Traditional, Contemporary, and Emerging Approaches to Strategy Execution - Research Paper Example

Approaches to Strategy Execution Introduction Strategy execution, or interchangeably strategy implementation, can be referred to as a process through which a developed strategy is put into action. Although the term strategy execution has not been clearly defined yet, some scholars have tried to distinguish this process from other concepts of strategic management. Thinkers like Paul Stonich (as cited in MacLennan , 2011) have distinguished strategy formulation and strategy execution describing that the former is about in which path the organization is going whereas the latter is about how to get the planned path. In his words, the strategy execution is the “process of indirectly manipulating the pattern of interactions an organization has with its environment in order to achieve its overall objective” (MacLennan, 2011, p.11). However, this process deals with development and management of various systems to achieve better and integrated working of people, structures, and resources. This paper will review traditional, contemporary, and emerging approaches to strategy execution. Traditional Approaches to Strategy Execution Conventionally, top executives believed that strategy implementation is just an activity followed by strategy development and hence they did not give much emphasis on this process. In contrast, traditional approaches held the view that strategy formulation was the one and only process that determined organizational success. In addition, it was discovered that traditional approaches to strategy execution were not effective for several reasons. Firstly, traditional theories considered strategy execution as a simple process that did not need extensive operational frameworks to be put into practice. According to Galpin (2005), under traditional approaches, managements did not pay proper attention to implementation activities beyond the first few months following the strategy development. In case of marketing strategies, traditional approaches in promoting a product or service became generic immediately after the implementation and therefore they were copied easily. It has been also identified that conventional approaches often failed to ensure effective employee contributions to strategy implementation. It is clear that traditional management models have not fostered employee empowerment. Traditional management approaches held the view that employees have little role in strategy formulation and execution, and hence older business models could not take advantages of employee contributions. Scholars opine that conventional strategy execution policies have never focused on intangibles such as people and processes that were inevitable in developing a sustainable platform for implementation. Moreover, traditional strategies were designed to meet short term financial objectives rather than achieve long term business sustainability. As a result, managements were forced to restructure their business policies frequently and this process inevitably raised the operating expenses of firms. Recent researches on the field have explored major limitations of a traditional strategy execution approach. Among these, increased time consumption is identified to be the key disadvantage. Since traditional models had not designed a specific and systematic framework for strategy execution process, they often faced huge operational barriers and hence took long time to overcome such difficulties. Naturally, the increased time consumption caused organizations to exceed their budgeted expenses associated with the strategy implementation. In addition, majority of the top executives had not possessed sufficient skills those required to coordinate different processes and procedures related with a strategy execution. Under the traditional approaches, implementation activities and key tasks were not adequately defined. Therefore, top executive could not often efficiently deal with implementation procedures. Furthermore, there were not sufficient information systems to monitor implementation processes and post-implementation activities. Unlike the current approaches, traditional strategy execution policies did not try to analyze whether or not the implemented strategy had produced expected results. Such a situation caused the organization to continue even a poorly performing strategy until the financial statements prepared at the end of the fiscal year show an operating loss. Henry Mintzberg (as cited in Barnat, 2005) has proposed a model depicting traditional approach to strategy execution. Mintzberg’s model suggests that conventional strategy implementation approach focuses only on deliberate strategies and often organizations begin strategy execution procedures even before the mission, goals, and objectives were clearly structured. He says that the phase of strategy execution precedes the strategy development stage under such circumstances and strategies so framed are called emergent strategies. This model adds that emergent strategy execution involves resource allocation even though a company has not unambiguously selected its strategies. Mintzberg clearly indicates that a strategy hardly affects an organization until it is executed, whether it is an emergent strategy or a deliberate strategy (Mintzberg’s model). In addition, majority of the traditional approaches did not research on the far reaching impacts of the proposed strategy on organizational performance. As a result, many of the executed strategies failed after a short term successful running. Many scholars have pointed out that the element of communication had little role in traditional strategy execution, which reduced the efficiency of the implemented strategy. Evidently, the traditional strategy execution approaches overemphasized structural aspects. Management experts argue that such a strategy greatly reduced the scope of strategy implementation since other factors such as cultural and human resource aspects also had to be essentially considered while implementing a new strategy. In addition, the traditional frameworks never tried to deal with organizational changes that would result from the proposed strategy execution. Researchers argue that such unplanned strategy implementation activities greatly impacted the smooth flow of firms as employees and other organizational elements could not effectively cop up with it. Finally, due to the limitations of traditional approaches, top executives could not evaluate how effective an implemented strategy was. Contemporary Approaches to Strategy Execution The emergence of globalization liberalized international trade barriers and greatly promoted the idea of cross border movement of capital, people, technology, and ideas. This concept totally restructured the way organizations strategically operated, mainly because of mutual sharing of ideas. Furthermore, business organizations identified that ineffective strategy execution was the major reason why they failed to transform a well planned strategy into business success. Hence, they realized that they would be thrown out of the market unless the strategic management practices are immediately redesigned. Firms understood the fact that “strategy is easy, but execution is hard” and therefore even a good strategy may not produce sustainable competitive advantages if it is poorly implemented (Getz, Jones & Loewe, 2009). Hence, modern managements have really comprehended the significance of strategy implementation and consequently they have developed a process called migration management in order to effectively link both strategy development and strategy execution. Evidences suggest that a migration management strategy would greatly assist an organization to avoid unnecessary risks associated with a strategy implementation. Contemporary approaches to strategy execution consider this process as a dynamic activity within strategic management process. In order to promote the significance of strategy implementation process, a number of theoretical frameworks have been developed. Among these, the conceptual model is more important and is well known for its simplicity and relevance. It argues that there is a direct relationship between efficacy of strategy implementation and the level of organizational performance. The model is illustrated below. (Source: Sorooshian., Norzima & Rosnah, 2010) Recently, organizations, especially multinational corporations, take several organizational issues into account before implementing a strategy. In the view of Sorooshian, Norzima, Yusof, and Rosnah (2010), a failed strategy implementation process would not only waste a considerable amount of money and time but also result in a lower employee morale and diminished trust in top level management; and the current approaches hold the view that a strategy execution process may cause changes to general culture, structure, or management system of the whole organization. The contemporary management models specifically emphasize that efficacy of top level management is undoubtedly crucial for a successful strategy implementation. Hence the top executives must have the final authority to take decisions on various matters. According to Sorooshian, Norzima, Yusof, and Rosnah, (2010), in contemporary approaches, three organizational factors such as leadership, structure, and human resources play a significant role ensuring an effective strategy implementation process. Recently proposed models claim that leaders have a crucial role to play in designing a comprehensive executive structure that determines the way a strategy is implemented. Many of the modern frameworks suggest that top level management must make sure the active involvement of middle management in a strategy implementation process. According to a study conducted by Bourgeois and Brodwin (as cited in Parsa, 1999), CEOs approaches to a strategy execution process are of five types such as commander, organizational change, collaborative, cultural, and coercive. The first two approaches are traditional and have been currently replaced with the next three. Under collaborative and cultural approaches, a CEO tries to improve strategy execution process by extending the participation base into the planning process. A CEO/manager makes sure the involvement of different people to discuss strategy implementation under a collaborative approach. It is advisable for organizations to have managers who are well informed and possess broader mental capabilities. By practicing this approach, the top level management can ensure a strong people commitment as different people participate in the whole process from formulation to implementation. One of the major limitations of this approach is that a powerful manager may influence the anticipated outcomes of this process even though different people are involved in the discussions. Another pitfall of this approach is that “since the strategy formulation is a result of either a consensus or majority opinion or is negotiated, the best suited strategy may not be accepted and implemented” (Phadtare, 2011, p.169). Under a cultural approach, the low level management is given the opportunity to take part in the strategy formulation and implementation. Here, the manager goes on with the strategy implementation process by ensuring the support and cooperation of his subordinates. This approach is recommendable for firms when participants are well informed and possess broader mental abilities. In addition, firms must have access to a large volume of resources in order to practice this approach. It is observed that a cultural framework is beneficial for eliminating the barriers between strategy developers and strategy executives. This model also assists the organization to ensure a strong commitment from the part of bottom level employees. Increased time consumption is the most important limitation of this approach. In many cases, it has been identified that the cultural strategy execution approach results in homogeneity. Finally, there will be a strong resistance to change in the case of firms having strong cultures. Although CEOs have a general inclination to practice a coercive approach, experiences show that such a strategy implementation would probably fail in the long run. As Sorooshian et al (2010) state, organizational structure is an important part of effective strategy execution. As they point out, in contemporary models, structure is the design of an organization through which the whole enterprise is operated; hence, it would be difficult to adopt course of action and allocate resources in a strategy implementation process unless the organizational structure is not considered. According to Sorooshian et al (2010), since organizations need to modify their strategies in terms of economic, technological, and demographic variation, the process of strategy implementation without considering organizational structure would lead to economic inefficiencies and administrative issues. Modern business managements consider human resource as their most valuable asset as it has the potential to add value to organizational efficiency through effective diversification. Contemporary approaches believe that human resources are criteria building blocks of a strategy and they have the ability to determine what a firm needs to achieve and what it can do to meet of the identified needs. There must be a clear relationship between an organization’s strategy and its level of human resource employment. Furthermore, the element of human resource is considered to be a factor in determining the performance level of a firm and hence an effective strategy execution without taking this element into account would be difficult. In short, an effective strategy implementation process is dependent on factors like leadership, organizational structure, and human resources. Hence, the conceptual model can be also presented as shown below. (Source: Sorooshian et al, 2010) Emerging Approaches to Strategy Execution Obviously, modern business environments are continually undergoing tremendous changes. These changing business environments demand new approaches to strategy implementation. In order to effectively respond to this need, organizations are timely modifying their strategy execution approaches. As a result of the increasing significance of employee involvement in organizational performance, emerging strategy execution approaches give great emphasis on the concept change management which is a structured process intended to transform people and organizations from the current state into planned future state. This process would greatly assist an organization to prepare its employees to accept changes in their current business environment and thereby to avoid distractions. The Pryor’s 5Ps model is an emerging approach to strategy implementation. As per this, the five basic elements such as purpose, principles, processes, people, and performance constitute the framework of this concept. As Tan and Mattthews (2009) argue, this approach includes elements that play a crucial role in promoting an effective strategy execution. The major advantage of this approach is that it can be applicable to all types and sizes of organizations. Similarly, a wide variety of other management theories and concepts support this model so that this model can be applied together with other theoretical frameworks. Furthermore, this approach is comprehensive enough to include all the key components of a successful strategy execution. Emerging approaches to strategy implementation specifically focus on the communication factor as modern managements have realized the significance of communication in organizational affairs. Modern theorists hold the view that an ineffective communication would make a strategy inefficient even though it was formulated and implemented well. Some of the developing frameworks highlight organizational planning and competitive analysis as the building blocks of an effective strategy execution, whereas some others emphasize on proper treatment of human resource element. During the last few decades, financial barriers and unexpected legal and institutional barriers led to the failure of some strategy implementations. Hence, modern management experts strongly argue that new models must be restructured so that organizations can be flexible enough to overcome difficulties associated with different unforeseen operational barriers that would develop during the course of strategy formulation and implementation. Although majority of the emerging models can accurately point out why a strategy implementation becomes ineffective, most of them fail to suggest better solutions. The major factor that distinguishes emerging approaches from a traditional or contemporary approach to strategy execution is that most of the emerging approaches clearly define the post implementation phase while the two other categories say little about post the implementation processes. Conclusion In total, approaches to strategy execution have varied over time. Under traditional approaches, strategy implementation was considered just as a subsidiary process of strategy formulation. However, modern managements comprehend the significance of effective strategic execution and developed extensive frameworks to resolve troubles identified with traditional approaches. Finally, emerging approaches to strategy execution focus on elements like communication, organizational planning, and competitive analysis. They also clearly point out the importance of monitoring post implementation processes. References Barnat, R. (2005). Mintzberg’s model. Retrieved from http://www.strategy-implementation.24xls.com/en104 Galpin, T. J. (2005). Making strategy work. Strategic Performance Group, LLC. Retrieved from http://www.spg-consulting.com/newsletters/2005-q4-book-review Getz, G., Jones, C & Loewe, P. (2009). Migration management: An approach for improving strategy implementation. Strategy & Leadership, 37(6), 18-24. MacLennan, A. (2011). 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