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WHAT SPECIAL CONSIDERATIONS APPLY WHEN SEEKING INNONATIVE STRATEGIES AND HOW ARE MANAGERS SELECTED AND MOTIVATED TO IMPLEMENT STRATEGIES? Introduction Organization has been defined in several ways. Leavitt (1962) defines it as a specific configuration of structure, people, task and techniques. Structure describes the form of departments, hierarchy and committees. It influences the organization's efficiency and effectiveness. People refer to the skills, attitudes and social interaction of the members of the organization. Task refers to the goals of the individual and the organization. Techniques refer to the methodical approach used to perform tasks. Organizational structure thus refers to the institutional arrangements and mechanisms for mobilizing human, physical, financial and information resources at all levels of the system. Designing organizational structures Some important considerations in designing an effective organizational structure are:  Clarity: The structure of the organization should be such that there is no confusion about people's goals, tasks, style of functioning, reporting relationship and sources of information.    Understanding: The structure of an organization should provide people with a clear picture of how their work fits into the organization. De-centralization: The design of an organization should compel discussions and decisions at the lowest possible level. Stability and adaptability: While the organizational structure should be adaptable to environmental changes, it should remain steady during unfavorable conditions.

Principles of organization structure Modern organizational structures have evolved from several organizational theories, which have identified certain principles as basic to any organization. 1. Specialization Specialization facilitates division of work into units for efficient performance. According to the classical approach, work can be performed much better if it is divided into components and people are encouraged to specialize by components. Work can be specialized both horizontally and vertically. Vertical specialization in a research organization refers to different kinds of work at different levels, such as project leader, scientist, researcher, field staff, etc. Horizontally, work is divided into departments like genetics, plant pathology, administration, accounts, etc. Specialization enables application of specialized knowledge which betters the quality of work and improves organizational efficiency. At the same time, it can also influence fundamental work attitudes, relationships and communication. This may make coordination difficult and obstruct the functioning of the organization. There are four main causal factors which could unfavorably affect attitudes and work styles. These are differences in:     Goal orientation; Time orientation; Inter-personal orientation; and The formality of structure (Lawrence and Lorsch, 1967).

2. Coordination Coordination refers to integrating the objectives and activities of specialized departments to realize broad strategic objectives of the organization. It includes two basic decisions pertaining to:

 

Which units or groups should be placed together; and The patterns of relationships, information networks and communication (Anderson, 1988).

In agricultural research institutions, where most of the research is multidisciplinary but involves specialization, coordination of different activities is important to achieve strategic objectives. Efficient coordination can also help in resolving conflicts and disputes between scientists in a research organization. Hierarchy facilitates vertical coordination of various departments and their activities. Organizational theorists have over the years developed several principles relating to the hierarchy of authority for coordinating various activities. Some of the important principles are discussed below: Unity of Command: Every person in an organization should be responsible to one superior and receive orders from that person only. Fayol (1949) considered this to be the most important principle for efficient working and increased productivity in an organization. The Scalar Principle: Decision making authority and the chain of command in an organization should flow in a straight line from the highest level to the lowest. The principle evolves from the principle of unity of command. However, this may not always be possible, particularly in large organizations or in research institutions. Therefore Fayol (1949) felt that members in such organizations could also communicate directly at the same level of hierarchy, with prior intimation to their superiors. The Responsibility and Authority Principle: For successfully performing certain tasks, responsibility must be accompanied by proper authority. Those responsible for performance of tasks should also have the appropriate level of influence on decision making. Span of Control: This refers to the number of specialized activities or individuals supervised by one person. Deciding the span of control is important for coordinating different types of activities effectively.


Departmentalization by Users is grouping of both activities and positions to make them compatible with the special needs of some specific groups of users. As organizations increase in size and diversify. rural marketing and administration. 1937). Departmentalization Departmentalization is a process of horizontal clustering of different types of functions and activities on any one level of the hierarchy. functional departmentalization may not be very effective. Departmentalization by Territory or Geography involves grouping of activities and positions at a given location to take advantage of local participation in decision making. market. functional departments can be further differentiated by products and purpose or type of research. In a research organization the groupings could be research. agricultural engineering. Other common bases for departmentalization can be time of duty. personal things and place (Gullick and Urwick. In an agricultural research institution. function. The organization has to be further divided into separate units to limit the span of control of a manager to a manageable level (Luthans. Product Departmentalization refers to the grouping of jobs and activities that are associated with a specific product. Departmentalization is conventionally based on purpose. 1986). product. Departmentalization by Process or Equipment refers to jobs and activities which require a specific type of technology. distribution channel or services. process. machine or production process.3. extension. Functional Departmentalization is the basic form of departmentalization. production. 4|Page . It refers to the grouping of activities or jobs involving common functions. regional research stations are set up to take advantage of specific agro-ecological environments. The territorial units are under the control of a manager who is responsible for operations of the organization at that location. number of employees. 1986). In agricultural research institutions. It is closely related to the classical bureaucratic principle of specialization (Luthans. Such departmentalization usually offers economic advantage.

The degree of centralization and de-centralization depends on the number of levels of hierarchy. Administrative employees are considered staff. O'Donnell and Weihrich. that extend throughout the hierarchy (Koontz. scientists and researchers form the line. In contrast. 1980). or to the superior-subordinate linkages. decision making in a centralized type of organizational structure is at higher levels. centralization and de-centralization could be according to:    Geographical or territorial concentration or dispersion of operations. Line employees are responsible for achieving the basic or strategic objectives of the organization. It is also an important aid to information processing and coordination. 1988). Specialized staff conducts technical work that is beyond the time or knowledge capacity of top 5|Page . The relationship between line and staff is crucial in organizational structure. The staff may be specialized. but to varying degrees. Modern organizational structures show a strong tendency towards de-centralization. while staff plays a supporting role to line employees and provides services. and their main function is to support and provide help to scientists to achieve organizational goals It is the responsibility of the manager to make proper and effective use of staff through their supportive functions. De-centralization and Centralization De-centralization refers to decision making at lower levels in the hierarchy of authority. specialization and span of control. 5. Every organizational structure contains both centralization and de-centralization. degree of coordination. general or organizational (Anderson. According to Luthans (1986). Line and Staff Relationships Line authority refers to the scalar chain. In an agricultural research organization. Functions Extent of concentration or delegation of decision making powers. design and efficiency.4. The extent of this can be determined by identifying how much of the decision making is concentrated at the top and how much is delegated to lower levels.

they could frequently face conflict situations. an innovation strategy needs to be truly inspiring and should describe a desirable future state for the company. Opportunities and possibilities formulated in an innovation strategy should actually provide input and shape the overall corporate strategy. Organization staff (such as centralized personnel. Rather. not an innovation strategy. the innovation strategy needs to be ambitious in terms of providing the basis to break away from the competition. and create new spaces. Again. goals. However. Third. This is a high bar as it rules out a single-minded focus on incremental add-ons to the business. accounting and public relations staff) provides services to the organization as a whole. Too many innovation strategies tend to be ―me too‖ (and mostly incremental). Special considerations when seeking innovation strategy First. they fail to deliver the truly sustainable competitive advantages that can only be derived by performing above the overall market growth level and exceeding average profit margins. cultures and the strategy in all practicality is probably just a product roadmap of business extensions. such as conducting market research and forecasting. the innovation strategy should aim higher and help the company outpace anybody else in a contested space. It is often hard for companies to open up and avoid merely 6|Page . Consequently. If the so-called strategy does not seek to push those boundaries. beat the competition. General staff consists of staff assistants to whom managers assign work. Line and staff personnel have different functions. Even if executed according to plan. A manager has to use his skills in resolving such conflicts. the process of developing the strategy needs to be open. Their role is to integrate different operations across departments.The innovation strategy should be derived from the corporate strategy to clearly define how the organization sees opportunities for growth and makes explicit choices about the role of innovation. it requires the organization to aim higher. Second.Open means bringing the outside in and working under the assumption that people may have insights that do not exist within a particular company‘s boundaries.

Innovation sometimes requires more time than originally estimated.settling. At the same time. An innovation strategy and the respective execution should be capable of adapting the moment there are new insights. This typically does not fit with the classic annual corporate planning cycle. Fourth.e. even if that requires moving in multiple directions to raise the aspiration you had at the beginning. i. and it reflects the available capabilities. an innovation strategy needs to be adaptive and to evolve over time. as opening up the innovation pipeline is not just a matter of mindset. technologies and gaps that may need to be filled. and where to invest and compete. as it is grounded in the reality of a company‘s environment. 7|Page . allow adjustments to the desired course and maybe even allow an organization to cut its losses if required. By the way. new technologies play an important role in making openness commercially feasible. Being open is just a great way to raise the bar in terms of ambition and to more quickly get to more mature plans. incorporate learning. this should not be mistaken as an excuse for failing to come up with a great innovation strategy based on internal ideas and conviction. It is important to describe with great precision which specific innovation initiatives should be pursued. an innovation strategy must also be specific to the time in which it is developed. Finally.

8|Page . Strategic planning is also an organizational management activity that is used to set priorities. That kind of thinking can bring a small business down. Most entrepreneurs have their ideas and plans in their heads and since they are the ones running the business. focus energy and resources. establish agreement around intended outcomes/results and assesses and adjust the organization‘s direct response to a changing environment. A strategic plan however is a document used to communicate with the organizational goals. Strategic planning According to Wikipedia. Small businesses need to recognize that in order to reach their desired level of success it is necessary to create a plan. the needed actions to achieve those goals and all of the other elements developed during the planning exercise. strengthen operations. they often feel there is no need to waste time putting it to paper.QUESTION 2: DOES A SMALL COMPANY NEED A FORMAL STRATEGIC PLAN? WHY AND WHY NOT? Introduction Many small companies are aware of strategic planning but have a notion that it is only useful for larger businesses or organizations. Planning is essential to the success of small businesses. values and strategies. Key components of strategic planning The key components of 'strategic planning' include an understanding of an entity's vision. ensure that employees and other stakeholders are working towards common goals. it is necessary to understand its current position and possible avenues through which it can pursue particular courses of action. mission. strategic planning is an organization‘s process of defining its strategy or direction and making decisions on allocating its resources to pursue this strategy. In order to determine the future direction of the organization.

For example. For example. But perhaps most importantly. but teach him to farm and feed him for life"."  Mission: defines the fundamental purpose of an organization or an enterprise. Without a plan. Also managers and business owners need a well-developed strategic plan in order to effectively establish expectations for their employees. A strategy is sometimes called a roadmap .defined as towards the end vision. in order to reach certain points and levels of success. Values drive an organization's culture and priorities and provide a framework in which decisions are made.which is the path chosen to plow towards the end vision. It is a long-term view and concentrates on the future. the path they follow. succinctly describing why it exists and what it does to achieve its vision.  Strategy: defines as a means to the end and these ends concerns the purpose and objectives of the organization. expectations are developed in a void and there is little or no alignment with common goals and strategies. owners and entrepreneurs the necessary framework for developing sound business strategy. For example. They are the things that businesses do. and the decisions they take. A good strategic plan looks 9|Page . It can be emotive and is a source of inspiration. or how it wants the world in which it operates to be (an "idealized" view of the world). Why small businesses need a formal strategic plan A strategic plan helps the various people and work units within an organization to align themselves with common goals. the charity above might have a mission statement as "providing jobs for the homeless and unemployed". These example maxims may set the priorities of self-sufficiency over shelter. The most important part of implementing the strategy is ensuring the company is going in the right direction .Vision: outlines what the organization wants to be. the strategic planning process provides managers. "Knowledge and skills are the keys to success" or "give man bread and feed him for a day.  Values: beliefs that are shared among the stakeholders of an organization. a charity working with the poor might have a vision statement which reads "A World without Poverty.

More so. day-to-day decision making and problem solving will be directly related to long-range and short-term goals. A strategic plan that is well developed. with a strategic plan in place. Furthermore. Conversely. marketing and other strategies will be followed. organizations with solid plans that are being implemented effectively stand a far better chance of surviving tough economic times. When choices are made within the context of a strategic framework. during tough economic times. product/service. strategies. and carefully implemented can launch struggling or underperforming businesses to new heights. and tactics have not been integral to the daily operations. pricing. the organization‘s direction is clearly defined. all employees need to understand the guiding principles of the business and what everyone should be aiming to achieve. properly communicated. Strategic decision making and problem solving assure that the organization‘s vision will be achieved. When the economy turns down. the future of the organization is in the hands of whoever is making choices. Most small business owners have no time and or the resources to invest in days of planning. the need for a solid strategic direction and plan is even more pronounced because the margin for error generally becomes much smaller for most businesses. Why? Because sound strategic direction provided by a strategic plan lays a strong foundation that will support a business during these economic downturns. the business will not be well positioned to withstand the hits delivered by a struggling economy. 10 | P a g e . Because sound goals. If there is no strategic framework. Why small businesses do not need a strategic plan Strategic planning is inappropriate for small companies because: The strategic planning process is one which is very daunting and requires various data to arrive a comprehensive strategic plan. Planning reduces stress by making decisions easier. objectives. the absence of a well-designed and effectively implemented strategic plan will often be felt in a dramatic manner. Another reason is that.out 2 to 5 years and describes clearly what market.

developing a strategic plan requires senior managers to make time and spend days in meetings to formulate. Most small businesses win because they are more nimble. 11 | P a g e . Furthermore. More so. so it makes no financial sense for small businesses to over invest in the effort. small business must continually adjust their strategy so the strategies they develop during a strategic planning session are usually short-lived. Conclusion Despite the fact the one can somehow argue for the fact the small businesses might not necessarily need a strategic plan due to the cost and time involved in developing one I will conclude by saying that every business really needs a strategic plan no matter how small the business is.Also. This is because the plan will keep the business focus and the objectives developed from the plan can serve as a guide for performance to be measured and monitored. quicker to seize unexpected opportunities than their larger competitors. Long term planning can slow them down and kill this advantage. This comes at a big cost for small businesses because most of the top team members usually lead their sales and marketing efforts and taking them off the road to sit in meetings for days formulating a strategic plan has immediate negative impact on revenues. the payoff of strategic planning is often measured in millions of dollars rather than hundreds of dollars.

but in some situations. our historical movement toward democracy brings a negative connotation to autocracy. They ensure that their people have everything they need to be productive and successful. That. This style is reminiscent of the earliest tribes and empires. Introduction Taking a team from ordinary to extraordinary means understanding and embracing the difference between management and leadership. happy and have minimal roadblocks in their path. Conversely. Obviously. 12 | P a g e . Managers are facilitators of their team members‘ success. but monitor them for completion –often under close scrutiny. that they‘re being groomed for the next level. A leader leads based on strengths. doesn‘t mean a blank check to ignore the wellbeing of his subordinate. It is the most common form of leadership. that they‘re well trained. they not only control the efforts of the team. By virtue of their position and job responsibilities. A dominant leader is a leader who is in charge and has total authority and control over decision making. a leader can be anyone on the team who has a particular talent. who is creatively thinking out of the box and has a great idea. it is the most appropriate type of leadership. that they are recognized for great performance and coached through their challenges.QUESTION 3: IN WHAT STRATEGIC CIRCUMSTANCES SHOULD A LEADER BE DOMINANT AND IN WHAT CIRCUMSTANCES SHOULD A LEADER WORK WITH A SHARED VISION? GIVE EXAMPLES TO SUPPORT YOUR VIEWS AND SHOW HOW OTHER FACTORS CAN ALSO INFLUENCE LEADERSHIP STYLE. who has experience in a certain aspect of the business or project that can prove useful to the manager and the team. Circumstances where a leader should be dominant A dominant leadership is characterized by a clear line of authority that gives the leader the power of delegation and the power to control the subordinates‘ level of participation in decision making process. of course.

often where there is little margin for error. Make sure that everyone is exactly where they need to be and doing their job. it can lead to resentment and strained morale. while the important tasks are handled quickly and correctly. Being an effective autocratic leader means being very intentional about when and how demands are made of the team.The dominant leadership style is best used in situations where control is necessary. Making subordinates realize they are respected keeps moral up and resentment low. rigid rules can keep people out of harm‘s way. and being too heavy handed will squelch all group input. It is difficult balancing the use of authority with the morale of the team. It‘s important that you stay fair and acknowledge that everyone brings something to the table. the subordinate staff is inexperienced or unfamiliar with the type of work and heavy oversight is necessary. independent minded teams. even if they don‘t call the shots. It‘s very intuitive to tell people what needs to be done by when. and in highlyprofessional. Too much direct scrutiny will make your subordinates miserable. Here are some things to keep in mind to be an effective when acting as a dominant leader:  Respect your Subordinates: It‘s easy to end up as rigid as the rules you are trying to enforce. dating back to the early empires. 13 | P a g e . every functional team is built on a foundation of mutual respect. Many times. In many ways this is the oldest leadership style. When conditions are dangerous. Good fits for dominant Leadership:    Military Manufacturing Construction It‘s easy to see the immediate goal of this type of leadership: use your expertise to get the job done. It has been known to be very paternalistic. Rigid organizations often use this style.

 Listen. democratic leadership offers a great deal of flexibility to adapt to better ways of doing things. but it helps them do a better job if they know why. even if they aren‘t going to lead to immediate change and being a leader means that your team will want to bring their opinions to you. Everyone is given a seat at the table. In these fast moving organizations. encouraging people to share their ideas. every option for improvement has to be considered to keep the group from falling out of date. even if you don‘t change: We all want to feel like our opinions are appreciated. Ideas move freely amongst the group and are discussed openly. and then synthesizing all the available information into the best possible decision. Circumstance where a leader should work with a shared-vision This leadership style is a very open and collegial style of running a team. The democratic leadership style means facilitating the conversation. you have to make sure you do so consistently and fairly. but hard to trust someone who applies policy differently in similar circumstances. When situations change frequently. it might not do so very quickly. It‘s easy to respect someone objective. It‘s important to be clear that they are heard. Being above board from the outset prevents a lot of miscommunications and misunderstandings. Unfortunately. This style is needed in dynamic and rapidly changing environments where very little can be taken as a constant.  Be consistent: If your role in the team is to enforce the company line. so while it may embrace newer and better methods. and discussion is relatively free-flowing. The democratic leader must also be able to communicate that decision back to the group to bring unity the plan is chosen. no matter the outcome. 14 | P a g e . Explain the rules: Your people know they have to follow procedure.  Educate before you enforce: Having everyone understand your expectations up front will mean less surprises down the road. it is also somewhat slow to make a decision in this structure.

when the time comes. How to be effective with this position:  Keep communication open: If the marketplace of ideas is going to be open for business. and that means there has to be a great deal of exploration and open discussion.  Be ready to commit: In the democratic leadership style. If the conversation begins to stray. you get presented with so many possibilities and suggestions that it can be overwhelming and difficult to commit.  Much of the Service industry: new ideas allow for more flexibility to changing customer demands. you have to choose and do so with conviction. design): ideas need to flow in creative environments to find create new concepts and designs. your role will be to explore the possibilities in depth. 15 | P a g e . It capitalizes on their skills and talents by letting them share their views. Make sure to take note of off-topic comments and try to return to them when they are pertinent. everyone needs to feel comfortable enough to put their ideas on the table.  Focus the discussion: It‘s hard to keep unstructured discussion productive. it is important to have the different areas of expertise represented and contributing input – this is where democratic leader shines.  Education: few places need to be open to different ideas than education. The team depends on the clear and unambiguous mandates to be committed. It‘s the leader‘s job to balance being open to ideas and keeping everything on-topic. both by educators and their students. But as the leader. rather than simply expecting them to conform. remind everyone of the goal on hand and then steer it back.Democratic leadership style can bring the best out of an experienced and professional team.  Consulting: when paid to explore problems and find solutions. Good fits for Democratic Leadership:  Creative groups (advertising. If a decision is very complex and broad. The democratic leadership style thrives when all the considerations are laid out for everyone to examine.

but don‘t apologize: You want the advocates of the solutions that were not selected to understand that their thoughts were considered and had validity.  Explain. 16 | P a g e . however. It is important.or the flow of ideas will slow to a trickle. It‘s important that the decision be communicated. Respect the ideas: You and your team might not agree with every idea. and that‘s ok. but that ultimately you had strong reasons to go a different direction. but you should not apologize for deciding on what you think. that you create a healthy environment where those ideas are entertained and considered --not maligned-.

large. emergent strategies arise from individuals in an organization responding directly to market forces. A simple example of this might be a comic book shop owner setting a strategy for dominating comic book sales in given city. Profits rise and owner recasts the strategy to become the dominant gaming shop in a given city. Most businesses accept and act on this by establishing very structured two-. discrete decisions made by numerous. The manager. order sizes and practices of competitor businesses. midlevel employees unintentionally move an entire organization in a new direction. Their decisions reflect shifts in consumer tastes.and even five-year plans to expand market share or distribution. the stated goals or mission of the business. The pattern typically becomes apparent only after the fact. In most cases. Strategy is a series of plans and decisions developed to enable a company to reach goals and settle objectives. however. three.QUESTION 4: IF EMERGENT APPROACHES TO CORPORATE STRATEGY HAVE ANY SIGNIFICANCE. In essence. profit seeking or not. In some cases. All organizations have a set of objectives that they are aiming to achieve and this is the case whether the organization is small. the advantage of emergent strategy is that it leads a business 17 | P a g e . WHY DO COMPANIES INSIST ON DEFINING AND STICKING RIGIDLY TO PRESCRIPTIVE CORPORATE OBJECTIVES A strategy is a set of guiding principles that. Emergent strategies are characterized by patterns of actions within a business that occur without a clear relationship to. A strategy is therefore about how people throughout the organization should make decisions and allocate resources in order to accomplish key objectives. which means clear and fully formed intentions for where a business should go and how to get there. Virtually every organization will have a set of objectives that will require some form of strategic planning in order to achieve. when communicated and adopted in the organization generates a desired pattern of decision making. which results in an emergent strategy. or even in spite of. but businesses often adopt the change as the new business strategy. notes that profits from tabletop gaming products far exceed that of the comics and shifts resources to beef up gaming inventory. Business strategy implicitly or explicitly draws on deliberate strategy.

Management control becomes unclear as actions to be undertaken are not planned in advance. 18 | P a g e . As such. Group resources need to be allocated between demands of competing operating companies. particularly at the owner or executive level. At best. unstructured business activities remains slim. Removes aspects of rational thinking from decision making. some companies do insist on defining and sticking rigidly to prescriptive corporate objectives because of the reasons discussed below. emergent strategy occurs as part of ongoing organizational activity. rather than what the owner or executive thinks or believes the market wants. Advantages of emergent strategy      Consistent with actual practice in organizations Considers people issues such as motivation Allows experimentation about the strategy to take place Opportunity for inclusion of culture and politics of organization Flexibility to respond to market changes Criticisms of emergent strategy approach       There is a danger of ―strategic drift‖ as objectives is not clear It is more difficult to assess performance as targets are less well defined Impracticable to expect board members to allow business to function without objectives. emergent strategy does not offer a genuine alternative to more traditional deliberate strategy. to embrace the new strategy. Despite the significance of the emergence approach to corporate strategy. the odds of such order manifesting from pure. especially for new businesses operating on narrow margins. Effective emergent strategy does require that the organization maintain the flexibility. By nature. it serves to complement and serve as a corrective measure for deliberative provide what the market actually wants. While a business could forgo a deliberate strategy and rely on an emergent strategy to develop.

2003). establishes 19 | P a g e . Also. businesses do insist on defining and sticking to rigid corporate objectives because objectives can be translated into targets against which performance can be measured and monitored. These set targets monitored and measured ensures the organization does not veer off course and at each point in time can assess how well the organization is performing and what sets to take to ensure the organization performs better to achieve the overall corporate vision. measurable ways. then everyone will know what the goals are and be able to pursue them to the greater extent. Goals provide the clearest way to measure the success of the company. Because resources are usually scarce or never enough organizations have to plan on how to allocate these scarce resources to specific objectives to enable the business reach its full potential. Business objectives allow everyone to be a cohesive unit and be on the same page. It is the main function of the business objectives to provide direction to the company to guide them towards whatever goal has been specified for whatever time period has been listed in the objective. some businesses do insist on defining and sticking to rigid corporate objectives because it gives complex information. A business is lost without goals and that is what corporate objectives are. If the business objectives are written out and clear. By stating or defining the company's goals in specific. businesses do insist on defining and sticking to rigid corporate objectives because of cohesion. A company with clear established goals will know how well the company is doing at different stages to meet the overall objective of the company and provide focus. businesses do insist on defining and sticking to rigid corporate objectives because resources can be allocated to specific objectives and efficiency can be judged. defines and focuses business objectives. it gives direction to the company's efforts and allows every person in the company the chance to work towards those goals. In addition. More so. Business objectives are a great tool for communication with the company and a way to make sure everyone is working together.Prescriptive strategic planning is the term given to a strategy whereby the objectives of the strategy are defined in advance and the main elements are designed and developed prior to the strategy implementation (Lynch. Businesses do insist on defining and sticking to rigid corporate objectives because clear objectives provide focus on the Business. Furthermore.

However. Last but not the least. Shifts in the strategic position of the business due to mid-level decisions may come about as the result of poor or uninformed decision-making at that level. For example. objectives allow the business to be cohesive. Business owners and executives do need to remain cautious about reading emergent strategy into patterns of behavior. driven by the rapid cycling of consumer interests and technical innovation. Also. rational and systematic process. businesses do insist on defining and sticking to rigid corporate objectives because the approach is logical and rational. non-food and international sectors. the approach is logical. The basic premise of using strategy within a company is that the effective allocation of resources to the right areas of the company for the correct purposes will yield a stronger competitive position and provide overall better returns. suggest that tolerance for emergent strategy may need to become inherent for all businesses. formulate. retail service. strategy is a periodic deliberate planning process that is loosely tied to its day-to-day business and resource allocation processes. businesses do insist on defining and sticking to rigid corporate objectives because. The approach views strategy formulation and implementation as a logical. After analysis of the business and its environment. The increasing pace of change in the business landscape. Tesco's planning process resulted in well-defined long-term goals and clear boundaries for its UK core business. This approach makes it possible to organize complex activities and exercise a greater degree of control over different business units. Conclusion For most companies that use strategy to help manage and improve their company‘s performance. and sets targets that performance can be measured. 20 | P a g e . businesses do insist on defining and sticking to rigid corporate objectives because objectives can be translated into targets against which performance can be measured and monitored. select and implement strategies that will allow objectives to be achieved. strategists set well-defined corporate and business objectives.controls.

QUESTION 5: WHAT ARE THE PROBLEMS WITH USING ALLIANCES AND JOINT VENTURES IN INTERNATIONAL STRATEGY DEVELOPMENT? HOW MIGHT THEY BE OVERCOME? Introduction Joint ventures and strategic alliances are a proven tactic for management to secure faster and lower risk growth. The alternatives are to grow organically (100% control but generally slower 21 | P a g e .

40% of joint ventures result in divorce within three years – which is not necessarily a sign of failure. with production and sales networks that competed with the joint venture. But. With such benefits. Strategic alliance projects often fail because of tactical errors made by management. when joint ventures are not properly managed over their life time. the increasing costs of R&D (with the complexity of technology and convergence of it). Danone also believed its local partner was in breach of confidentiality agreements. The divorce took place because Danone accused its joint venture partner (Wahaha) of setting up at least 96 parallel companies. However. strategic alliances are not simple or easy to create.growth). to bypass governmental restrictions expeditiously and to learn quickly from the leading firms in the industry. For example. While Danone ‗controlled‘ the joint venture at board level. and sharing and controlling risks. the Chinese partner had almost total day-to-day control. develop and support. Strategic alliances can be effective ways to diffuse new technologies rapidly to enter new market. Problems associated with using joint ventures and strategic alliance  Lack of trust 22 | P a g e . the French company Danone accepted an exit settlement of 21% below its book value as payment by its local partner of $450m for the 51% majority ownership of their joint venture. there are also potential downsides. The main catalysts for the growth in such alliances are: the increasing internationalization of markets. then the exit costs can be huge. and. Joint ventures and strategic alliances allow faster growth by accessing markets and technology. or with acquisitions (faster growth but demanding on capital and challenging to integrate post-acquisition and secure the forecast benefits). It is essential that companies enter into strategic alliances arrangements with a comprehensive plan outlining detailed expectations. requirements and expected benefits. the growing importance of innovation management (with rapid technology transfer and shorter product lives). after ten years of operating in China with its local partner.

Also different cultures operate in different ways. Only people can trust each other. inability to share risks and the lack of trust lead to an early alliance demise. Therefore. In many alliance cases one company will point the failure finger at the partnering company.  Lack of coordination between management teams Action taken by subordinates that are not congruent with top-level management can prove particularly disruptive.Building trust is the most important and yet most difficult aspect of a successful alliance. The alliance may put the companies in the spotlight causing more competition. lack of understanding and despondent relationships. Dissimilar objectives. and they would most likely end up in a legal battle which could take years to solve if it were settled at all. not the company. If it were to happen that one company would go off on its own and do its own marketing and sell its own product while in alliance with another company it would for sure be grounds for the two to break up. alliances need to be formed to enhance trust between individuals. When the partnering companies do not manage culture well it can also cause problems for the alliance. Some companies enter into alliances to combat industry competitors. especially in instances where companies remain competitors in spite of their strategic alliance. These problems consist of language. Shifting the blame does not solve the problem but increases the tension between the partnering companies and often leads to alliance ruin. Many strategic alliances.  Lack of clear goals and objectives Many strategic alliances are formed for the wrong reasons.  Clash of cultures Cultural clash is probably one of the biggest problems that companies in alliances face. although entered into for all the right reasons do not work. Many alliances fail due to the lack of trust causing unsolved problems.  Difference in operating procedures and attitudes among partners 23 | P a g e . egos and different attitudes to business can all make the going rough. The first thing that can cause problems is language barrier that a company might face.

Other problems that occur between companies in trade alliances are different attitudes among the companies. When problems like this occur it usually makes the other company angry and this could lead to a takeover. managed and monitored with a full commitment of senior 24 | P a g e . By declining to cooperate with others in the area of its core competency. a company can reduce the likelihood of creating a competitor that would threaten its main area of business. internal factors such as lack of competence in critical areas or sheer bad luck.. they must have a significant impact on the companies‘ overall strategic plans and must therefore be formulated. The venture officially ended earlier after bitter and expensive divorce proceedings. An example is Publicis Communication and Foote.  Performance risk Performance risk is the probability that an alliance may fail even when partner firms commit themselves fully to the alliance. Indeed for alliances to be truly strategic. market factors such as fierce competition and demand fluctuations. one may deliver its goods or services behind schedule or do a bad job producing their goods and service which may lead to distrust among the two companies.8 agency group is fighting off a $28-a-share hostile takeover attempt by its ex-partner Publicis which still owns 18. True North Communications Inc. Cone and Belding (FCB) case. implemented. How to overcome the problems associated with strategic alliance  Senior management commitment The commitment of the senior management of all companies involved in a strategic alliance is a key factor in the alliances ultimate success. the holding company for Foote Cone and the world‘s no.5 percent (Melcher and Edmundson. 1997)  Future local or global competitor One partner for example might be using the alliance to test a market and prepare the launch of a wholly owned subsidiary. war and economic recession. The sources of performance risk according to a study by Das and Tend (1999) include environmental factors such as government policy changes. The deal was designed to fill strategic needs of each. An alliance in Europe would finally give FCB the international reach it needed while Publicis could use FCB‘s experience in North and South America to serve its multinational clients.

they require effort to build. otherwise. management staff and support functions . Without senior management commitment. they're not partnerships. 25 | P a g e . They require the respect and interaction of people in each organization. and make adjustments as needed. Developing key objectives and goals that reflect what both parties expect to gain is however. Top management must articulate a clear link between where it expects the industry ‗s future profits pools will be.  Clearly defined. you can count on them. Nothing sours an alliance faster than the notion that one party is giving everything while the other is getting a free ride. Strategic alliances have to foster an environment in which both parties gain something. don't pursue an alliance at this time. Once they're in place. like good personal relationships.  Build on Trust Strategic alliances are built on trust. dedication and mutual interests. Senior management commitment to alliances‘ is important not only to ensure the alliances receive the necessary resources but also to convince others throughout the organization of the importance of the alliance. alliances‘ will not receive the resources they need. shared goals and objectives In forming a strategic alliance the question must be asked: ‗how integrated will the alliance be with the parent company? Some alliance are highly integrated with one or more of the parent organization and share such resources as manufacturing facilities. And. If you haven't taken the time to think through how both sides will benefit. Each party has to feel that he or she is giving something and getting something in return. Be sure that expectations are realistic in light of the resources both parties are willing to put forth. how to capture a large share of those and where if at all alliance fit in the plan (Ernst and Stern 1996).

the detailed analysis begins. Be specific: decide how many people will be involved in the alliance 26 | P a g e .  Define Roles and Responsibilities Assess each company's strengths. This will also help overcome the problem where a partner can later become a local or global competitor. for instance. so document clearly what's expected. they can communicate better. are known for their tight rein on employees or the long hours they keep. And by learning and understanding the culture of the partners involved. You must feel comfortable with the strategies and tactics of any company you‘re considering an alliance with. It's critical that you look objectively at management styles. work ethics and values. and define responsibilities accordingly – especially in the area of management. It's also smart to get references from people who have worked with your potential strategic partner. if your work style isn't similar to theirs.  Develop a Good Communications Process Clear communication is important to creating an enduring partnership. and identity where potential clashes could occur. Some companies. you could be headed for problems. The relationship must be developed to the point where both parties can be honest when evaluating progress and offering recommendations for improvement – both of which should be done on a regular basis. For example: you might want to exchange weekly sales reports. market position and if possible financial status. Key questions to ask:     How are decisions made? How controlling is management of its employees? At what pace do employees work? How competitive or aggressive is the company? Answering these questions honestly leads to a better match. Evaluate Potential Partners Even when you get a referral from a trusted advisor. researching a prospective partner is crucial. Disappointments and misunderstandings can be avoided by establishing an effective process for working with your partner. Once you‘ve narrowed the field on paper. Many alliances fail because of poor management relationships. Find out about the business' key strengths.

no business should form partnership just because alliances are trendy. QUESTION 6: WHY IS IT SOMETIMES DIFFICULT FOR AN ORGANIZATION TO ACT UPON THE CHANGES THAT IT SEES TAKING PLACE IN THE ENVIRONMENT? WHAT CAN IT DO TO OVERCOME SUCH PROBLEMS? GIVE EXAMPLES TO SUPPORT YOUR VIEWS. strategic alliances concept is growing in appeal to organizations because of the cost savings achieved in executing operations. detailed expectations. and both parties need someone within their organization who will champion the cause. In addition. while also maximizing the effectiveness of the change effort. Form a game plan for how the alliance will operate from the beginning to the end of the relationship Conclusion Strategic alliances and Joint ventures are important tools for attaining and maintaining competitive advantage. tax and legal ramifications of the alliance. Managing organizational change is the process of planning and implementing change in organizations in such a way as to minimize employee resistance and cost to the organization. This is the primary reason why alliances fail so it is imperative that companies make sure that an alliance is the best option for their needs. Companies sometimes enter into alliances without thoroughly analyzing their options. Also consider all the accounting. Each party has to dedicate resources to the relationship. Alliances entered into with comprehensive plan outline. Though strategic alliances can pay off. Today‘s business environment requires companies to undergo changes almost constantly if they 27 | P a g e . Organizational change occurs when a company makes a transition from its current state to some desired future state. requirements and an expected benefit is likely to succeed.from each company and what their specific roles will be.

he says. The result is that we can't talk with each other about things that are really important. It is therefore an essential prerequisite to bringing about desired changes. dialogue allows for what physicist David Bohme calls a "higher social intelligence. 28 | P a g e . by sets of rules by which we try to affect each other like parts of a machine." At a more fundamental level. How to overcome change problems in an organization  Build new relationships. It means forming relationships. discussion allows the issues to be named and framed. building new relationships may only be possible by fundamentally changing relationships that are already in place. All effective change strategies hinge on discussion and deliberation. "most fundamental change activities break down because those involved in them do not take the time to gain a shared model of reality. builds common ground. In some cases. and committed to. others gives people a feeling that they are equal to their problems." Dialogue helps to eliminate false divisions among people. Being associated with." One of the chief obstacles to change.  Discuss and deliberate.  Develop shared visions and goals. and claiming collective responsibility for a given issue or situation. The key is to develop a sense of group identity as well as a sense of agency. and allows for the emergence of a more systemic perspective. A crucial first step in any change process is to build relationships. Organizations must change because their environments change. is that "we've organized our societies by algorithms — that is. organizing. As Robert Theobald points out. Such changes may be relatively minor as in the case of installing a new software program or quite major as in the case of refocusing an overall marketing strategy. This can range from highly organized management meetings to a few teams getting together to discuss their concerns. At a minimum. Factors such as globalization of markets and rapidly evolving technology force businesses to respond in order to survive. It also helps individuals develop a shared perspective.are to remain competitive.

Research in anthropology. but it is no doubt one of the most effective change strategies available to communities and organizations. has studied the nature of community collaboration in cities across the United States. It follows that planned change is best achieved by promoting diversity. search conferences. But no matter what form they take they lend cohesion to a group and act as spark-plugs for change. The term suggests that capital can be measured in social as well as economic terms. There are many types of leaders. a creative tension is established that gives focus. "it was trust that was based on personal relationships. and even parents." he says. and mutual understanding. drive and personal commitment can be keys to galvanizing 29 | P a g e . that relationships have an inherent value. author of The Public/Private Partnership. direction.  Determine leadership roles. When people come together in such a way that their individual visions can start to interact." Building networks and relationships within and between individuals and groups is not something that can be done overnight. Robert Putnam and others have used the term "social capital" to denote the networks and norms of trust and reciprocity that characterize healthy social orders. from presidents and mayors to teachers. and visioning meetings in which participants develop "best case" scenarios and articulate common goals. It often involves a great deal of reflection.  Ensure broad participation and diversity. sociology. neighborhood activists.Setting new directions for the future is one of the most powerful ways of effecting change. Scott Fosler. Without the full participation of all concerned. listening. and context to changes as they occur. while diversity invariably produces change. Another aspect of this is the inherent value of diversity. This process is very different from such perfunctory strategies as writing "vision" statements. "If you look back at what it was that was key in the development of civic and political institutions. perspectives will be missing and there is a good chance that some of the issues involved will go unaddressed.  Foster social capital. Some techniques for developing common visions include futures commissions. and biology shows that homogeneity fosters stability. Their vision. Fundamental change is impossible without the participation of everybody with a stake in the problem or issue.

30 | P a g e .  Adopt a change mindset. Leaders are also able to champion and protect those within groups who are most willing to risk change. trade associations. civic organizations. it is important to operate within clearly defined boundaries for both psychological and practical reasons. The question is whether it is possible to adopt a crisis-perspective without a crisis. Change takes place in an infinite variety of ways and there is no single strategy that will work for every individual or group. those seeking to effect change may take comfort and inspiration from the examples of others. is the mother of invention. Nothing precipitates change like a crisis. Many innovators and change agents insist that it is possible. government departments. and grow. Boundaries provide frameworks for measuring change and give focus and direction to one's efforts.  Identify outside resources. Fundamental change tends to be difficult and painful and always involves uncertainty and risk. Still. They also provide a sense of what is feasible. clearly defined goals allow one to make realistic plans. learn. Strategizing for change ultimately comes down to whether individuals are motivated to change. consultants. they need to develop linkages to outside sources of capital and information. What is required. Not only does this provide mentors from whom they can learn. they say.  Set clear boundaries.  Draw on the examples of others. it offers them conviction that their goal is attainable. after all.a group into action. On a practical level. etc. These linkages not only facilitate the process of change they often provide opportunities for lateral learning and growth. Since most communities and organizations that embark on the journey need outside help from foundations. or at least a mindset that is constantly attuned to change. Necessity. is a shift of perception from seeing change as disequilibrium to seeing it as a constant. When planning for specific kinds of change.

decreased market opportunity and dramatic increases in services.QUESTION 7: IF STRATEGIC CHANGE IS IMPORTANT. WHY DO SOME PEOPLE FIND IT DIFFICULT TO ACCEPT AND WHAT ARE THE CONSEQUENCES OF THIS FOR THE CHANGE PROCESS? HOW CAN THESE DIFFICULTIES BE OVERCOME GIVEN THE PROBLEMS ASSOCIATED. Introduction Organizational change is often stimulated by a major external force. for example. Typically. substantial cuts in funding. organizations undertake technical. structural or strategic shifts in the organization to evolve to a 31 | P a g e .

 Some resistance can also be expected where people have worked out ways of doing things which are beneficial to them in terms of their objectives and preferences. Change decisions may be by the strategic leader and then delegated for implementation. people tend not to take kindly to change in any form. Managers who are closer to the market may have some justified reservations if they have not been consulted during the formulation process. attract and retain the brightest minds.different level in their life cycle. Despite the need for organizations to change in order to survive in business. and adaptation means change. it must respond to new circumstances in a proactive. Consequently. Yesterday‘s assumptions and practices may no longer be valid and may no longer work. An organization cannot just replicate yesterday‘s practices and expect to achieve the success it has had in the past.  Resistance is likely to be forthcoming where there are perceived flaws or weaknesses in the proposal. To manage within the changing environment. so that many employees are seeking different rewards from work and different kinds of relationships from those at work. They may see change as a threat. a company must adapt. 32 | P a g e . investment in new equipment and the associated risks.  The organization itself or particular managers may resist external pressures if the change involves considerable expense. measured and agile manner. deliver on strategic objectives. Why people resist change There are several reasons why changes might be resisted and certain circumstances where the implementation of change will have to be planned carefully and the needs of the people considered. for example changing from a highly reactive organization to a more stable proactive environment Education and the media are transforming the expectations of the workforce. if an organization wants to maintain its competitive advantage. Similarly when people have mastered tasks and feel in control of their jobs and responsibilities. they are likely to feel relatively safe and secure personally.

against these advantages are the negatives: potential for a poor solution and great consumption of time. Awareness and understanding is therefore an important aspect of change.  Participation It‘s difficult to resist a change decision in which we have participated. if employees receive the full facts and clear up misunderstanding. resistance should subside.  Education and communication Communication the logic of a change can reduce employee resistance on two levels. communication can help ‗see‘ the need for change by packaging it properly. However. where particular policies. When managers or employees have low 33 | P a g e . First.This issue can be exacerbated where there has previously been substantial investment in plant and equipment which technically is still satisfactory. their involvement can reduce resistance. Assuming participants have expertise to make a meaningful contribution. Below are some ways of overcoming resistance to change. The need for the change may not be accepted readily.  Furthermore. Second. Although demand may be falling there may be a reluctance to sell or close. it fights the effects of the misinformation and poor communication.  More so. change will require careful implementation. behavior patterns and the ways of doing have been established and accepted for a long time and in effect have become part of the culture of the organization. it is not unusual for people to have some fear of the unknown and to feel comfortable with situations. policies and procedures that they know. counseling and therapy. Overcoming resistance to change Effective change occurs when managers and employees modify their behaviors in a desired way and when the important changes are lasting rather than temporary. obtain commitment and increase the quality of the change decision.  Building support and commitment When employees‘ fear and anxiety are high. new-skills training or a short paid leave of absence may facilitate adjustment.

So firing up employees can also help them emotionally commit to the change rather than embrace the status quo. combines manipulation and participation. It is the role of the direct supervisor to translate the change around the team into clear identifiable outcomes and expectations for individual roles. Conclusion The role of a manager in clarifying direction is even more important during times of change. this can be useful particularly where the resisting force is powerful. Where the resistance stems from a perceived loss as a result of the proposed change.  Manipulation and cooptation Manipulation refers to covert influence attempts. 34 | P a g e . seeking their advice not to find a better solution but to get their endorsement. If anything. If management threatens to close a manufacturing plant whose employees are resisting an across-the –board pay cut. managers need to communicate more and meet more frequently with their team members during times of change to ensure staff member‘s efforts stay focused and constructive towards the new change vision. However. It seeks to ‗buy off‘ the leaders of a resistance group by giving them a key role. offering rewards every time changes in behavior are desired is likely to prove impractical. withholding information and creating false rumors to get employees to accept changes are all examples of manipulation.  Negotiation and agreement Negotiation and agreement are normally linked to incentives and rewards. Twisting facts to make them more attractive. These outcomes need to be managed and supported throughout the change process. they favor the status quo and resist it. Cooptation on the other hand. and if the threat is actually not true. management is using manipulation.emotional commitment to change.

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