Prime Journal Of Social Science (PJSS)

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Prime Journal of Social Science (PJSS)thISSN: 2315-5051. Vol. 2(4), pp. 275-281, March 28 , 2013www.primejournal.org/PJSS Prime JournalsFull Length ResearchThe managerial process of crafting and executingstrategyMary Ragui and Purity W. WeruJomo Kenyatta University of Agriculture and Technology (JKUAT), Nairobi CBD Centre, Box 62000 00200, Nairobi,Kenya.Accepted 22nd March, 2013This study constitutes a review of existing literature relevant to the subject. The study examines and brieflydiscusses salient issues in managerial process of crafting and executing strategy. It identifies and layssignificant emphasis on the five major phases that shapes the managerial process of crafting and executingstrategy. The five phases identified and discussed are; the development of strategic vision, setting objectives,crafting a strategy to achieve objectives, implementing and executing the chosen strategies efficiently andeffectively, and evaluating the performance of the new adjustments within a company. The paper winds up witha conclusion that Good Strategy Good Strategy Execution Good Management. Competent execution of awell-conceived strategy is the test of managerial excellence and a proven recipe for organizational success!Key words: Strategy, management, strategy crafting, strategy implementation and strategy evaluationINTRODUCTIONCarscrud and Brannback (2007) likened strategy to themaster screenplay, where a poor screenplay gives a badfilm even if it is full of special effects. Accordingly,strategy provides management and employees with ageneral, broad sense of direction of the venture thuscannot be ignored for survival and growth of the firm.Govindarajan and Trimble (2012) assert that strategyformulation and execution is an analytical, data-drivenprocess that scrupulously identifies client needs,differentiates the company from competitors, andmaximizes profits. Strategy formulation is mostlyregarded as the exclusive domain of senior management(Cocks, 2010). Strategy development process is like a“black box” that produces a strategy to be implementedusing strategy maps and balanced scorecards whichshould be governed by a systematic process that definesthe organization's purpose and goals and carefullyexamines the external and internal environment toidentify opportunities and constraints regarding thatstrategy (Kaplan et al., 2008). Effective strategyexecution rarely gets as much attention as formulation yetexperienced managers appreciate that well craftedvisions and strategic plans are useless if they cannot beeffectively executed. The best formulated strategies mayfail to produce superior performance for the firm if theyare not successfully implemented (Martin, 2010).Hrebiniak (2006) argues that making that strategy work isa more difficult task for a management team thanformulating of the same. Li et al., (2008) argues thatamong other factors that influence the success ofstrategy implementation includes the people who executethe strategy; the systems or mechanisms in place forcoordination; and control and support of implementation.Cocks (2010), asserts that successful execution ofstrategy calls for leadership and communication of thestrategy to all stakeholders. Crafting and executingstrategy is thus a managerial process that is not an endby itself but a means to the end. This paper identifies anddiscusses the process and concludes with remarks drawnfrom the discussion making recommendations forpossible future consideration. It is however important topreliminary discuss management and strategy as the twomain concepts widely used in this paper.ManagementDifferent scholars define the term managementdifferently. Some definitions include: Daft (2010) thatmanagement is the attainment of organizational goals inan effective and efficient manner through planning,organizing, leading and controlling organizational2

Ragui and Weru 276resources; Robbins and Coulter (2005) that managementis the efficiency and effectiveness in attainingorganisational goals; and Gomez-Mejia and Balkin(2002); and Lewis et al., (2007) that management isknowing how to allocate people and resources efficientlyto accomplish organizational goals and to keep thosegoals in tune with changes in the external environment.Gomez-Mejia and Balkin (2002) summarized theimportance of management as:- reconciling the interestsof all the stakeholders; optimizing utilization of resources;managing changing environment; expanding the size ofbusiness; providing innovation; tackling businessproblems; directing the organization and providing coordination .StrategyDifferent authors defines strategy differently but all arerelated to mean it is a road map to where we are goingwhich enables planning on every level to ensure we getthere. Some definitions include: Bryson (1995) thatstrategy is a pattern of purposes, policies, programmes,actions, decisions, or resource allocations that definewhat an organisation is, what it does, and why it does it.Johnson, Scholes and Whittington (2005) defines it as“the direction and scope of an organization over the longterm, which achieves advantage in a changingenvironment through its configuration of resources andcompetences with the aim of fulfilling stakeholderexpectations.” Thompston, Strickland and Gamble (2010)defines it as a management’s action plan to grow thebusiness, attract and please the customers, competesuccessfully, conduct operations and achieve targetlevels of organisational performance. Carscrud andBrannback (2007) states that in a simple shorthandstrategy is fundamentally who, what, when, where, why,how, and how much.Mintzberg et al., (2003) opened up the concept ofstrategy to a variety of views. Strategy is an elephant,they argue, and we are all the proverbial blind mengrabbing at its different parts and pretending tounderstand the whole. These different parts could definestrategy as: Strategy as plan - a direction, guide, courseof action - intention rather than actual; Strategy as ploy a maneuver intended to outwit a competitor; Strategy aspattern - a consistent pattern of past behaviour - realizedrather than intended; Strategy as position - locating ofbrands, products, or companies within the conceptualframework of consumers or other stakeholders - strategydetermined primarily by factors outside the firm; Strategyas perspective - strategy determined primarily by amaster strategist and thus strategy could also be aconcept which exist in the minds of the interested parties.As can be deduced from all their definitions, strategy isthe coherent or consistent stream of actions which anorganization takes to move towards its vision. Thisstream of actions can be centrally planned and driven;delegated and distributed throughout the organization.They can be either conscious actions, unconscious oremergent actions resulting from the past patterns ofdecisions, resource allocations or current responses toproblems and opportunities. In reality, organisations tendto pursue a mixture of these. These strategies are puttogether in one strategic plan which is formally reviewedannually but frequently reviewed informally when majorand unexpected events occur. Because strategies are notends in themselves but means to an end, they are bynecessity both flexible and pragmatic. They will beconstructed and pursued only to the extent that theyfacilitate the pursuit of the vision (Burnes, 1996). Strategyscholars Hambrick and Fredrickson (2001) indicated thata good strategy should have elements of one or more of:arenas (where will we be active?), vehicles (how will weget there?), differentiators (how will we win in the marketplace?), staging (what will be our speed and sequence ofmoves?) or economic logic (how will we obtain ourreturns).Criteria for Effective StrategyMintzberg et al., (2003) argues that effective strategiesshould at a minimum encompass certain other criticalfactors and structural elements. These include:- Clear, decisive objectives: Are all efforts directedtoward clearly understood, decisive, and attainableoverall goals? Specific goals of subordinate units maychange in the heat of campaigns or competition, but theoverriding goals of the strategy for all units must remainclear enough to provide continuity and cohesion fortactical choices during the time horizon of the strategy.- Maintaining the initiative: Does the strategy preservefreedom of action and enhance commitment? Does it setthe pace and determine the course of events rather thanreacting to them? A prolonged reactive posture breedsunrest, lowers morale, and surrenders the advantage oftiming and intangibles to opponents. Ultimately such aposture increases costs, decreases the number ofoptions available, and lowers the probability of achievingsufficient success to ensure independence andcontinuity.- Flexibility: Has the strategy purposely built in resourcebuffers and dimensions for flexibility and maneuver?Reserved capabilities, planned maneuverability, andrepositioning allow one to use minimum resources whilekeeping opponents at a relative disadvantage.- Coordinated and committed leadership: Does thestrategy provide responsible, committed leadership foreach of its major goals? Successful strategies requirecommitment, not just acceptance.- Surprise: Has the strategy made use of speed,secrecy, and intelligence to attack exposed orunprepared opponents at unexpected times? Withsurprise and correct timing, success can be achieved outof all proportion to the energy exerted and can decisivelychange strategic positions.2

277 Prim. J. Soc. Sci.- Security: Does the strategy secure resource bases andall vital operating points for the enterprise? Does itdevelop an effective intelligence system sufficient toprevent surprises by opponents? Does it develop the fulllogistics to support each of its major thrusts? Does it usecoalitions effectively to extend the resource base andzones of friendly acceptance for the enterprise?The managerial process of crafting and executingstrategyThe managerial process of crafting and executingstrategy has five phases, which includes developing astrategic vision; setting objectives; crafting a strategy toachieve the objectives and vision; implementing andexecuting the strategy; and monitoring iveadjustments.Phase 1 - Developing a strategic visionThompson et al., (2010) describes a strategic vision asthe route a company intends to take in developing andstrengthening its business. In this step, a strategic visionof where the company needs to head and what its futureis in regard to its products, customers, market andtechnology focus is sort and detailed. This managerialstep provides long-term direction, infuses theorganization with a sense of purposeful action, andcommunicates to stakeholders what management'saspirations for the company are.Rigsby and Grecor (2003) listed six characteristics of aneffective vision as follows: Imaginable: Conveys a pictureof what the future will look like (graphic); Desirable:Appeals to the long-term interest of employees,customers, stockholders, and others who have a stake inthe enterprise (directional); Feasible: Comprises realistic,attainable goals; Focused: Is clear enough to provideguidance in decision making; Flexible: Is general enoughto allow individual initiative and alternative responses inlight of changing conditions; and Communicable: Is easyto communicate; can be successfully explained within fiveminutes process, an integral part of the ongoing task ofvisionary leadership.A clear strategic vision crystallizes an organization’slong-term direction; reduces risk of rudderless decisionmaking; creates a committed enterprise whereorganizational members enthusiastically pursue efforts tomake the vision a reality; provides a beacon to keepstrategy-related actions of all managers on common path;and helps an organization prepare for the future.Phase 2 - Setting objectivesAccording to Johnson et al., (2005), objectives arequantifiable aims in line with a mission. Pearce andRobinson (2011) define objectives as the end results ofplanned activities. They should be stated as action verbsand tell what is to be accomplished by when andquantified. Pearce and Robinson (2011) says thatobjectives are different from goals as a “goal” is anoperation ended statement of what one wants toaccomplish with no quantification of what is to beachieved and no time criteria for completion. Thompsonet al., (2010) identifies two types of objectives requiredwhich includes the financial and the strategic objectives.Financial objectives focus on improving financialperformance while strategic objectives focus onimproving competitive vitality and future businessposition.Pearce and Robinson (2011) indicates main reasonswhy objectives should be set as: conversion of the visioninto specific performance targets, and creating yardsticksto track performance. This is because the vision is too bigto use as target as it could take long beforeaccomplishment. The objectives will be used to trackperformance and see if the company is still on the righttrack. These are mostly set by the business andoperational strategies in line with the vision.Thompson et al., (2010) identifies well-stated objectivesas being: quantifiable, measurable and contains adeadline for achievement. They spell-out how much ofwhat kind of performance by when. Objectives should beset at levels that stretch an organization to perform at itsfull potential, deliver the best possible results, push firmto be more inventive, exhibit more urgency to improve itsbusiness position and be intentional and focused in itsactions.Specification of objectivesDruker (1986) came up with the following specifications ofobjectives:- 1) Objectives must be derived from “what ourbusiness is, what it will be, and what it should be.” Theyare the action commitments through which the mission ofa business is to be carried out, and the standards againstwhich performance is to be measured. 2) Objectives mustbe operational. They must be capable of being convertedinto specific targets and specific assignments. They mustbe capable of becoming the basis, as well as themotivation: for work and achievement. 3) Objectives mustmake possible concentration of resources and efforts.They must winnow out the fundamentals among thegoals of a business so that the key resources of men,money, and physical facilities can be concentrated. Theymust, therefore, be selective rather than encompasseverything. 4) There must be multiple objectives ratherthan a single objective. To manage a business is tobalance a variety of needs and goals that requiresmultiple objectives. 5) Objectives are needed in all areason which the survival of the business depends.Phase 3 - Crafting an strategyAccording to Thompson et al., (2010), crafting theStrategy is primarily a market driven activity. It involvesidentifying the desired competencies and capabilities to3

Ragui and Weru 278build into the strategy and help achieve competitiveadvantage. Crafting strategy is concerned principally withforming responses to changes under way in the externalenvironment, devising competitive moves and marketapproaches aimed at producing sustainable competitiveadvantage, building competitively valuable competenciesand capabilities, and uniting the strategic actions initiatedin various parts of the company. Successful strategymaking depends on the business vision, perceptiveanalysis of the situation, attracting and pleasingcustomers, and outcompeting rivals.An effectively formulated strategy integrates, marshals,and allocates the firm’s internal resources and makesappropriate use of external environmental information.The idea is to formulate a mission-consistent strategy thatwill lead to sustained superior performance. Poor strategyformulation can result in costly business failures. GomezMejia and Balkin (2002) and Vallabhaneni (2009) statedthat the formulation includes the planning and decisionmaking that lead to the establishment of the firm’s goalsand the development of a specific strategic plan.Thompson et al., (2010) says that a firm's strategy isdefined by six “How’s”: how to grow the business; how toplease customers; how to outcompete rivals; how torespond to changing market conditions; how to manageeach functional piece of the business (RandD,production, marketing, HR, finance, and so on); and howto achieve targeted levels of performance.Types of strategiesThere are different types of strategies availabledepending on factors like:- product life cycle, changingenvironment, competitor’s game, vision of the company.The most pronounced strategies are the Porter’s grandand generic strategies and red and blue ocean strategies.Different tools used to know which strategy to takeincludes:- the Strength, Weakness, Opportunity andThreat (SWOT) analysis, Porter’s five forces ofcompetition, Political, Economical, Social, Technological,Ecological and Legal (PESTEL) analysis, McKinsey 7-Sframework, portfolio analysis, Boston Consulting Group(BCG) Matrix model, Strategic Position and ActionEvaluation (SPACE) matrix, Grand Matrix andQuantitative Strategic Planning Matrix (QSPM).Selection of strategiesJohnson et al., (2005) indicates that it is important torecognise that the evaluations do not by themselvesdetermine which strategies should be or are selected forimplementation. However, the evaluation process alwayscontributes by raising the level of debate which occursamong senior managers when they are using judgmentson the selection of strategy. Also, strategic choice can bea process of 'testing and learning' in which a particularstrategic option is partially implemented to be continuedor modified depending upon the results obtained.Similarly, it is impossible to demonstrate conclusively thata particular business strategy is optimal or even toguarantee that it will work. One can, nevertheless, test itfor critical flaws.Mintzberg et al., (2003) says that of the many testswhich could be justifiably applied to a business strategy,most will fit within one of these broad criteria:Consistency: The strategy must not present mutuallyinconsistent goals and policies; Consonance: Thestrategy must represent an adaptive response to theexternal environment and to the critical changesoccurring within it; Advantage: The strategy must providefor the creation and/or maintenance of a competitiveadvantage in the selected area of activity; and Feasibility:The strategy must neither overtax available resources norcreate unsolvable sub problems.The table 1 summarizes the questions that can beposed and the tools that could be used to analyse thesame.Mintzberg et al., (2003) says that a strategy that fails tomeet one or more of these criteria is strongly suspect. Itfails to perform at least one of the key functions that arenecessary for the survival of the business. Experiencewithin a particular industry or other setting will permit theanalyst to sharpen these criteria and add others that areappropriate to the situation at hand.Finally strategic choice has an ethical aspect - a factmuch more dramatically illustrated in some industriesthan in others. Mintzberg et al., (2003) added that just asalternatives may be ordered in terms of the degree of riskthat they entail, so may they be examined against thestandards of responsiveness to the expectations ofsociety that the strategist elects. Some alternatives mayseem to the executive considering them more attractivethan others when the public good or service to society isconsidered.Phase 4 - Implementing and executing the chosenstrategyThompson et al., (2010) indicates that executing thestrategy is primarily an operations-driven activity which istougher and more time consuming than crafting thesame. This is because of the variety of managerialactivities to be performed and most importantly battlingresistance to change that might occur. Good strategyexecution requires putting desired competencies andcapabilities

the strategy; the systems or mechanisms in place for coordination; and control and support of implementation. Cocks (2010), asserts that successful execution of strategy calls for leadership and communication of the strategy to all stakeholders. Crafting and executing strategy is thus a managerial process that is not an end

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