Issues in Implementation

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Issues in Implementation
2
A Linear Sequential Perspective of Implementation

• Closes the gap between intentions and actions
• The final step in the process of strategic
  management
• Seeks to ensure that the realised strategy is
  identical to the intended strategy
• Requires the creation of detailed plans and
  budgets for each functional department
• Encourages infrequent, major change

3
An Adaptive Perspective of Implementation

• The continuous process of day-to-day management
  in the organisation
• Seeks to maintain the alignment between the
  organisation and its environment
• Allows strategy to emerge within pre-defined
  limits
• Builds major change incrementally

4
An Interpretive Perspective of Implementation

• Managing change within the organisation
  successfully
• Achieving organisational objectives through well
  motivated stakeholder groupings
• Encourages strategy to emerge from consensus
• Facilitates controlled change whilst maintaining
  stability and harmony

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Implementation at Three Levels

• Implementation of Corporate Strategy
• What business(es) shall we be in?
• How do we enter each business?
• Implementation of Business Strategy
• How shall we compete in each business area?
• Implementation of Operational or Functional
  Strategy
• What tactics can we use to defeat the competition?

6
Peters and Watermans Formula for Organisational
Success

• A bias for action
• Close to the customer
• Autonomy and entrepreneurship
• Productivity through people
• Hands on, value driven
• Stick to the knitting
• Simple form lean staff
• Simultaneous tight-loose properties

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The McKinsey 7 S Framework
Structure
Systems
Strategy
Shared Values
Style
Skills
Staff
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Types of Strategic Change
9
Managerial Problems Of Change

• Stability to facilitate achievement of current
  goals
• Continuity to ensure orderly change
• Flexibility to react to external opportunities
  and internal conditions
• Innovativeness to allow organisation to be
  proactive

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Stimuli Leading To Change

• Environmental
• Goals and values
• Technology
• Structural
• Psychosocial
• Managerial

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Paradoxical View Of Organisational Change

• Social system versus
• Society makes and controls man
• Equates to-
• System theory
• Society (environment) makes and controls business
  organisations (man-groups)

• Social action
• Man constructs and controls aspects of society
• System action
• Business organisations (man-groups) construct and
  control aspects of society (environment)

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Managing Strategic Change
Types of strategic change
Diagnosing strategic change needs
Managing strategic change processes
Structure and control
Change tactics
Styles of managing change
Communicating change
Changing routines
Political processes
Structure and control
Roles in the change process
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Designing Effective Organisations

• The Creation Hypothesis
• "Effective design requires a new configuration,
  an original yet consistent combination of design
  parameters and situational factors"

Henry Mintzberg, 1995
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Organisation Structure

• The established pattern of relationships among
  the component parts of the organisation
• The features which serve to control or
  distinguish its parts

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Formal Structure Often Described In Terms Of

• The pattern of formal relationships and duties -
  charts, job descriptions, etc.
• The way in which the various activities or tasks
  are assigned to differentiate departments and/or
  people - differentiation
• The way in which separate activities or tasks are
  co-ordinated -integration
• The power, status, and hierarchical relationships
  within the organisation - the authority system
• The planned and formalised policies and
  procedures and controls that guide the activities
  and relationships of people in the organisation -
  the administrative system

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Differentiation

• The state of segmentation of organisational
  systems into components.
• Vertical differentiation- decision making and
  authority at different levels in the organisation
• Horizontal differentiation- tasks units, etc,
  differences at the same level of hierarchy

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Integration

• The degree of co-ordination and control which
  exists between the various levels and activities
  of the organisation.
• Conventional integration mechanisms- rules,
  policies, procedures, hierarchical referral
• Non-conventional integration mechanisms -
  management into-systems, integrator roles, cross
  functional teams, re-organisation into a matrix
  structure

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Co-Ordination Mechanisms

• Mutual adjustment
• Direct supervision
• Standardisation
• work processes
• outputs
• skills and/or knowledge
• norms or values
• necessary because of differentiation and
  division of labour

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Basic View Of "Strategy-Structure" Relationship
strategy
structure
fit
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Crucial Elements Of Chandlers Thesis

• 1. Organisation structure follows the growth
  strategies of the firm.
• 2. USA firms had followed a stage or stepwise
  process of development of strategies and
  structures.
• 3. Organisations do not change their structures
  until provoked by inefficiencies to do so.
• 4. Added later by Drucker and Miles and Snow
• "structure constrains strategy".

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Organisational Design Variables
Product/market policies
Task uncertainty diversity interdependence
People recruitment, selection transfer
promotion training development
Structure division of labour departmentalisation s
hape distribution of power
Reward Systems compensation promotion leadership
style job design
Information Decision Processes planning
control budgeting integration mechanisms performan
ce measures
Success
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Approaches To Organisational Design

• The One Best Way Approach
• e.g. scientific management, bureaucracy,
  administrative management, management by
  objectives, long range planning, organisational
  development and so on.
• All organisations should be of the same design.
• The Contingency Approach
• e.g. it all depends upon the situation facing the
  firm.
• The situation determines the design.
• The Configuration/Context Approach
• e.g. design parameter and situational factors
  cluster together into internally consistent
  groupings.
• Design and situation relationship is symbiotic
  not deterministic.

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Organisation Design (1)

• Individual positions
• job specialisation
• behaviour formalisation
• training
• indoctrination
• The skeletal structure
• bases for establishing groupings
• function/activity
• knowledge, skill, process, function
• market
• output, client, place
• (time may be a sub category of either)
• size of units

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Organisation Design (2)

• Design of lateral linking devices
• liaison devices
• planning and control systems
• Design of decision making systems
• centralised
• decentralised

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Basic Contingency Model
Organisation Design
Organisation Effectiveness
Organisation Environment
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Situational Factors (1)

• Perception of environment
• Age
• of industry
• different configurations favoured at different
  times.
• of organisation
• increasing age increasing formalisation
• Size of organisation
• growth leads to increasing average unit size,
  increasing formalisation, more elaborate
  configuration

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Situational Factors (2)

• Technical system in operating core
• regulatory systems
• formalisation and bureaucracy
• complexity
• elaborate administrative system and selective
  decentralisation
• automation
• organic administrative systems
• Power
• increasing external control, centralisation
  formalisation
• individuals favour centralisation
• fashion overrides common sense

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Why Do Configurations Exist?

• The Darwinian" Perspective
• survival of the fittest
• The Harmony Perspective
• consistency, synergy, strategic fit
• The Quantum Leap Perspective
• approach to strategic change

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Six Basic Elements Of The Organisation

• the strategic apex
• the middle line
• the technostructure
• the support staff
• the operating core
• the ideology

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Six Basic Elements Of The Organisation
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Six Structural Configurations

• the simple structure
• pull to centralise
• the machine bureaucracy
• pull to standardise
• the professional bureaucracy
• pull to professionalise
• the divisionalised form
• pull to balkanise
• the adhocracy
• pull to collaborate
• the missionary
• pull to evangelise

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The Simple Structure (1)

• Key co-ordinating mechanism
• direct supervision
• Key element
• strategic apex

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The Simple Structure (2)

• Design parameters
• Specialisation - little
• Training - little
• Indoctrination - little
• Formalisation of behaviour - little
• Style - organic
• Groupings - functional
• Unit size - wide
• Planning and control - no formal systems
• Liaison devices - few
• Decision making power - centralised

• Situational factors
• Age and size - young and small
• Technical system - simple, not regulatory
• Environment - simple, dynamic (hostile?)
• Power source - Managing Director authority and
  control

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The Entrepreneurial Context (1)

• Dominated by a single individual, with clear and
  distinct mission, directing a responsive
  organisation
• new organisations
• small organisations
• crisis organisations
• autocratic organisations
• charismatic organisations
• entrepreneurial organisations

The Simple Structure
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The Entrepreneurial Context (2)

• Environment tends to be
• simple
• dynamic
• nichés in existing fragmented mature industries

• Advantages
• centralisation
• strong ideology
• effective in some situations

• Disadvantages
• confusion
• inefficient
• vulnerable to loss of leader
• narrow environment range
• leader resists change
• abuse of authority

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The Machine Bureaucracy (1)

• Key co-ordinating mechanism
• standardisation of work
• Key element
• technostructure

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The Machine Bureaucracy (2)

• Design parameters
• Specialisation - high vertical horizontal
• Training - little
• Indoctrination - little
• Formalisation of behaviour - high
• Style - bureaucratic
• Groupings - functional
• Unit size - wide in operating core, narrow
  elsewhere
• Planning and control - action planning
• Liaison devices - few
• Decision making power - limited horizontal
  decentralisation

• Situational factors
• Age and size - old and large
• Technical system - simple, not automated or
  sophisticated
• Environment - simple, stable
• Power source - technocratic and external

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The Mature Context (1)

• An integrated set of simple, repetitive tasks
  must be performed precisely and consistently by
  human beings
• Found in- older mature organisations with
  regulatory technical systems.
• Strong external control by dominant stakeholder
• Regulatory functions
• Safety conscious organisations

The Machine Bureaucracy
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The Mature Context (2)

• Environment tends to be
• simple
• stable
• demanding mass provision of goods and services

• Advantages
• control / accuracy
• certainty / precision
• efficiency (?)

• Disadvantages
• boring, repetitive work
• inflexibility
• conflict
• limited scope of personal development

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The Professional Bureaucracy (1)

• Key co-ordinating mechanism
• standardisation of skills
• Key element
• operating core

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The Professional Bureaucracy (2)

• Design parameters
• Specialisation - high in horizontal plane
• Training - high
• Indoctrination - little
• Formalisation of behaviour - little
• Style - bureaucratic
• Groupings - functional and market
• Unit size - wide in operating core, narrow
  elsewhere
• Planning and control - little
• Liaison devices - roles in administration
• Decision making power - horizontal
  decentralisation

• Situational factors
• Age and size - variable
• Technical system - not regulatory or
  sophisticated
• Environment - complex and stable
• Power source - professional operator control

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The Professional Context (1)

• Organisations designed to deal with stable yet
  high complex working patterns
• Organisations tend to be
• public service
• personal service orientated
• missing regulatory, sophisticated or automated
  technical systems
• strong operating core support staff bases

The Professional Bureaucracy
43
The Professional Context (2)

• Environment tends to be
• stable
• complex

• Advantages
• democratic
• provides extensive autonomy

• Disadvantages
• lack of control
• co-ordination difficulties
• discretion over use of standard programmes
• innovation
• inflexibility

44
The Divisionalised Form (1)

• Key co-ordinating mechanism
• standardisation of outputs
• Key element
• middle line

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The Divisionalised Form (2)

• Design parameters
• Specialisation - high in horizontal and vertical
  plane
• Training - little
• Indoctrination - some in key roles
• Formalisation of behaviour - high
• Style - bureaucratic
• Groupings - market
• Unit size - wide at top
• Planning and control - high performance control
• Liaison devices - few
• Decision making power - limited vertical
  integration

• Situational factors
• Age and size - old and very large
• Technical system - divisible, often mirroring
  machine bureaucracy
• Environment - diverse
• Power source - middle line control

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The Diversified Context (1)

• A set of quasi-autonomous units coupled together
  by a central administrative structure
• Organisations have diverse markets created by
  product/service or client or regional
  segmentation.
• Client and regional segmentation encourages
  superimposition of machine bureaucracy in
  operating core
• Technical system divisible into efficient units.
• Larger, older firms.

The Divisionalised Form
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The Diversified Context (2)

• Environment tends to be
• multiple
• simple
• static

• Advantages
• strategic flexibility
• efficient allocation of capital
• helps personal development
• spreads risk
• responsiveness

• Disadvantages
• expensive duplication
• lack of central control
• extended shareholder grouping
• lack of synergy
• quantitative performance measures

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The Adhocracy (1)

• Key co-ordinating mechanism
• mutual adjustment
• Key element
• support staff

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The Adhocracy (2)

• Design parameters
• Specialisation - high in horizontal plane
• Training - high
• Indoctrination - some
• Formalisation of behaviour - little
• Style - organic
• Groupings - functional and market
• Unit size - narrow
• Planning and control - limited action planning
• Liaison devices - many and various
• Decision making power - selective decentralisation

• Situational factors
• Age and size - young
• Technical system - sophisticated and automated or
  simple and non-regulatory
• Environment - complex and dynamic
• Power source - expert control

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The Innovation Context (1)

• Organisations designed to deal with complex
  technologies and systems under conditions of
  severe dynamism.
• Organisations tend to be-
• operating adhocracy
• administrative adhocracy
• entrepreneurial adhocracy
• competitive adhocracy
• temporary adhocracy
• mammoth project adhocracy
• automated adhocracy
• Young organisations - age breeds standardisation

The Adhocracy
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The Innovation Context (2)

• Environment tends to be
• dynamic
• complex

• Advantages
• copes with difficult conditions
• provides challenges
• very effective

• Disadvantages
• confusion and ambiguity
• inefficient
• internal politics and conflict
• group goals must dominate
• unbalanced workloads
• drift towards other configurations

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The Missionary Organisation (1)

• Key co-ordinating mechanism
• standardisation of norms
• Key element
• ideology

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The Missionary Organisation (2)

• Design parameters
• Specialisation - little
• Training - little
• Indoctrination - high
• Formalisation of behaviour - little
• Style - bureaucratic
• Groupings - market
• Unit size - wide
• Planning and control - little
• Liaison devices - few
• Decision making power - decentralised

• Situational factors
• Age and size - middle range
• Technical system - simple and non-regulatory
• Environment - simple, usually stable
• Power source - ideological control

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Configurations as One System
Simple Structure
Ageing
Professionalism
complexity
hostility
hostility
complexity
Machine Bureaucracy
Professional Bureaucracy
rationalisation
automation sophistication
dynamism
diversification
Ageing / success
hostility
success in one area
consolidation
complexity
fragmentation
Divisionalised Form
Adhocracy
dynamism
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A Portfolio Of Configuration At The Business Level
Question Marks adhocracies or simple
structures
Question Marks adhocracies or simple
structures
Stars simple structures
Cash Cows machine or professional bureaucracies
Dogs machine or professional bureaucracies
R D adhocracies
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The Role of People in Strategic Change
Strategic change
Key tasks
People
Systems
Structure and Design
Capability Effort Satisfaction
Reward Control Information
Values Perception Power
Performance
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Factors Causing Resistance To Change

• Sunk costs
• Misunderstandings

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Impact Of Change
Learning
Level or Degree
Confidence
Confusion Anxiety
Change occurs
Time
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Overcoming Barriers To Change
Unfreezing Mechanisms
Rumours signals questions challenges
Making sense of early signals within paradigm
Organisational Anticipation
Political pressures not to rock the boat
Felt need for change
Organisational Flux
Competing views of causes of problems remedies
Information Building
Information collection Political testing of
support
Making sense of information within paradigm
Experimentation
Resistance to new ideas
New ideas tested out
Refreezing
60
Controls Upon Individual Members Of Organisations
(1)

• Organisational controls
• Mechanistic
• Formalised
• Use quantitative standards
• Closely related to authority system
• Group or social controls
• Do not have formal force of authority
• Often not expressly written down
• Very influential
• Take form of group norms
• Pressure placed on non-conformers

61
Controls Upon Individual Members Of Organisations
(2)

• Self Control
• Also known as motivation
• Individuals control their own actions
• Standards are your own expectations
• Rewards and punishments largely intrinsic

62
Resource Allocation and Control
63
Easing The Effects Of Change

• Management attention drawn to
• climate
• information
• reassurance
• involvement
• incrementalism
• And at an individual level
• reassess roles and capabilities
• provide training
• redeployment (redundancy?)
• recruitment
• settling down period

64
Effective Communication
Changes Routine
Complex
Overly rich communication causes confusion
Face to Face (one to one or group) Interactive (e.
g. telephoning, video conference) Personal
memoing (e.g. tailored memos, letters) General
bulletins (e.g. circulars, announcements on
notice broads)
Rich communication for complex changes
Effective Communication
Type of Media
Routine communication for routine change
Too little information and sensitivity leads to
mistrust lack of commitment
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Organisational Rituals and Culture Change
66
Styles for Managing Strategic Change

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The Corporate Death Spiral
68
Types Of Turnaround

• Strategic turnaround involving
• changing the strategy for competing in the
  existing operating domain
• or
• changing the operating domain
• Operational turnaround involving
• increased revenues
• and
• decreased costs
• and
• decreased assets/improved asset utilisation

69
Strategies For Turnaround And Recovery

• rationalisation and merger
• increasing productivity and automation
• reduce overheads and streamline organisation
• up-grade product line
• source and produce internationally
• the global niche

70
Strategic Leadership
New reality
New image
New philosophy
New reality
New objectives
New programme
New culture
New strategy
New organisation
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Strategic Leadership In Turnaround - Key Issues

• Visible leadership
• Small autonomous work groups
• Win stakeholder confidence through communication
• Promote entrepreneurial managers
• Monitor performance link rewards to results
• Flexibility
• Avoid a repeat performance

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Organising A Business Revolution

• Get rid of the old guard
• Build a new team around you
• Explain/communicate the new reality
• Develop a new ideology, philosophy and culture
• Implement a new strategy
• Work through project teams
• Declare and resource a general mobilisation
• Keep the momentum going

73
Managing Change For Competitive Success
Coherence
Environmental assessment
Leading change
Strategic human resource management
Linking strategic and operational change