RESEARCH ARTICLES

 

Perceptions regarding the use of strategy execution tools and processes in the contemporary workplace

 

 

EE Smith

Nelson Mandela metropolitan university

 

 

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ABSTRACT

This article investigates the perceptions of management and employees regarding the use of strategy execution tools and processes in organisations within the Nelson Mandela Metropole. To achieve the research objectives, a comprehensive literature study was conducted as to provide a theoretical framework for the empirical study. Self-administered questionnaires were distributed to a non-probability convenient sample of 180 organisations in the designated region. To investigate the relationships between the independent and dependent variables, nine null-hypotheses were tested. Perceptions regarding the use of strategy execution tools and processes (dependent variables) and classification data (independent variables) were tested. The results revealed significant relationships between these variables. It appears that the task of executing a strategy is primarily an operations-driven activity, revolving around the management of people and business processes. The implementation task entails coordination of a range of efforts expected to transform strategic intensions into actions. Strategy implementation is an extremely difficult exercise and management wanting to develop world class strategy execution skills must accept a new strategic paradigm. Practical guidelines are provided to strategy executors for using the tools and processes available to ensure successful strategy execution in the contemporary workplace.

Key phrases: Strategy execution, tools, processes

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1 INTRODUCTION

Strategic management is the set of decisions and actions that result in the formulation and implementation of strategies to achieve the objectives of the organisation (Sterling 2003:32). According to Hrebiniak (2005:4), management literature has focused over the years primarily on revealing new ideas on planning and strategy formulation, thus greatly neglecting strategy execution and its importance. Li, Guohui and Eppler (2008:3) assert that unlike strategy formulation, strategy implementation or execution is often seen as a craft, rather than a science and its research history is seen as fragmented and eclectic. Slater and Olson (2000:813) state that the basic premise of strategy implementation literature is that different strategies require different configurations of organisational practices to achieve optimal performance. Generally strategy implementation research is built on the premise that strategy failure stems from formulation shortcomings rather than execution problems (Parnell 2008:1278).

Neilson, Martin and Powers (2008:60) further postulate that execution of strategies is the result of thousands of decisions made by management and employees and often fails as a result of only paying attention to structural re-organisation and neglecting decision rights and information flow. Dooley, Fryxell and Judge (2000:1237) concur that many strategic management researchers assume that consensus among decision-makers facilitate implementation, but ignore the influence of other implementation factors. Heidi, Gronhaug and Johannessen (2002:226) allege that many factors influence the degree of successful strategy implementation, yet few studies have attempted to identify exactly what these implementation barriers are. These barriers can lead to a complete breakdown of the formulated strategy.

The implementation of a crafted strategy has a huge impact on an organisation's overall success, thus a strategy can only add value to the organisation if it is successfully implemented (Raps 2005:145). It is therefore imperative to state that each organisation's strategy implementation process is unique, and management needs to identify what needs to be done to guide employees to perform the required actions or display the necessary behaviours for successful implementation (Speculand 2010:Internet). In this article, the problem statement and objectives of the study is firstly outlined. A theoretical overview of strategy execution literature is then provided. In the next sections, the research methodology and empirical results are provided. Lastly, the main conclusions and managerial implications of the study are highlighted.

 

2 PROBLEM STATEMENT

Strategy implementation is viewed as an integral part of the strategic management process; however managers do not pay as much attention to planning the implementation of their strategies as they do to strategy formulation. Despite acknowledged importance of strategy implementation, limited research has been done in this field (Shah 2005:294). Most aspects of strategy implementation is built on a number of underlying assumptions that failed strategies tend to emanate more from execution problems rather than from formulation shortcomings (Parnell 2008: 1278). Although Hrebiniak (2005:5) argues that strategy implementation is extremely difficult, management teams wanting to develop world class strategy execution skills must accept a new strategic paradigm and not allow that the implementation part of the strategy is neglected (Bigler 2001:29). Often, organisations' implementation processes fall victim to a number of obstacles (Shah 2005:293-295).

Organisations experience difficulties in implementing their strategies because implementation is more difficult than establishing a good strategy (Taslak 2004: 154). Hrebiniak (2005:20) states that employees do not understand how their jobs contribute to important execution outcomes. Aaltonen and Ikavalko (2002:415) allege that many studies have been conducted regarding why organisations fail in successfully implementing strategies and findings were predominantly unanimous on issues such as weak management roles in implementation, a lack of communication, lack of employee commitment to the strategy, and an unaligned organisational structure and culture. However, these factors only provide a vague picture of the real problem. It is evident that organisations do understand the need for strategy and its effective implementation, however most of their efforts fall short of the goals they had set for themselves. Various processes and tools are available for strategy execution. This lead to the following research question to be addressed in this study:

"What are the perceptions of managers and employees regarding the use of strategy execution tools and processes in the contemporary workplace and how do these perceptions differ in terms of demographical characteristics?"

 

3 OBJECTIVES

The primary objective of this study is to investigate perceptions regarding the use of strategy execution tools and processes in contemporary organisations within the Nelson Mandela Metropole and to identify how these perceptions differ in terms of demographic characteristics.

3.1 SECONDARY GOALS

To help achieve the primary objective, the following secondary goals are identified:

• To contextualise concepts related to strategy execution.

• To provide a theoretical overview of strategy execution tools and processes used in organisations.

• To empirically assess perceptions regarding the use of strategy execution tools and processes by organisations within the Nelson Mandela Metropole.

• To provide managerial guidelines for using strategy execution tools and processes in the contemporary workplace.

 

4 A THEORETICAL OVERVIEW OF STRATEGY EXECUTION

4.1 CONCEPT CLARIFICATION

Strategy is the plan of action that prescribes resource allocation and other activities for dealing with the environment and achieving a competitive advantage (Daft 2008: 242). Strategy formulation is the development of long range plans for effective management of opportunities and threats, taking into consideration corporate strengths and weaknesses. It also includes defining the corporate mission, specifying achievable objectives, developing strategies and setting policy guidelines (Hunger & Wheelen 2010:Internet). Strategy execution/implementation is the sum total of the activities required for the execution of the strategic plans through which strategies and policies are put into action. Strategy execution is a critical cornerstone and an ally in building a capable organisation and the use of appropriate levers of implementation could be the crucial turning point in the development of an organisation (Crittenden & Crittenden 2008:302).

4.2 NATURE OF STRATEGY EXECUTION

Strategy execution takes place when a firm adopts organisational policies and practices that are consistent with the strategy (David 2003:236). Strategy execution is the most complicated and time consuming strategic management component, as it cuts across all facets of managing. It needs to be initiated from many levels and areas inside the organisation (Shah 2005:294). The task of executing a strategy is primarily an operations-driven activity, revolving around the management of people and business processes. Successful execution thus depends on performing a good job with and through others, building and strengthening competitive capabilities, motivating and rewarding people in a strategy supporting manner (Hough, Thompson, Strickland & Gamble 2008:256). The implementation task entails coordination of a range of efforts expected to transform strategic intensions into actions. This challenges strategists¹ abilities to deal with various issues related with the implementation process. Strategy implementation also includes on-going adaptation of the strategy through the implementation process and naturally requires learning and adjustment in relation to the strategy (Shimizu 2008:4).

4.3 STRATEGY EXECUTION TOOLS AND PROCESSES

Strategy execution entails finding answers to the question "how?" - the specific techniques, actions and behaviours needed for a smooth strategy-supportive operation (Hough et al. 2008:259). According to Thompson, Strickland and Gamble (2010:329), eight managerial tasks are necessary for effective strategy execution (see Figure 1). These eight tasks or tools also formed the basis for the theoretical framework and empirical part of this study.

There is no ready-made managerial recipe for successful strategy execution that could be used across all organisational situations or types of strategies. These actions and tools need to be adapted for each unique situation. These eight components or strategy execution tools and processes are further highlighted and discussed below. Table 1 highlights certain aspects of these tools and processes that could assist in strategy execution.

It should be clear from Table 1 that putting a strategy into place calls for various managerial skills. Executing a strategy is mainly an operations-driven and action-orientated activity involving the management of people and processes.

 

5 DEMOGRAPHICAL INFLUENCES ON STRATEGY EXECUTION

Various authors (see for example Barber, Laing & Simeone 2005:210; Golden 1992:145 and Wooldridge, Schmid & Floyd 2008:1190) have attempted to investigate the influence of demographics on strategy execution with varying results. Qi (2005:45) concurs that much organisational research has focused on exploring relationships between the demographic characteristics of employees and various work-related outcomes. Waldersee and Sheather (1996:105) state that different strategies need to be implemented in different ways and it is often assumed that personality is a primary determinant of strategy execution actions. However, the effect of strategic context on managers' espoused strategy implementation intentions is sometimes overlooked.

Parnell (2008:1277) further argues that the extent to which strategies are effectively executed and become an integral part of an organisation varies across organisations due to a number of factors influencing the process of strategic diffusion, such as organisational culture, stage of economic development and management practices. Both Arnold (2010:166) and Ashton and Morton (2005:28) concur by stating that effective management of human resources (talent management) is critical to facilitate the execution of strategies and that employees have different and unique characteristics that influence their behaviour in the workplace and ultimately strategy execution. Goll and Rasheed (2005:999) concluded that there is support for the assertion that management demographic characteristics influence decision-making and ultimately strategy execution and organisational performance. Harrington and Kendall (2006:207) concur that managers' perceptions of environmental complexity and organisation size directly impact involvement during strategy execution.

Based on the above reasoning and primary objective of this study, various null-hypotheses are formulated to test the relationships between the independent and dependent variables. Eight dependent variables (perceptions regarding strategy execution tools and processes) and nine independent variables (demographical characteristics of respondents) were used. A total of 72 null-hypotheses were thus formulated in this study. Based on the ANOVA results that follow in the results section, only those formulated hypotheses that show significant relationships between the independent and dependent variables are reported here and those that exhibit no statistically significant relationships are excluded from this discussion.

The following null-hypotheses are reported in this article:

H01: There is no relationship between the perceptions regarding building a capable organisation necessary for strategy execution and the ethnic classification of respondents.

H02: There is no relationship between the perceptions regarding marshalling of resources necessary for strategy execution and the position of respondents in an organisation.

H03: There is no relationship between the perceptions regarding instituting policies and procedures necessary for strategy execution and the position of respondents in an organisation.

H0₄: There is no relationship between the perceptions regarding best practices and continuous improvement necessary for strategy execution and the position of respondents in an organisation.

H05: There is no relationship between the perceptions regarding the provision of rewards and incentives necessary for strategy execution and the position of respondents in an organisation.

H06: There is no relationship between the perceptions regarding the provision of rewards and incentives necessary for strategy execution and the length of current employment of respondents in an organisation.

H07: There is no relationship between the perceptions regarding instilling a corporate culture necessary for strategy execution and the position of respondents in an organisation.

H0₈: There is no relationship between the perceptions regarding leadership necessary for strategy execution and the position of respondents in an organisation.

H09: There is no relationship between the perceptions regarding leadership necessary for strategy execution and the employment size of an organisation.

The alternative hypotheses (H1 to H9) can be stated as the exact opposites of these null-hypotheses.

 

6 RESEARCH METHODOLOGY

This section outlines the research methodology followed in this study.

6.1 RESEARCH PARADIGM

The quantitative research method is used in this study. It is a form of conclusive research, which involves a large representative sample and structured data collection procedures are used. The quantitative research approach used is descriptive research (perceptions regarding strategy execution tools and processes in organisations) and exploratory research.

6.2 POPULATION

The population of this study can be regarded as all medium and large-sized organisations in the Nelson Mandela Metropole involved in strategy execution. The reason for using this population is that these organisations are more likely to be involved in strategy execution and that smaller organisations are less likely to be involved in all these aspects of strategy execution.

6.3 THE SAMPLE

A non-probability convenience sample was drawn based on the availability and accessibility of respondents in the designated region. Only medium (employing 51 to 200 employees) and large-size organisations (201 and more employees) were included in the final sample as these organisations are more likely to deal with strategy execution tasks. Fieldworkers had to establish prior to administering the questionnaire whether respondents are knowledgeable on strategy execution aspects of their organisations.

6.4 QUESTIONNAIRE DESIGN

Based on the sample size of 180, a survey by means of self-administered questionnaires was used. The questionnaire is divided into two sections:

• Section A deals with perceptions regarding strategy execution tools and processes used in organisations and consists of eight factors (strategy execution tools). A total of 45 variables/statements are used. The type of ordinal scale used is a five-point Likert-type scale, ranging from strongly agree (5) to strongly disagree (1).

• Section B provides classification data (demographic characteristics) of respondents and contains a nominal scale of measurement, using nine categorical variables.

6.5 DATA COLLECTION

The type of data collected was numeric, non-verbal and non-overt (questionnaires). During the literature search (secondary data collection), various textbooks, journals and the Internet were consulted. Primary data was collected by means of a survey using self-administered questionnaires. Two hundred self-administered questionnaires were distributed and 180 correctly completed questionnaires were received. The effective response rate of this survey is thus 90%.

6.6 PILOT STUDY

In order to pre-test the questionnaire, it was given to 15 organisations included in the population. It was also given to a few academics in the field of strategic management and statistics to pay attention to wording and sequence of items, layout and coding of information. After processing and analysing the data from this pilot study, the questionnaire was refined and some minor changes were made regarding wording, sequence and layout

6.7 DATA PROCESSING AND ANALYSIS

The returned questionnaires were inspected to determine their acceptability, edited where necessary, and coded. The data were transferred to an Excel spreadsheet. A statistical computer package, named SPSS-PC, was used to process the results. Techniques used during data analysis included descriptive statistics (e.g. mean and standard deviation), frequency distributions, correlation coefficients and analysis of variance.

 

7 EMPIRICAL RESULTS

7.1 DEMOGRAPHICAL PROFILE OF RESPONDENTS

Table 2 provides a demographical profile of the respondents of this study.

From the results in Table 2 it is clear that the majority of the respondents (62%) are males and 38% females. It is also evident that 71% of the respondents are between the ages of 25 to 44 years and 71% have a national certificate/diploma or bachelors degree (19% have a post-graduate qualification). It is further shown that the majority of the respondents are white (40%) and black (27%) and 67% are owners/managers and 33% are employees. Sixty five percent of the employees have been employed for between one and 10 years with their current employer and 24% for 11 years or longer. The employment size of the majority of the respondents is medium-sized (57%) and large (43%) organisations. In terms of type of industry, 24% are active in the retail and wholesale industry and 19% in the mining industry respectively. Seventy one percent of the respondents are employed in the private sector whilst only 29% are employed in the public sector.

7.2 DESCRIPTIVE STATISTICS

Table 3 provides an overview of the most important and significant descriptive statistics for Section A (perceptions regarding strategy execution tools) of the questionnaire.

In analysing the measure of central tendency (mean values) for the factors used in Section A of the questionnaire, it appears that most values cluster around point four of the scale (agree), indicating that respondents tend to agree with most of the factors in this section of the questionnaire. Measures of dispersion, by means of low standard deviation scores indicate that respondents tend not to vary much regarding the factors tested in these sections of the questionnaire. The lowest mean score (3.62) and highest standard deviation score (0.91) was obtained for the factor regarding the provision of rewards and incentives.

7.3 RELIABILITY AND VALIDITY OF THE MEASURING INSTRUMENT

External validity is ensured by means of a proper and sound sampling procedure. Attention was given to ensure that the questionnaires were completed at the appropriate time and place and under conditions conducive for accurate research. Internal validity of the instrument's scores is ensured through both face and content validity. Expert judgment and a pilot study were undertaken to assist in this regard. The statistical software package, SPSS, was used to determine the Cronbach's alpha values for the eight predetermined factors of Section A. To confirm the internal reliability of these nine factors, Cronbach's alpha was calculated (refer to Table 4).

The reliability coefficients of Cronbach's alpha for the various factors are all above 0.7. It can therefore be concluded that all factors are internally reliability.

7.4 CORRELATION

An inter-item correlation exercise was conducted to determine the correlation between the variables constituting each factor in Section A of the questionnaire. A detailed presentation of the correlation matrix results falls beyond the scope of this article. It can however, be reported that all the variables in each factor show positive relationships with each other. The strongest positive r-value (0.7469) was obtained for the items constituting the provision of resources and incentives factor and the lowest positive r-value (0.1654) for the items of building a capable organisation. A positive correlation coefficient (r-value) indicates a strong or positive relationship among the variables. No negative r-values are reported.

7.5 ANOVA

The purpose of this analysis is to investigate the relationship between the independent and dependent variables and to test the stated hypotheses. Table 5 provides an outline of the variables used in this analysis. Inferential statistics are used to make inferences about the population using sample data to make decisions regarding various hypotheses. Different analyses of variance exercises were conducted to test the stated hypotheses. Only those ANOVA results that show significant relationships between the independent (classification data) and dependent variables (strategy execution tools) are reported and those that exhibit no significant relationships are excluded from this discussion. Significant relationships exist between all the dependent variables, except for instilling information and operating systems and the following independent variables: ethnic classification, position in organisation, length of current employment and employment size.

The ANOVA results clearly indicate the relationships between the independent and dependent variables. The null-hypotheses (HO1 to HO9) can, in all cases, be rejected at a significance level of 0.05 and the alternative hypotheses can be accepted. These null-hypotheses fall within the rejection region (p < 0.05 and large F-statistic values), which indicate that there is a significant relationship (difference) between the perceptions regarding strategy execution tools and processes and some of the classification data variables (H₁ to H₉ can be accepted which indicate that there are significant relationships between the tested variables). From the above results, one can therefore construct the following model, as depicted in Figure 2, to indicate the different relationships between the dependent and the independent variables. Those variables that are not linked to any of the variables thus indicate no relationships.

 

8 CONCLUSIONS AND RECOMMENDATIONS

The strategy implementation process is affected by many variables inside and within the organisation's environment. It appears that the task of executing a strategy is primarily an operations-driven activity, revolving around the management of people and business processes. Successful execution thus depends on performing a good job with and through others, building and strengthening competitive capabilities, motivating and rewarding people in a strategy supporting manner. The implementation task entails coordination of a range of efforts expected to transform strategic intensions into actions. This study focused on eight key strategy execution tools or processes (managerial tasks), namely: building a capable organisation; marshalling resources; instituting policies and procedures; adopting best practices and continuous improvement; installing information and operating systems; providing rewards and incentives; instilling a corporate culture and leadership.

The following conclusions and recommendations can be drawn, based on the analysis of variance of the independent variables (classification data) and dependent variables (strategy execution tools and processes) used in this study:

• There appears to be a significant relationship between the perceptions regarding building a capable organisation and the ethnic classification of respondents (H01 rejected). Managers and employees of different ethnic groups have divergent views on building a capable organisation necessary for strategy execution. Organisations should therefore ensure that efforts for building a capable organisation should make provision for the viewpoints of diverse workforce. Organisations should make provision for a strong management team to drive strategy implementation and that employees with needed experience, technical skills and intellectual capital are recruited and retained across the spectrum of a diverse workforce.

• It was found that the position of respondents in organisations is significantly related to the following strategy execution tools: marshalling resources, instituting policies and procedures, adopting best practices and continuous improvement and provision of rewards and incentives (H0₂ to H0₅ rejected). Owners/ managers and employees have different views regarding the use of these strategy execution tools. Organisations should realise that when implementing these strategy execution tools employees from different positions and managerial levels attach different value to the use of these tools. The manner in which resources, policies and procedures, continuous improvement initiatives and rewards and incentives are deployed during the strategy execution process should be sensitive toward the different positions and managerial levels in an organisation.

• The length of employees' current employment appears to be significantly related to the use of rewards and incentives during strategy execution (H06 rejected). Employees with longer tenure at their current employer have different views regarding the use of resources and incentives during strategy execution as compared to employees who have been employed for shorter periods with their current employer. Rewards and incentives should be based on achieving results and what to be achieved and not on performing assigned duties (what to do). All employees, irrespective of length of employment, should understand the reward and incentive system used in an organisation.

• There appears to be a significant relationship between the position of employees in an organisation and instilling a corporate culture necessary for strategy execution (H0₇ rejected). Although management and employees might have different views regarding instilling a corporate culture necessary for strategy execution, the culture or work climate should be grounded in values and practices conducive to strategy execution efforts.

• Leadership necessary for strategy execution is significantly related to the position of employees in an organisation and the employment size of an organisation (H08 and H09 rejected). Employees from different positions and managerial levels and medium and large-sized organisations have divergent perceptions on the use of leadership as a tool for strategy execution. Despite these perceptual differences the leadership challenge is to push for corrective actions if strategy execution is not delivering good results.

Based on the items in the questionnaire, Table 6 provides general guidelines and recommendations for using strategy execution tools and processes in the workplace.

The following extract seems appropriate to conclude this article with:

"... Decades of company interactions consisting of research, teaching and consulting suggest that strategy implementation has become a catchall of phrases and recommendations with little clarity as to what comprises the necessary cornerstones ... as an ally and not an opponent, the implementation process works side-by-side with the formulation process ... the use of appropriate levers of implementation is the pivotal hinge in the development of an organisation, helping create the future, not inhibit it." (Crittenden & Crittenden 2008:301)

 

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