ENVIRONMENT OF BUSINESS��SESSION 5: STRATEGY EVALUATION & PRESENTATION GUIDANCE

DR AMIR QAMAR

LECTURER/ASSISTANT PROFESSOR IN STRATEGIC MANAGEMENT

DEPARTMENT OF STRATEGY & INTERNATIONAL BUSINESS

THE PROCESS SO FAR

Internationalisation

External Business

CSR

Stakeholders

SBUs

ISSUES

Having generated strategic options to solve your respective key strategic issue, you now need to evaluate the options in order to decide which strategy you will recommend.

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However – First we need to decided which issue is the key strategic issue that needs resolving.

Politics & Culture

ISSUE PRIORITISATION

• Evaluate all issues based on urgency and importance - Map all issues within Eisenhower’s Matrix
• Key Issues = High Urgency & High Importance
• There may be multiple Key Issues – you decide which is most important (i.e. reasons can include financial, brand, loss of market share etc.) and justify.
• The most important and urgent issue is now referred to as your Key Strategic Issue!

THE PROCESS SO FAR

Internationalisation

External Business

CSR

Stakeholders

SBUs

ISSUES

Justification of key Issue

SO1

SO2

Having generated strategic options to solve your respective key strategic issue, next, you now need to evaluate the options in order to decide which strategy you will recommend.

Politics & Culture

Evaluation (SAF)

Recommendation

Implementation/Action Plan

STRATEGIC CHANGE - CONTEXTUAL CONSTRAINTS AND ENABLERS�

• Time - The speed with which change needs to be achieved. For example, is change reactive in response to particular events, or is it pro-active? Organisations in crisis have little time and need to change re-actively - longer-term strategic development normally have more time to change.
• Scope - The extent of change required, in terms of transformation or realignment, within the parts of the organisation affected by the changes.
• Preservation- The extent to which it is necessary to maintain continuity in certain practices or preserve specific assets, be it staff, aspects of culture, or particular competences.
• Diversity - The degree of diversity in terms of values, norms and attitudes among the groups of staff affected by change. This could be affected by existence of multiple subcultures (sales versus R&D) or national cultures within an organisation, or different professional groups.

Hailey and Balogun (2002)

STRATEGIC CHANGE - CONTEXTUAL CONSTRAINTS AND ENABLERS�

• Capability - The level of competence for managing change in the organisation, in terms of staff knowledgeable about the design of change, and in terms of the ability of individuals to cope with change and manage others through the process.
• Capacity - The amount of money available to invest in the change process, and the availability of human resources and managerial time to divert towards the change.
• Readiness for change - The extent to which staff are aware of the need for change, understand implications of the change, and are motivated towards achieving the change.
• Power - The relative power of the change initiator, or the main change agent, in relation to other stakeholders who have an influence on the change process.

Hailey and Balogun (2002)

TYPE OF STRATEGIC CHANGE

• Now that you have your KSI – what strategic change is required to fix this issue?
• The most important and urgent issue is now referred to as your Key Strategic Issue!
• A common way of defining the type of change is to combine speed of change with extent of change required, and we take a similar approach.
• The extent of change required can be classified in terms of scope, as re-alignment or transformation. The speed of change, can either be ‘big-bang’ (an all-at-once change with many initiatives in a relatively short time-frame) or more gradual, with change initiatives phased through time. This leads to four change types.

TYPE OF STRATEGIC CHANGE

• Horizontal dimension - labelled extent of change as opposed to scope of change, because the desired scope of change may be different to the extent of change actually delivered.
• Organisations could choose a staged approach, moving from one change type to another. - i.e. an organisation could have insufficient funds to invest in a longer-term transformation, and need to first strengthen their competitive position via some type of re-alignment. This re-alignment might be a rapid re-construction, such as a turnaround, or a slower rationalisation of the business portfolio, which then leads into more evolutionary change.

Hailey and Balogun (2002)

THE SAF CRITERIA

• Each strategic option needs to be analysed in terms of suitability, acceptability and feasibility
• SUITABILITY: Does this strategy actually ‘fix’ the issue?
• ACCEPTABILITY: Risk, Return, Reaction
• FEASIBILITY: Resources and capabilities

SUITABILITY

• Does this strategic option ‘fix’ the issue?
• Relate back to the analysis:
• Does this strategy exploit the opportunities you identified?
• Does this strategy avoid/mitigate the threats?
• Does it make use of the firm’s strengths?
• Does this strategy overcome/combat your weaknesses?

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Does this strategy solve the root cause of the issue?

ACCEPTABILITY

• RISK
• Can the outcome of this strategy be predicted? Impact on liquidity can help to evaluate risk
• RETURN
• The financial benefits from pursuing a strategy
• Estimate payback period
• REACTION
• How will your Key Players feel about this strategy?
• Will this strategy increase the interest of other stakeholders?
• Will it attract negative publicity?

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Make reasonable assumptions where possible. If you cannot – don’t worry – can you make an educated guess?

FEASIBILITY

• Can this strategy work in practice?
• Does the firm have the resources and capabilities to implement this strategic option?
• If not, what is the cost of obtaining these?

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• Financial feasibility – link to financial resources analysis. Sources of finance?
• People and skills - What resources/capabilities are needed to make this strategy happen? Does the firm have them? Can it build or buy them?

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How will the organisation manage change?

STRATEGIC RECOMMENDATIONS

• Remember you need to select two good strategic options
• It is supposed to be difficult to choose between them
• Compare and contrast the options in terms of SAF
• Which strategy is better? This becomes the strategic recommendation

IMPLEMENTING CHANGE - LEWIN’S CHANGE MODEL

IMPLEMENTING CHANGE – KOTTER’S 8 STEP MODEL

IMPLEMENTING CHANGE - ACTION PLAN

How do we know this strategy is working?

Are there any targets? Benchmarks?

What happens if the targets are not met?

REFERENCES

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• Appelbaum, S. H., Habashy, S., Malo, J. L., & Shafiq, H. (2012). Back to the future: revisiting Kotter's 1996 change model. Journal of Management Development.
• Hailey, V. H., & Balogun, J. (2002). Devising context sensitive approaches to change: the example of Glaxo Wellcome. Long Range Planning, 35(2), 153-178.
• Hussain, S. T., Lei, S., Akram, T., Haider, M. J., Hussain, S. H., & Ali, M. (2018). Kurt Lewin's change model: A critical review of the role of leadership and employee involvement in organizational change. Journal of Innovation & Knowledge, 3(3), 123-127.

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