E-Business

Ch 9
E-business strategy: Implementation
Key Issues:
Strategic controls;

Organisational learning;

Organisational culture and e-business;

Organisational structure and e-business;

Change management.
Chapter 9 focuses on the implementation of an e-business strategy. The first section outlines the type
of strategic controls that are required to link the chosen strategy with performance. Two main types
of strategic controls discussed are information control and behavioural control. This is followed by
discussion of organisational culture.
Strategic Controls:
Once a strategy has been formulated, the next stage is implementation. Strategic implementation is
the practical measures taken to execute a strategic choice. However, in order to implement a strategy
successfully, firms need to put in place effective strategic controls that link strategy with
performance.
Consequently, it is an on-going process of information gathering and analysis to improve organisational learning. Simons
(1995) highlights four key characteristics that determine effective information control as part of a strategic control system.
These include:

.A focus on constantly changing information that has potential strategic importance;

.The information is important enough to warrant frequent and regular attention of managers at all levels of the
organisation;
.The information generated is best interpreted and discussed by face-to-face meetings of superiors, subordinates and peers;

.The control system is a catalyst for on-going debate about underlying data, assumptions and action plans.
 Behavioural control focuses on the extent to which the actions undertaken are correct and meet set
performance standards. Traditionally, firms placed an emphasis on rules, regulations and procedures
to control behaviour and achieve aims and objectives.
Organisational Learning:
Implementation of strategy requires firms to effectively leverage organisational learning.
Organisational learning occurs through experience, building and sharing knowledge, expertise, ideas
and insights.
Organisational learning is linked to leadership, organisational structure and culture.
Effective leadership should entail creating a vision for the firm that incorporates the learning
process.
 One way of influencing culture is to build an organisational structure that facilitates the key
features of a learning culture. This may include organising work schedules and projects around small
groups or teams of workers, empowering those workers to take charge of their project and creating
an integrated and free-flowing communications system that incorporates internal employees and
external suppliers, partners and customers.
-First- and second-movers

Many of the first-movers in the e-business environment started with a leader who communicated a
vision based on learning. When the internet was commercialised for business purposes in the mid
1990s it provided a new channel of communication and transaction. This presented opportunities and
challenges for firms.

Some firms adopt a strategy of ‘wait and see’ and benefit from second-mover advantages. That is,
they deliberately delay entry to the industry until incumbent firms have put in place strategies that
they can learn from.
-Cost advantages of a learning organisation

There are also cost advantages associated with a learning organisation. The learning curve points to
the cost advantages that are derived from accumulating knowledge, experience and expertise.
Learning occurs at both the individual and organisational levels.
Workers’ performance is improved through building and using their experience to improve the
efficiency and quality of their activities. At the organisational level, learning can improve value
chain activities.
Organisational Culture & E-business:
Organisational culture is the set of beliefs, values, norms of behaviour, and attitudes shared by
members of a firm that influences individual employee preferences and behaviour. These bases of
culture are very often difficult to observe and measure.

Nevertheless, culture plays an important role in determining performance by providing a guide to

employee behaviour that is not governed by contractual duties but that, nonetheless, constrains and
informs the managers and employees.
There are many factors that determine organisational culture. Some of the more prominent

ones include:

. The vision of the person or people who established the organisations;

. The historical precedence set by previous generations of managers and workers;

. The type and range of activities a particular firm undertakes;

. The nature of interpersonal relationships within the organisation;

. The management style: autocratic, consensual, participative;

. The reward structure: financial, promotion, status, freedom, peer acceptance;

. The level of technological dependence;

. The geographical location: national and regional characteristics.

Managers in e-business are concerned as to whether the organisation’s culture affects its
performance. Linking the two can be problematic since, although culture may be associated with
high performance, it may not necessarily cause high performance.
Organisational structure & E-business:
Successful implementation of strategies requires an appropriate organisational structure to determine
how activities and tasks are divided, supervised and co-ordinated
.Teamwork

Traditional structures have largely been superseded by a trend towards adopting flatter structures
where more people are involved in the decision-making process and communications are more fluid.
Modern organisations are typically characterised by multi-skilled staff, teamwork, geographical
dispersion of functions, and fewer
layers of management.
.Virtual teams

Information technology has opened up opportunities to expand the concept of teamwork to that of
virtual teams. A virtual team uses information technology and telecommunications to facilitate
collaboration between geographically dispersed members who work on the same project.

Virtual teams are usually made up of employees from the same organisation but can consist of other
workers from partner organisations such as consultancies or suppliers.
A virtual team is a dynamic arrangement designed to maximise efficiency in the use of resources.
The critical success factors in virtual teams include the:

. Ability to quickly assemble the correct mix of skills for each stage of the project;

. Building of trust between all members;

. Creation of a knowledge sharing culture;

. Ability to apply technology to optimise communications.

.Global teams

Virtual teams can be comprised of workers from around the globe.

A global team brings together people from many different countries and cultures and their activities
span many different countries. Virtual global teams comprise members from many different
countries who remain geographically dispersed and who communicate electronically.
The critical success factors for virtual global teams include the:

. Recruitment of skilled and culturally sensitive staff;

. Communication of organisational objectives;

. Communication of roles and responsibilities to each team member;

.The boundaryless organisation

The development of information technology (IT) in general, and the internet in particular, has played
an important role in determining the shape and character of modern organisational structures. IT has
a strategic role to play in helping firms increase efficiency and gain a competitive advantage.

The development of a global network of communications has redefined the boundaries facing
organisations when conducting business. Traditional organisations have boundaries that create
barriers against their ability to compete. These can be external or internal barriers.
The main advantages that organisations gain from a boundaryless structure are that it:

. Improves the scope for co-operation, co-ordination and collaboration among the functional areas
that comprise the organisation;

. Allows greater knowledge sharing across the organisation;

. Allows organisations to respond more quickly to changes in the environment;

. Helps co-ordination and collaboration with partners, suppliers and customers;

.The network organisation

A network organisation is one that outsources or subcontracts some of its functions to other
organisations and co-ordinates their activities from its own central headquarters.
The hub firm in the network organisation is where the strategic decisions are made and where the
strategic controls are co-ordinated and monitored
There are a number of important advantages that network organisations have. These include:

. No geographical constraints on outsourcing functions;

. Increased competitiveness on a global scale;

. Flexibility in workflows; no permanent staff undertaking non-core activities;

. Flexibility in dealing with changes in market conditions; can outsource work according to need;

. Cost savings in minimal supervisory or administration staff.

Change Management
Change management refers to major alterations to an organisation’s processes, structure, technology,
staff or culture.
Change management is necessary when firms seek to improve their current performance through
changing their infrastructure and internal processes and activities. Usually, change management is
necessary when a performance gap emerges.
.Key aspects of change

The key factors to be taken into consideration when undertaking change management in e-business include the:

. Scope of change required;

. Timeframe for undertaking each successive stage of change;

. Financing of change;

. Identification of resources required for implementing change;

. The resources to be retained and the procurement of new resources;

 The implementation process can only begin once a thorough evaluation of appropriate activities
has taken place. This ensures that the correct hardware and software has been selected, that the
systems have been rigorously tested, that an efficient user documentation system has been developed
and that all staff have received suitable training.
.Business Process Re-engineering

Business Process Re-engineering (BPR) is a relatively new concept developed by Michael Hammer
in 1990. Hammer argued that computerising existing processes wasted the opportunity to use
modern IT systems as a means of remodelling business processes from scratch. He believed that
waste and duplication of effort between departments could be avoided by entirely rethinking
processes.

BPR has become an important method of implementing strategies in e-business.

.Business Process Improvement

Business Process Improvement (BPI) is a less radical approach to change than BPR. It is incremental
in scale and involves introducing change to optimise existing processes using information
technology. BPI offers an alternative to the more radical scale of change represented by BPR.

Over a period of time other business processes can be improved by introducing appropriate
information technology. The risks and rewards associated with BPI are less than those associated
with BPR.
BPI may be an option for firms who lack the resources, either financial or human, to undertake
radical change.
Finally
The success of an e-business depends crucially on having a viable business model, a coherent
strategy and the ability to implement the strategy to achieve stated objectives.

Implementation refers to the practical measures that managers can take to translate a chosen strategy
into action.
The appropriate management actions to be undertaken will depend on the workers response to the
proposed change.
THANKYOU