Implementing Strategies - Essay Example

PREAMBLE Strategy is the direction and scope of an organisation over the long term, which helps it to achieve one or more objectives through interrelated activities which are undertaken over a specific period of time (Alan 2001, Doyle et al 2002). These activities form part of the strategy cycle which provides the plan of action for the organisation. This strategy cycle is illustrated in Figure 1.0 below. Figure 1.0 Strategy Cycle (Doyle et al 2002) The first of the stage involves the strategy identification, which plays an important role as the resulting activities of the organisation will be based on decision made at this stage. In order to identify the best strategy to follow, the organisation has to have an understanding of their stakeholders' expectations (Alan 2001, Doyle et al 2002). Stakeholders can include customers, as they are ultimately the service users or consumers. By understanding their expectation, the process of identifying options becomes simplified. For example, if stakeholders expect superior quality or service, then the resulting strategic options could include a focus on creating a unique specialisation, novel approaches or even the introduction of equipment and/or technology to enhance this aspect. The second stage of formulating the strategy involves determining the appropriate courses of action to take to enable the organisation to achieve its objectives (Alan 2001, Doyle et al 2002). This can include increasing recruitment, job redundancies, relocation, expansion and other visible aspects of the plan. This is then appraised in Stage 3, a process which includes critical and feasibility assessments. The strategy is then implemented in Stage 4, and this stage is the practical part of the strategy where management actively put a strategy into place (Alan 2001, Doyle et al 2002). However, the implementation of a strategy is likely to be influenced by the dynamics of the organisation in terms of its culture and identity, as strategy implementation can sometimes be part of a change management process. Corporate culture can be defined as the set of beliefs, experiences and attitudes within an organisation (Alan 2001, Doyle et al 2002), and this is often entwined with corporate identity which tends to reflect and represent the culture. Corporate culture and identity have a significant influence on employees, as they dictate simple aspects such as the number of hours worked a day or a week, commuting options, interaction, dress code, benefits, training, office space and professional development (Morris 2005). For example, IBM will have a different corporate culture and identity to say a medical organisation. One can already make out the differences in work hours, as medical organisations tend to have variable working patterns, which in turn influence the amount of office space allocated to an individual, which can also influence the level of communication and interaction with other colleagues. This means that the strategy formulation and implementation processes cannot exclude corporate culture and identity, as these will ultimately determine the parameters of success for the organisation. THE INFLUENCE OF CORPORATE CULTURE AND IDENTITY ON STRATEGY FORMULATION Strategy formulation includes undertaking feasibility, techno-economic, strategy decision/network, input, financial, cost-benefit and pre-investment analyses (Toyohiro 1998, Matson 2001). Feasibility analysis This is where a proposed strategy is examined for its influences and effects on its consumers and/or other competitors (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). For instance, if a strategy is formulated that has the effect of increasing the level of competition in the industry, then there has to be some thought how this strategy will affect working hours and motivation of employees. It could be that the proposed strategy will result in a commission based system of work, which will conflict with employees especially if other aspects such as office space are not configured. If the corporate culture and identity is one which extols ethical values, then the strategy cannot include any elements which may go against these values. Other organisations have a culture of openness, which will mean that the strategy formulation process will take longer to complete as there are more voices to be heard and disagreements to settle. Techno-economic analysis This involves strategy formulation, which is the estimation of the strategy demand potential and choice of optimal technology (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). For instance, if the analysis involves some technological innovation, the choice and decision will be determined by the best fit to corporate culture and identity. For example, the introduction of automation in any organisation can affect the amount of hours employees will need to work, and in some cases the distances they will need to travel. One application can this can be a strategy to cope with adverse weather conditions, which would include the ability for employees to work from home. If the existing culture and identity was one which had flexible working hours and lone working, then this strategy would not conflict with the culture. On the other hand, an organisation with a culture that is devoid of technology is more likely to struggle if the strategy involves major technological changes. Strategy design and network analysis This is an important step as it defines the individual activities which constitute the strategy and the relationships involved (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). The existing corporate culture could influence this analysis as there may be some relationships which are incompatible, for example, there may be activities which propose the sharing of information to all employees. In an organisation that deals with personal information and data, such activities will conflict with existing arrangements for confidentiality and access. Therefore in a way, the culture of an organisation, serves as a check to protect the identity of the organisation by preventing situations which could lead to the loss of trust and reputation of the organisation. Input analysis This involves assigning the input requirements of the strategy and this normally requires a summation of all the input required for each activity to get the total input required. The inputs include materials and human resources (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). The input analysis normally includes the recurring as well as the non-recurring resource requirements and the evaluation of the feasibility to gauge the availability of resources (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). These inputs may place a requirement to borrow funds externally, which could affect the culture of the firm as it may have to borrow at a certain point in the financial year hence forcing the strategy to be withdrawn (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). Financial analysis This stage involves estimating the strategy costs, operating costs and the fund requirements (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). It also assists in comparing the various strategy proposals on a common scale thereby aiding the decision making process. Some of the key analytical tools used in financial analysis include (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002): Discounted cash flow Ratio analysis Past volume profit analysis The corporate culture could be that loan repayments above a certain interest are not paid due to the prevailing market conditions which would result in a strategy being abandoned. The corporate organisation may have a weak relationship with commercial banks, which could influence the decision to severe the strategy. The stakeholders may not support the strategy if returns are not realised within a specified timeframe, particularly if they are involved in the decision making (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). Cost benefit analysis The overall worth of the strategy is the main consideration as it involves an assessment of national viability (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). Besides the direct cost and benefits to the strategy, it also takes into account the cost which all the entities connected with strategy have to bear and the benefits which will be enjoyed by all such entities. Pre-investment analysis All the results obtained from the above steps are consolidated and at this stage the strategy is presented, to those responsible for strategy implementation body, as well as other external consulting agencies for a decision (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). The purpose of the pre-investment appraisal is to present the strategy idea in a format which enables any project sponsoring bodies or the strategy implementing bodies to make an investment decision regarding the strategy (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). The firm's decision making body may take longer to come to a pre-investment decision; or sponsors may have some unfavourable comments on the implementing body especially on the time allocation which could halt the strategy. HOW CORPORATE CULTURE AND IDENTITY CAN INFLUENCE STRATEGY IMPLEMENTATION Strategies are implemented according to a detailed implementation plan which determines the timing of most activities. Strategy implementation is probably the most important step in this area, as the process can either pass or fail. The most important activities that can be affected by corporate culture include: Mastering of the strategy document The strategy manager must first grasp the integrity of the strategy. They should study all the details including the appraisal reports, drawing, maps, and bills of quantity, loan contracts and various strategy related agreements Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). Mastering the strategy document is a prerequisite for successful strategy implementation. The manager should also consult staff with technical skills and expertise about the implementation, as they may have better methods of implementing certain aspects of the strategy. The corporate culture and identity can have an effect on the strategy, especially where no prior consultation has occurred with other staff that will be directly affected by this implementation. The lack of a consultation process or forum can create resistance within the organisation, which can ultimately cause the implementation to fail. Initiating financial management The strategy manager should make sure that the funds are available and that they are accessible Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). Various documents relating to administration procedures should also be prepared, and the transfer of financial resources will facilitate the strategy (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). In a situation where corruption has previously been rife in the organisation's history, then the culture will be one which is identified by high levels of mistrust and suspicion. Public relation Strategy implementation involves all employees and staff, and is not confined to one individual (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). All employees and staff will ultimately be affected by the strategy chosen, and it is only right that everyone is encouraged to participate in the changes. Depending on the relationship between the corporate and the external environment which includes the people living around and working in the firm, the strategy might be accepted or rejected regardless of any positive impacts to society. Selecting the strategy personnel Depending on the corporate culture and identity, individuals make a decision on whether they want to be associated with the organisation (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). For instance, if the organisation is in decline, or has been affected by scandals, then the desire to associate one will be low. This means that corporate culture and identity will affect the quality of new recruits, and it also means that organisations have to spend time on managing their image through public relations and/or marketing directorates. Monitoring of the strategy Monitoring the progress of the strategy goes hand in hand with the implementation of the strategy (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). This is a management tool which ensures that the implementation proceeds in the desired manner, to the schedule and within budget limitations. In a broader sense, it is a management tool through which an executive/ managers/ administrator controls the whole process of input conversion into the finished product or other to achieve the goals and objectives of the strategy within the time frame and resource limitations (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). This is also defined in the power structure of many firms who is responsible for this function. A company with a reputable culture invests a lot of its money to protect its identity to its audience (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002). The process of strategy implementation and monitoring of the strategy is keenly carried out to ensure that it continues to command respect from its clients. The purpose of monitoring strategy includes the following (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002): It facilitates testing for further refinement. It helps to identify the problems encountered during the implementation so that appropriate changes can be made in the strategy design. It helps in developing manuals that detail administrative procedures, service delivery and essential qualifications of personnel. It helps with the fine tuning of strategy especially when information monitored indicates that targets are not being met. It determines how strategy was actually carried out in order to link its output to input. It is directed at maximising production and efficiency. The illustration below show how the monitoring process is carried out. Figure 2.0 The monitoring process (Toyohiro 1998) Since the foremost purpose of monitoring is to warranty effective and efficient implementation of strategy, the entire process follows a cycle of activities. The monitoring cycle evolves around four main aspects which are (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002): 1. Periodic assessment of the progress of the strategy 2. Problem identification and analysis 3. Decision making 4. Implementation of the decision The four stages of monitoring depend upon three systems of the monitoring process and these are (Toyohiro 1998, Alan 2001, Matson 2001, Doyle et al 2002): 1. information generation 2. information processing 3. decision making and follow up action A corporate culture is mainly determined by the leadership style or the management style. A situation where by the culture of the firm is deep rooted in all the workers and is lead by management by objective method. This kind of style is likely to increase the probability of successful implementation of strategies since superiors and the subordinates get together and jointly set the objectives agreeable to both parties and these are reasonable with regard to all the processes concerning the strategy, unlike where there is authoritarian leadership. The reason for this is that the thoughts, ideas and wishes of the managers are obeyed without any question and the manager does not consult any body and therefore there is the likelihood of the strategy implementation facing shortcomings. CONCLUSION From the above analysis one can deduce that the corporate culture reflects the workings of a firm and therefore has a big impact on the formulation and implementation of strategies, and it also determines the success of strategies. The culture which also encompasses the philosophies of a firm needs to be critically evaluated to determine the success of a strategy, as it will serve as a reference point for future strategies. REFERENCES Alan, RM. (2001). "Business Ethics", Routledge publishers UK. Corporate strategy, retrieved on 22nd June, 2007, available at http://www.strategyconsultinglimited.co.uk Corporate culture retrieved on 23rd June 2007, available at http://en.wikipedia.org/wiki/Organizational_culture Doyle, L., Colley, JL., Hardie, RD. (2002). "Corporate Strategy", McGraw-Hill Professional publishers UK. Matson, KP. (2001). "Designing Corporate Identity: Graphic Design as a Business Strategy", Rockport Publishers. Morris, RG. (2005). "Contemporary Strategy Analysis", Blackwell Publishing Organizational strategy retrieved on 23rd June, 2007, available at www.ucm.es/info/Psyap/23ICAP/abstract/organiza3.html Toyohiro, K. (1998). "Transformations of Corporate Culture: Experiences of Japanese Enterprises" Walter de Gruyter publishers. Wikipendia, the free encyclopaedia, retrieved on 23rd June, 2007, available at http://en.wikipedia.org/wiki/Corporate_identity Read More