STRATEGY IMPLEMENTATION

The strategic-management process does not end when the firm decides what strategy or strategies to pursue. There must be a translation of strategic thought into strategic action. This translation is much easier if managers and employees of the firm understand the business, feel a part of the company, and through involvement in strategy formulation activities have become committed to helping the organization succeed. Without understanding and commitment, strategy implementation efforts face major problems. Implementation strategy affects an organization from top to bottom; it affects all the functional and divisional areas of business. Even the most technically perfect strategic plan will serve little purpose if it is not implemented. Many organizations tend to spend an inordinate amount of time money, and effort on developing the strategic plan, treating the means and circumstances under which it will be implemented as afterthoughts ! Change comes through implementation and evaluation, not through plan. A technically imperfect plan that is, implemented well will achieve more than the perfect plan that never gets off the paper on which it is typed. Concept of Strategy Implementation Strategy formulation is not in itself sufficient for an organization. It is important to ensure that the strategy is implemented effectively, Strategy implementation is an important aspect of strategic management.

Strategic implementation is the sum total of all the activities and choices required for the execution of a strategic plan. It is the process by which strategies and policies are put into action through the development of programs, budgets and procedures. Definition Daniel McCarthy Robert Minichiello and Joseph Curran in their book ' Business Policy and Strategy ' have defined strategy implementation as: “Strategy implementation may be said to consist of securing resources, organizing these resources and directing the use of these resources within and outside the organization.” Nature of Strategy Implementation Successful strategy formulation does not guarantee successful strategy implementation. It is always more difficult to do something ( strategy implementation ) than to say you are going to do it ( strategy formulation ) ! Although inextricably linked , strategy implementation is fundamentally different from strategy formulation. Strategy formulation and implementation can be contrasted in the following ways:

Strategy formulation is positioning force s before the action Strategy implementation is managing forces during the action Strategy formulation focuses on effectiveness Strategy implementation forces on efficiency Strategy formulation is primarily an intellectual process Strategy implementation is primarily an operational process Strategy formulation requires good intuitive and analytical skills Strategy implementation requires special motivation and leadership skill

Strategy formulation requires coordination among a few individuals Strategy implementation requires coordination among many individuals.

ISSUES INVOLVED IN STRATEGY IMPLEMENTATION Strategy implementation involves several issues. Some of the important issues are

1. Annual Objectives Establishing annual objectives is a decentralized activity that directly involves all managers in an organization. Active participation in establishing annual objectives can lead to acceptance and commitment. Annual objectives are essential for strategy implementation because they (1) represent the basis for allocating resources; (2) are a primary mechanism for evaluating managers (3) are the major instrument for monitoring progress toward achieving long-term objectives; and (4) establish organizational, divisional and departmental priorities. Considerable time and effort should be devoted to ensuring that annual objectives are well conceived, consistent with long -term objective, and supportive of strategies to be implemented.

2. Policies Changes in a firm's strategic direction do not occur automatically, On a day-to-day basis, policies are needed to make a strategy work. Policies, facilitate solving recurring problem and guide the implementation of strategy. Broadly defined, policy refers to specific guidelines, methods, procedures, rules, forms and administrative practices established to support and encourage work toward stated goals. Policies are instruments for strategy implementation. Policies set boundaries, constraints and limits on the kinds of administrative actions that can be taken to reward and sanction the behavior; they clarify what can and cannot be done in pursuit of an organization's objectives.

3. Resource allocation Resource allocation is a central management activity that allows for strategy execution. In organization that do not use a strategic management approach to decision making, resource allocation is often based on political or personal factors. Strategic management enables resources to be allocated accordingly to priorities established by annual objectives. Effective resource allocation does not guarantee successful strategy implementation because programs. Personnel , controls and commitment must breathe life into the resources provided. Strategic management itself is sometimes referred to as a' resource allocation process 4. Managing conflict Interdependency of objectives and competition for limited resources often leads to conflict. Conflict can be defined as a disagreement between two or more parties on one or more issues. Establishing annual objectives can lead to conflict because individuals have different expectations and perceptions, schedule create pressure, personalities are incompatible, and misunderstanding between line managers and staff managers occur. For Example , a collection manager's objective of reducing bad debts by 50 percent in a given year may conflict with a divisional objective to

increase sale by 20 percent. Conflict is unavoidable in organizations, so it is important that conflict be managed and resolved before it effects strategy implementation and organizational performance.

Various approaches for managing and resolving conflict can be classified into three categories avoidance, defusion, and confrontation. Avoidance includes such actions as ignoring the problem in hopes that the conflict will resolve itself or physically separating the conflicting individuals (or groups). Defusion can include playing down differences between conflicting parties while accentuating similarities and common interest, compromising so that there is neither a clear winner or loser. Confrontation is exemplified by exchanging members of conflicting parties so that each can gain an appreciation of the other's point of view.

5. Matching structure with strategy Change in strategy often require changes in the way an organization is structured for two major reasons. First structure largely dictates how objectives and policies will be established. For example, objectives and policies established under geographic organizational structure are couched in geographic terms. The structural format for developing objectives and policies can significantly impact all other strategy implementation activities and structures dictates how resources will be allocated. A more important concern is determining what types of structural changes are needed to implement new strategies and how these changes can best be accomplished.

6. Managing resistance to change No organization or individual can escape change. But the thought of change raises anxieties because people feat of economic loss, inconvenience, uncertainty, and a break in normal social pattern. The strategic management process itself can impose major changes on individuals and processes. Resistance to change can be considered the single greatest threat to successful strategy implementation. People often resist strategy implementation because they do not understand what is happening or why changes are taking place. In that case , employees may simply need accurate information. Successful strategy implementation hinges upon manager's ability to develop an organizational climate conducive to change. Change must be viewed as an opportunity rather than as a threat by managers and employees.

7. Creating a Strategy-Supportive Culture Strategists should strive to pressure, emphasize and build upon aspects of an existing culture that support proposed new strategies. Aspects of an existing culture that are antagonistic to a proposed strategy should be identified and changed, Substantial research indicates that new strategies are often market-driven and dictated by competitive forces. For this reason, changing a firm's culture to fit a new strategy is usually more effective than changing a strategy to fit an existing culture. Numerous techniques are available to alter an organization's culture, including recruitment,

training, transfer, promotion, restructure of an organization's design, role modeling, and positive reinforcement.

8. Production / Operations Concerns Production / operations capabilities, limitations, and policies can significantly enhance or inhibit the attainment of objectives. A major part of the strategy implementation process takes place at production site. Production -related decisions on plant size, plant location, product design, choice of equipment, kind of tooling, inventory control, quality control, cost control, use of standards, job specialization , employee training, equipment and resource utilization, shipping and packaging, and technological innovation can have a dramatic impact on the success or failure of strategy implementation efforts.

9. Human Resource Concerns The job of human resource manager is changing rapidly as companies continue to downsize and reorganize. Strategic responsibilities of the human resource manager include assessing the staffing needs and cost for strategies proposed during strategy formulation and developing a staffing plan for effectively implementing strategies. A well-designed strategic management system can fail if insufficient attention is given to the human resource dimension. Human resource problems that arise when business implement strategies can usually be traced to one of three causes : (1) disruption of social and political structures, (2) failure to match individual's aptitudes with implementing tasks, and (3) inadequate top management support for implementation activities. The process of empowering managers and employees through their involvement in strategic management activities yields the greatest benefits when all organizational members understand clearly how they will benefit personally if the firm does well.

RESOURCE ALLOCATION Resource allocation is an important activity in strategy implementation. Resource allocation requires procurement and commitment of financial, human and physical resources to the various activities required for the accomplishment of objectives. The success of the organization depends upon the quality and quantity of resources and their utilization. Resource allocation is a central management activity that allows for strategy execution. In organization that do not use a strategic-management approach to decision making, resource allocation is often based on political or personal factors. Strategic management enables resources to be allocated accordingly to priorities established by annual objectives. All organizations have at least 4 types of resources that can be used to achieve desired objectives: financial, physical, human and technological resources. Allocating resources to particular divisions and departments does not mean that strategies will be successfully implemented. A number of factors commonly prohibit effective resource allocation, including an overprotection of resources, too great an emphasis on short-run financial criteria, organizational politics, vague strategy targets, a reluctance to take risks, and a lack of sufficient knowledge. The real value of any

resource allocation program lies in the resulting accomplishment of an organization's objectives. Effective resource allocation does not guarantee successful strategy implementation because programs, personnel, controls, and commitment must breathe life into the resources provided. Strategic management itself is sometimes referred to as a resource allocation process

Steps involved in Resource Allocation The following are the important steps involved in resource allocation

1. Determining the type and the amount of resources – The first step involved in resource allocation is to determine the type and amount of resources required to implement the strategy. A firm may require various types of resources such as human, financial, physical and informational or technological resources. At times, a firm may require only the financial resources, as human and informational resources are already available with the firm, and that the physical resources such as machinery or equipments can be purchased with the financial resources. A firm should also decide the amount of resources required. For example modernization strategy would require more resources that the integration strategy.

2. Determining the sources of resources - The next step is to find out the sources of resources. The sources of resources depends upon the type of resources. The human resources can be obtained from both internal and external sources. For example mangers can be promoted from within the organization or can be selected from external sources for the purpose of strategy implementation. Financial resources can be obtained from internal or external sources. For example retained earnings can be used to finance strategy implementation or additional loan can be taken or capital can be issued to finance strategy implementation.

3. Mobilisation of resources - After determining the amount and the type of resources, the next step is to make arrangement to obtain the resources. Necessary procedure is required to be followed to obtain the resources. For instance , if financial resources are to be obtained by way of issue of shares , the following steps have to be followed.

Preparation of draft Prospectus Vetting of Prospectus Appointment of Intermediaries - Bankers Underwriters, Brokers, Advertising Agency etc. Filing of Prospectus with Registrar of Companies Printing and Dispatch of Prospectus and Application forms Filing of Initial Listing Application Establishing the liability of Underwriters

Allotment of shares Listing of the Issue

4. Resource Allocation – After obtaining the resources, the resources must be properly allocated for the purpose of strategy implementation. The required physical resources can be purchased with the help of financial resources. If required, additional human resources can be selected for the purpose of strategy implementation. In any case, there must be proper allocation of all the resources.

5. Utilization of Resources - The allocated resources need to be utilized in respect of various activities. For example, the funds allocated for market development strategy need to be utilized for various activities in connection with market development activities such as marketing research, advertising, sales promotion, dealers incentives, etc. The funds must be utilized for productive activities, and care must be taken to see to it that the funds are not misused or poorly utlilized.

6. Monitoring the Resources Allocation - The management should monitor the resource allocation to find out whether or not the allocated are properly utilized. The management should also find out whether the resources allocated are sufficient enough to undertake the various activities efficiently and effectively. If required, management may make necessary changes in resource allocation, i.e. , additional funds may be mobilized, if required or the resource allocation-mix can be modified depending upon the importance of activities.

Factors affecting Resource Allocation There are several factors which affects resource allocation, they are as follow. 1. Objectives of the organization- The aims and objectives of the organization affects resource allocation. An organization has various objectives to be accomplished- some are very important, some are least important to the organization. For example increasing market share is given more importance than other objectives. So accordingly, resources have to be allocated. Normally resources are allocated to accomplish important objectives.

2. The nature of strategies - There are various types of strategies of a firm. Some strategies may require huge capital or some may require less capital. Some may require more human resources or some may require less human resources. Accordingly the strategies which requires more capital or more human resources are allocated with more resources than other strategies. Therefore modernization strategy is allocated with more resources than product introduction strategy.

3. Availability of Resources – The availability of funds affect resources allocation. When a firm has adequate funds or when a firm is in a position to obtain funds easily, then it

can adequately allocate funds for various resources. But if the firm has a problem of obtaining additional funds, the certain activities may be dropped out or there may be distribution of resources according to the importance of activities.

4. Internal Politics – Sometimes, internal politics in an organization can affect resource allocation. Some departmental heads are in a position to get more funds for their departments. This may be due to their power or influence they have over top management. For example, if HRD manager has good terms with the top management, his department may be allocated with more funds.

5. External factors - There are various external factors which influence resource allocation for example, financial institutions, local community, shareholders, government policies and others etc. For example, the financial institutions , which have provided long term loans may restrict allocation of resources in form of dividend to shareholder, organizational expenditure etc. Some times due to government policies, firm may have to allocate to employees welfare fund, environment protection fund etc.

PROBLEMS IN RESOURCE ALLOCATION There are several problems faced in resources allocation. Some problems can not be avoided. Some problems can be avoided with the efforts on the part of management.

1. Scarcity of Resources – The major problem arises due to scarcity of resources. Due to scarcity of resources, it would be difficult for the management to obtain right type and right amount of resources. Some times due to scarcity, management may have to pay high price to obtain required resources.

2. Over-estimation of Resource need – The resource allocation problem may arise due to over-estimation of resource needs. Normally each department may try to obtain maximum amount of resources. This may be to avoid shortage of resources in future. Higher the demand of resources from all the department makes it difficult to allocate resources properly. Sometimes department gets used to overestimating resource needs.

3. Organization's Past allocation of resources – Some units may be allocated with more resources in the past as their activities were more important than other activities. Sometimes same allocation is followed in the present situations, even though now their activities are not so important. On the other hand other department's activities may be more important at present, but they do not get required amount of resources due to past allocation . So top management should consider relative importance of the activities and the allocate the resources.

4. Problem of internal politics – Some manager may involve the internal politics. They may try to influence top management and may try to get more funds than other

departments. As a result those departments who actually deserve more funds do not get required amount of resources.

5. Poor financial climate - Due to financial climate, may investors do not invest in the shares issued by the company. So company finds it difficult to raise additional finance. This affects the resource allocation for strategy implementation. Sometimes company may have to go for additional loans from financial institutions at higher cost.

6. Conflicts of interest – There may be problem of conflict of interest between management and various other parties for example, shareholders, trader unions, employees , government, society etc. For example trade union may insist to allocate resources to employee's welfare, management may like to allocate resources for modernization. This conflict can be solved with proper discussion between management and various parties and proper planning of resource allocation.

7. Problem of Resistance to Change - Sometimes management may resist to change its own resource allocation strategy. For example there may be some unprofitable products in the company, but management may continue to allocate more resources to that unprofitable product than the other promising products of the company. So management should try to review market success of each product and try to allocate the resources.

MEANS OF RESOURCE ALLOCATIONThere are several ways of allocating resources in a systematic way, namely

Strategic budget: Keeping the assumptions made before the formulation of a budget, divisional heads (SBUs) and functional managers focus their efforts on allocating funds, through an interactive exercise—taking the opinions of all those who matter most. The external influences and their likely impact and the internal capabilities of a firm are also kept mind in this joint budgeting effort (hence, the name strategic budget).

• Capital budget: The primary purpose of a capital budget is to maximize the long term profitability of a firm while deploying resources. Various techniques like internal rate of return, pay back period, net present value are used to find where a rupee invested would earn maximum returns.

• Performance budget: Here the basic purpose is to focus attention on the work to be carried out, services to be rendered rather than things to be spent for or acquired. It concentrates attention on physical aspects of achievement. Here, there is not only a work plan but also a work plan in terms of work done. It takes a systems view of activities trying to associate the inputs of the expenditure with the output of accomplishment in terms of services, benefits etc.

• Zero based budget: The key element of ZBB is future-objective orientation of past objectives. Instead of taking the last year's budgets and adjusting them for finding out the future level of activity and preparation of budget there from, ZBB forces managers to review the current, ongoing objectives and operations. ZBB is, therefore, a type of budgets that requires managers to rejustify the past objectives, projects, and budget and to set priorities for the future. The essential idea budget that differentiates ZBB from traditional budgeting is that it requires managers to justify their budget request in detail from scratch, without any reference to the level of previous appropriations. It tantamount to recalculation of all organizational activities to see which should be eliminated, funded at a reduced level, funded at the current level or increased finances must be provided.

The Functional StructureIn the functional structure, activities are grouped together by common function.Each functional unit has a dissimilar set of duties and responsibilities. In a university, functional structure would mean a set of departments like marketing, management, business economics, finance, etc. Thus, similar and related occupational specialties are grouped together. Functional structure tries to incorporate the positive aspects of specialization.

ADVANTAGES OF FUNCTIONAL STRUCTURE1. Clarity: Functional design has the great advantage of clarity. Everybody has a 'home'. Everybody understands his own task. As a result, functional structures bring order and clarity to organisational activities.

2. Economies of scale within function: It provides economy of scale within functions. It reduces duplication and waste. For example, the total floor space shared by several products in functional organisation leading to economy of operations.

3. Specialisation: Each departmental manager is concerned with only one kind ofwork and can concentrate all his energies upon it with minimum diversion. Specialisation being built into the organisation brings about competitive advantagefor the firm. By putting its limited resources into one specialized activity, 'even thesmall company can compete with the giant corporation on quantity, delivery andprice'.

4. Coordination: Coordination within functions is easy. Centralized decision-makingensures unity of performance.

5. In-depth skill development: The functional structure also promotes skilldevelopment of employees. Employees are exposed to a range of functional activities within their departments allowing them to embody their outstanding skills in every activity of the company.

6. Suitability: The functional type of organisation is best for small to medium sizedorganisation producing one or a few products where the dominant competitive issueand goals of the organisation emphasise functional specialisation, efficiency and quality. In fact, Fayol's model for functional structure was a coal-mining company where there was only one product, demanding simple, mechanical operations. The operations were more or less standardised.

Behavioral Issues in Strategy ImplementationInfluence TacticsApart from a suitable structure, commitment from leaders at the top is important tosuccessfully implementing and achieving objectives. To this end, they must establishthe firm's direction -by developing and communicating a vision of the future — andto motivate and inspire organisation members to move in that direction. Leadership success is often linked to the ability of a leader to exercise the right kind of influenceat the right time.

PowerLeaders often use their power to influence others and implement strategy. Formal authority that comes through the leader's position in the organisation — say CEO may not always help in influencing others. Two reasons could be stated in support of this contention.

•Not everyone in today's organisations passively accepts and enthusiastically implements multi-myriad rules, orders, instructions coming from the top. Subordinates may resist orders, subtly ignore them, blatantly question them, or even quit.

•The CEO cannot influence some individuals — such as customers, government officials, competing managers in rival firms, board of directors etc. — through his influence tactics (because he has not formal authority over them). The leader, therefore, needs to exercise something more than formal authority — called as power — to secure compliance and cooperation from others. Here, power may be defined as the potential ability to influence the behaviour of others or represent the resources with which a leader effects changes in employee behaviour (and thereby implements the strategic game plan).

•Expertise: Power resulting from a leader's special knowledge or skill regarding thetasks carried out by followers is referred to as expert power. When the leader is a true expert, subordinates go along with recommendations because of his or her superior knowledge. Three conditions are essential to maintain expert power. First, since expert power is based on knowledge and skill, the experts must continue to beperceived as competent; those who become obsolete lose their expert power. The second

requirement is to make certain that the organisation continues to need the expert's knowledge and skill. The expert power of many accountants and lawyers iscreated by complex laws and tax regulations. If these laws were repealed, the expertise of accountants and lawyers would suddenly become unnecessary. Finally,individuals who are exerting expert power must prevent other experts from replacing them. In short, expert power can be maintained only if there is a critical need for the skills and knowledge of the expert that cannot be conveniently obtained elsewhere.

Charisma: It refers to a leader's ability to influence others through his personal magnetism, enthusiasm and strongly held convictions. Often, leaders are able to communicate these convictions and their vision for the future through a dramatic persuasive manner of speaking. Dr Martin Luther King's famous "I have a Dream" speech galvanised a generation to support the Civil Rights Movement in the United States. As Yukl remarked, charismatic leaders (Mahatma Gandhi, Abraham Lincoln, Nehru etc.) attempt to create an image of competence and success. They are often hailed as heroes and role models everywhere. The more that followers admire their leaders and identify with them the more likely they are to accept the leaders' values and beliefs. This acceptance helps charismatic leaders to exercise great influence over their followers' behaviours (Yukl, 1989). If they set high standards for themselves, subordinates follow their steps religiously. Such leaders, as researchers pointed out, are most likely to be effective during periods of organisational crisis or transition. Stressful situations are more likely to encourage employees to repose faith in a leader who seems to steer the ship out of trouble. If the leader's strategy works and organisational performance improves, his power base too will expand dramatically.

Reward Power: Top managers can get others to implement the organisation's strategies by making changes in formal reward systems. Those who carry out the strategy will receive pay raises, bonuses, promotions etc. Those who support the strategic initiatives and remain loyal to the leader will assume responsible positionsand get away with plum postings. If the leader has a number of rewards under his control, which are valued and desired by subordinates strongly, he will be able to secure cooperation and compliance from subordinates easily.

• Information Power: A manager's access to important information and control overits distribution, often, help him influence the behaviour of subordinates. Accordingto Mintzberg, the CEO is generally the best informed member of an organisation. He is able to oversee everything from the top and he has excellent external contactsto secure as much information as possible. He may not, of course, know everything,but he usually knows more than anyone else. If the CEO's information is reliable and complete, no one will be able to question his decisions which are based on a lot of information and knowledge.

• Exchange: The use of exchange as a power base is quite common in corporate circles. The leader helps others when they are at the receiving end. Others, in turn, will feel obliged to carry out things the leader would request later. Such reciprocal relationships flourish when the leaders step down from their ivory tower, join the mainstream and get along with others — shedding a portion of their superego, status and power. Sometimes connections or links with people inside or outside the work environment by the manager also bring some power to him. A manager who has got many valuable, respectable and useful links possesses this type of power; a subordinate who has good public relations and rapport with officials outside the organisation, or elsewhere can also have connection power. A manager or subordinate can influence others who acknowledge the connections they have.

• Legitimate Power: This power is the prerogative of a manager by virtue of his position in the organisation. Power is inherent in the position and authority a manager has. In our society people accept the right of top managers to direct the organisation. They are conditioned to accept the authority of superiors in higher positions. Moreover, managers have control over the distribution of resources and this control earns power for them over others. The quantum of legitimate power a manager exercises depends on the nature of his task, the organisation and the willingness of the manager to exercise power.

•Coercive Power: Managers who have "reward power" also have "coercive power".This is generally exercised by the manager against unproductive or disturbing elements and to restore discipline in the task environment. Coercive power is associated with the ability to assign distasteful tasks, withhold promotions, harass subordinates by not rewarding performance suitably, etc. Managers threaten the employees, when exercising this kind of coercive power, with job-related punishments such as dismissal, demotion, reprimand, transfer, and discourage low performance etc. Coercive power, if used properly, can lead to strong leadership. Ifpunishments are inflicted indiscriminately, several dysfunctional consequences willautomatically follow viz., damaging leader-member relations, frustration of the punished people, irreparable damage to the organisational set up etc. The punished person may be totally frustrated so that he retaliates by aggressive and violent responses which may prove to be very costly, for the organisation in the end.

STRATEGIES AND TACTICS TO ACQUIRE POWERVarious political strategies are pursued by individuals with a view to enhance their image and gain respect from others. Successful political behaviour involves keeping people happy, cultivating contacts and wheeling and dealing. Some commonly employed political strategies are given below (Dubrin):

• Forming Alliances: Maintain alliances with powerful people, especially those whoare close to the most powerful person in the organisation.

• Selective use of Information: Control the flow of important pieces of information to suit personal ends. Includes withholding unfavourable information from superiors, keeping useful information from competitors, interpreting information in a way that is favourable to oneself.

• Scapegoating: Ensuring that someone else is blamed for a failure. Skilled politicians make sure that they never blamed when something goes wrong and aregiven get credit when something goes right.

• Image Building: Skilled politicians know the importance of being viewed positively and go out of their way to create positive images of themselves. Includes dressing appropriately, highlighting one's successes, being enthusiastic about the organisation, adhering to group norms etc. Also they always try to present a conservative image of themselves. It can be disadvantageous to be seen as too radicalan agent of change.

•Networking: Insuring that one has many friends in positions of influence. Skilfulpoliticians extend favours to cultivate rewarding relationships with others. They praise people and avoid critical, negative remarks about others. They are generallyvery cordial in their interpersonal dealings.

•Compromise: Giving in on an important issue in order to gain an ally who will be on your side when an issue of importance to you arises at a later date.

• Rule Manipulation: Refusing an opponent's request on the grounds that it is againstcompany policy but granting an identical request from an ally on grounds that it is a'special occasion.'

• Fabianism: Avoiding decisive engagement. This means going slow and easy — anevolutionary rather than a revolutionary approach to change. By not 'ruffling feathers', the power seeker can slowly but steadily become entrenched and gain thecooperation and trust of others.

• One Step at a Time: Skilful politicians take one step at a time instead of pushing the whole project or reorganisation attempt at a time. One small step can be a foothold that the power seeker can use as a basis to get other, more major .things accomplished.

• Persuasion: Another tactic is persuasion which relies on both emotion and logic.An operations manager wanting to construct a new plant on a certain site might persuade others to support his goal on grounds that are objective and logical (land is cheap, tax concessions are great) as well as subjective and personal.

Leadership Style and Culture ChangeTo bring about change and to implement strategies successfully, organisations arenow pinning hopes on the unique capabilities of transformational leaders. Le lacocca is often used as an example of a successful transformational leader because of his successful efforts in transforming Chrysler Corporation from a floundering company into a much more successful company that could avoid bankruptcy. The word, 'transformational leadership' is used to signify leadership that goes beyond ordinary expectations by transmitting a sense of mission, stimulating learning experiences and inspiring new ways of thinking. In 1914 Henry Ford, for example, offered unusually high wages for workers @$5 a day in exchange for their accepting tight controls to be imposed on them (strict discipline, no idle time etc.).

The culture of an organisation is the set of values, beliefs, behaviours that helps itsmembers understand what the organisation stands for, how it does things and whatit considers important. Culture is a kind of social glue that binds people together through shared symbols, language, stories, and practices.

The concept of "corporate culture" and its companion notion of shared values is important in the field of strategic management. Researchers recognise that organisations develop different cultures, that these cultures have different performance implications and that they can be changed. Strong cultures that fit the needs and challenges of the situation are "in", whereas weak or poorly matched cultures are "out". The case of AT&T, the telecommunications giant, is a good example. For many years the company operated as a regulated monopoly and created what many observers felt was the best phone system in the world. All this was achieved in a highly structured corporate culture where "universal service at reasonable cost" was the predominant value. Things are different for AT&T today.The culture is changing, albeit slowly, as the company tries to instill in itself the newsense of innovation and competition that is necessary to prosper in a deregulated environment (like what is happening in public sector banks, insurance firms and oilcompanies after deregulation).

VALUES AND BEHAVIOUR FORMATIONPeople are not born with values; rather they acquire and develop them early in life.Parents, teachers, relatives, friends and others influence an individuals' values. Values such as — stealing is bad, 'honestly is the best policy' respect your elders andteachers', 'be kind to people' are taught and reinforced in schools, religious institutions and social groups. Over the years these values become relatively stable and enduring. As we grow in years, we often seek environments that are compatiblewith the values we learned as children. For example, values help find out what companies we are attracted to and how long we stay therein. They also influence how motivated we are at work; people who share same values as the organization are more

committed to the organisation than those who do not.

IMPACTWhenever people make decisions or talk about what constitutes appropriate behaviour at work, we can easily see the impact of values or even conflicts betweendifferent values. For example, consider the question of laying off employees. Managers with dominant economic values would be less hesitant to lay them off quickly than would managers with high social values.

Ethics and StrategyEthics are contemporary standards and a principles or conducts that govern the actions and behaviour of individuals within the organisation. They provide a basis for determining what is right or wrong in terms of a given situation. If we accept that all organisations pose ethical problems for managers then what constitutes ethical behaviour? There is a great tendency to oversimplify the matters of ethical problems in business organisations. Frequently, we visualise decisions as involving simple choices between right and wrong, black and white. However, drawing the curtain between ethical and unethical practices is not an easy matter.

In a controversial Harvard Business Review article, Albert Z Carr argued that therehas always been a kind of double standard applied to the morality of business. Carrbelieves that business and poker should be played by different rules -than those which apply to polite society. He argues that be should not expect to approach a used car salesman with an open straightforward statement of what we will pay any more than we expect a poker player to tell us what cards he has. When companies begin negotiations with union representatives what would happen if all cards were laid face up on the table? A manager of corporate planning from India, for example, may be acquiring a non-India company with two sets of books to evade income tax — a standard practice for the country. Do we (i) declare income and pay taxes (ii) take the black money out the country (illegally) or (iii) continue tax evasion?

Another type of dilemma confronts the manager who must decide whether to lay offan older, less efficient employee for a younger employee with greater skill and vigour. Again how to resolve the conflicting interests while deciding on a particularissue? Can a businessman make decision in favour of his employee, the government,society at large, or some other persons when he would personally profit more by making a decision contrary to that interest? Thus, decisions with ethical overtones are often complex. Often there are conflicts in values and the manager perceives different obligations which seem to conflict in their implications.

Factors influencing Business EthicsAt least five factors significantly influence decisions made by managers involving

ethical issues.

1. Legislation: Laws are generally passed as a result of low ethical Standards or thefailure 10 recognizes social responsibilities. They are the result of social pressures. A practice can be made illegal if society views ir as being unethical. For example, ifcontributions to political parties by corporations are viewed as being excessive andunethical, the practice can be banned.

2. Government rules and regulations: Government regulations regarding workingconditions, product safety, statutory warnings (on cigarettes and other harmful products), etc., are all supported by laws. These provide guidelines to managers indetermining what are acceptable standards and practices.

3. Industry and for company ethical codes of behaviour: Many times specific guidelines are provided to managers by the company’s' ethical code of behaviour. One important question in such instances is whether individuals within organisations are really governed by the code of ethics or give lip-service to the guidelines.

4. Social pressures: Social forces and pressures have considerable influence on ethics in business. Society, in the recent past, has demonstrated how a special status can be conferred on backward castes; boycotted products and complained and threatened action to prevent the construction of nuclear power plants. Such actions by different groups in society may, in fact, force management to alter certain decisions by taking a broader view of the environment and the needs of society.

5. Conflicts between personal values and the needs of the firm: Many times, managers may be forced to compromise their personal ethical and moral values in order to achieve organisational goals. Everyday ethical decisions are usually made between the lesser of the two evils rather than obvious right and wrong.

UNETHICAL BEHAVIOUR AND CODE OF CONDUCTThe manager's real world of deciding shades of difference is far more challengingand complex than the textbook ethical problem situations. In addition to the above factors, there are other complicating factors in making choices between right and wrong. Often it may be difficult for the manager to free himself from bias and prejudice and look at issues objectively. In spite of good intentions, he becomes involved in the situation and becomes identified with certain positions or points of view. It becomes difficult to step back and to take a detached point of view in examining the issue from an ethical standpoint. In spite of these problems, certain examples can be cited to answer the question as to what constitutes unethical behaviour:

• Padding expense accounts to obtain reimbursement for questionable business expenses

• Revealing confidential information or trade secrets• Giving or accepting 'gifts' or 'favours'• Using company property and/or materials for personal use• Leaving the job without observing job contract• Being severely critical of competitors• Attempting to corner opportunities by bribing public officials• Price discrimination, unfair pricing, price collusion• Unfair competitive practices, pirating employees or ideas, etc.• Cheating customers, overselling, unfair credit practices• Dishonesty in making or fulfilling contracts• Code of Ethics" and Answer to Ethical Problems in Business

"One of the most far-reaching company activities designed to improve business ethics is the adoption of code of ethics and/or standards of practice. Although it is true that codes range from arbitrary, legalistic documents to vague generalities written in such misty, grandiose terms that they become meaningless, the potential contributions from codes make them worthy of consideration by progressive organisations." R W Austin suggested a simple positive code of conduct for businessmanagement thus:

• The professional manager affirms that he will place the interest of his company before his own private interests.• He will place his duty to society above his duty to his company and above his private interest.• He has a duty to reveal the facts in any situation where his private interests are involved with those of his company, or where the interests of his company are involved with those of society.• He must subscribe wholeheartedly to the belief that when business managers follow this code of conduct, the profit motive is the best incentive of all for the development of a dynamic economy.

CONCEPT OF CORPORATE CULTURECorporate culture is the collection of beliefs, expectation and values learned and shared by an organization's members and transmitted from one generation of employees to another. The organization's culture generally reflects the values and beliefs of the founder(s) and the mission of the firm. It gives a sense of identity to the organization's members - This is who we are. This is what we stand for. The main features of organizational culture are as follows:

Organizational culture is a combination of social, cultural, physical, psychological, and other conditions within an organization.

It influence the motivation, attitudes, behaviour and performance of the members of an organization.

It gives a separate identity to the organization as compared to other organizations as each organization has its own set of values, beliefs, practices customs etc.

The organizational culture evolves over a fairly long period of time.

It can be relatively stable over a period of time. However, there can be changes in the organization culture, with a change in top management, or management's philosophy.

It is invisible and abstract, although it is perceived and experienced by the the members of an organization.

Organization culture can bring name and goodwill to the organization.

It can provide opportunities and threats to its members.

PERSONAL VALUES AND BUSINESS ETHICS The personal values are imbibed from parents, elders, and teachers. As an individual grows, values are adapted and refined in the light of new knowledge and experiences. In an organization, values are imparted by the founder or by a dominant personality - mostly the chief executive. Such values remain for fairly a long time, even when the founder or the dominant personality is not there in the organization Ethics specify what is good or bad, right or wrong, proper or improper from social point of view. Business ethics relates to behaviour and actions of corporations relating to business. According to Robert Gurinner "Business ethics may be defined as those principles, practices, and philosophies that are concerned with moral judgments and good conduct as they are applicable to business situation." Features of Business Ethics The following are some of the important features of business ethics:

Ethical Values: Business ethics is concerned with morality in business. In today's world, business community forms a large part pf the society and its actions (like right or wrong, legal or illegal) are bound to have a direct impact on the well being and welfare of the society. Business affects society in terms of what products it supplies. Therefore, it is necessary that community conduct its activities with self-check, and self-control keeping always in mind the interest of community at large.

Relative Term: Ethics is a relative term i. e. the concept of morality and immorality differs from one individual to other or society. What is moral in one society may be immoral in other. For example, taking or giving bribe is considered as unethical in our

society but may be a routine affair or just ignored by society in some other countries.

Interest of Society: Business ethics implies that the business should do first good to the society and then to itself. Business is an important institution and has a social responsibility to protect the interest of all those groups like employees, shareholders, consumers who contribute to the success of business.

Business-Society Relationship: Business ethics set the terms and standards to understand business society relationship. It indicates what society expects from business and what it thinks about business.

Provides Framework: Like an individual, business is also bound by social rules and regulations. Business is expected to confine its activities within the limits of social, legal, cultural and economic environment.

Systematic Study: Business ethics is a systematic study of business policies and actions that have an impact (positive and negative) on human beings and the society. For example, a company that cares for better natural environment will pursue those plans and policies that protects environment.

Universal Application: Business ethics has universal application. It is applicable to all business units in all countries whether large or small. However, the degree of business ethics may vary from country to country.

Code of Conduct: Business ethics, like code of conduct or professional ethics provides guidelines to regulate business activities on legal, moral, social and ethical principles. It prescribes what should and should not done for the welfare of the society. Importance of business ethics and values The need for business ethics is more felt in recent years than ever before. The following point outline the importance of business ethics

1. Survival of Business Business need to follow ethical values for its own good and survival. A firm can have short-term and quick gains by resorting to unethical means and disregarding social welfare. However, such firms grow fast and are out of business faster. On the other hand, organizations doing business ethically have continued to survive and prosper for a long time.

2. Protection of Consumer Rights The application of business ethics will help to confer and implement consumer rights. This will enhances the strength of individual consumer against powerful business community. Business ethics can be used to check malpractices like adulteration, unfair trade practices and to make the working of business consumer oriented.

3. Consideration of Society's Interest Those firms, which follow business ethics in the society, would make every possible effort to produce goods and services not only in the interest of the consumers, but also in the interests of the society. These firms would look into not only consumer's well being, but also welfare of the society. Therefore, they would make every possible effort to produce eco-friendly products

4. Better relations with Members of the Society Business ethics is needed to develop good relations between business and society. The relationship of business with society has various dimensions such as its relations with shareholders, employees, consumers, distributors, competitors and government. Ethics is needed to maintain good relations among the firms on one side and between the firm and the social groups on other side.

5. Mutual Benefit Business ethics benefits the business firm as well as the society. The business firm that adopts business ethics get good name in the society. It may be able to increase confidence in the minds of the buyers who in turn would help to improve the sale of the firm. The society can also gain due to ethical practices on the part of the business.

SOCIAL RESPONSIVENESS AND STRATEGIC MANAGEMENT Business is basically an economic activity, but in modem world it cannot concentrate only on profit maximization. It is a group effort, as there is participation, directly or indirectly, of the employees, customers, society, government, shareholders etc. Business can not function independently and depend on the society for supply of raw materials, capital, labour, and other requirements. Business is a part of society and has to follow and operate within the limits of the environment, and, rules and regulations prescribed by the society. There is a need to have social responsiveness in strategic management. This is because greater social responsiveness means good business.

Normally the top management takes the major decisions in respect of social responsibility. The decisions in respect of social responsibility are based on the personal values, views, opinions and business ethics of the top management. Having decided to adopt social responsibility , the top management should involve social responsiveness in all the phases of implementation and strategy evaluation will be affected by social responsiveness. The strategist must consider the social responsibility towards various group in strategic management.

FUNCTIONAL IMPLEMENTATION The implementation of strategy also requires development of functional policies which provide the direction to middle management on how to make the optimal use of allocated resources. They guide the middle level executives in framing operational plans and tactics to make strategy implementable. Policies are basically general guidelines to

help executives to make certain choices. They are developed in order to ensure that strategic decisions are implemented.

In order to formulate plans at the functional level, the strategist has only to decide which functional area goals (or set of related goals) for which it is necessary to formulate action plans. A single goal may require action plans at several functional areas such as marketing, finance, research and development, personnel, production and external relations are explained below:

MARKETING STRATEGY Marketing policy provides the guidelines for managerial decision making and actions to carry out the marketing functions in line with chosen strategy. It basically focuses on the organizations‘ existing and potential customers and seeks to earn profit through customers‘ satisfaction with an integrated programme. Broadly speaking, marketing policy and plan addresses the issues such as pricing, distribution, promotion and product lines with a view to counter competition from rival.

Pricing: Organization strategy regarding product/services prices is to accomplish the four fundamental things i.e. (i) change in profitability; (ii) change in sales level or growth rate; (iii) change in net cash flow; or (iv) maintenance of present sales, profit, or cash flow level. Marketing goals and action plans deal with price by specifying the planned-for impact on company performance desired strategy.

The task of actually setting price to yield the impact is normally the responsibility of the firm's marketing director where marketing is decentralized. The major factors which are taken into account while formulating the pricing policy include the following: (a) Prices of competing product; (b) Prices of different items in product line; (c) Cost of production and distribution; (d) Discriminating pricing policies for different customers; (e) Scope of change in prices.

The major price options which can be adopted by an organization are as under: — Penetrating prices—means low price combined with aggressive advertising in order to capture large share in the market. — Skimming – high price policy suitable for established top quality products. — PLC pricing—charging initially higher prices to cover development and advertising cost. This price is systematically reduced in later stages of product life cycles. — Incentives—such as discount, mode of payment, credit terms etc.

Distribution (Place): Channel of distribution is another important aspect of marketing

policy to a strategist. Yet the corporate strategist's input to distribution system design is critical in that it sets the limits for subsequent distribution decisions. The primary element of distribution goals and action plans is a definition of planned- for coverage or exposure of products addressed at higher levels of strategy. Intended product exposure is a function of: (i) the extent to which the organization is integrated forward or backward, (ii) whether the output of intermediate steps in the production process will be marketed or retained only as components, and (iii) desired coverage, usually in geographical terms, of the items marketed. The important issues of distribution include:

— Efficiency and effectiveness of distribution channel. — Type of channels to be used—direct to consumers, producer to retailers and producer to wholesaler. — Intensity of distribution—number of sales outlets to be opened. — Choice of distributors and extent of control.

Promotion: The strategist's primary concern with promotion, or, more generally, communication, is to provide guidance to the firm's marketing specialists so that marketing communication assumes a form consistent with overall strategy.

There are four types of communication methods: 1. Personal sales presentations—direct communication between sellers and potential buyers. 2. Sales promotion—displays, exhibitions, demonstrations, and trade shows to complement other communication techniques. 3. Mass advertising—communication with large aggregates of potential buyers simultaneously. 4. Public relations—free non-personal communication.

In a decentralized firm, the job of selecting a particular combination of communication methods is usually the responsibility of marketing specialists. The strategist sets communication strategy as a guide to the specialist's decisions to optimize congruence between communication methods and overall strategy.

New Product Development: As products reach the decline stage of their life cycles, they must be replaced by new products in order for the firm to grow and prosper. Thus, an integral part of a business strategy that stresses product development is a marketing strategy which defines the way in which new product ideas will be generated. The product development process can be summarized in the following stages: (i) Formulation of product goals; (ii) Search, discovery and evaluation of new product proposals; (iii) Product development and testing; (iv) Market entry.

FINANCE POLICIES Finance strategy is generally concerned with the acquisition and allocation of financial resources for the purpose of achieving goals at an acceptable level of risk. Thus, the setting of goals and action plans for finance can be viewed as a problem relating to the sources and uses of capital that is constrained, at least in part, by stockholders' wealth goals. Financial goals and action plans are treated from capital acquisition and allocation perspectives, though this distinction is only for expository purposes. Rarely is capital acquisition decisions made in isolation from those relating to how funds would be allocated, and vice versa.

On the matter of risk, we will find that it enters into both sources and uses problems. It is manifest primarily through the notions of financial leverage, operating leverage, liquidity, and working capital management. Higher-level strategies normally involve certain current and fixed asset investments that represent short and long- term applications or uses of funds. Specifications describing these investments are outlined in terms of capital budgeting techniques, cost-benefit analysis, and a cash budget, which serve: (i) to determine the financial characteristics of strategic investments; and (ii) as evaluative criteria for monitoring the operation of the firm under the business-level strategy. Of course, to determine the financial impact of strategic investments, a comprehensive financial analysis of the firm is necessary to define its pre-implementation financial structure. All subsequent changes can then be evaluated according to their expected effect on this financial profile.

Business-level strategy will necessitate selection from among various expenditure choices. Finance goals and action plans are needed to establish the expected outcomes and methods to be followed in such evaluations. Related decisions involve the relative amounts of capital diverted to dividends versus reinvestment in the firm.

WORKING CAPITAL MANAGEMENT Working capital management is an integral part of a firm's day-to-day affairs and is guided to some extent directly by strategic choices. Since it entails the management of current assets and current liabilities, it involves both the allocation and acquisition of funds and/or their material counterparts. The focus of working capital is generally short term, although it interacts with longer-term decision-making in the context of strategy implementation, and insofar as short-term financing is used in lieu of long-term financing. Allocation of after-tax net profits is the area of dividend and retention policy. Profits can either be retained in the business and ploughed back for expansion or growth. Alternatively, profits may be distributed among shareholders in the form of dividends. While formulating financial policy regarding the distribution of earnings, management should consider the company‘s cash position, need for additional capital, attitudes of

shareholders, effect of income tax, legal restrictions etc. Dividend policy influences not only the income of shareholders but marketability of shares, credit standing of the company and its ability to raise debt.

Evaluation of financial performance and protection of assets is an important element of financial policy. Suitable standards and procedures of financial control are required to maintain and improve the financial health of an enterprise.

Thus in brief the major areas covered by financial policies include the following:

— Capital structure mix i.e. proportion of short-term debt, long-term debt preferred and common equity. — Efficiency and effectiveness of resource utilization in terms of capital investments, fixed asset acquisition, current assets, loans and advances, dividend policy etc. — Maximizing market valuation of the firm. — Extent to which internally generated profits are reinvested within the firm. — Guidelines on decisions regarding leasing versus buying of fixed assets. — Relationship with credit agencies such as banks and financial institutions.

Financial policies are formulated within the framework of corporate strategy. For example when evaluating proposals for investments in projects, managers will select high risk projects if expansion is the desired strategy. If retrenchment strategy is being preferred then low risk projects will be selected.

The successful implementation of financial policies will enable a firm to: — Replace capital assets when necessary. — Pay loan and debenture interest when it falls due and repay the capital on maturity. — Accumulate adequate reserves to meet contingencies. — Facilitate steady long-term growth. — Ensure ready availability of funds at the lowest cost.

The common thread in the management of working capital is cash or more generally, cash flow, which leads to changes in cash balances. In some cases, short- term cash flow is a function of long-term commitments (a capital purchase, for example) that may require a series of short-term obligations (e.g., current portion of long-term debt) or a large, non serial cash outlay. In either circumstances working capital is affected through its cash component.

The minimum cash balance carried by a firm is that which is necessary to conduct business in a manner consistent with the firm's strategies. This includes the ability to

react to emergencies to maintain compensating balances, and to take advantage of profit-generating opportunities, as well as to meet regular requirements for raw material or inventory purchases, operating expenses, debt service, and other day-to-day expenditures. The management of cash balances and their near- equivalents (e.g., marketable securities) can become a critical component of strategy implementation. Certainly this would be the case for marginal firms embarking on survival or turn-around strategies involving divestment, retrenchment, or financial reorganization.

All this is not meant to imply that working capital management translates solely into the management of cash. The mix and magnitude of current liabilities and the non-cash components of current assets also have direct implications for higher-level strategy and its implementation. Though normally aimed at achieving a desired liquidity position (with a keen focus on cash flow), working capital decisions must be carefully cast in the strategic framework that guides them.

HUMAN RESOURCE MANAGEMENT (HRM) POLICY HRM has assumed a vital place in an organization. The personnel function effectively contributes in integrating strategies in various functional areas for accomplishing set objectives.

Personnel goals and action plans are set to guide the personnel department in major staffing decisions pertinent to business-level strategy. It has the following elements: (i) job analysis; (ii) staffing plan; (iii) payroll budget; and (iv) union relations strategy.

(i) Job Analysis: Sometimes a strategy has very specific implications for jobs. A job analysis is performed to gather pertinent information to communicate expectations about job content. The job-related data are then reported in a set of job descriptions; people-related information is arranged in a set of job specifications.

The primary role of job descriptions and specifications is to guide the process of hiring and placing people. When no new jobs are involved in a new strategy, job analysis can be conducted on existing jobs. Ideally job analysis data would already be available in the latter case; the strategist could simply refer to existing job descriptions and specifications and note the number of job titles required. Of course, the problem the strategist faces when a strategy necessitates creation of new jobs is having to decide what the content of jobs and employment requirements will be before hiring applicants.

(ii) Staffing Plan: The staffing plan presents the required number of employees by job title which will be needed over the strategy's planning horizon. This is a key consideration for the organizations‘ personnel specialists. It tells them how many and when people will have to be brought into the organizations to operationalize the strategy. Human resource planning procedures are followed to develop the staffing plan. Total

employee requirements are determined by job title for the initial stages of strategy implementation. Subsequently, these totals are modified to reflect the number of current employees who can be transferred into the new jobs as `well as expected normal outflows caused by retirements, deaths, out-transfers, and separations. The result is net incremental human resource demand by job title generated by the strategic change.

(iii) Payroll Budget: The cost of labor is a major strategy variable. It can be a primary consideration in determining the feasibility of a new strategy. The staffing budget is simply the sum of estimated total labor costs involved in the new strategy. It should be broken down by department. As such, it represents the rupee limits that functional managers cannot exceed in hiring people to implement the new strategy. Personnel strategy can address union/management relations whether or not the firm is organized by a union. By reducing the critical areas of labor/management relations to strategy, the relationship between unions and management can be productive and comfortable in unionized firms. For non-unionized firms the relationship between labor and management can be prevented from degenerating into a strictly adversarial one.

(iv) Union Relations Strategy: The purpose of union relations strategy is to set goals and action plans which will lead to acceptance of the new strategy set by unions representing employees of the organization.

Setting union relations strategy involves: (a) Relationships between Strategy and the Union Contract: There are many possible ways in which a new strategy set can affect a union/management contract. A retrenchment strategy might involve layoffs, of which the circumstances either could be spelled out in the contract or would have to be negotiated before implementation. Similarly, a product development strategy could necessitate a work-force expansion. The process of increasing the number of jobs and employees could be subject to contract provisions or negotiations.

Labor legislations of major countries define the range of topics subject to collective bargaining in the private sector, as matters of wages, hours, and working conditions. In the public sector, the items subject to bargaining are usually covered by statute. They differ from organization to organization.

When agreement cannot be reached as to whether an item is subject to negotiation, the appropriate authority can be called upon to make the determination. Bargaining issues for determination may be placed in three categories: mandatory, permissive, and illegal. Illegal bargaining subjects are those which are prohibited. Closed-shop agreements are in this category. Permissive items include management rights issues over which management has exclusive decision authority. Examples are product choices, pricing decisions, and types of advertisements. Permissive topics do not have to be

negotiated, but can be if management so desires.

Mandatory bargaining subjects include matters pertaining to wages, hours, and working conditions, and these issues must be resolved by negotiations. Whenever a new strategy requires changing any of these three factors, it may be necessary to negotiate the company's position with affected unions.

(b) Formal or Informal Negotiations: Some items might be better left to formal negotiations whereas others could be resolved by informal bargaining. Formal negotiations are those that lead to a new contract between labor and management. Informal negotiations refer to the day-to-day discussions by the two parties about how the contract applies to particular situations. Many of the issues that surface when new strategy is developed can be resolved by informal negotiations during meetings between union and management representatives.

Items that would have to be handled through formal negotiations probably would hold up implementation of the strategy until the next collective bargaining sessions. Therefore, in practice it would be most helpful if negotiable items could be resolved informally.

(c) Preparation of Negotiation Proposals: Preparing proposals for either formal or informal collective bargaining purposes is largely a matter of conducting the necessary research to support one's position and then presenting findings, in as convincing a form as possible, during the negotiations themselves. For strategy- setting purposes, this means that proposals must be "airtight" when presented. The best strategy ever conceived can be nullified by the inability of management to gain the support of unions or failure to consider before negotiations what the implications of the strategy are for union leadership and members.

Entering Negotiations: The final phase of implementing union relations strategy is the process of entering into negotiations. This phase is usually subject to convention within the organization involved. That is, in any firm negotiations proceed according to procedures understood by both parties or spelled out by law or agreement.

PRODUCTION STRATEGY Production is basically concerned with the process of transformation of various inputs into output in the light of objectives of the organization. The production process should be cost effective and without quality problems. To guide managers in the operation of production function in a way consistent with other levels, production strategies/policies are mainly concerned with the following aspects:

— Existing production capacity of the organization.

— Augmentation of production capacity in the short-run/long-run. — Decision regarding plant location, plant layout and degree of automation. — Manufacturing processes vertical integration. — Inventory control including re-order level. — Maintenance/replacement of existing production facilities. — Production and purchasing policies. — Technology planning including technology life cycle, division of labour, choice of technology. — Modernization. — Sourcing of inputs including reliability of suppliers. — Quality Control and Total quality management. — Coordination of activities. — Organizational capabilities. — Government policies. — Research and Development.

An organization should frame its productional and operational policies in the light of its overall corporate strategies. In a situation when an expansion strategy is desired through internal means, the organisation should have the adequate capacity to support such expansion. On the other hand, if retrenchment policy is being considered, in that situation production volume will need to reduce to avoid stock of inventory. Thus the production and operational policies in the organization must not only be properly coordinated but they should also match with the marketing policies in order to ensure that strategy is correctly implemented.

RESEARCH AND DEVELOPMENT STRATEGY Research and Development refers to acquisition of new technical knowledge in areas of developing new products, new processes, materials and working methods. In an organization industrial research can have one of two fundamental orientations. Scientific research refers to free-roving and analytical inquiry into the domain of unpredictable phenomena. This type of research activity is concerned with generating new concepts that may or may not have product applications.

The second orientation research on the other hand is commercial development the ultimate business outcome of successful industrial research, with its practical aura of economic and company values and restraints. Development activity can take several forms, but is essentially product, as opposed to concept oriented. Thus, it is a more pragmatic and market-centered form of research and development effort than scientific research. Research and development strategy has four primary components: ▬ research and development goals, ▬ extent of intensity of the research and development function,

▬ amount of market coupling desired, and ▬ size of the budget.

STRATEGIC INTENT

Strategic intent is a high-level statement of the means by which your organization will achieve its vision. It is a statement of design for creating a desirable future (stated in present terms). Simply put, a strategic intent is your company's vision of what it wants to achieve in the long term.

A readily grasped declaration of the course that the management of a business plans on taking the company in over some future time frame. The strategic intent of a business needs to be easily understood by every member of the firm so that all staff can be working toward a consistent overall goal.

Strategic intent can provide a sense of direction, a particular point of view about the long-term market or competitive position the organization hopes to develop and occupy.

Strategic intent can provide a sense of discovery in that it holds out to the organization’s members the promise of learning about other organizations that operate in the same market, adopting their best practices and avoiding pitfalls.

Strategic intent can provide a sense of destiny, a worthwhile goal around which energies can be focused across the organization.

In complexity science's terms, strategic intent is decomposition of exploration rules into the next level of detail, the linkages to the exploration rules and the transition rules that define how it will migrate from its current design and ecosystem to a future business design and ecosystem.1

Purpose of Strategic IntentThe logic, uniqueness and discovery that make your strategic intent come to life are vitally important for employees.  They have to understand, believe and live according to it. Strategy should be a stretch exercise, not a fit exercise. Expression of strategic intent is to help individuals and organizations share the common intention to survive and continue or extend themselves through time and space.