HUMAN CAPITAL MANAGEMENT

‡ LECTURER: DR. ANGELINE TAY
TUESDAY MORNING CLASS

FIRST PRESENTATION GROUP-2 DATE: JANUARY 22, 2008

GROUP MEMBERS
1- Muhammad Zia Aslam (CGA-070040) (CGA2- Mohammad Shahid (CGA-070092) (CGA-

A Framework to Implement Strategies in Organizations
By

Fevzi Okumus

Table of Contents: 
Issue/Problem Statement  Introduction  Proposed Framework  Further Explanation  Contextual and Processual Approach  Concluding Remarks  Recommendations  More about Strategy Implementation  Why Strategies Fail

ISSUE / PROBLEM STATEMENT
‡ To propose a comprehensive corporate strategy

implementation framework by identifying key elements of implementation and categorizing them into different groups depending on their role and importance, as limited research work is available in this important area of strategic management discipline.

INTRODUCTION
‡ Implementation of a strategy is far most difficult and time taking process than formulating the strategy itself. ‡ There are some commonly used useful models for strategy formulation (SWOT analysis for example) , however strategy implementation is still a field to be explored comprehensively. ‡ This article basically goes through an extensive literature review of the work previously done in strategy implementation. ‡ Based upon literature review, the author proposes a comprehensive strategy implementation framework by identifying key factors of strategy implementation and their mutual relationship.

INTRODUCTION (Cont«)
‡ There are some major deficiencies in the previously proposed models by different researchers on strategy implementation. Those are: 
Previous studies on strategy implementation do not specifically advocate any implementation approach, as different schools of thought emphasize on different previously identified factors.  Similarity, in one way or the other, between previously identified factors of implementation, despite the fact that different models include different numbers and types of factors.  They didn¶t provide clear examples and explanations for the relationships and interactions between their proposed implementation factors.

INTRODUCTION (Cont«)
‡ The article provide about 17 examples of previous literature review of the frameworks proposed by researchers in different time spans. ‡ It also provides critical analysis of Balanced Scorecard Technique (Kaplan and Norton), used for strategy implementation in recent years.
± Balanced Scorecard technique looks strategy implementation in four angles:
‡ ‡ ‡ ‡ The financial perspective Customer perspective Internal business perspective Learning and growth perspective

INTRODUCTION (Cont«)
‡ Balanced Scorecard has five principles and four main implementation areas, but this technique neither solves all implementation problems nor provides new insights into strategy implementation. Reasons for this are:
± It is mainly a control mechanism, suggesting a top-down approach with limited participation from lower levels ± Secondly, all implementation factors and sub-factors are similar to the factors that have been identified by previous scholars of strategy implementation

PROPOSED FRAMEWORK
‡ Four grouping areas for strategy implementation factors has been identified by the author, based upon the role and characteristics of each factor. Those are:
± Strategic Content
‡ Involves development of strategy

± Strategic Context
‡ Internal (structure, culture, leadership) and external (environmental uncertainty)

± Operational Process
‡ Involves operational issues of business (planning, resources, people, control etc)

± Outcome
‡ Results of implementation process (positive/negative)

PROPOSED FRAMEWORK (Cont«)

FURTHER EXPLANATION
‡ In the proposed framework, strategy implementation is seen as a process that occurs in the strategic context. ‡ The strategic content is viewed as the strategic direction of the company and the need to design new initiatives. ‡ The process factors utilized in the implementation process and the outcome are seen as the expected and unexpected results of the initiated strategy. ‡ When applying this model in international firms, the type and characteristic of the factors should be carefully analyzed to overcome potential problems. ‡ Implementation factors, given in the four groupings, should not be considered separately because a factor in one group can influence the other factors in the same and/or other groups.

CONTEXTUAL AND PROCESSUAL APPROACH
‡ Implementation process must be examined and evaluated from a holistic perspective over a long period of time, which is referred to as the contextual and processual approach. ‡ According to this approach, researchers and practitioners need to adapt a more comprehensive view and look at content ,context, process and outcome simultaneously. ‡ This approach has received more support and attention in recent years, as it provides a more comprehensive view for understanding and evaluating complex organizational change processes.

CONCLUDING REMARKS
‡ This article provides a comprehensive review of strategy implementation literature. ‡ Proposes a theoretical framework of strategy implementation by looking strategy formulation and implementation as interdependent tasks. ‡ It also suggests that, to better understand implementation issues, practicing executives should make informed judgments about the process of strategy implementation, rather than looking for ready-made solutions. ‡ The framework proposed provides good understanding of the factors affecting implementation process, and the relationship between them.

RECOMMENDATIONS
‡ The framework developed in this study should be empirically tested and improved by investigating real cases of strategy implementation in organizations. ‡ Organizational change management training programs are the necessity in today¶s turbulent business environment, which should be considered very seriously for middle as well as upper management. ‡ Lot of research work needs to be done in this very important issue of strategic management field, as very limited research work is available on the issue. ‡ Strategy implementation in global firms should also be considered for future research work.

MORE ABOUT STRATEGY IMPLEMENTATION«. IMPLEMENTATION«.
‡ Fortune magazine stated that ³less than 10% strategies effectively formulated are effectively executed´. ‡ Again, according to Fortune magazine, only one of ten companies that do an effective job of formulating strategy are doing equally effective jobs of implementing it. ‡ In today¶s fast-moving fast-changing business world, where best thing in business is not the thing anymore but the service, the rules of management and leadership have changed. So, effective leadership and communication within the company are the key factors for the successful implementation of a strategy. ‡ Work on these intangibles is a strategic investment equally as important as new assets or mergers or acquisitions for the company

WHY STRATEGIES FAIL?
‡ The main barriers to the implementation of strategies include implementation taking more time than planned, poor communication, lack of coordination and support from other levels of management, resistance from lower levels and lack of or poor planning activities. (Alexander-1985, Kotter-1995, & Strabel-1996) ‡ Henry Mintzberg believe that the strategic planning models fail due to the lack of strategic thinking and because of some fundamental flaws like I) the fallacy of prediction II) the fallacy of detachment, and III) the fallacy of formalization. ‡ According to Alexander (1991, p. 74)
± Practicing executives, managers and supervisors don¶t have practical models to guide their actions during implementation.

WHY STRATEGIES FAIL? (MILLER¶S ICARUS PARADOX)
‡ Denny Miller, in his landmark study, investigated the decline of powerful corporations. He found in his study that ³the victories and strengths of companies can often be the cause of their future strategic failure´. He found four major causes of strategic failure:
± Leadership traps ± Monolithic cultures and skills ± Power and politics ± Structural memories

WHY STRATEGIES FAIL? (DISRUPTIVE TECHNOLOGIES)
‡ Clayton M. Christensen in his book the innovator¶s dilemma reported that ³the logical competent decisions of management that are critical to the success of their companies are also the reasons why they lose their positions of leadership´. Such companies can be blind-sided by the emergence of disruptive technologies, he says. These disruptive technologies are products or processes that appear in the marketplace, but look harmless to the successful company. Examples of disruptive technologies:
± Small, off-road Japanese motorcycles introduced in US, threatened Harley Davidson and BMW ± Transistors killed the vacuum-tube industry ± Digital evolution changed the field of photography by switching it from traditional to digital

‡

WHY STRATEGIES FAIL? (EXAMPLES OF HP & XEROX)
‡ Hewlett Packard (HP): CEO Carly Fiorina¶s strategic decision to acquire Compaq in 2002 proved a drastic failure for HP and the CEO too. Since then the company is struggling in everything except its stellar printing business. ‡ XEROX: after facing many years of weak sales and high costs, the company was near to bankruptcy when, in July 2004, Anne Mulcahy named CEO of Xerox. And because of the leadership qualities she made relentless efforts to stabilize Xerox.

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