This issue is especially challenging with multinational companies (Macs), which are doing business in different business environments. Therefore, understanding the importance of strategic implementation and its lolls as well as enhancing the abilities to apply these tools into practical activities is necessary for Macs. The aim of this paper is to introduce some popular tools of strategic implementation. These tools are balanced scorecard, AS McKinney framework, business process reengineering, total quality management, six sigma, Nut’s implementation tactics and scrounging.
However, the author chooses only three most popular tools for analyzing and evaluating.
Through the analysis and evaluation, this paper brings the basic understanding about the tools as well s the advantages and disadvantages of these tools for readers. In addition, application of these tools in Macs context is considered. This paper contains four sections. Introduction Tools of strategic implementation: introduction, analysis and evaluation Application of the tools for strategic implementation in NC context Conclusion The research is based on published articles in academic journals and published books only.
To enhance the credibility of this research, the author limits her selection within high ranking journals based on the latest Academic Journal Quality Guide from the Association of Business Schools’ (ABS). This is the reputation guide obtaining by peer review and statistical figure relating to citation and editorial judgments over a long period of time. Some of the journals used in this research are Strategic Management Journal, Academy of Management Journal, Harvard Business Review and Journal of Business Research. Because of time and scope limitation, the paper cannot analyses all tools of strategic implementation.
In addition, suggestions and critical evaluation in this paper are of the author, therefore, they are one-sided ideas and cannot avoid eases. 2. TOOLS OF STRATEGIC IMPLEMENTATION A well-formulated strategy only brings positive performance for a firm when it is successfully implemented (Bonbon, 1984). However, in a long time, researchers and even strategists assumed that strategic formulation was the most important factor to make a strategy success. In these cases, they considered strategic implementation as a simple mechanistic tool so that they did not pay much attention on it.
Before 1 999, there were little researches about strategic implementation nature and the reason for its success and failure (Noble, 1999). In this situation, researches of tools for strategic implementation are also limited. Until now, the author finds out that there is no research that systematizes the strategic implementation tools and evaluates these tools thoroughly. There are some popular strategic implementation tools that are applied in many firms and corporations. Among these tools, the three most popular tools are balanced scorecard (BBS), AS framework and business process reengineering (BPR) (Atkinson, 1997).
Balanced scorecard is considered as the dominated tool (Ackerman, 1997), as it helps firms translate their strategies and missions not specific goals and measures and keeps balancing between financial and operational performances. While balanced scorecard limits its concern in only four perspectives, AS framework prove its advantage of integrating “multiplicity of factors that influence an organization’s ability to change and its proper mode of changes” (Waterman, Peters and Phillips, 1980). In the quick changing business environment nowadays, business process engineering which focuses on innovation is more and more widespread.
In this section, three tools above will be introduced, analyses and evaluated. Besides, some other tools are introduced shortly. 2. 1. Balanced scorecard (BBS) According to Harvard Business Review on Measuring Corporate Performance (1998), balanced scorecard (BBS) is a revolutionary concept about performance metrics, which was first introduced by Kaplan and Norton in 1992. It has changed the traditional system of evaluating performance of a firm. Instead of basing only on financial perspective, BBS includes other operational perspectives into firm performance evaluation.
These perspectives are: customers, internal business processes and learning and growth. Figure 2. 1 . Balance scorecard example (Source: www. Smarter. Com) Above is an example of BBS. The framework shows that BBS is a closed loop that each factor affects each other and all of them contribute to maintain and develop the vision of a firm, which is placed in the centre of the framework. It also demonstrates an important characteristic of BBS. Besides the characteristic of mixing financial and non-financial data, the most impressing and crucial characteristic of BBS is the selection of a small number of data in each perspective to monitor.
By filling the vision, defining the strategic goals for ACH perspective, listing actions to achieve these goals and deciding measures for each action, firms can focus on the most important activities that lead to a positive performance. An interesting factor of BBS which is discovered after several year of applying this tool in practice is that BBS has changed the underlying assumption about performance measurement. According to Kaplan and Norton, traditional performance measurement system was designed by financial experts and therefore, the system has a control bias.
To reach the financial target, this traditional system defined specific activities and required the employees to allow. However, the scorecard puts the strategy, not the control, as the centre. This change represents that the end result is the most important thing. Senior managers do not involve heavily in daily activities but only established goals for their employees. (Kaplan and Norton, 1998: 139 – 141 . ) From this discovery, we can conclude that the balanced scorecard is flexible so that it can adapt the constantly changing context. Originally, BBS works from the top down.
The entire framework aligns with the strategy, and strategy comes from the top management. Therefore, the role f manager in defining strategy is very important. However, from sass, this model was redesigned and the four step process was introduced. These four steps are translating the vision, communicating and linking, business planning and feedback and learning (Kaplan and Norton, 1998: 187). Through this improvement, we can evaluate that BBS now works both top down and bottom up. The feedback from employees is taken into consideration in the redesigned process.
From the analysis of BBS model, some usages of this tool can be listed. Firstly, BBS helps firms keep track on their financial results and develop their intangible stets, such as customer royalty and technology, at the same time. It helps the manager avoid choosing between financial performance and other operational performances, as they are both important. Secondly, BBS presents not past and present activities through financial figures but also future growth based on customer satisfaction, internal process and organization’s innovation (Harvard Business Review, 1998).
Therefore, firms can achieve both their short term objectives and build capabilities for their future growth. Lastly, with BBS, managers can consider whether the development of one aspect obtained by the expense of other aspects. Based on this consideration, manager team can choose the optimal solution for the firm’s development. Besides these merits of BBS, there are several drawbacks. First, BBS only focuses on four perspectives that its authors consider as the most important ones. These perspectives are finance, customer, internal process and learning and growth.
Other perspectives such as supplier or human resources are not included (Atkinson et al. , 1997; Malta, Sheehan and Reilly, 2003). In addition, Nёrecruit (2000, 73 – 74) claims that the cause and effect relations in BBS model are not elated in reality. In my own perspective, the lack of considering competition in this model is the most crucial limitations. If a firm only cares about its internal development and tries to serve its customer but does not pay attention on its competitors’ activities, it may lose the competitive advantages and the position in the market.
A research of Ackerman in 1997 finds out that 64% of companies questioned used BBS into their work. From this ratio, we can conclude that BBS is the dominated tool for strategic implementation. We can also draw a conclusion that firms pay ore and more attention to intangible assets and capabilities development compared with the sass period when only financial performance was considered. 2. 2. AS framework (McKinney) AS framework is created by Waterman, Peters and Phillips, three consultants of McKinney, in 1980 (therefore, this framework has another name called McKinney framework).
It was first published under the title “Structure is Not Organization” in Business Horizons, a not very well-known journal. After that, it was published in a management book “In Search of Excellence”. This book has become the best- seller management book at that time. S framework comprises by seven factors: structure, strategy, systems, style, skills, staff and shared value (before the seventh factor was “subordinate goals”). Structure is the way business divisions and unit are organized and the flow of information is arranged. Strategy represents a plan that helps the firm gains competitive advantages.
Systems are processes and procedures of the companies. Style means the management style, how they interact, what actions they take and their symbols value. Skills are the competencies and abilities of firms’ employees to do good works. Staff means the employees of the firm. Shared value represents the firm’s culture and ethics. The idea of the diagram is that the organizational change comes from the interactions among these factors; therefore, monitoring these interactions will help to increase the change effectiveness. There are four important characteristics of AS framework.
Firstly, the idea of multiplicity of factors is a great contribution. It describes the complexity of organizational change. Secondly, the diagram emphasizes the interconnectedness of the variables, and point out that a change in any variable will affect to the others. Therefore, managers should be aware of this aspect; otherwise, it will be dangerous for their organization. Thirdly, in front of the fact that many carefully planned strategy has failed in implementation, this diagram shows that the reason may be because of the system or staff, which are underestimated in previous measurements.
Lastly, the shape of the framework is significant, because it puts every factor as the same weigh. At a specific time or in a specific case, strategy may be the crucial factor. In others, the important variable may be the style. (Quinn, Miniature and James, 1988. ) Figure 2. 2. AS framework example (source: tempers. Com) These above characteristics are also considered as the good points of this framework. Besides, the weak points still remain. Firstly, this framework is complex. The change of one factor will lead to the change of the other, therefore, the whole system has to change.
In addition, the external factors are not involved in the diagram is a big weakness. 2. 3. Business process reengineering (BPR) Developed in the early sass, “BPR concerns the fundamental rethinking and radical redesign of a business process to obtain dramatic and sustained improvements in quality, cost, service, lead time, flexibility and innovation” (Hammer and Champ, 1993). BPR focuses on analysis and design of workflow and business process, especially with the help of information technology (IT). IT plays a major role in BPR as it allows the business flexible in manufacturing, quick in delivery and convenient in communication.
By this way, firms can reduce the non-value added activities to have a light and effectively operational system. (Sexagenarians and Kobo, 2002). Figure 2. 3. BPR example (source: www. Heartbreakingly. Com) There are eight steps for implementing BPR: (a) develop vision and objectives, b) understand existing processes, (c) identify process for redesign, (d) identify change levers, (e) implement the new process, (f) make the new process operational, (g) evaluate the new process, (f) ongoing continuous improvement. With this life cycle, the firm using BPR keeps rethinking and redesigning its process.
The firm can apply this diagram not only in corporation level but also in department level such as manufacturing, marketing, communications and other company’s activities (Lazing et al. , 1995). BPR will help to cut operational cost and improve quality in each department in these cases. On one hand, the benefits for firms applying BPR are reallocation of jobs and processes so as to execute effectively with fewer employees, reorganization of company’s structure (downsizing) and flexibility of jobs and processes to meet customers’ needs (Garish, 2000).
On the other hand, the drawbacks of BPR that should be considered carefully are listed. First, BPR is a high risk activity that cannot be repeated if it does wrong at the first time. Secondly, it denominated employees, as it bases on the support of technology to cut down non-value added activities and workforce. Another weak point of BPR is that it is internal focus: the external factors are underestimated in this diagram. (Martin, 2014. ) Although BPR remains some disadvantage, together with the development of technology, it is a tool applied in many companies (Hamster, 1994).
It is also a top down approach that needs the high involvement from managers. 2. 4. Other tools of strategic implementation: short introductions a. Total quality management (TTS): TTS is an approach that organization focuses on the quality of its products and services. Manager is responsible for controlling activities to improve the overall quality. This tool has customer’s perspective with the belief that serving customer with high quality products is the key point for the firm sustainability development. Paying attention on quality improvement, TTS increases the quality of product and customer service.
However, it is time and cost consuming, reducing productivity and requiring continuously training for employees about the improvement. Therefore, TTS which was widespread in the sass becomes less popular recent years. (Martinez-Lorene, Detours, Dale, 1998: 378 – 386. ) b. Six-sigma Six-sigma is a tool for process improvement, which was developed by Motorola n 1986. DRP Mike Harry, the 6-Sigma project leader defined that “Six-sigma is a highly disciplined process that helps a company focus on developing and delivering near-perfect products and services” (see Mike Harry and Richard Schroeder, 2005, 1 – 10).
By identifying and removing the causes of defects, six- sigma helps to minimize errors and improve quality. The operation method of sigh-sigma is a close loop of five steps: define, measure, analyses, improve and control. Focusing on quality control, the most application of six-sigma is in manufacturing sector. The application of this tool in strategic implementation mess to be rare although some researchers have showed that six-sigma can strongly support business strategic implementation, especially when they want to implement new strategies (Perkier-Grassing, 2011). C.
Nut’s four implementation tactics The case study research of Nut (1986) is popular when discussing about strategic implementation. In his research, Nut describes the success rates and conditions for using four tactics: intervention, participation, persuasion and edict into implementation. In 1989, he sets up a useful framework to select tactics to implement strategic plans. By testing fifty case studies, each case identified implementation tactic used and its outcome, he finalized that the involvement of managers and key stakeholders into implementation activities plays a key role in its success. . Scrounging Scrounging is a process that collecting ideas, services, etc. From a large group of people. Scrounging has been applied in many fields such as research participation (Brethren et al. 2011). In strategic implementation, scrounging implies the involvement of all levels in an organization, from managers to employees, in strategy formulating and execution. It is an open strategy where everyone is involved and it encourages innovation. 2. 5 Personal evaluation The common characteristic of all above tools is that they are also performance measurement tools.
This factor shows the strong connection between strategic implementation and firm performance. Considering all the analysis, they are in cause and effect relationship. The main aim for implementing strategy is achieving a good performance. Therefore, the tools for measurement are the same, although in each process, they are exploited and applied differently. In terms of level of implementations, these tools operate in different level. All of these tools can apply for corporate level. However, while BBS, AS framework and BPR is popular in corporate level, TTS and six-sigma is more well-known in departmental level.
With regard to the categories, most of the tools such as BBS, AS, TTS and six-sigma are top down, from the management team to the lower level employee. Scrounging is the good example of bottom up strategic implementation tool, which employees have a right to speak. Together with the development of technology and corporation trend, some tools become more and more practical. They are BPR and scrounging. Some other lolls, although they appeared long time ago, are still valid and widespread, such as BBS and AS framework. However, such tool as TTS shows many drawbacks (inflexibility, high cost and time consuming, etc. Has been overshadowed. CONTEXT In the Macs context, the difference of origins between the mother company and its subsidiaries effect the strategic implementation. External factors such as government policy, business culture, geographical distance and internal factors such as human resource management make the strategic implementation process more and more complex. For example, with the firm applying AS remark to implement its strategy, because of these differences between the head quarter and the branches, the framework cannot work as the same way as it does in local context.
In this case, the firm may have to implement a AS framework for the head quarter. This is the main framework that shows the final objectives of the firm. After that, the firm may have to set up each different AS framework in each branch. These sub-division frameworks fit with the branch, from structure, strategy, system, style, staff, skills and shared value. They are also firmly connected with the main framework to make sure that in general, firm ill produce a good performance, reduce cost, improve quality and maintain its competitive advantages. 4.
CONCLUSION implementation. Through the analysis and evaluation, this paper brings the basic understanding about the tools as well as the advantages and disadvantages of these tools for readers. In addition, application of these tools in Macs context is Some important conclusions can be draw after the analysis. Firstly, there are many different tools for strategic implementation, each tool has its own advantages and disadvantages. Based on the background of the firm and the understanding of the management team, the firm can choose a suitable tool to use.
Secondly, the involvement of manager in strategic implementation is necessary, especially in the top down tools such as BSP or AS. Thirdly, the importance of intangible assets is expressed via these tools. Firms are aware that for long term development, they need to consider many factors besides financial aspect. Lastly, the tendency of applying new technology into operation is also represented into tools of strategic implementation. Tools considering technology development and innovation factor show a tendency of fast expansion.
Cite this Popular Tools of Strategic Implementation of Macs Company
Popular Tools of Strategic Implementation of Macs Company. (2018, Jun 20). Retrieved from https://graduateway.com/ism-assignment/