purposefully checked) for:
sufficiency (is there enough for the purpose?);
adequacy (is the condition, location, state, or quality of the
resources adequate for the purpose?); and
availability (are the required resources available at the time,
price and in the quantities required?)
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MATCHING STRATEGY WITH RESOURCES
▪ For example – an audit of a hotel group’s chain of hotels (an
example of physical resources) might take the form of
assessing whether the number of rooms is sufficient for
current needs and any planned expansion. This might be
followed by an evaluation of its adequacy – the location
of the hotels relative to customers and those of
competitors; the state of repair and decoration of the
hotels; and, the ability of the hotels to support the
prevailing business (leisure, business, conferences etc.).
Finally, if more resources are required or if development
of the land or buildings is needed, availability is 9
DEVELOPING AND CONTROLLING RESOURCES
1. Financial Planning
▪ Capital budgeting concerns projecting the capital needs of a strategy. This is usually
a relatively straightforward operation as costs can normally be forecast with some
accuracy. Once the capital requirements are known, a plan is put in place to finance
any shortfall.
2. Human Resource Planning
▪ Involves projecting the human capital required for the successful
implementation of the proposed strategy. It would typically take the form of
forecasts of both the numbers of people required and the types of skills and
abilities that will be in demand. If a shortfall in either of these is identified, the ‘gap’
will be filled by one or more of the following:
▪ Training, retraining or staff development – to close the skills gap by
developing existing employees.
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▪ Appointing new employees – entering the labour market and competing with
DEVELOPING AND CONTROLLING RESOURCES
3. Physical Resource Planning
▪ Some physical resources are more easily obtained than others. Most equipment is
relatively easily obtained, unless the requirement is very specialized. However,
careful planning may be necessary for some equipment needs require long lead
times for their construction.
4. Intellectual Resource Planning
▪ Intellectual resources – inputs that cannot be seen and touched – can be the most
important resource inputs of all. Some proposed strategies have a requirement for
a legal or regulatory permission, a database (say of key customers in a certain
market segment) or experience of dealing with certain markets.
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CONFIGURATION OF
CULTURE AND
STRUCTURE
CONFIGURATION OF CULTURE AND STRUCTURE
▪ Cultural suitability involves making an assessment of the
suitability of a culture to undertake the strategy. In the
same way that human personalities differ in their readiness to
undertake certain courses of action, so also some
organizational ‘personalities’ differ.
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Miles and Snow’s Typology and Cultural Postures
▪ Miles and Snow’s (1978) typology divides culture types according to how
they approach strategy. These distinctions are important as they tell us
how each culture type will react to different strategic options.
Miles and Snow identify four categories of organizational culture:
a. Defender cultures are suitable for organizations that exist in relatively
well-defined market areas and where improving the position in
existing markets is the most appropriate strategic option (e.g.
market penetration). The culture would feel uncomfortable with
diversification or having to develop new markets. The values resident
within defender cultures work well if markets are stable and relatively
mature.
- Defender strategy are not looking to change their position in the
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market, instead they wish to defend and maintain their position whilst
Miles and Snow’s Typology and Cultural Postures
b. Prospector cultures, in contrast to defenders, are continually seeking
out new product and market opportunities. Accordingly, they often
create change and uncertainty. The cultural norms within the culture
are consequently more able to develop new markets and products
(differentiation). E.g. Starbucks
c. Analyser cultures exhibit features of both defenders and prospectors.
They have developed a culture that is able to accommodate both stability
(which defenders like) and instability (which prospectors have
learned to adjust to). The culture can be formal in some circumstances
and flexible and ‘organic’ in others. They are defending their current
market position, whilst looking for new opportunities and
innovating
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Miles and Snow’s Typology and Cultural Postures
d. Reactor cultures Reactor companies focus on their
external environment and change their strategy
depending on the threats or opportunities that arise
and impact them. They can sometimes lack strategic focus
and are consequently sometimes accused of being ‘blown
around’ by changes in their environments. They do not
innovate and tend to emulate the successes of competitors.
- It’s perhaps better suited to smaller, more agile companies
where it’s easy to change and adapt their position, but the
lack of planning or analysis can ultimately be fatal for companies
that adopt this position. 16
ORGANIZATIONAL STRUCTURE
▪ Organizational structure refers to the ‘shape’ of the organization. In
this context it is necessary to consider whether the proposed structure is
capable of helping the organization achieve the objectives that have been
set as part of its strategy. In this regard key issues include:
How easy is it to change the structure when circumstances
change?
How efficient is the structure in ensuring that key information and
decisions are disseminated appropriately?
To what degree does the formal organization chart represent the
way in which decision making really takes place?
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ORGANIZATIONAL STRUCTURE
▪ The main issues in designing an organizational structure are
concerned with:
Division of labour – who does what?
Source of authority – who has the right to tell others what to
do?
Relationships – how does the structure fit together?
In attempting to resolve the key design issues organizational
structures tend to be described in terms of their:
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ORGANIZATIONAL STRUCTURE
a. Height
- Height refers to the number of layers that exist
within the structure. It is perhaps intuitively
obvious that larger organizations are higher than
smaller ones. The guide to how high an
organizational structure should be depend upon
the complexity of the tasks that a proposed
strategy entails.
For example – contrast a small events
management company with a diversified
international travel group.
b. Width
- Organization structures can be described as
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wide (with a larger span of control) or narrow
ORGANIZATIONAL STRUCTURE
c. Complexity
- Organizational complexity refers to
how multiple entities of an
organization differentiate from each
other. A complex organization has a
larger size of its organizational
structure or has a higher number of
resources in any division, project, or
team.
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ORGANIZATIONAL STRUCTURE
d. Divisionality
▪ There are five common methods of
divisionalization. A company or group of
companies can be divisional by:
Functional specialism (typically,
operations, HRM, marketing, finance, etc.).
Geographic concentration (where
divisions are regionally located and have
specialized knowledge of local market
conditions).
Product specialism (where divisions,
usually within multi-product companies,
have detailed knowledge of their particular
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product area).
ORGANIZATIONAL STRUCTURE
Customer focus (where the company orientates itself by divisions
dedicated to serving particular customer types, for example retail
customers, industrial customers, etc.).
Holding company (where a company owns various individual businesses
and the holding company acts as an investment company overseeing its
investments in individual businesses which can be wholly or partly owned
but where the individual companies run largely autonomously).
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MANAGING AND
LEADING CHANGE
MANAGING AND LEADING CHANGE
▪ The need for change at its simplest, strategy is all about change. In this
chapter, we have encountered the importance of an organization’s
resource base, its culture and its structure. In order to bring about strategic
repositioning (say in respect to products and markets), all of these may
need to be changed.
▪ Change can take different forms in different circumstances. For example, it
can be viewed in four dimensions in that it might be:
continuous or discontinuous;
incremental or transformational;
proactive or reactive; and
broad or narrow in its scope.
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MANAGING AND LEADING CHANGE
▪ Those affected by the change may undergo resistance
because they:
Lack understanding of the details – They may not have
had the reasons for the change explained to them or they may
not be aware of how they will personally be affected. This
particular barrier can normally be overcome relatively easily
by management taking the requisite measures to close the
information gap.
Lack trust in respect to management.
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MANAGING AND LEADING CHANGE
▪ Have a fear – Particularly in respect to their personal position
or their social relationships. They may fear that the proposed
changes will adversely affect their place in the structure or the
relationships they enjoy in the organization.
▪ Have uncertainty about the future – Attitudes to
uncertainty vary significantly between people with some
showing a much more adverse reaction to it than others.
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UNDERSTANDING CHANGE – KURT LEWIN’S THREE STEP-
MODEL
Lewin (1947) suggested that organizational change could be
understood in terms of three consecutive processes: unfreezing,
moving and then refreezing as shown in Figure 5.1:
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UNDERSTANDING CHANGE – KURT LEWIN’S THREE STEP-
MODEL
Unfreezing (mobilization for change)
▪ Unfreezing involves introducing measures that will enable
employees to abandon their current practices or cultural norms in
preparation for the change. In many organizations, little has changed
for many years and unfreezing is necessary as a ‘shaking-up’ phase. The
impetus for unfreezing can come from either inside or outside the
organization itself. Changing market conditions for example,
sometimes give employees warning that change will be imminent.
Internally, a management shake-up, a profit warning or talk of
restructuring may bring about similar expectations.
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UNDERSTANDING CHANGE – KURT LEWIN’S THREE STEP-
MODEL
Moving (movement to a new level)
▪ Moving to the new level involves bringing about the requisite
change itself. The time period given over to this phase varies
widely. Structural change can usually be brought about
relatively quickly. Changes in internal systems sometimes take
longer (such as the introduction of new quality or information
systems) whilst changing culture can take years.
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UNDERSTANDING CHANGE – KURT LEWIN’S THREE STEP-
MODEL
Refreezing (sustaining change)
▪ Refreezing is necessary to ‘lock in’ the changes and to prevent
the organization from going back to its old ways. Again, we
would usually take cultural changes to require more
‘cementing in’ than some other changes and some resolve
might be required on the part of senior management to avoid
slippage.
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CHANGE LEADERSHIP VS. CHANGE MANAGEMENT
▪ Change management, which is the term most everyone uses,
refers to a set of basic tools or structures intended to keep any
change effort under control. The goal is often to minimize the
distractions and impacts of the change. Change leadership, on
the other hand, concerns the driving forces, visions and
processes that fuel large-scale transformation.
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CHANGE LEADERSHIP VS. CHANGE MANAGEMENT
Kotter (1995) produces
eight practical
guidelines for leaders
and managers seeking
to transform their
organizations as seen in
Figure 5.2
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