Implementing Strategies and Their Effects
Implementation strategies may not always result to improved organizational performance since processes, people and external causes limit the successful implementation of strategies. Because of these limitations organizations can still fail despite the presence of implementing strategies. This paper seeks to defend the above propositions as it evaluates the following statements: Can strategy implementation always contribute significantly to organizational performance. Are there any limitations? Can organizations fail despite implementing strategies? 2. Analysis and Discussion
Implementing strategies should be taken not as panacea to all the problems of an organization. Its useful still will have to depend primarily from a well crafted set of strategies that are to attain corporate mission, vision and objectives. Secondarily, their effectiveness will have to take into consideration the conditions under which they should be applied and the absence of these conditions could limit their effectiveness. Within implementation of the strategies are processes, people and external causes which must be supportive ,otherwise these the latter could served as causes to limit the effectiveness of these implementing strategies.
The following discussions will explain how and why. 2. 1 The Failure of Processes The word “processes” in this paper is defined as just getting the right things done at the right
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Professor Hrebiniak, of Wharton and advocate on putting more on processes as the key to success, noted that MBA-Trained managers knowing a lot about how to decide a plan but have very little about know how in carrying it out. He admitted the need the need for executives to learn through experience over time and making a lot of mistakes is part of the process (Wharton, 2005). The deficiency of expertise in execution brings severe consequences not intended as found in a survey by Marakon Associates and the Economist Intelligence Unit, involving not less than 200 senior executives from their own companies.
The results revealed that respondent firms achieved only 63% of the expected results of their strategic plans. Thus execution or implementation is the perceived culprit behind these results of surveys. Poor synchronization is part of failure in processes. Wharton (2005) blamed pitfall of poor synchronization. Companies do allow g the focus of the strategy to shift over time. It cited the case of Hewlett-Packard (HP) which had acquired Compaq, while HP tried to sell through often inconsistent, high-cost channels. The strategy just resulted to losing of HP CEO Carly Fiorina but the company has left unresolved some key strategic issues.
Implementation therefore is not a simple things and its presence is not a guarantee for success (Wharton, 2005). Like any activity, doing it involves some challenges and if these cannot be defined clearly, the pathway to failure could be sure destination. In finding that the challenge of execution is typically a matter of synchronization, Steel of Marakon’s New York office, explained the need to get the right product to the right customer at the right time. Steel admitted the difficulty of synchronization in the light of the fact present large companies do sell s multiple products to numerous customers in numerous geographies.
Failure therefore to define challenge would lead to nowhere. Pursuing the scale benefits of size through consolidation requires managers to know increasing complexity across the matrix. He illustrated that a regional manufacturing plan in Europe need one to reconfigure a number of various supply chains while being required to understand various markets from different countries of Europe (Wharton, 2005). The case of United Air Lines’ TED, which planned to have a competitive subsidiary to compete against companies under different group like that of Southwest is another example of poor synchronization.
Although a good idea, United still failed because of its use of its same old cost structure which was the very cause why it was losing is market share against low-cost airlines (Wharton, 2005). Communication is part of process to have an effective implementation. Hrebiniak blames lack of communication down to people in the organization where the company is heading. Strategies are made to reach a destination and the people in the organization must be able to know these if they are to support these plans (Wharton, 2005). 2. 2 The Failure of People Strategies also collapse due to individuals resisting the change needed.
Corporate headquarters are expected to go for more standardization in their product, yet the companies, local marketing officers could not just accept the idea (Wharton, 2005). A question of pride or a just wanting to do what they were used to doing could prevent the best crafted plans and put them into the was basket. Refusing to support is variant of now wanting the implementation of well crafted strategy. In certain cases reasons for resistance could be sound. A strategy might make sense sometime among the top brass in the organization, but the top is not the whole organization.
The interests of the people at the top are not the interests of the people below. Thus, the strategies impact on the whole organization may not be after all fully considered yet, according to Steele and the consequences could be easily understood (Wharton, 2005). Steele illustrated a case of a general strategy that wants to promote one brand throughout the company but would take resources away from other brand. Although such will make sense in one market, the other country managers that are affected will turn the strategy to become counterproductive in someway or the other by trying to fight or circumvent the strategy.
Steele recognized human nature which will refuse synchronize with general strategy and efforts could end where the country manager will just simply refuse to spend the money they should be according to general strategy (Wharton, 2005). Cultural factors have their share in hindering execution. With the firms sometimes trying to apply a time-tested strategy but would soon realize that they are operating in markets that require a different approach, one could just see the relevance of culture which are part of people as part of looking at management.
The case of Wal-Mart which was noted to be successful in implementing its strategies recognized the effect of disregarding culture. Thus a case where Wal-Mart had first moved in to Brazil by applying terms with suppliers under the U. S. way where the firm has big share in the market, would affirm the strength of culture as Wal-Mart found its Brazil suppliers not wanting to play by the same rules (Wharton, 2005). What should the company do? Should it impose its own implementing strategy which has been tested overtime. Wal-Mart was left with no choice to again go over and formulate another implementing strategy for its Brazil market.
The issue of culture is deeper than one may commonly perceived it as there are also things like internal cultural factors that could problems. Steele cited the case of marketers characteristically moving from brand to brand over ever two year in cycles. This is unmatched by the behaviour of operation executives who may be opting to be guided by a slower, steadier five-year pace. This situation creates difference in perspectives by different members of organization and this has the effect of nailing organization to more from its present state that is need to grow (Wharton, 2005).
Related to people is often surprisingly little follow-through or monitoring which will make is sure that what is executed is monitored to attain its targets. It was not that less than 15% of companies bothered to regularly track how their performance and experience was noted that only the first year’s goals get measure as way to have justification for a bonus designed with the strategy. A lack of introspection was therefore evident but such resulted to virtually ignoring its failed plans.
Incidentally ignoring such things could miss the lessons to be learned like identifying the needed execution bottlenecks and taking corrective action (Wharton, 2005). 2. 3 Validation of principles noted The causes as identified by Wharton could be validated through the experience of Xerox Corporation which had its share of business failures in the 1970’s and 1980’s. Causes are sometimes confused with symptoms of failure and as Slatter said, identifying the causal factors would require considerable subjective judgment. He however was able to concentrate on thirteen principal causes.
Each cause is classified into process and people and those not classified would be called external causes. The causes as described by Slatter (1999) are also viewed in the context of Xerox Corporation which has suffered business failure in the past. 2. 3. 1 People 2. 3. 1. 1 Poor Management The first cause blamed by Slatter (1999) is poor management which may include top management, middle management or lower level management. For purposes of poor management, Slatter focused on the Chairman of the Board, chief executive officer, the key corporate officers and the board of directors of a corporation as the persons responsible.
He specifically referred to the incompetence and/or lack of interest and autocracy of the CEO (Slatter, 1999). Combined chairman and chief executive, ineffective boards of directors and ineffective management are some the major descriptions used by Slatter to define the concept. Applying the concept to Xerox, there is basis to use the same, since if number of years it was the practice of the corporation to combine really the position (Xerox, 2008). This combined positions in one person had consequences that therefore makes ineffective the implementing strategies (Cooper, 2000; Johnson and Scholes, 1993; Pearson, 1999).
Slatter expounded the autocratic rule tendencies of due to dominating and autocratic chief executive as a result combined position of CEO and Chairman. Such a chief executive, will technically makes all the major decisions in the company and any opposition will not be allowed to present its logical presents. The effect on the character of the person occupying two positions is for the chief executive to have all the praises if companies remain financially successful, but gets blamed for the trouble he might cause. It should be pointed that exceptions could exist as not every autocratic chief executive officer (EO)’s unsuccessful.
The main difference between the successful and the unsuccessful autocrat will be found in their attitudes towards change and new ideas. The successful CEO will adapt to changing business conditions and will be receptive to new ideas from subordinates and outsiders, while the unsuccessful autocrat is not (Slatter, 1999). 2. 3. 1. 2. Lack of Marketing Effort Another cause blamed by Slatter (1999) for business failure is the lack of marketing effort, which could mean management and employee complacency at all levels in the organization to pursue marketing activities.
In finding application with that of Xerox considering its market position as monopolist before the failure, the people were not prepared when competition came. Time has conditioned people to act under old practices. The lack of responsiveness to customer’s enquiries, a poorly motivated sales force with a non-aggressive sales manager, poor after-sales service and lack of market research/knowledge of the customer is buying habits could lead only the one thing- the certainty of failure (Slatter,1999). It could be argued that there is not implementing strategy.
The company just kept on implementing old strategy when it was a sole player. Its management just lacked then the required skill to face the changes occurring then (Hoover’s, Inc, 2008). 2. 3. 1. 3. Organizational Inertia and Confusion Slatter (1999) argued that companies suffering from organizational inertia fail to make decisions and/or implement them. Poor leadership, inappropriate organizational structures and poorly motivated staff are believed to be the real causes of this organizational inertia.
There is evidence to attribute this to Xerox because of its failure to respond to competition and the poor leadership caused by poor management (Slatter, 1999). 2. 3. 2 Processes This part includes items related to failing to do what is expected from skilled managers. These are internal financial control, poor working capital management, overtrading, big projects, acquisitions and financial policy. Each is explained below in the context of their applicability to Xerox Corporation which has suffered a failure in the past.