lesson 7 : the strategy process - implementation · bmbe/l7/2016 . main contributors to the problem...

ADAPTED FROM Dr. Scott Fernie ‘S SLIDES AND LESSON

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LESSON 7 :

The strategy process - implementation

Business Management in the Built Environment

BMBE/L7/2016

Organisation Structure affects Strategy and

governance …

Forms of governance :

a)Market orientation

b)Hierarchy orientation

c) Network structure


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Organisational Forms of Governance

Markets Hierarchies

buy make

The price

mechanism

Forward / backward

integration


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Organisational Forms of Governance

* For Markets if: * For Hierarchies if:

Markets or Hierarchies?

* Commodity Products * Economies of scale

* Market Mechanism * Temper Opportunism

* Profit Maximisation * Thin markets

* High Management Cost * Complex Situations

* Routine Situations * Intellectual Capital


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Neither a Market nor a Hierarchy:

Markets Networks Hierarchies

buy collaborate make

The price mechanism

Forward / backward

integration

Economic & social

equilibrium

alliances JV coalition


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Networks and Competition

Traditionally, collaboration by firms has been

frowned upon by economists as the basis for

monopolies and cartels. However the fashion for

alliances and network collaborations seems to be

generating sophisticated new ways to compete

and additional sources of advantage over

traditional firms


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Networks and Competition

Flexible capabilities: equipped to assemble diverse /

unique, set of capabilities.

Specialisation: networks can benefit from a division of

specialisation

Learning: New alliances – new learning capabilities

Increased options: Networks can be a rich source of

strategic options


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Question for discussion

Critically explore the various types of

complexity that a manager will undoubtedly

encounter in developing strategy within a

construction company

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THE STRATEGY PROCESS

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Answer the following....

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“Organisations fail to implement more than 70 percent of their new strategic initiatives” (Miller 2002)

What are the obstacles?

Can you describe a theoretical model?

What are the connections between schools of thought and implementation


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“

It can be much easier to think of a good strategy than it is to

implement it” (Woolridge and Floyd 1990)

“Without successful implementation, a strategy is but a fantasy” (Kast and Rosenzweig 1985)

This is the same as our new year

resolutions! 11

Implementation


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Implementation – what could be easier!

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“Organisations fail to implement more than 70

percent of their new strategic initiatives” (Miller

2002)

What are the obstacles?

Take 10 minutes to make a list of reasons

You could think about why you fail to

implement your own plans and relate these

to construction organisations


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Main contributors to the problem

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1.Focus on formulation rather than

implementation – Do you ever spend time

planning and forget about implementing

study plans?

2. The models of implementation are too

complex (Okumus 2003)


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MAIN contributors to the problem

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Implementation is frequently viewed separately (Aaltonen and Ivävalko 2002)

Planning perspective supports separation

Emergent perspective fails to see any distance between them

Others argue that planned and emergent strategies occur together

Those that formulate are frequently different to those that implement

VISION

Pla

nn

ed

stra

teg

y

Em

erg

en

t stra

teg

y

Implementing

strategy


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MAIN contributors to the problem

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Ultimately change involves people and thus it is NOT a simple linear, predictable process It simply IS NOT easy to control people Strategy does not resonate with practitioners We are challengers and questioners of change We represent barriers and resistance to change We also provide opportunities to change ‘All progress is made through the unreasonable

man!’ We are also the implementers of change Change may also be implemented by

unreasonable man


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OTHER COMMON REASONS FOR PROBLEMS OR FAILURE

OF EFFECTIVE IMPLEMENTATION

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• Weak management roles in implementation

• A lack of communication

• Lacking commitment to the strategy

• Unaware or lack of understanding of strategy

• Unaligned organisational systems and resources

• Poor coordination and sharing of responsibilities

• Inadequate capabilities and training provided

• Competing activities diverted attention away from implementation

Taken from Aaltonen and Ivävalko (2002) and Al-Ghamdi (1998)


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OTHER COMMON REASONS FOR PROBLEMS OR

FAILURE OF EFFECTIVE IMPLEMENTATION

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• Uncontrollable environmental factors

• Formulators walk away from implementation!!

• Formulators and/or implementers left the company

• Leadership necessary was absent during implementation

• Underestimation of resources required to carry through implementation

• Control and monitoring systems inadequate

• Lack of definition of key tasks and activities

Taken from Aaltonen and Ivävalko (2002) and Al-Ghamdi (1998)


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The real challenge for implementation

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• To identify what requires to be changed • To consider what is required to make

change happen • To monitor what actually changes • To consider the context within which

change will occur • To formulate and execute a plan/process

for change • To monitor and react to implementation

(Pettigrew 1987)


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The real challenge for implementation

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HIERARCHY OF

STRATEGY :

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Strategic Management

Operational Management

Overlapping Concerns


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Strategy as innovation- FOR TOP MANAGEMENT

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Diffusion

Conventionally

percieved to be

the resolution of a

socio-technical

problem

Closely linked to

change management

Concerned with

communication in a

social system

Formulation is all about invention: the invention of strategy.

implementation is invention + diffusion

Diffusion may capture all the theoretical influences and

difficulties discussed previously.

Vision SWOT

Analysis

Competition

Resources

Bottom up

Top down

Scenario

Planning

Decision

Making

Implementation

Evaluation

Vision SWOT

Analysis

Competition

Resources

Bottom up

Top down

Scenario

Planning

Decision

Making

Implementation

Evaluation


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DIFFUSION : seven s’ s model)

to guide Implementation

(unit 7 : 1-7)


Mckinsey 7-s model

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Diffusion: The seven S’s model

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• Superordinate goals

– impetus for change or act

as a binding force

– one or more guiding

themes of the organisation

– represent the shared

values crucial to success

– may be a binding force

during strategic change

– can be a catalyst for

strategic change and a

source of motivation for

individuals.

StrategySkills

SystemsStructure Staff Style

Superordinategoals

Level of change

What needs to change


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• Strategy

– outlines where the

company or business

unit should

concentrate its forces

and compete

– sets out the basis on

which the company

will compete, the

direction in which it

will develop and the

method it will use.

StrategySkills


Superordinategoals

Level of change



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• Skills

– Gap between current

and desired

– What capabilities do

we require to achieve

to achieve our

strategic objectives StrategySkills


Superordinategoals

Level of change



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Levels of change

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Three primary “S’s” determine level of change

Continuation. Additional resources, new skills and

unfamiliar tasks are not required

Routine. A small refinement on continuation. Additional

resources may be required in the short term

Limited Change. Additional resources required, but it

does not require any major organisational change.

Radical change. Involves major change within the

organisation. Numerous changes in the organisation’s

structure, systems, staff and management styles.

Organisational redirection. Major changes in terms of the

industry in which the organisation operates.

What levels are there?


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• Structure

– We (re)organise to deliver

the plan

– The way in which the

people are organised

– Each structure has its

merits and demerits

• Small firms - simple structures

• The machine bureaucracy

structure

• Divisionalised structure

• Professional bureaucracy

• Adhocracy

StrategySkills


Superordinategoals

Level of change



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• Systems

– routines or processes which

exist in an organisation for

the purpose of identifying

important issues, getting

things done or making

decisions

– have a very strong influence

on what happens in an

organisation

• Reward systems

• Financial systems

• Information systems

StrategySkills


Superordinategoals

Level of change



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• Staff

– concerned with the

human resources of the

organisation in relation

to the implementation of

the strategy

• what resources will a

strategy require

• do these new resources

build on or are they a

change from existing

• can the new resources be

integrated

StrategySkills


Superordinategoals

Level of change



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• Style

– Style is concerned with

the management of

change

– not concerned with the

personal styles of

managers on a day-to-

day basis but in the way

in which they implement

the changes

StrategySkills


Superordinategoals

Level of change



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Successfully managing change

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Coherence

Environmental

assessment

Leading

change

Strategic

human

resource

management

Linking

strategic and

operational

change

1. Ongoing sensitivity

to the environment.

2. Not every aspect of

strategy is planned.

1. The way that change

is led must depend

on the context in

which it must occur

2. Manage resistance

1. Emphasises the

importance of

translating strategic

change into

operational language

and action

1. Is strategic change coherent?

1. Relevant to objectives?

2. Consistent with context?

3. Is it feasible

4. Does it make sense?

1. Integrate human

resource

management policies

with their strategic

management and its

change process


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In the context of a built environment

organisation, critically examine and discuss

typical problems encountered when

implementing a strategy and how these could

be addressed.


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Question for thought:

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References

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1. Cole, G.A. (1997) Strategic Management, Continuum, London

2. Woolridge, B., Floyd, S.W. (1990) Bridging the gap between strategy and operations: the implications of middle management involvement in strategy, The Annual International Conference of the Strategic Management Society Proceedings, Stockholm.

3. Al-Ghamdi, S.M. (1998) Obstacles to successful implementation of strategic decisions: the British experience, European Business Review, 98(6) 322-327

4. Aaltonen, P., Ivävalko, H. (2002) Implementing strategies successfully, Integrated Manufacturing Systems, 13(6), 415-418

5. Pettigrew, A. M. (1987). "Context and action in the transformation of the firm." Journal of Management Studies, 24, 649-670.


BMBE/L7/2016

lesson 7 : the strategy process - implementation · bmbe/l7/2016 . main contributors to the problem...

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