Business Policy and Strategic Management - Challenges and Opportunities in Strategy Implementation - Coursework Example

Challenges and Opportunities in Strategy Implementation s Submitted by s: Contents Introduction 3 In order to increase the effectiveness of new ideas in the business, an efficient business implementation strategy is required (Crandall & Crandall, 2008, p. 374). The formulation of creative business ideas is not beneficial if there is no plan in place for proper execution. Additionally, the organizational structure of the business can be strengthened when the management takes time to analyse various ways of implementing plans in an efficient manner. Business ideas can originate from any member of staff but getting the company to accept the execution of these new ideas requires the involvement of the staff in some the planning. It is not compulsory that all the individuals should give their ideas, but departmental managers can be involved in the process right from the start particularly concerning the manner in which key changes will have an impact on their respective departments. These managers may then be able to communicate with their staff in order to get the company involved executing the implementation strategy as well as broadening the scope and outlook of the process. 3 Governance and stakeholders 3 Culture and leadership 5 Business model 8 Business structure 10 Conclusion 12 Bibliography 14 Introduction In order to increase the effectiveness of new ideas in the business, an efficient business implementation strategy is required (Crandall & Crandall, 2008, p. 374). The formulation of creative business ideas is not beneficial if there is no plan in place for proper execution. Additionally, the organizational structure of the business can be strengthened when the management takes time to analyse various ways of implementing plans in an efficient manner. Business ideas can originate from any member of staff but getting the company to accept the execution of these new ideas requires the involvement of the staff in some the planning. It is not compulsory that all the individuals should give their ideas, but departmental managers can be involved in the process right from the start particularly concerning the manner in which key changes will have an impact on their respective departments. These managers may then be able to communicate with their staff in order to get the company involved executing the implementation strategy as well as broadening the scope and outlook of the process. Governance and stakeholders Corporate governance is a connection between the stakeholders, which is employed in the determination and control of the performance and direction of companies (Hitt, Ireland and Hoskisson, 2011). It determines the manner in which the shareholders can make sure that managers develop and implement strategic decisions, which best serve the best interests of the shareholders and not interests of the managers at the expense of the shareholders. When internal governance mechanisms are not present, markets for corporate controls, which are additional governance mechanisms are likely to be activated. Corporations utilize several mechanisms to achieve governance in the contemporary corporations including Board of directors, Executive compensation, ownership concentration and market for corporate control. The main aim of governance mechanisms is the prevention of severe issues that may take place as a result of the separation of ownership as well as control in large organizations through positively impacting the behavior of managers. The capabilities of governance mechanisms to guide the actions of top-level managers in the direction of the objectives that are favored by the shareholders are reliant on the appropriate blend of mechanisms in use. In situations that involve the large corporations, which are public owned, a varied group of owners works with skilled managers to supervise the strategic decision process of the company, and compensates them for the services they offer. The managers mainly concentrate on decision making as well as development of strategies and without this kind of managers, owners would not have the ability to dedicate themselves to in risk bearing. The strategic attractiveness of companies can then be restricted to capacity of the owners in regards to management. This effective separation of ownership from control allows specialization by the managers and owners resulting in some potential costs for the owners through creation of an agency relationship. The possibility of conflict of interest occurring between managers and owners is developed by the designation of the responsibilities associated with making decisions and management by the owners to the managers. Thus, managers may instigate actions that may not be preferred by the owners through the selection of strategic alternatives that serve the interests of the managers instead of those preferred by the owners or the shareholders. Diversifying products can be advantageous to the managers and the shareholders; however, it may also be a source of problems for the company (Gospel and Pendleton, 2005). Managers may seek higher levels of diversification of products than the levels preferred by the shareholders in order to seize the available opportunities that are accessible to managers and are of benefit to owners. Usually, increased diversification inspires growth of the organization and its growth is positively connected to compensation by managers. Therefore, through diversification towards a greater extent than may be favored by the shareholders, managers may have the ability to enjoy the increased degrees of compensation that is associated with the management of larger companies. Additionally, increased diversification may decrease the employment risks of the managers since the company will be less affected by a decrease in demand for one product when there is production and sale of more than one commodity. Owners may further benefit from the decision of the managers towards the diversification of the products of the company to the point when returns on investments at the margin stop being positive (Furrer, 2011, p. 21). This means that diversification is beneficial to owners only when it has a positive impact on the value of company. Nonetheless, some organizations may experience over-diversification regardless of the lack of profitability in the business they consider most dominant. Owners may also want excess funds to be returned through dividends in order for the control the decisions that affect reinvestments. In order for the diversification of a company to reach the levels where the benefits of the shareholders are optimal, managerial independence should be controlled by the board of directors of the company or through other governance mechanisms, which encourage the managers to make tactical decisions, which favour the shareholders. It is imperative to note that the establishment and utilization of governance mechanisms comes at a cost as the agency incurs some expenses. The agency costs include those associated with incentives, enforcements and monitoring expenses as well as outstanding losses, which are incurred by the principals, as they are not able to guarantee total compliance through monitoring engagements. Culture and leadership Meaningful connections are evident between organizational culture and the implementation of strategies as all forms of organization cultures have considerable connections with the process of implementation, but the degree of the effect of culture ranges from most effective to the one with the least effect (Kozami, 2005, p. 373). Investigations on the manner in which the development programs of organizations and the way it is applied inspire a company to change its culture, the operating processes and structure concluded that a structure that is supple and adaptable workers willing to initiate process changes are imperative to the production of better-quality products at the lowest costs possible. A successful enterprise resource planning implementation is connected in a positive manner to organizational culture in regards to learning and development, decision making of a participative nature, sharing of power as well as risk tolerance and conflicts, which together constitute a part of the cultural environment of an organization. Studies in the hindrances of successful implementation of strategies identified inadequate sharing of information, accountability, unclear responsibility and working against the power structure of the organization lead to unsuccessful processes of implementation. On the other hand, investigations on the significance of human resources in the implementation of strategies in companies revealed that is a the implementation is to succeed, then the top management should be greatly involved in tracking and reviewing the progress of every strategic program that is developed by the organization. In the event that the structure and culture of an organization are not aligned with the suggested strategy and the new conduct needed, the implementation process of the strategy will be undoubtedly defeated. An organizational culture that supports values and principles in new strategies results in successful implementation of strategies in organizations. Additionally, approximately eighty-six percent of the most successful organizations consider culture that is aligned to strategy as a highly considerable aspect compared to fifty-five percent of the less successful organizations. As far as strategy implementation is concerned, a well-developed strategy and an efficient pool of skills along with human capital are exceptionally significant resources for the success of strategies while poor leadership is among the key obstacles of successful strategic implementation. Executives as well as top management should put emphasis on several interfaces in the organization. One major challenge of effective strategy implementation is making sure of acceptance by the employees and directing their capacity and understanding of the business in the direction of the new strategy and thus the need for an operational leadership overshadows any other aspect. When operational leadership does not exist, conflicting priorities will lead to inadequate coordination since the employees will have suspicion that the top management would rather avoid possibly intimidating and uncomfortable situations. Another dynamic of leadership entails the enhancement of communication in the organization (Walker, 2011, p. 300). Vertical communication that is blocked has an especially negative impact on the capacity of a business to execute and polish its strategy. Generally, CEOs emphasize on reputation and branding with the aim of prioritizing internal communication. Streamlining processes, alignment of the structure of the organization, coordination of activities and ensuring that employees remain motivated while having a commitment to implementation of strategies are the main responsibilities of leadership. The role of the board is to make sure that consistency in the allocation of resources, the intended strategy of the firm and processes, this makes a lack of coordination in functions and insufficient down the line skills and development in leadership the main hindrances of implementation of strategies. The significance of leadership can be classified into three main roles that include management of the strategic process, relationships and training of managers, and commitment and leadership by the top-level management is important in the implementation of strategies. Comparatively low involvement by leaders as far as strategy implementation is concerned, has previously resulted in fractional strategy success in companies. Studies have examined the impact of hierarchical leadership on the implementation of strategies and there have been conclusions that it is when the efficacy of leaders at varying degrees is considered that considerable improvement in performance took place during the implementation of strategies. Implementation includes various dynamics some of which may be altered directly while some can only be changed in an indirect manner. Business model All through most of the contemporary business history, organizations have tried to unlock value through aligning their structures with their strategies. For example, with the advent of mass production in the nineteenth century, companies created economies of scale through the centralization of core functions such as operations, finance and sales. Decades later, as companies were diversifying offerings and shifting into new regions, a rival model developed with companies like General Motors creating business units that who structure was based on the its products and geographical markets. The business units that were smaller had to sacrifice some economies of scale but had more flexibility and adaptability to the local conditions. These business models that are centralized through function against comparatively decentralized by region and product, appeared durable for a prolonged time mainly become the advancement of business organization was legitimately incremental (Hill and Jones, 2013, p. 20). Undeniably, the product division structure continued to be the dominant model for more than half a century, however, with the intensification of competition in the last twenty-five years of the twentieth century, challenges with the two models became clearer and organizations looked for new means of organizing themselves to unravel corporate value. Numerous multinational embraced a matrix arrangement in the hope that they would be able to retain their economies of scale in regards to centralized functions as well as the flexibility of geographical business units and product lines. However, the operation of matrix organizations remained challenging since the managers who operated the matrix approach were forced to manage the edicts of the two masters that resulted in conflicts and interruptions. In the nineties, the reengineering movement for business processes developed an additional model that the companies organized around their processes rather than their conventional product, geographical and functional boundaries (Hill and Jones, 2013, p. 19). However, units that are focused on multiple processes continue to have problems in the coordination and alignment of their activities as a silo is a silo regardless of whether it is a business process, product group or a function. In more recent times, there has been reference to networked and virtual organizations that operate across conventional boundaries as well as the Velcro organizations, which denotes the companies that are able to be dismantled and put back together in a manner that will react to the evolving opportunities. The incessant search for new organizational structures is informed fundamental changes in the form of the competition as well as the economy. To begin with, advantage presently results less from management of financial and physical assets and more from the degree to which companies are able to align the intangible assets such as the knowledge of its workers, IT and research and development to their customers’ demand. Secondly, the challenges and opportunities afforded by globalization are obligating organizations to revisit numerous assumptions concerning the management and control of their intangible and physical assets. Presently, companies such as BlackBerry are able to manufacture some components of their products in one place, carry out assembly in another and service the customers from call centres in a very different part of the globe. This scattering results in demands for newer structures with the aim of aligning outsourced and internal units all over the globe. Since organizations have been struggling with these issues, most of them have found themselves entangled in expensive and frustrating cycles in regards to organizational change. Restructuring churns are costly and every so often create newer problems for the organization that are as bad, or sometimes worse than the ones being solved. Workers need time to embrace the new structures and significant implicit awareness is lost in the process, as the employees who are dissatisfied leave. Additionally, organizations become burdened with remnants of previous decisions that affected the organization like out-dated domestic and regional head offices as well as legacy IT infrastructure among others (Jensen and Bard, 2003, p. 7). Considering the challenges and costs involved in finding structural ways of unearthing value, it is fair to consider whether structural change is to appropriate instrument for the job. Business structure Structure and strategy are connected in such a manner that if one is changes, then the other will also automatically change and for a long time, structure had been considered as being independent from strategy. Revision of structures is in most cases considered as a means of enhancing efficiency, promoting teamwork and creating synergy or reducing costs (Kozami, 2005, p. 317). The fact that strategy and structure are reliant on each other is aspect that has been less obvious as the most competent, team-centred and synergic structure can be created, but the company still remains at the same place or in a worse position. Structure is not merely an organization chart as it entails individuals, procedures, technology, processes and positions among other connected aspects that make up the organization. It informs the manner in which all the parts, pieces and processes work in harmony and is supposed to be completely integrated with strategy in order for the organization to realize objectives and mission. It can therefore be concluded that structure is instrumental in the support of strategy. In the event that an organization decides to make changes to its strategy, its structure must also be altered so that it can support the newly adopted strategy since if it does not, the structure will act in the same way as a bungee code in that, it will pull the company back to its previous strategy. This is the case since structure informs strategy and the actions of the organization are responsible for defining strategy. A change in strategy implies instigating changes in all the activities of the organization. In the cases where organizations change their structure and not their strategy, the strategy will usually changes to align with the new structure. All of a sudden, the management will become aware that the strategy of the organization has shifted in a manner that is not desirable and seems to have done it on its own. It is impossible to direct it to do something for any amount of time except if the strategy is being supported by the structure. The whole manner in which an organization carries out its activities is what is considered as strategy, and since structure and strategy are connected, all major changes by the company are supposed to consider carefully all aspects of the structure that is needed to support the strategy (Rao, Rao and Sivaramakrishna, 2008, p. 196). This is the only way that prolonged improvements can be implemented with all the components of the organization including the employees being required to be focused on providing support for the company’s vision and direction. The manner in which all the activities are carried out and their operation should be integrated so that all the resources and activities support the company’s strategy. The top management of a company cannot just release a proclamation concerning a new strategy, vision and direction and expect all the employees to adhere to it. In order for such a tactical shift to be implemented, a total change is needed within the organization itself and the core aspects of the organization have to be recreated or the existing structure will result in the new strategy failing and forcing the company to revert to the old strategy without any form of involvement by the top management. Issues of leadership and employees end up being more important that previously realized. This is where companies to realize their focus on maximizing revenues have to be balanced by a similar emphasis on the implementation of change. Companies should not be left with un-implemented reports as a consequence of adopting directives that will ultimately fail. It is impossible to make any improvements to strategy, maximize revenue and enhance the performance of a sales effort without considering aspects such as the employees, culture of the organization, its structure as well as communication of the organization or a section of the organization that is implementing the change. The decision to change either the structure or the strategy needs a lot of effort to change the other; however, changes to the structure must be comprehensively considered and founded on a detailed analysis of cause and effect. As structure is not just changed for the sake of it, as changes that will be in support of that strategy have to be made. Similarly, implementing a better leadership and approach to engagement in an organization or making changed to the organization chart without an evaluation of the manner in which it will affect the ability of company to carry out its present strategies, is a recipe for failure. Conclusion The biggest threat to organizations when generational changes come upon them is the desire to sit back and do nothing (Smith & Graetz, 2011, p. 59). However, when the strategy becomes obvious as leading to total failure, the they find themselves panicking or proceeding with strategies that do not have the capability to fulfil or hedge till is becomes too late to take any action that will have a positive effect. In order for new business ideas to be implemented in an effective manner, companies should invest in training at all the phases of the process. For example, at least sixty days before the implementation of new business ideas, the staff should trained on the pending changes along with an introduction of the manner in which these changes will be beneficial to the company. The trainings should continue throughout the entire process of implementation while taking input from the employees on the manner in which the process can be made smoother. The implementation of new ideas may have an impact on vendors as well as customers; therefore, the implementation strategy will need to consider any changes that will have an impact on the entities utilized for the business. Targeted marketing research may also be instrumental in in providing indications of the manner in which the changes will affect the company before any implementation. Additional, the implementation of change becomes simpler when communication in the company is free and open and when employees are encouraged to provide their input on the proposed adjustments. 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Walker, R. 2011, Strategic management communication, South-Western Cengage Learning, Australia. Read More