MNG3702 - Strategic Implementation And Control .

MNG3702 - Strategic Implementation And Control . . Discuss the component of the McKinsey 7S framework  This model links the organisations strategy to the various factors that need to be addressed to ensure successful implementation and consequently strategic success. The 7 –s are:  The framework distinguishes between a cold triangle and a warm square.  The warm square are style, skills, staff and shared values Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved. o It refers to the people in the organisation. o Strategy  The organisations chosen strategy and the way it intends to achieve its strategic goals and vision. o Structure  The way in which an organisation is structured. o Systems  Including systems such as reward systems, strategic control systems and operational control systems. o Style  the leader and management style of the organisation o Staff  the people in the organisation o Skills  the organisations core competencies and source of competitive advantage o Shared values  the values the organisation believes in  The cold triangle refers to structure, strategy and systems of the organisation.  These issues cannot be isolated from one another. 15. Discuss the drivers of strategic implementation (5)  Leadership  This is vital in strategy implementation as it is only through effective leadership that organisations are able to use strategic management successfully.  Organisational culture  Is a set of important beliefs, behavioural norms and values that the members of an organisation share. It refers to the way we do things around here.  Reward system  Required to motivate managers and employees to ensure commitment to the implementation of new strategies.  Organisational structure  Refers to the framework within which the strategic process must operate to achieve the organisations goals. Identify the tasks necessary for strategy implementation and how is responsible for the tasks.  Resource Allocation Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved.  is essential that resources be allocated in such a way that they supports the organisations long-term goals, chosen strategy, structure and short term goals. Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved. Topic 2: The drivers of strategy implementation 16. Discuss attributes of emotional intelligence (10)  Self-awareness – self-awareness is the first component of emotional intelligence and refers to the extent to which an individual is aware of his or her emotions, strengths, weaknesses, needs and drives  Self-regulation – self-regulation refers to the extent that people are in control of their emotions, feelings and impulses.  Motivation – One trait common to almost all effective leaders is motivation. Leaders have a deep desire to achieve for the sake of achievement and not for large salaries or status and are driven to exceed expectations.  Empathy – Empathy refers to the extent that a leader can thoughtfully consider employees’ feelings in the process of making decisions. Empathy also refers to the extent that a leader is able to sense and understand the viewpoints of his or her team.  Social Skills – Good social skills in the context of emotional intelligence do not simply imply friendliness. They are about friendliness with the purpose of leading people in the desired direction, being able to establish a rapport with anybody, being able to network and interact with a wide circle of acquaintances, capable of managing teams and being able to build relationships throughout the organisation. 17. Discuss the reasons why leadership is an important driver of strategy implementation (5)  Somewhere in the organisation someone must have a vision of the ideal state and be willing to guide the organisation to the achievement of this vision through successful strategy implementation.  Such a person is a strategic leader.  Strategic leadership drives strategic change, and strong leadership is perhaps the most important “tool” that a strategist can have in the implementation toolkit to give direction and purpose to integrated strategy formulation, implementation and control.  Leadership is vital in strategy implementation as it is only through effective strategic leadership that organisations are able to use the strategic management process successfully.  Successful strategy implementation and strategic change also depend on the leaders and managers distributed throughout an organisation. 18. Discuss the key responsibilities of a strategic leader (6)  Developing an appropriate vision or strategic direction for the organisation in which as many stakeholders as possible participated Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved.  Communicating the vision and strategic direction to all the employees and other stakeholders of the organisation  Inspiring and motivating the employees to achieve the strategic goals of the organisation  With top management, designing appropriate reward systems and organisational structures  Developing and maintaining and effective organisational culture  With managers, ensuring that the organisation continually incorporates good corporate governance principles into its strategies and operations. 19. Indicate the difference between management and leadership (5) LEADERSHIP MANAGEMENT Coping with change Coping with complexity Concerned with guiding, encouraging and facilitating others in pursuit of ends by the use of means, both of which they have either selected or approved. Concerned with directing others in the pursuit of ends and by the use of means, both of which have been selected by the manager Tend to be more visionary, experimental, flexible and creative Tend to be more analytical, structured and controlled Value the intuitive side of their work Value the quantitative science part of their work Focus on the bigger picture Focus on the details Inspire and apply influence Instruct and apply authority 20. Differentiate between visionary and managerial leaders by identifying four key characteristics of each (HINT use table) (8) VISIONARY LEADERS MANAGERIAL LEADERS · Are proactive, shape ideas, change the way people think about what is desirable, possible and necessary · Are reactive, adopt passive attitudes towards goals. Their goals arise out of necessity and not out of desires and dreams, and are often are based on the past · Work to develop choice and fresh approaches to long-standing problems and work from high-risk positions · View work as an enabling process involving some combination of ideas and people interacting to establish strategies. · Are concerned with ideas, relate to people in intuitive and empathetic ways · Relate to people according to their roles in the decision-making process Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved. · Feel separate from their environment; they work in, but do not belong to, organizations; in other words their sense of who they are does not depend on their work · See themselves as conservators and regulators of the existing order. Their sense of who they are depends on their role in the organization. · Influence the attitudes and opinions of others in the organization · Influence the actions and decisions of those with whom they work · Are concerned with ensuring the future of the organization, especially through development and management of people · Are involved in situations and contexts characteristic of day-to-day activities 21. Discuss corporate governance and leadership in the light of the King II Report (4)  The King report on corporate governance 2002 (King II Report) emphasized the role of leadership in corporate Governance.  It stated that corporate governance is essentially about leadership and that leadership comprises four dimensions: efficiency, probity (honesty and decency); responsibility; and transparency and accountability.  In order for organisations to compete effectively in the global economy, leadership must be efficient.  Leadership for probity is important as it assures investors that the management of an organisation will behave honestly and with integrity towards its shareholders and other.  Addressing legitimate social concerns related to the organisation’s activities provides proof of responsible leadership.  Above all, leadership must be transparent and accountable for its activities. 22. Discuss the key responsibilities of a strategic leader (6)  Develop appropriate strategic direction  Communication of vision and strategic direction  Motivate employees to achieve strategic objectives  Design appropriate reward systems and organisation structure  The development of strategic and operational control systems  Develop and maintain effective organisational culture  Ensure good corporate governance and management 23. Explain why different strategies require different leadership styles (5)  As the environment in which the organisation operates changes, so does the choice of strategies. Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved.  Strategic implementation is essential about creating a tight fit between strategy and leadership, strategy with culture, strategy with reward systems, strategy with organisational structure and strategy with short-term objectives.  Different types of strategy require different types of leadership style.  When a growth strategy is followed, it is important that the leader pays attention to managing relationships, inspiring people and communicating the goals and strategies to them.  Corporate combination strategies require a leader who can integrate different cultures and value systems, and identify synergies, and who possesses a combination of people and task skills.  Organisations that follow decline strategies need leaders who are task oriented and who focus on reducing assets and costs; such a leader will often be more autocratic than when a growth strategy is followed. 24. Discuss five moral duties for strategic leaders and company directors (5)  Conscience. Strategic leaders and directors should act with intellectual honesty in the best interests of the organization and all its stakeholders and independence of mind should prevail.  Care. A director should devote serious attention to the affairs of the organization.  Competence. A director should have the knowledge and skills required for governing an organization effectively.  Commitment. A director should be diligent in performing director’s duties and responsibilities.  Courage. A director should have the courage to take the risks associated with directing and controlling a successful sustainable organization, but also have the courage to act with integrity in all strategic decisions and activities. 25. Explain the importance of organisational culture in strategy implementation (5)  Organisational culture refers to “the way we do things around here”.  It can be defined as the set of important, often unstated, assumptions, beliefs, behavioural norms and values that the members of an organisation share.  An organisational culture that is rare and not easily imitated can be a source of competitive advantage.  When the organisation’s beliefs, visions and goals underpinning its chosen strategy are compatible with its organisational culture, this culture serves as a valuable driver and simplifies strategy implementation efforts. Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved.  Reshaping organisational culture is a complex and time-consuming task, yet in order to execute strategies successfully, top management must establish a tight fit between the chosen strategy and culture. 26. Explain the different aspects and levels of organisational culture (as identified by Thompson & Martin 2005) (12) The aspects and levels of culture can be grouped into manifestations, people and power. MANIFESTATION PEOPLE POWER Artefacts and symbols Stories from the past Ownership and structure Values Leadership and management styles Personal power Underlying assumptions Communication Politics Behaviours  The most visible level of culture is artefacts and symbols. Artefacts include the physical and social environment, written communications, advertisements and the reception that visitors to the organisation receive.  Values are the second level and represent a sense of “what ought to be” based on the convictions held by top management for example.  The underlying assumptions are the third level and they represent the taken-for-granted ways of doing things or solutions to problems.  The people in an organisation are also an important part of culture. The way people do things and their values and underlying assumptions are based on and influenced by stories from the past, the leadership and management style of the organisation and by communication.  Another dimension of culture is power. Power is reflected in the ownership of the organisation.  Structural issues include the extent to which the organisation is centralised or decentralised and will impact on control and reward systems.  Politics refers to the ways in which managers use power and influence to affect decisions and actions. 27. Discuss the different types of organisational culture as identified by Charles Handy (6)  Power culture o It can be compared to a spider (power and influence source) and a web (functional area). o It depends on trust and empathy for effectiveness and personal communication Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved. o It is strong and has the ability to move quickly.  Role culture o Is often stereotyped as bureaucracy where logic, rules and procedures dominate. o The role or job description is considered more important than the person who fills it. o It offers individual security.  Task culture o Is project-oriented and this type of culture is often found in organisations with matrix structures. o It seeks to bring together the right people, functional expertise and resources.  Person culture  Have the individual as the central point and the organisation only exists to serve the individual within it.  This type of culture is formed when a group of people band together, like sharing space, services and equipment. 28. Discuss the different cultural dimensions of Hofstede (5)  Power distance, that is. The extreme to which people accept that power is distributed unequally  Uncertainty avoidance. That is, the extent to which people feel uncomfortable with uncertainty and ambiguity  Individualism/collectivism, that is, the extent to which there is a preference for belonging to a tightly knit collective rather than a more loosely knit society  Masculinity/femininity, the extent to which gender roles are clearly distinct  Confusion/dynamism, the extent to which long-termism or short-termism tends to predominate. 29. Differentiate between adaptive, weak, strong and unhealthy cultures (8)  In a strong organisational culture, values, norms and beliefs are deeply ingrained and difficult to eliminate. If a tight fit exists between the chosen strategy and a strong culture, it is a valuable asset.  A weak organisational culture is a fragmented one. There are few traditions and few values and beliefs shared.  An organisational culture is classified as being unhealthy if it has a politicised internal environment where influential managers operate in autonomous “kingdoms”. Unhealthy organisational cultures are also characterised by a hostile resistance to change and to people who advocate new ways of doing things. Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved.  In an adaptive organisational culture, members share a feeling of confidence that the organisation can neutralise the threats and exploit the opportunities that cross its path. Adaptive cultures are characterised by receptiveness to risk taking. Innovation and experimentation. 30. Discuss actions that leaders can take to develop an ethical culture (6)  Establishing and communicating an ethical code or code of conduct  Continuously revising and updating the ethical code or code of conduct by including inputs from both internal and external stakeholders.  Disseminating the ethical code or code of conduct to all stakeholders to inform them of the organisations ethical standards and practices.  Developing and implementing methods and procedures to use in achieving the organisation’s ethical standards.  Creating and using explicit rewards systems that recognise good ethical behaviour and encourage employees to use proper channels and procedures to report wrongdoing.  Creating a work environment in which all people are treated with dignity. 31. Explain how the strategy culture relationship can be managed (6) 32. Explain the role of reward systems in strategy implementation (5)  Reward systems can be defined as the umbrella term for the different components considered in performance evaluation and the assignment of monetary and non-monetary rewards to them. Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved.  Reward systems play an important role in strategy implementation and should be created in such a way that they are tightly linked to the strategy, encourage a change in behaviour to support strategy implementation, and reward managers for performance over the long term.  In addition, reward systems have to be tied to achieving the specific outcomes necessary to make the new strategy work, and must emphasize rewarding people for showing results, not just for dutifully performing assigned tasks.  In order to be an effective motivator for strategy implementation, reward systems should extend to middle and lower levels of management and really be used for the entire workforce. 33. Describe any four monetary reward systems that can be used as drivers in the strategic implementation process (8) Monetary Non-monetary 1 Salary increases Profit sharing Share options Cash bonuses Retirement packages Status Recognition awards Job security Promotion Perks 34. Discuss the major types of executive bonus compensations plans (10)  Share options. The use of share options in the company as an executive reward system gained increasing popularity during the information technology boom of the 1990s. Share option programmes link individual rewards to organisational performance.  Restricted Share plan. A restricted share plan also uses company shares as an incentive for executives. Under such a plan an executive is typically given a certain number of shares, but may not sell them for a specified period of time.  Golden handcuffs. Another type of executive bonus compensation that offers an incentive for executives to remain with the company is that of golden handcuffs. Under such a plan, cash bonuses are deferred in a series of annual instalments. Should the executive leave the company before a certain time, compensation is forfeited.  Golden Parachutes. In a similar vein to golden handcuffs, organisations also use golden parachutes to retain talented executives. Under such a compensation plan, an executive retains a substantial cash bonus regardless of whether he or she quits, resigns or is fired. Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved.  Cash bonuses. Another popular reward system is that of cash bonuses. Whereas share option plans are often used to reward only executives and the top management team, the use of cash bonuses as a reward system is more widespread in organisations. 35. Discuss recognition as a component of reward systems (6)  More and more organisations are realising that employees and managers not only want to be rewarded, but also want recognition.  Recognition and its role in strategy implementation through employee and manager retention is still a rather new concept in strategic management.  Various studies in the last few years have found that recognition is not only a very important component of employee motivation, but also an important component of organisational mobilisation and engagement during strategic change. 36. Discuss guidelines in aligning reward systems with the chosen strategy (5)  Organisations that are pursuing growth strategies in the start-up phase of the organisational life cycle should incorporate large salaries and equity into their reward system.  In the rapid-growth phase of the organisational life cycle, reward systems should include a salary plus large bonus for growth targets, plus equity for key people.  Organisations faced with maturity should link reward systems to efficiency and profit-margin performance.  During the decline phase, reward systems should be linked to cost savings. 37. Discuss corporate governance and reward systems in the light of the King II Report (4)  According to the King II Report, one of the responsibilities of a board of directors is to monitor remuneration.  It suggest that an organisation should appoint a remuneration committee to make recommendations to the board of directors on the organisations framework of executive remuneration and to determine specific remuneration packages for each of the executive directors.  Organisations should provide full disclosure of director remuneration and give details of earnings, share options, restraint payments and all other benefits.  Reward systems should be designed in such a way that they provide incentives to perform at the highest operational standards. 38. Guidelines for establishing a reward system (10) Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved.  The performance pay-off must be a major, not minor, piece of the total compensation package.  The incentive plan should extend to all managers and all workers, not just top management.  The reward system should be administered with fairness and transparency  The reward system must be tightly linked to achieving only those performance targets spelled out in the strategic plan  The performance targets each individual is expected to achieve should involve outcomes that the individual can personally influence in some way.  Keep the time between the performance review and payment of the reward short.  Make use of both monetary and non-monetary rewards.  Avoid skirting the system to find ways to reward non-performers. Topic 3: Structural Drivers of Strategy Implementation 39. Discuss the role that organisational structure plays in implementing strategy / Explain the concept structure follows strategy (5)  The concept “structure follows strategy” is widely used in strategic management literature.  It confirms or emphasises, that a change in the chosen strategy necessitates a change in structure. Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved.  When a tight fit between strategy and structure is absent, the organisations’ performance will decline, as it will experience administrative problems, resource allocation problems and conflicting priorities regarding strategy implementation tasks.  Strategy and structure has a reciprocal relationship.  As much as strategy influences structure, structure can also influence strategy. 40. Explain how organisational structures evolve over time (3)  As organisations grow and the environment changes, different types of strategy are selected at different stages to ensure continued success.  Most organisations grow first by volume, then by geography, then by integration, and finally through product/business diversification.  Therefore as organisations grow, structure generally change from simple (e.g. entrepreneurial or functional) to complex.  Matrix and product-team structures are examples of complex structures.  Expound on the role that structures play in the implementing the chosen strategy (4)  To provide a formal allocation of work rules  Serves as channels for collaborative working  Set boundaries of authority and lines of communication  It’s a means of allocating power and responsibility  Prescriptive levels of formality and complexity.  Organisational design can be a source of competitive advantage if it ensures that organisational structures are  Aligned with the chosen strategy  Functional  Difficult to copy  Make it easy for customers to do business with the organisation. 41. Discuss the essential parameters of organisational design (16)  In organisational design, the parameters of design are the elements that influence the division of labour and coordination.  Job specialisation, which essentially focuses on what each person should do, how many distinct tasks the job should contain and how much control a person should have over these tasks.  Behaviour formalisation, refers to the extent to which tasks are soecified and have to be carried out in a certain manner. Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved.  Training, entails deciding what formal training is required for different positions and then selecting appropriately trained people to fill these positions.  Socialisation, refers to the process by which a new employee learns and become part of the value system, the norms and the required patterns of behaviour in the organisation.  Unit grouping refers to grouping different positions into units, each under its own manager, and these units are in turn clustered together to form another unit, again with its own manager , until the whole organisation has been grouped into one unit with the CEO as the strategic apex.  Unit size refers to the size of each unit and is determined by the extent to which standardisation is used and the need for mutual adjustment.  Job specialisation, behaviour formalisation, socialisation, unit grouping and unit size determine an organisational design framework.  To create linkages, planning and control systems and liaison devices are used. 42. Discuss the six basic coordination mechanisms used by organisations to coordinate activities (12)  Mutual adjustment o The informal communication used to coordinate mechanisms.  Direct supervision o This is where one person is responsible for coordinating the work of others and gives orders and instructions.  Standardisation of work processes o Refer to the specifications how the work should be carried out.  Standardisation of skills and knowledge o This is also a co-ordination but less formal. Employees know each other responsibilities.  Standardisation of outputs o This focus on the results that must be achieved.  Standardisation of norms o refer to the organisations culture, shared beliefs and values of the employees 43. Describe any five types of organisational structures (10)  Entrepreneurial structures - A simple structure typically consisting of the owner-manager and the employees. The owner-manager makes all major decisions and monitors the employees.  Functional structures - Consist of a CEO supported by a limited number of corporate staff such as legal advisors, accountants and functional managers. Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved.  Divisional structures - Activities and responsibilities are organized into a series of divisions, each with its general manager and functional areas.  Strategic business units (SBU) - It is similar to the divisional structure.  Matrix structures - Dual lines of authority.  Network structure - Are loosely grouped business teams that come together or a single project.  Structures of the future - Are based on networks of temporary external and internal relationships, linked primarily by information technology in order to share skills, costs and access to markets. 44. Provide guidelines for matching structures with strategies (4)  There is no one size fit all structure that all organisations can use, but below is several guidelines for matching strategy with structure.  Functional structure :Single-product or dominant product organisations  Divisional structure: Organisations with several business lines  Strategic business units: Large, diverse organisations with unrelated business divisions  Matrix structure: Product development and innovation oriented organisations. *** Chandler found that a particular structure sequence is often repeated as organisations grow and change their strategy over time. 45. Discuss the five basic parts of an organisation (5)  Strategic apex o The home for top management and strategic leadership in an organisation.  Middle line o Includes all the managers in direct line relationships between strategic apex and the operating core.  Operating core Downloaded by Larissa Lessing () lOMoARcPSD| Downloaded by: studyengine | Distribution of this document is illegal S - The Marketplace to Buy and Sell your Study Material © 2017 Together We Pass. All rights reserved. o Occurs where the actual operating tasks for an organisation are performed to produce the product/service.  Techno-structure o Includes all staff analyses who design the systems by which work processes are formally designed.  Support staff o Includes the support for the organisation outside its operating workflow, corporate communications, legal, etc. 46. Discuss the role of resource allocation in strategy implementation  Organisations differ from one another in terms of sets of experiences, assets, skills and organisational culture.  These sets of resources and capabilities determine how effectively and efficiently an organisation performs its activities.  It can therefore be concluded that an organisation will succeed if has the best and most appropriate resources for its strategy.  To achieve successful strategy implementation, it is essential that the resources be allocated in such a way that they support the organisation’s long-term goals, chosen strategy, structure and short term goals.  Strategy implementation efforts will seldom succeed if the resource allocation plan or budget is not linked to the strategy. 47. Identify the different types of resources in an organisation (3)  Tangible resources are often described as the resources that can be touch, feel or see.  Examples include property, land, buildings, equipment and shares (balance sheet items).  Intangible resources cannot be seen or touched.  It forms the core of an organisations competitive advantage. It’s classified into o human capital, (employees skills, talent and knowledge) o information capital (technology infrastructure, databases) o Organisation capital. (culture, leadership, teamwork)