6.4. Strategic implementation Flashcards
1
Q
Define strategic implementation
A
the process of allocating and controlling resources to support the chosen strategies
2
Q
What factors strategic implementation aims to ensure?
A
- appropriate organisational structure to deal with the change
- adequate resources
- well motivated staff
- a leadership stye and organisational culture that allow change to be implemented with wide ranging support
- control and review systems to monitor the firm’s progress towards the objectives
3
Q
Define business plan
A
a written document that describes a business, its objectives and strategies, the market it is in and its financial forecasts
4
Q
Content of business plan
A
- Executive summary - overview of the business and strategies
- description of the business opportunity - details of the entrepreneur; what is going to be sold, why and whom
- marketing and sales strategy - details of why the entrepreneur thinks customers will buy what and how business plans to sell them
- management and personnel - the skills and experience of the entrepreneur and the people he/she intends to recruit
- financial forecasts - the future projection of sales, profit and cash flow for at least one year ahead
5
Q
Importance of business plans
A
- To obtain finance for a start up - potential investors and creditors will not provide finance unless clear details abt the business proposal are presented
- Clear sense of purpose, direction for strategies, improvement and recruitment
- Financial and other forecass can be used as targets tat the business should aim for => compare to check on progress
- Rewrite and adapt it to accomodate new/revised strategies
- Acts a budgets and control benchmarks
- Updated version can be used to apply for additional funding
6
Q
Define corporate plan
A
a methodical plan containing details of the organisation’s central objectives and the strategies to be followed to achieve them
7
Q
What is included in the corporate plan?
A
- overall objectives of the organisation within a time frame
- strategy used to attempt to meet these objectives (can use the Ansoff matrix)
- the main objectives for the key departments of the business derived from the overall objective
8
Q
Benefits of corporate plan
A
- Clear focus and sense of purpose for what they are trying to achieve
- Easier to communicate and distribute this purpose to focus all managers and staff in the organisation
- Control and review for improvements
- Forcing to consider the strengths and weaknesses in relation to its environment and to think abt how all of the different functional department interrelate
9
Q
Limitations of corporate plan
A
- Can be made obsolete by rapid and unexpeced internal/external changes
- Cannot forsee some events
- Time consuming
- Must be adapted and updated
- Can be sometimes inflexible
- For a large multinational company, it is unrealistic to think that all employees will identify with the long-term objectives of the business
10
Q
Internal influences on corporate plan
A
- financial resources
- operating capacity
- managerial skills and experience
- staff numbers and skills
- culture of the organisation
11
Q
External influences on corporate plan
A
- macro-economic conditions
- central bank and government economic policy changes
- likely technological changes
- competitor’s actions
12
Q
Define corporate culture
A
the values, attitudes, and beliefs of the people working in an organisation that control the way they interact with each other and with external stakeholder groups
13
Q
Define power culture
A
- concentrating power among just a few people
- associated with autocratic leadership
- swift decisions are made
- used in response to a crisis, as it is important to make decisions quickly
14
Q
Define role culture
A
- each member of staf has a clearly defined job title and role
- used where stability is needed
- associated with burreaucratic organisations
- operate within rules with little creativity
- has clear delegated authority
- power and influence come from a person’s position
15
Q
Define task culture
A
- based on cooperation and teamwork
- used where product life cycles are short and, therefore, there is a need to be adaptable
- groups are formed to solve particular problems
- lines of communication similar to a matrix structure
- each team usually have a distinctive culture b/c they have been empowered to make decisions
- encouraged to be creative
16
Q
Define person culture
A
- when individuals are given the freedom to express themselves fully and make decisions for themselves
- may be some conflict beyween individual goals and those of the organissation
- creative type
- used where an organisation has individuals working abroad on their own. In this case, it is important that the individuals are able to make decisions without referring everything back to governors.
- or used when creative solutions/innovations are needed to out compete competitors
17
Q
Define entrepreneurial culture
A
- encourages mgmt and workers to take risks, to come up with new ideas and test out new business ventures
- used in a highly competitive industry where it may be necessary to encourage risk taking in order to gain a competitive edge
- failure is not necessarily criticised as it is considered an inevitable consequence of showing risk taking
18
Q
Reasons for changing organisational culture
A
- A traditional family which has favoured family members converts into a plc as new investors demand more transparency and recognition of natural talent from recruited employees
- A product-led business needs to respond to changing market conditions by encouraging more staff involvement (task culture)
- A recently privatised business formerly run on burreaucratic principles needs to be more customer focused => entrepreneurial
- A merger or takeover => adapt its culture to ensure consistency
- Declining profits and market share may be consequences of poorly motivated staff -> person culture
- A business which has suffered losses due to a culture that encourages risk taking (e.g. many banks in the UK and USA in the years before 2008). In this situation a role culture may be more appropriate as this does not encourage creativity and people in the organisation operate within the rules. It is a more bureaucratic approach.
- A business that is suffering from a high labour turnover − a person-based culture might help to motivate employees by giving them more responsibility and the freedom to express themselves.
19
Q
Why expansion are less likely to be successful when 2 businesses merge?
A
- The cultures of the merged businesses will confl ict and this leads to conflict at all levels of the new organisation.
- The firms have different ways of operating. For example, if a business with a power culture merges with a business that has a person culture, the role of the individual is very different. Autocratic leaders in the first business would fight to maintain their power, whilst employees in the second business would resist any loss of freedom to express themselves fully.
- Conflict will cause inefficiency in decision making.
- The merged business will not share the same values.
- If cultures are different, there will be no synergy between the merged businesses.
20
Q
Problems of changing organisational culture
A
- changing the way people think and react to problem situations
- directly challenging the way things have been done for years
- involve substantial changes of personnel, job descriptions, communications methods and working practices
- time consuming
- collective efforts from everyone
21
Q
Best way to bring about change to an organisation’s culture
A
- Concentrate on positive aspects of the business and how it currently operates and enlarge on these
- Obtain full commitment of the people at the top of the business and all key personnel
- Establish new objectives and a mission statement that accurately reflect the new values and attitudes to be adopted
- Encourage bottom up participation of workers when defining exisiting problems or devising new solutions
- Train staff and new procedures and new ways of working to reflect the changed value system (explain why it will benefit them)
- Change the staff reward system to ensure that appropriate behaviours are encouraged
22
Q
How does a corporation’s culture affect strategic implementation?
A
- Strong culture encourages fast and effective implementation since everyone shares the same value
- In weak culture, employees may have not agreed set of beliefs => form their own groupss that are based on individual interests which might conflict with the interest of the whole organisation
- Power culture, for instance, can stir up resistance to change => difficult to implement which contrasts with person/task culture that emphasises on active participation of all staff
23
Q
Evaluation of the importance of corporate culture
A
- Values of a business establish the norms of behaviour of staff
- Culture determines the way in which managers and workers treat each other
- A distinctive organisational culture can suport a business’ brand image and relationships with custimers
- Strategy is just the headline on the company’s story – culture needs a clearly understood common language to embrace and tell the story that includes mission, vision, values, and clear expectations
- Strategy is about intent and ingenuity and culture determines and measures desire, engagement, and execution => When culture embraces strategy, execution is scalable, repeatable and sustainable
24
Q
Define change management
A
planning, implementing, controlling and reviewing the movement of an organisation from its current state to a new one
25
Types of change
* Evolutionary/incremental changes that occur slowly over time
* Dramatic/revolutionary changes that are usually unanticipated
26
Causes of change
* Technological advances leading to new products and new processes
* Macro-economic changes - fiscal policies, interest rates, fluctuations in the business cycle
* Legal changes (changes to what can be sold)
* Competitors
27
Managing technological changes
* staff retraining
* purchase of new equipment
* additions to product portfolio/ other products to be dropped
* need for quicker product development =\> new organisational structures and teams
28
Managing macro economic changes
* flexible production systems include staff flexibility
* explain need for extra capacity or rationalisation
* deal with staff cutbacks in a way that encourages remaining ones to accept change
29
Managing legal changes
* staff retraining on company policy
* flexible working hours and practices
30
Managing competitor's actions (more like responding)
* Encourages new ideas from staff
* increase efficiency by staff accepting the need to change production methods
* ensure resources are available to meet the challenge
31
Steps of introducing change
* Where are we now and why is change neeeded
* New vision and objectives
* Ensure resouces are in place to enable change to happen
* Give maximum warning of the change
* Involve staff in the plan for change and its implementation
* Communicate
* Introduce initial changes that bring quick results
* Focus on training
* Sell the benefits to staff and other stakeholders
* Always rmb the effects on individuals
* Check on how individuals are coping and provide support if needed
32
What does leading change mean?
* dynamic leaders who will get rid of corporate inertia (complacency to change) and away from resistance to change
* motivation of staff at all levels of the organisation so that change is looked upon as an positive force
* ensuring that acceptance of change is part of the culture of the organisation
* visible support of all senior managers who will help the change process to be accepted
33
Define project champion
a person assigned to support and drive a project forward who explains the benefits of change and assists and supports the team putting change into practice
34
Quality of a project champion
* Diplomacy – as senior managers are opposed to the new IT system, the project champion must be able to encourage them to accept the change. The champion must be a skilled relationship manager and bridge builder.
* Strong communication skills – s/he must act as a conduit for keeping stakeholders informed of the project’s status. S/he must also be able to ensure that everyone understands the project goals.
* People-management skills – the project champion has to be able to influence and motivate people.
* Drive and enthusiasm – the project champion must be able to push the project forward.
* Problem-solving skills – the project champion has to remove as many obstacles as possible.
35
Define project groups
are created by an organisaton to address a problem that requires input from different specialists
36
How to promote change?
* establish a sense of urgency
* create an effective project team to lead the change
* develop a vision and a strategy for change
* communicate this change of vision
* empower people to take actions
* generate short term gains from change that benefit as many people as possible
* consolidate these gains and produce even more change
* build change into the culture of the organisation to build up damaging resistance that could increase chance of failures
37
What would be the resistances to strategic change?
* Fear of the unknown: change means uncertainty
* Fear of failure
* Losing something of value: lose status/job security
* False beliefs about the need for change
* Lack of trust
* Inertia
38
Define contingency plan
preparing an organisation's resources for unlikely events
39
Key steps in contingency planning
1. identify the potential disasters that could affect the business
2. assess the likelihood of these occurring
3. minimise the potential impact of crises
4. plan for continued operations of the business
40
Benefits of contingency planning
* reassures staff, customers and local residents that concerns for safety are a priority
* minimises negative impact on customers and suppliers in the event of a major disaster
* public relations repsonse is much more likely to be speedy and appropriate, with senior managers being used to promote what the company intends to do, by when and how
41
Limitations of contingency planning
* costly and time consuming - not just the planning process but the need to train staff and have practice dry runs of what to do in the event of emergency
* needs to be constantly updated as the number and range of potential disasters can change over time
* staff training increases if labour turnover is high
* avoiding disasters is still better than planning for what to do if they occur
