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ICS 462Information Systems

Strategy & Implementation

1.1 Introduction to Strategic Management

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Definitions of Strategy Strategy refers to the formulation of basic

organisational missions, purposes and objectives, policies and program strategies to achieve them; and the methods needed to ensure that strategies are implemented to achieve organisational ends. [Steiner and Miner (1977) Management Policy and Strategy]

Strategy formulation involves the interpretation of the environment and the development of consistent patterns in streams of organisational decisions. [Mintzberg (1979) The Structuring of Organisations]

Strategy is a broad based formula for how business is going to compete, what its goals should be, and what policies will be needed to carry out those goals. The essence of formulating competitive strategy is relating a company to its environment. [Porter (1980) Competitive Strategy]

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Definitions of Strategy

Definitions depend on views of strategic planning process adopted. (5 Ps of stragey- Mintzberg et.al )• a plan a guide for a course of action, a path from a

current state to a desired future end state• a pattern "...that is, a consistency of behavior over time. • as position the location of particular products in

particular markets• as perspective -a particular philosophy of the business

in terms of interacting with the customer, or the way(s) in which goods or services are supplied

• as a ploy under this definition, strategy is a means of gaining market share through a specific maneuver – Aim is to outwit a competitor or opponent

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Observations by Quinn and Mintzberg (1991) The Strategy

Process: There is no single, universally accepted definition of

strategy. There is no one best way to create strategy, nor is there

one best form of organisation. The world is full of contradictions and the effective strategist is one who can live with contradictions, learn to appreciate their causes and effects and reconcile them sufficiently for effective action.

No single model or theory can incorporate all the factors that influence major business decisions or all the possible combinations of these factors that could be faced. Nor can any anticipate the bizarre changes that occur in real world environments, or, even more important, the impacts of your own or others‘ creative innovations.

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According to Johnson and Scholes strategic decisions are concerned with:

The scope of an organisation's activities The matching of an organisation's activities to its

environment The matching of an organisation's activities to its

resource capability The allocation and reallocation of major resources in

an organisation The values, expectations and goals of those

influencing strategy The direction in which an organisation will move in

the long term Implications for change throughout the organisation.

 Johnson and Scholes (1993) Exploring Corporate Strategy.

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Definitions of Strategic Mgnt … a systematic approach to a major and increasingly

important responsibility of general management to position and relate the firm to its environment in a way which will assure its continued success and make it secure from surprises. [Ansoff (1990) Implanting Strategic Management]

…the decision process that aligns the organisation's internal capability with the opportunities and threats it faces in its environment. [Rowe et al. (1994) Strategic Management]

… is concerned with deciding on strategy and planning how that strategy is to be put into effect via: Strategic analysis Strategic choice Strategic implementation

[Johnson and Scholes (1993) Exploring Corporate Strategy]

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SM involves consistency of strategy across corporate (corporate strategy), SBU (business strategy) and functional unit (functional strategy) levels

Major elements of strategic management: Strategic analysis (environment; expectations, objectives,

power and culture; and resources) Strategic choice (generation of options, evaluation of

options and selection of strategy) Strategy implementation (resource planning, organization

structure, people & systems)

Factors that determine nature of strategic problems: Nature of industry (products, markets, technologies) Nature of the organization (size, ownership, maturity, etc.) Current/future external circumstances (e.g. state of

economy, political factors, etc.) Organization’s environment e.g. HR, culture, etc.

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Analytical view of SPExpansion of org. size & business opportunities in 1950s/60s, necessitated systematic or formal ways of looking at the future, leading to long-term planning using formal-rational methods e.g. forecasting (the analytical school):

■ Assumptions - organizations are purposeful, formal and exist in an objective environment; strategists can be trained to respond to the future and complexity in a controlled manner; strategic planning involves following a set of sequential procedures & using formal models; there are no biases in SP process; etc.

1970s - realized that formal planning often lacked relevance, its resultant plans were often “buried” and strategic decisions were often taken outside the formal SP process

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The pattern or process school Empirical studies showed formal/explicit strategies rarely exist

at the outset – strategic decisions are rarely the result of planned moves

Recognizes that strategy emerges, on a trial-and-error basis, from a complex process. Successful actions are pursued while unsuccessful ones are discarded.

Outcome of the process of trial and reaction (i.e. strategy) = a set of resource commitments that reflects the competitive force acting on the organization & the needs and aspirations of those within it who have the power to commit resources

Early writers influencing this school were Quinn’s logical incrementalism – cautious step-by-step evolutionary process where executives muddle through with a purpose and Mintzberg who defined strategy as “a pattern in a stream of decisions” which enabled him to identify 3 types of strategies: deliberate, emergent and unrealized (after implementation)

School has evolved to have sophisticated perspectives of the process of strategic planning and its relationship to the context in which it takes place (outside the scope of this course)

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Conclusion on SM• SM is a basis of strategic planning,

recognizing that planning is the prelude of strategic management but not sufficient if not followed by the deployment and implementation of the plan and the evaluation of the plan in action

• However we know that organizations are not static, (changes occur, politics, power, culture, competition etc)

• =>SM is iterative and, therefore, involves a process of feedback and learning as a means of informing future actions.

Conclusion on SM• is expressed from a ‘top-down’

perspective of the decisions of managers in organizations

• portrayed as revolving around formulation, implementation and control

• involves setting the goals of the organization, choosing the most appropriate actions for achieving aims, and fulfilling the aims over a set timeframe

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Strategic Planning

Figure 1: Strategic Management Framework

Implementation

- Take action

- Track status

- Communicate Progress

Developing Strategy

Situation Analysis

External Environment

Internal Environment

Deployment

- Complete Strategic Plan e.g. budget, operational plan

- Communicate Strategic Plan

Resource

Allocation

Evaluate

Collect Monitoring Data

Communicate Results

Monitoring & Evaluation

Strategic Foundation

Mission

Guiding Values

Vision Strategies

Actions

Strategic Objective

Gap Analysis

Outcomes

Outputs

Results

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23a

4

5

6

7

3b

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Strategic Planning & Organizational Change

A process of developing and maintaining consistency or fit between an organization’s objectives and its resources and its changing ext. environ

The first step in initiating organizational change; An element of business process reengineering

Determining where an organization is going in future, how it will get there and how it will know if it got there

Part of strategic management process

Quotes on planning5 Ps of planning – proper planning prevents poor

performanceBy failing to prepare, you are preparing to fail -

Benjamin Franklin Meticulous planning will enable everything a man

does to appear spontaneous - Mark Caine It's not the situation ... It's your reaction to the

situation - Robert ConklinTo hell with circumstances; I create opportunities -

Bruce Lee If you don't know where you're going, you'll

probably wind up no where! Clark Crouch Without a plan, the only way you get where you are

going is by accidentPlans are nothing; planning is everything -Dwight

D. Eisenhower

Why strategic plan?Consensus-building amongst stakeholders of

where firm is headedOrganizational – environment fit - Cope with

changing environmentResource utilization – optimize use of ltd

resourcesMonitoring & evaluation – have a basis of M&E &

be accountableBenchmarking – assist in benchmarking with best

practiceCommunication - Communicates to everyone what

is most important; basis of communicating to others to inform, motivate & involve

Framework for decision-making or securing support

Improves performance

Happiness!

Expectations - strategies & targets in SPAchievements – after perf. evaluationHappiness – a rating, leading to reward or sanction

H = A / EIf we are to be happy, we MUST at least Achieve our Expectations, i.e. H = 100% if A=E

VisionHow the organization wants to be perceived

in the futureAn expression of the desired end state What success will look like in x yearsPurpose

• Provides a long-term focus for the school• Challenges everyone to reach for something

significant• Inspires a compelling future

Some examples:UoN- be a world-class university committed to

scholarly excellence

CBPS- “Centre of excellence in Science, Technology and Innovation”.

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Characteristics of an effective vision: Imaginable: Conveys a picture of what the

future will look like Desirable: Appeals to the long-term interests

of employees, customers and stakeholders Feasible: Comprises realistic, attainable goals Focused: Is clear enough to provide guidance

in decision making Flexible: Is general enough to allow individual

initiative and alternative responses in light of changing conditions

Communicable: Is easy to communicate; can be successfully explained within five mins

MissionCaptures the essence of why the

organization exists – Who we are? What do we do?

Explains the basic needs that you fulfill

Mission statement should contain:Purpose statement – Why do we exist? What is

the ultimate result of our work?

Business statement – What activities do we do to accomplish the purpose?

e.g. UoN- to provide quality university education and training and to embody the aspirations of the Kenyan people and the global community through creation, preservation, integration, transmission and utilization of knowledge

Core valuesThe set of values and beliefs that are shared

by the organization e.g. UoN community

Provide an underlying framework for making decisions – part of the organization’s culture

Values are often rooted in ethical themes, such as honesty, trust, integrity, respect, fairness, . . .

Values may be appropriate for certain best management practices

Types of environments

Internal EnvironmentStructure, Culture,

Resources, Processes,People, Strategies,

Leadership, Systems

Demand

Ext. Environment 1

Govt

Market Structure

Technology

Political-Legal forces

Technological forces

Economic forcesExt. Environment 2

Socio-cultural forces

SWOT analysisS&W are realistic and objective appraisal of the

resources or capabilities that help (S) or deficiencies that hinder (W) an organization to accomplish its mission

O&T are ext. factors or situations that affect an org. in a favourable (O) or negative way (T)Investment opportunities (O)

External conditions that can constrain investment (T)

SWOC usefulness:

clarifies the conditions within which an organization operates

provides good indication of strategies – build on S, take advantage of O & minimize the effects of W&T

External analysis - PESTELPolitical context (e.g. Government policies, donor

support, etc.)Economic context (e.g. global economic

developments, employment levels, economic well being of Tanzanians, etc.)

Socio-cultural context (e.g. population growth, life expectancy, life style changes, governance, etc.)

Technological context (e.g. developments in technology, under-sea fibre, national fibre backbone, etc.)

Environmental context (e.g. environmental issues such as e-waste management)

Legal context (e.g. relevant laws)

Strategic issuesDefinition?

Fundamental challenges affecting an organization’s mandate/mission, products/ services, resources, service delivery, key stakeholders, processes, or management

Characteristics?derived from environmental analysis emphasis is on issues (rather than answers)are consistent with the mission and visionare few (5-7) – shows a degree of prioritization

Why need them?focuses organizational attention (resource

allocation, dm, etc.) on what is really importantneed be dealt with expeditiously & effectively for

survival and prosperitybasis for developing strategy (the SP)

Strategic objectives & strategiesStrategic objectives

Broad statements or goals about where the firm wants to be in x years

Put strategic focus into the organizationAddress the SIs and are supportive of the mission and

vision in the context of the core valuesEach strategic issue has preferably one strategic

objectiveE.g. Growth of assets,

StrategiesStatements that set HOW organization will achieve its

strategic objectivesThere are many ways to achieve those objectives Strategies define the alternatives selected by the

organization

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Results Chain

Outputs Outcomes Impact

SocietyBeneficiariesIntermediary

Groups

RESULTS CHAIN

Inputs Activities

RESOURCES

Results along the influence chain

Outcomes ImpactsOutputsActivitiesInputs

Expected outcomesThese are end of project results

Characteristics of outcomes:end-of-plan results on beneficiariesconsequences of the achievement of a set of

outputs

are subject to numerous other influences

only surface over time – medium term

hence, attribution becomes an issue

ExamplesEnhanced school performance

KPIsMeasure relatively direct and short to medium term

effects (on beneficiaries) of the plan outputsUsed for:

Setting performance targets Assessing progress toward achieving targets

(M&E)They answer the question “How will we know

success when we see it?” KPIs should be SMART (Specific, Measurable,

Achievable, Realistic and Time-bound)Examples:

Mean score

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A results chain is a logically linked set of results, some immediate, others distant

Results at each level aggregate to produce the results at the next higher level

A linear cause and effect relationship Immediate results called OUTPUTS that are

consequences of completed activities End of project results called OUTCOMES, which

are the consequences of the achievement of a set of outputs

A long-term result called IMPACT, that is the logical consequence of the achievement of the outcomes

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OUTPUTS are generally under direct control of agency

OUTCOMES are not under complete control are subject to numerous other influences only surface over time hence, attribution becomes an issue

IMPACTS refer to ultimate long-term desired and widespread changes in the society, economy or the environment of the targeted population and are even more out of control of an agency

RESULTS are always expressed with terms like “reduced”, ‘ increased” “improved” “enhanced”, “better”, “lesser”, “superior” etc. etc.