10.4 Managing Strategic Implementation

Question 1

Challenges and difficulties with implementing strategy

Answer 1

• Overall goals are not sufficiently understood by the workforce or perhaps the wrong targets have been set because of insufficient analysis of data
• Lack of capability of employees or training and instruction might have been inadequate
• Leadership may fail to provide adequate direction leading to an overall lack of commitment
• May be unforeseen events, perhaps problems with implementation that were not anticipated
• Changes in external environment
• Implementation may take longer than expected

Question 2

Planned strategy

Answer 2

One that managers intend to implement using a carefully laid plan to achieve the desired position.

Question 3

Emergent strategy

Answer 3

Unplanned strategy that develops over time and is based on the belief that change should not be seen as a series of linear events.

Question 4

Strategic drift

Answer 4

Occurs where a business responds too slowly to changes in its external environment and results in the strategic plan no longer being appropriate.

Question 5

Four phases in strategic drift:

Answer 5

Phase 1: Incremental change
Phase 2: Strategic drift
Phase 3: Flux
Phase 4: Transformational change or demise

Question 6

Phase 1: Incremental change

Answer 6

• Organisation remains competitive due to incremental changes in strategy
• Changes made in line with the external environment

Question 7

Phase 2: Strategic drift

Answer 7

• Strategic drift begins to appears
• Appears as incremental changes fail to keep up with the rate of change in the external environment

Question 8

Phase 3: Flux

Answer 8

• State of flux in strategy now develops where the management recognises the existence of drift due to poorer performance + tries to make strategic changes
• There is no clear direction and disagreements can occur, leading to poorer performance and increased drift

Question 9

Phase 4: Transformational change or demise

Answer 9

• Final phase where organisation either fails completely or undertakes a transformational change
• Transformational change in order to realign itself with the external environment

Question 10

Causes of strategic drift:

Answer 10

• Technological environment: very dynamic and changes constantly
• Lagged performance: First symptoms of strategic drift may not be immediately apparent as financial results are normally reported at the end of a period
• Culture: Culture may be quite rigid in terms of values and relationships - attempts to change may be limited to what is familiar than a radical plan
• Lack of monitoring: Organisation may have insufficient monitoring of strategy - missing changes in the environment

Question 11

Divorce of ownership and control

Answer 11

Refers to the separation of the ownership and control in a public limited company.
Ownership - Shareholders
Control - Elected board of directors

Question 12

Corporate governance

Answer 12

Set of systems, processes and principles that ensures the organisation is governed in the best interest of all its stakeholders.

Question 13

What does corporate governance involve?

Answer 13

• Accountability: Ensure that the management are accountable to the board of directors and in turn the board of directors is accountable for the shareholders
• Fairness: To protect shareholder’s rights, to ensure all are treated equitably and to provide redress for violations
• Transparency: ensure all matters related to finance, performance, ownership and corporate governance are communicated both accurately and in a timely manner
• Responsibility: Ensuring organisation’s comply with the relevant laws and regulations of a society

Question 14

Strategy evaluation

Answer 14

Process of determining the effectiveness of a given strategy in achieving the organisational objectives and taking corrective action wherever required.

Question 15

Strategic planning helps create value as they:

Answer 15

• Give purposeful directions to the organisation and outline measurable goals
• Identify and help build a competitive advantage
• Assist in making choices where resources are limited
• Save time as clear priorities are set

Question 16

Contingency planning

Answer 16

Means planning for the unexpected, such as natural disasters or loss of data.

Question 17

What are types of events that are planned for?

Answer 17

• Natural disasters
• Loss of data
• Loss of key personnel
• Product issues