Acquisition Strategy and Implementation - Essay Example

Strategic Management Introduction Great strategies are regarded useless if at all they are not implemented. In addition it can be concluded that it is effective to implement a second class strategy than to misuse a first class grade through inappropriate implementation. Usually not more than 50% of formulated strategies are implemented. In various occasions, every failure that is related to implementation is always accompanied with a failure of formulation. Making use of any working tool solely lies with its effective use and the same applies to strategy. Strategy as well can be said to be a tool which an enterprise uses to make use of opportunities available in the business environment. In most occasions, business enterprises formulate strategies as their doctrines to aid them in the daily running of their businesses (Koteen 1997). A firm’s performance is a function of how in can demonstrate its effectiveness in assimilating a plan and executing the plan; then it can be deduced that implementation is the foundation of performance as long as an appropriate strategy is put in place. A lot of issues and concerns have been raised whenever matters to do with strategizing and achieving goals are brought on board. Chandler defines strategy in regard to planned process as determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for those goals. This easy will try to support why this statement still remains appropriate in the field of management. Evolution Over the last thirty seven years, the field of strategic management has evolved resulting to Strategic management being a discipline on its own. Through extensive comparison from Social and Economic sciences, Strategic management continues to be fragmented by a number of thoughts which still exist, broad nature of existing dimensional theories together with absence of disciplined methodologies. The fragmentation is as a result of high level of task unpredictability and poor coordination in the field of research: an outcome of lack of homogeneity and focus in between the field of strategy, its fundamental disciplines as well as practitioners. Strategy on its own developed as a result of enquiry from a real perception necessity to understand the main reasons behind success and failure among different organizations (Kerr 2003). This gave a lot of attention to general performance and top management. Chandler and Andrew’s activities demonstrated that strategy is designed and made at the top then finally executed at the bottom in an organization, further supporting the fields’ emphasis at the top management while on the other hand implementation being regarded as secondary. Corporate planning emerged back in the year 1970s which further steered disconnect between implementation and formulation, as effective decisions were reached upon as if plans never existed. The main insight was that plans were not effective and top managers were necessarily needed to get involved in the process. The emergence of analytical tools such as PIMS and BCG further demonstrated that strategic planning was solely a top management mandate. The advancement of strategic management paradigm demarcated the formulation and the implementation composition of strategy, defined roles for all managers excluding the lowest functional level in the process of formulation. Implementation was composed of rewards, standards, penalties, measures and controls. Managers were seen to be obstacles on the way leading to success of an organization. Mintzberg and Waters’ (1985) view was that strategy is a pattern in a creek of decisions that widened the role of other than top management since strategy was regarded as emergent. Burgelman (1983) neatly integrated both bottom up and top down approach of strategy through introduction of concept of autonomous advancement of strategy in addition to the usual intended strategy, fortifying Bower’s (1970) observation who mentioned that the top management had very little control over what projects get pushed for appropriate approval. Despite these observations and findings; till the era of 1990’s strategy formulation and implementations have been regarded as separate entities, with a clear focus on strategizing while on the other hand effective implementation of it was not taken with keen interest. Even though research on strategy formulation and implementation was neglected, few researchers took their time in developing frameworks that could be used in the management process: at the same time developed evaluation mechanisms affecting the implementation process such as the interest of middle managers or the application of implementation techniques. Currently, strategic management has been regarded as hypercompetitive which ensures that continued merit is transitory. Under these circumstances, strategy and the type of organization needs continuous assessment for appropriateness. Under various circumstances, strategy formulation and implementation has been viewed as inter-wined sub process in strategy process. The development of current strategy retraces its path back in Europe where more attention was drawn to the role of power as an influence on strategic outcomes. Cultural role was probed and then later combined effects of power and culture were investigated. Several large scale empirical studies induced a process approach which brought together process, content, context of change with diverse data collected at different levels. Process research has been fragmented, characterized by limited theory building and empirical testing. It is necessary for strategy to evolve and this cannot be prevented. Literature Review Strategic management has grown through contributions from various researchers in different fields such as economics, psychology, public administration, sociology and organizational behavior. Researchers from these fields addressed strategic management from perspectives that dominated each field. For instance, researchers form economics field addressed it with rational perspective while those form behavior used humanistic perspective. This implies that research on strategy implementation has been relying on the dominant approach giving guide to a researcher. Chafee (1985) basically laid his classification process on the parent focus which each mode is built upon. One of this mode is the linear model which regards planning as the main point of focus. Its reliance on methodical, directed action and sequential take depicts a rational decision making procedures; firm environment and a more simple view of strategy with a prime role for the top management. Time is stated as fixed. The adaptive model’s concentration is on continuous change of the environment and succeeding organizational adaptation. Environment is seen to be vast and dynamic; emphasis is more on means while goals are rather nebulous and the function of the other levels of management is considered more significant. The interpretive type views an organization as a collection of social contracts while strategy as organizational broad activities steered by shared beliefs and values. Decision making seems consensual tending to a political procedure. The process of decision making depends on environmental sensing technique and the organizational integrative mechanisms such meetings, feedback and so on (Saaty & Vargas2013). The type of decision making procedure is not as momentous as the patterns and exploitation of environmental sensing and organizational integrative contrivances. Literature on implementation of strategy can be categorized as: i. Resource distribution process literature ii. Stream dealing with organisational model as proxy for application variables iii. Stream that has endeavored to come up with frameworks for execution of strategy iv. Literature on strategic consensus and role of middle level managers. Implementation should be viewed together with strategy content. Strategy content literature can be categorized with those dealing with diversification, acquisitions and mergers, competitive strategies, innovation driven strategies and collaborative strategies. Approaches to strategy There are several approaches to strategies but for this case I will elaborate basically on two items. Generally there are two main approaches to strategy which are very opposite but complement of each other in one way or another as far as strategic management is concerned. The industrial organizational Approach. The sociological Approach. The industrial organizational Approach This kind of approach is basically originated from the theory of economics and deals with matters like economies of scale, competitive rivalry in the market and resource allocation. It uses the assumption of profit maximization, self-discipline behavior and rationality. The need for a industrial approach to corporate strategy was first identified by senior managers. These were firms that started emerging in the late 19th century. The Sociological Approach This kind of approach basically deals with human interactions and is established on assumption of bounded tightly bounded prudence, profit optimization and satisfying behavior. Sociological approach emphasizes the need for interaction and collaboration based on shared values, between different organizations. Generally strategic management methodologies can be categorized as bottom-up, top down or collaborative procedure. When bottom up approach is mentioned, it implies that employees submit their ideas and proposals to their line managers who later channel the most lucrative idea to boost the organization. This is normally achieved through a budgeting process. These proposals are reviewed based on financial criteria; for instance return on investment or even cost-benefit approach. Underestimation and overestimation are normally sources of errors. Top down is the most commonly used technique. This is where the top management makes decisions and later channeled down to the employees through their respective line managers. Some organizations have started trying out the collaborative of strategic planning techniques that appreciates the emergent nature of strategic decisions. Current Trends Since the inception of strategic management, there have been several changes that have taken place; for instance there are several theories and systems that have been put in place to ensure that strategic management is successful in various organizations. There has been emergence of systems such as; Balanced Scorecard System This is a kind of management system that aligns business operations with vision and strategies of an enterprise. This kind of system closely monitors the implementation of objectives against the company’s strategies and at the same time improves communication within the organization. This slant enables an enterprise to have an active versus passive strategic management solutions by providing daily directives to the management. Stakeholder Theory The freeman strategic management is a drift based on stakeholder theory. Here, the top management evaluates the necessity and identifies organizational stakeholders that are important to enterprise success. According to freeman, vital stakeholders that are necessary to organization success are the clients, suppliers, communities and employees. Focusing on two primary principles; principle of corporate legitimacy and the stakeholder fiduciary principle, stakeholders are to benefit from and take part in the management. Effective Strategic Management Trends can either be defined as general direction that at times something moves towards or vogue. In order to have a successful business enterprise, the objective prepares the organization to adopt to mutating trends in the field of business. Several changes have taken place in the field of management; this can be attributed with several changes which include migrating from manual decision making to use of information technology in decision making. Most organizations nowadays use computer software to help them decide on crucial management issues as compared to the 19th century when most of decisions were made from individuals who stood crucial positions in the management. Conclusion Strategy implementation is significant but difficult since implementation activities take a longer time frame as compared to formulation, involves more people and greater task complication, and there is need for sequential and concurrent thinking on part of implementation managers (Hubbard 1999). On regard to these factors, research into strategy implementation is also difficult for it entails the need to look at it over time; this presents conceptual and methodological dares as it entails multiple variables that interact with each other and show reciprocal causality. The issue of implementation is a neglected and overlooked jurisdiction in strategic management literature. Published articles reveal emphasis on strategy formulation. Strategy formulation and implementation are complementary and logically distinguishable areas of strategic management and part of the overall process of planning executing and adapting. More Research on implementation has been done in organizational theory and development than in strategic management. Implementation research needs to be interdisciplinary. The importance of implementation can be gauged from the study of Joyce (2000) which showed that firms with unusually high performance and firms which turned around their performance relied upon key activities of strategic direction, building a fast and effective organization, establishing an adaptive culture and executing against focus of customer needs and cost. References Hubbard, N. (1999). Acquisition strategy and implementation. West Lafayette, Ind: Ichor Business Books. Kerr, W. R. (2003). Tourism public policy, and the strategic management of failure. Amsterdam [u.a.: Pergamon. Koteen, J. (1997). Strategic management in public and nonprofit organizations: Managing public concerns in an era of limits. Westport, Conn: Praeger. Saaty, T. L., & Vargas, L. G. (2013). Decision making with the analytic network process: Economic, political, social and technological applications with benefits, opportunities, costs and risks. New York: Springer. Read More