PURCHASING AND SUPPLY STRATEGY KNEC NOTES

TOPIC ONE : INTRODUCTION TO STRATEGIC MANAGEMENT – Click to view

TOPIC TWO: STRATEGIC PLANNING – Click to view

TOPIC THREE: PURCHASING AND SUPPLY STRATEGIES – Click to view

TOPIC FOUR: PURCHASING AND SUPPLY CHAIN POLICIES – Click to view

TOPIC FIVE: PURCHASING AND SUPPLY ORGANIZATION – Click to view

TOPIC SIX: MEASURING PURCHASING AND SUPPLY PERFORMANCE – Click to view

 

 

STRATEGY IMPLEMENTATION, CHANGE AND CULTURE

STRATEGY IMPLEMENTATION

An idea, however good it is, is nothing until it is put into action. Strategy implementation as the fourth step in the strategic management process is the sum of activities and choices required for execution of a strategy. Strategy implementation is the process of putting strategies and policies into action through development of programs, budgets and procedures. Even the best conceived strategies are of little value if they are not implemented. After a strategy has been carefully chosen the next step in the strategic management process is to implement the chosen strategy. Implementation involves translating the strategic intent into organizational action. The main purpose is to deliver the desired goals and objectives as spelt out in the mission statement. Implementing strategies is the most critical part of strategic management.

Implementation of strategies many a time poses challenges to several managers, to the extent that many retire, resign or are discharged from their duties.

To begin the implementation process, strategies must consider three questions:

1. Who are the people who will implement the strategy?
2. What must be used and what should be done?
3. How are implementers going to do what is needed to be implemented?

 

NB

1. Strategies must be carefully and effectively implemented so that strategy formulation or development is not seen as a waste of time and effort.
2. Poor implementation wastes resources.
3. Poor implementation demoralizes instead if motivating employees.
4. The outcome of any strategy implementation may make organizational leaders famous, or otherwise.

The Scope of Strategy Implementation

The strategy implementation process involves:

1. Understanding and Managing change processes because a new strategy means new things for those in the organization.
2. Developing an operating framework.
3. Embedding the strategy.

Implementation takes place at the functional level and most of the managers at this level are crucial to the successful strategy implementation. They usually have little if anything to do with the development of the corporate and even business level strategies. Unless changes in the mission, objectives, strategies and policies and their importance to the company are communicated clearly to them as operational managers, resistance can result.

Therefore involving middle level as well as functional level managers in the formulation as well as in the implementation of strategy tends to result in better organizational performance. When top management formulates a strategy that challenges the corporations’ culture, lower-level managers might even sabotage the implementation. It is important therefore also to note that every operational manager down to the first-line supervisor should  be involved in some way in the implementing of corporate, divisional and functional strategies.

The managers of division and functional areas work with fellow managers to develop programs, budgets and procedures for the implementation of a strategy. They also work to achieve synergy among divisions and functional areas in order to establish and maintain company’s distinctive competence.

A program – This is a statement of activities or steps needed to accomplish a single-use plan. The purpose of a program is to make a strategy action-oriented.

A budget – is a statement of corporation’s programmes in money terms. After programs are developed, the budgeting plans begin. Planning a budget is the last real check a firm has on the feasibility of a selected strategy.

Procedure – sometimes termed “standard operating procedures” (SOP), are a system of sequential steps or techniques that describe in detail, how a particular task or job is done. After a program, divisional and corporate budgets are approved. SOP must be developed or revised. They typically detail the various activities that must be carried out to complete corporations programs.

Importance of Implementing Strategies Effectively

• If poorly implemented, the whole exercise of strategy development or strategic planning will be a wasted effort and time
• The outcomes of any strategy implementation determines who is who in the management hierarchy of any organization.
• Poor implementation wastes resources
• Poor implementation demoralizes

The Scope of Strategy Implementation

The strategy implementation process involves:

• Understanding and management of the change processes
• Development of an operating framework
• Embedding the strategy

Understanding the Change Processes

A new strategy means new things. For this reason, we always look at implementation of a new strategy as a management of change. Leading a strategic change often is one part that causes failure or success of strategies. According  to Machiavellian: There is nothing more difficult to arrange, more doubtful of success and more dangerous to carry through than initiating change.

Strategic change initiative involves a large number of people changing the roles they play. The transformation of roles, cultures and structures have to be supported by the will of those involved (stakeholders). For this to happen, change requires strong leadership at all levels by both individuals and groups to maintain the collective motivation and drive of all those involved in the changes.

STRATEGY IMPLEMENTATION AND LEADERSHIP

The ability to influence the attitudes and opinions of others in order to achieve a coordinated effort from a group of employees is a difficult task. One of the key methods available to management is creativity and overall sense of direction and purpose through effective strategic planning.

Leaders must have a clear vision of the organization’s purpose, mission and objectives and must be effective in communicating this vision, must have the will to change difficult things in the business and must demand uncompromising integrity.

 

ASSIGNMENT:

1. DISCUSS THE TYPES OF LEADERSHIP STYLES EMPLOYED IN STRATEGY IMPLEMENTATION.
2. STATE THE ADVANTAGES AND DISADVANTAGES OF EACH.

 

Factors that Influence the Choice of Leadership Style Adopted by Managers at the Workplace

Leader Personality

A leader who likes to manage all work activities or who distrusts subordinates is likely to adopt authoritarian leadership

Past Experiences

Managers are likely to continue with what have worked well for them in the past in similar situations.

Subordinate Characteristics and Expectations

The level of their training and skills will influence the manager’s choice of leadership style.

Task Requirement

Where precise instructions have to be followed, authoritarian style is the most appropriate.

Organisational Climate and Policy

Expectation of Superiors

A superior may cause a manager to  adopt their favourite leadership style.

 

The styles of leadership can and will influence their effectiveness in carrying out particular strategies. On the other hand matching managerial style to an organization’s unique situation is a more difficult and challenging task.

Factors Accounting for the Popularity of the Commander Approach to Strategy Implementation

1. It allows manager to focus their energy on strategy implementation since the manager has a free hand in undertaking the task.
2. The approach makes some ambitious managers feel powerful because their thinking and decision making affect the activities of many people.
3. Managers concentrate on implementing the strategy by applying rigorous logic and analysis.
4. It allows managers to focus on the quantitative and objective aspects of a situation rather than on the qualitative, subjective elements of behaviourial interactions.
5. It divides the strategic management task into ‘thinking’ and ‘doing’ thereby reducing the number of factors to be considered simultaneously.

Certain organizational cultures and strategies are better suited for certain styles of leadership.

The skills and knowledge needed to implement strategies that result in growth are different from those needed for strategies that maintain stability. The ability of executives to meet the leadership requirements of a particular strategy depends on their training, experience and personality. Because these characteristics are not easily changed, a change in strategy is often accompanied by change in leadership.

STRATEGY IMPLEMENTATION AND MOTIVATION

There is little doubt that highly motivated employees can significantly increase the likelihood that organizational strategies will be successfully implemented. The way that the management recognizes outstanding performance or fails to recognise it sounds signals throughout the organization about what is desired and what is worth to try to achieve. These signals should support the overall strategic direction of the firm.

Strategies and their requirements should be communicated and clearly defined for all affected employees. All affected employees must receive the management and organization support necessary to implement the strategies. Management and organizational support for strategy implementation include appropriate organizational structure, reinforcing policies, leadership and effective motivational systems.

Before any strategy can be implemented, it must be clearly understood. A clear understanding of a strategy gives purpose to the activity of each employee. It allows the employee to link whatever task is at hand to the overall organizational direction. Communicating the strategy ensures  its acceptance.

CHANGE MANAGEMENT

1. .

Some factors that account for resistance to change include:-

1. Disappointments from previous experience.
3. Lack of information.
4. Difficult to affiliate with current culture.
5. Managers with less involvement in decision making.

LEVELS OF STRATEGIC CHANGE

1. Continuum change – some strategy used before is repeated because it worked.
2. Routine strategy change – involves normal change in appeals used to attract customers. Requires managers to schedule and coordinate activities well.
3. Limited strategy change – involves offering new products to new markets within the general product class. There are many variations of this level of strategic change because products can be new in a variety of ways.
4. Radical strategy change – involves major re organization. This type of change is common when mergers and acquisitions occur between firms in the same basic industry.
5. Organization redirection – involves mergers and acquisition of firms in different industries. The degree of strategic change depends on how different industries are and how central the management of the new firms is to be.

Depending on the kind of change being pursued, the change leader needs to be either charismatic or transactional. A transactional leadership is more tasks oriented and is concerned with making sure that a complex series of actions is planned, coordinated and accomplished in time, within budget and to specifications.

Management of change requires a:

• Change in systems and processes within the organization.
• Change in culture.
• Change in the organizational structure.

Change in systems and processes within the organization

Management of strategic change is about managing systems, processes, culture and structure to create a new or a revised organizational capability fit for the new strategic intent of the organization, while sustaining employee morale and motivation.

A new strategy may not be workable with existing systems and processes within an organization because the existing ones were designed to support the previous strategy. Certainly, a new strategy requires a radical change to some or all of these processes. This has always been a challenge to do, because processes can be embodied in both information and organizational procedures and rules of operation. This therefore requires those in charge to identify all processes in use and to access that the processes depend on a structural form, reporting lines and procedures that will  support the new strategic intent. In other places the process is the individual. Such systems and processes must be changed to embrace the requirement of the new strategy.

Management of business processes is seen as a key issue in implementing strategy.

Business processes can be defined as a set of logically related tasks performed to achieve a defined business outcome. Business processes cut across organization boundaries i.e. extend through departments or units. Because of this, processes may be difficult to change.

To implement a strategic change requires a business process re – engineering (BPR). However, many (BPRs) have always failed. For them to succeed, a change leader must:

1. Develop a clear business vision or strategy. Such a vision must have specific business objectives.
2. Develop the process objectives.
3. Identify the current processes to be redesigned.
4. Review and understand existing processes. Through such reviews, we may understand how processes interrelate and this provides a baseline of future improvements.
5. Identify organizational IT levers necessary for process improvements.
6. Identify and benchmark best practices both within and outside the enterprise.
7. Design and build a process specification which is sufficiently specific to measure the performance of the new or revised process.
8. Design and build a prototype of the new process.
9. Obtain management agreement to the new process and then sell the idea to all involved in implementation and operations.
10. Install the new process.
11. Publicize the existence of the new process.
12. Remove all old processes otherwise staff will continue to use them.

Strategies/Ways/Approaches of Managing Change

1. Participation– Involvement of employees in change management – ensure all employees participate fully in the change management process.
2. Education and training – develop skills to handle change ang enlighten the concerned about reasons and necessity for change.
3. Facilitate and support -Manage the change through change agents (e.g. counselor) when there is fear and anxiety. Employees may need to be trained to get new skills to adapt to the change’
4. Constant communication -to arrest the fears of employees.
5. Negotiation/ Offering incentives –Exchanging something of value to increase motivation and lessen resistance..
6. Manipulation – Involves twisting and distorting facts to make them appear more attractive, withholding undesirable information and creating false rumours.
7. Cooptation– This strategy seeks to buy off the leaders of a resistance group by giving them key roles in the change decision.
8. Coercion – use of force, use of punishment when there is no prospect of a positive, productive acceptance by resisters.

Implementation and Changing Culture

The first function of strategic implementation and control is to shape the behavior of organizational members to ensure they are working towards organizational goals and to take corrective action if those goals are not being met. The second function of strategic control is to keep organizational members focused on thinking about what is best for their organization in the future and to keep them looking for new opportunities to use organizational resources and competencies to create value. One important aspect that serves this dual function of keeping organization members goal directed while open to new opportunities is to use their skills to create value is organizational culture.

Organizational culture is the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with shareholders outside the organization.

 It encompasses the shared values that create the norms of individual behavior and the tone of an organization. It reflects the set of important assumptions (often unstated) that members of an organization share in common. Although intangible, culture provides meaning, direction and the basis of action in an organization or community.

Strategic implementation usually involves making an assessment of the suitability of a culture in an organization to undertake the strategy. If found unsuitable, it becomes necessary to change that culture (unfreezing and refreeze the culture with an appropriate one)

For a culture to make sense in a new strategy, it must be shared among the members of an organization. Members share a culture by internalizing it among an organization’s individual members.

Leaders can manage and create distinct cultures through a variety of ways from which employees can learn the culture of their organisation, which include the following:

1. Emphasizing key themes or dominant values. For instance businesses build strategies around distinct competitive advantages they possess or seek e.g. quality, differentiation, cost advantages or speed. So leaders nurture key themes or dominant values within their organizations that reinforce competitive advantages they seek to maintain.
2. Encouraging dissemination of stories and legends about core values. They can also narrate stories about the organization e.g. Special events, founders of the organization, reactions to past mistakes etc.

3. Institutionalizing practices that systematically reinforce desired beliefs and values.
4. Material symbols- e.g. the layout of corporate headquarters, automobiles top executives are given, size of offices etc. will indicate the employees who are valued and the kind of behavior expected in an organization.
5. Rituals- These are repetitive sequences of activities that express and reinforce the key values of the organization.
6. Language- using language as a way to identify members of a culture. By learning this language members attest to their acceptance to this culture.
7. Adapting some very common themes in their unique ways e.g. encouraging such beliefs as:
8. A belief in being the best
9. A belief in superior quality or service
10. A belief in importance of people as individuals and a faith in their ability to make a strong contribution

Basic Considerations about Culture in Strategy Implementation

1. Key changes should be visibly linked to company mission.
2. If existing culture is found necessary for successful implementation of a given strategy, then, emphasis should be put on the use of existing personnel. Existing personnel, where possible should fill positions created by the strategy being implemented. But if unsuitable, use external personnel.
3. Considerations should be made about the existing reward systems.
4. Key attention should be paid to the changes that are least compatible with the current culture.
5. If absolutely incompatible and inconsistent then the culture should be reformulated – to implement a new strategy, organizational changes must be made that may embrace a culture necessary for the new strategy to operate.

Implementation Requires Changing Organizational Structures

Strategic change often requires that organizational structures and power bases change as well. Successful strategy implementation depends in a large part on the firm’s primary organizational structure.

Importance of an organization structure

• An organization structure helps to identify the firm’s key activities and the manner in which they will be coordinated to achieve the firm’s strategic intent.
• An organization’s structure defines the working (reporting) relationship in an organization.
• An organization structure particularly, the matrix type, enhances collaborative working relations between the operational and functional units.
• An organization structure defines the channel of communication which is core to the success of any strategy.

A firm’s primary organizational structure comprises the firm’s major elements, components or differentiated units. Such a structure portrays how key tasks and activities have been divided to achieve efficiency and effectiveness.

Organization structures can take different forms e.g.

• Functional structure
• Geographic structure
• Divisional structures
• Strategic business units
• Matrix structure etc.

The organizational structure to be adopted, depends on the organization’s basic business, its objectives etc.

Implementation and Strategic Change

Apart from Strategy Implementation, the Following are Factors that May Lead to Changes in the Operations of the Organisation

1. Strategic refocus- when there are changes in the business processes to adopt new paradigm.
2. Structural changes– when new business processes are introduced.
3. Technological changes-due to the rapid changes in technology.
4. Change in ownership– resulting from an acquisition, merger, strategic alliance or evemn a take- over.
5. Competition – addressing pressure in competition may lead to changes in an organization.
6. Changing Customer needs– increased customer needs enhancement calling for change to address such needs.
7. Globalisation – geographic location may necessitate the need for organizational change.
8. Managing change requires focused and strong leaders.

The Role of Change Leaders

1. Change leaders are likely to be involved in implementing strategic initiatives which they have not initiated and whose benefits they may not be totally convinced of.
2. They are unlikely to have ready – made networks and processes and will therefore have to create alliances and build networks in order to gain the support and resources for their change project(s)
3. Change leaders have to depend more on influence as they often do not have direct control of all the resources and people needed to achieve the changes they want
4. Change leadership usually requires multiple leadership roles i.e. the leadership task is not carried out by a single individual but divided among several or many people. This is because there are many simultaneous tasks to be accomplished at the same time. At the same time it is possible that the nominated leaders are not the best but there are others in the change team who are better. The initiators/sponsor of the change should identify these and harness their effort for better results.
5. Change leadership is a political task and has to be done at all levels in the organization. At one end, it is necessary to keep the courage and enthusiasm of the board and other senior managers, who as the change programme hits obstacles can falter in their belief in the benefits of the anticipated change. The change leaders should also try and win the hearts of those who are at the fence wishing for the changed to fail.

To be able to achieve the desired objectives, change leaders must be able to play as many of the following roles as possible in addition to their normal work related roles.

Change initiators – proposing necessary changes and get approval for them.

Change sponsors – providing high – level organizational support for the change programme. This requires seeking for the support of the board and other senior managers while helping the programme and project managers when asked. This is necessary for some change may be initiated at the unit level but with corporate wide repercussions, requiring director level support

Change leaders – providing the motivation and drive needed to take followers with them. This is necessary to energize their colleagues and keep the changes coming

Change managers (program and project managers) – this is necessary to keep all the players on track, rooting for the change initiatives and preventing the saboteurs from belittling the change. This is important for it will ensure successful task management.

Change designers – as change designers, leaders should work closely with the change initiators and the implementation team to achieve the ideas of change initiators

Change Implementers- People who work to deliver the change initiative before its value and purpose are eroded by time or loss of interest due to lapsed time and implementation problems.

Reviewer and Consolidator –A change leader needs to participate in the review and consolidation team. The team is mostly comprised of implementers and change initiators to review the outcome of the changes and to report back to the change sponsor.

Change Receivers – These are people who have to operate in a new environment and cope with new structures, processes and cultures. This is necessary to make a success of the change environment.

Change Supporter –These are those who believe in change and do their best to make it happen. However they are unable or are willing to take a leadership role.

CHARACTERISTICS OF CHANGE LEADERS

Change leaders are needed for successful implementation. Therefore they need to be:

Confidence Builders- who can lead others during the period of change when many people have feelings of uncertainty about the future and  worry about their ability to adapt their skills and capabilities to match that expected in their new roles. Change leaders will elicit performance, loyalty, commitment and motivation of their followers.

Motivators – They will connect to the emotions of their followers and convince them with his vision, encouraging them to be daring like himself.

Performance and not conformance Oriented- Their leadership must be focused on outcomes and not inputs.

Trustworthy – They must be sincere in their actions so that people believe in them and that their motives are honourable- They need to display many leadership behaviours to match the needs of their followers and the circumstances.

Self- motivating – As it is unlikely to find anyone else to motivate them when thing are going badly.

Convincing – Be able to establish an open forum for debate of contentious issues and a mechanism for resolving conflicts and disputes to get commitment to common objectives

Creative –and able to come up with solutions to obstacles and new challenges.

Politically Astitute – Change management is a political process and the leader must ready to overcome all political intrgues for the sake of the organization and the desired changes.

Persistent and Determined – and not let change constraints discourage them from achieving the desired change.

Quick Witted – to comprehend the issues that may arise from a variety of disciplines even if they are not masters in the disciplines being used during the change process.

 

Ways in Which Manager Contribute to Failure of Strategies/ Strategic Plans

1. Failure to accurately predict market trends.
2. Inability to predict reactions of competitors.
3. Over-estimation of the human resource competencies which leads to failure to develop employees.
4. Failure to obtain commitment from employees and lower levels of management.
5. Under- estimation of time required by failing to undertake critical path analysis.
6. Failure to follow through with plans after the initial planning.