Strategy Implementation and Strategic Control
In order to properly implement a strategic plan, organizations use structure, various control systems (budgets, variance analysis, policies and procedures, company rules), and culture.
Let us revisit General Mills and determine the relative effectiveness of the company’s strategic controls. Choose two implementation controls, and discuss whether or not you believe the controls you’ve selected effectively support the company’s strategic choices. Be sure to defend your answer (critical thinking is required)!
Be sure that you respond to the postings of your classmates.
Respond to the following:
As you’ve learned from the background readings, a key strategic control is that of organizational culture. Culture must fit with an organization’s strategic choices. Poor alignment between culture and strategic choice is a sure-fire way to doom any strategic choice.
Of course, some organizational theorists would assert that an organization’s culture cannot be “managed” in the truest sense of how one “manages” the processes and activities and things that exist within an organization. David Campbell (2000, p. 28) says that an organization
Is being constructed continuously on a daily, even momentary [italics added], basis through individual interactions with others. The organization never settles into an entity or a thing that can be labelled and described, because it is constantly changing, or reinventing itself, through the interactions going on within it. [At the same time, an organization] does have a certain character to it, such that, like driving on the motorway, not just anything goes (p. x).
Do you agree or disagree with the above? That is, can culture really be “managed”? What might this interpretation mean in the context of our current discussion related to “strategic controls”?
A few comments on the above: Many individuals believe that, while the notion of “culture” can be defined, no single individual (irrespective of his/her legitimate power) is capable of single-handedly moving an organization’s culture in one direction or another. These individuals suggest that the sheer number of formal and informal groups, structures, tasks, functional operations, and individual interactions that exist and occur within organizations (even moderate-sized ones) render the “management” of culture impossible (consider the potential number – and combination – of individual to individual, individual to group, and group to group interactions that are likely to occur within an organization at each and every moment (and then, there are endless numbers of contacts / interactions with external stakeholders as well). The possibilities are seemingly infinite — or at least they are indefinite. In this view, an organization’s culture is abstract, fragmentary, fluid — and even relative and momentary – how can such a thing be “managed” in the same sense that we “manage” people and organizational processes?
Campbell, D. (2000). The socially constructed organization. London: Karnac Books.
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posted May 28, 2019 2:24 PM
While talking about strategic implementation and strategic controls we must make a note of the following fact that The General Mills have successfully been able to reduce its wastage and significantly decreased its negative footprints on the environment. The success and failure of any company depends largely on the strategy implementation control. The company has to rely on its key players who will develop and implement the strategic planning. This will include an all round approach which will be holistic in nature. The management approach will be to incorporate cross-functional teams which will understand the components which are the value drivers of the company and which are concerned about branding, segmentation and analysis in order to check out the usefulness of the company in the present scenario.
The holistic margin management method used by General Mills focuses mainly on two things. The first one is savings and the second one is creating value for the company. The VP of supply change of General Mills is of the opinion that there are certain things which are very much vital for the company. They are the exclusion of non value added components completely from the domains of the customers as well as their perspective. He also stressed on value creation which will be done by reinvesting in the savings. It is impertinent that the holistic approach is applied to all areas and not only to the supply chain. This means taking into the hood every function from virtual involvement, product development, packaging innovation, product placement, logistics, marketing, sales and each and every other processes that go in the company. We can safely say that this Holistic Margin Approach is quite effective as it is shown result by saving close to $1.2 billion of the company in the year 2013. The target of the company is to save $4billion in the operational period. The second method used by General Mills is the segment growth analysis. Here the company make an analysis of the growth and makes various segment lines of its inventory. The main focus is on the extensive operation and attention is given on the segments which add significant value to the organization. In this method the sector which is growing comes under focus. Naturally the segment which is not showing desirable growth and in no way contributes to value creation also comes under focus. The company now examines closely the factors or causes which is affecting this stagnant situation. So this method is also useful to increase revenue in a gradual manner in a given fiscal or operational period.
Reynolds, R. (2008). General Mills. University of Oregon Investment Group. Retrieved from http://uoinvestmentgroup.org/wp-content/uploads/2009/08/General-Mills-GIS.pdf
Week 1 Response #2
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posted May 28, 2019 2:25 PM
General Mills has focused its entire 2018 in “Compete, Accelerate and Reshape”. General Mills wants to compete effectively, accelerate its growth platforms, and reshape its portfolio. General Mills CEO, Jeff Harmening, talks about this and writes about 2019 strategy and focuses on consumers. Second focus is its growth strategy by accelerating the global platform of cereals and yogurt.
Let me break this down, consumer focus is figuring out customer wants and needs and determining if we are meeting those needs. As a MBA candidate, part of our customer and consumer analyzation is to make sure that our customer or consumer understands their need. We also try to make our consumer aware that they have a need. General Mills generally utilizes general sales force and the team focuses primarily with grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, e-commerce retailers, commercial and noncommercial foodservice distributors and operators, restaurants, convenience stores, and pet specialty stores. Walmart also accounts for 30% of all North American Sales. Now to dig deeper, General Mills customers serve customers that is changing and we have discussed this in other threads that consumers now also focus on sustainability of products. Consumers want to address companies effect on the environment.
Growth Strategy is 2nd in the strategy scheme of CEO Jeff Harmening. Competing effectively in its cereal and yogurt which holds 17% and 15% of its sales is a priority. Cost reductions by efficient processing will help increase its profits. The purchase of Blue Buffalo dog food is also a growth strategy. This is a space that General Mills is expecting rise in projected profits. This focus is to keep the consistent sales and grow the sales profits in the cereal and yogurt realm. I agree with the focus and even the purchase of Blue Buffalo dog food. This can match the Nestle Dog Chow and Purina dog food. This diversity of products and ensure General Mills will stay competitive with the top 10 food producers in the world.
General Mills Final 2018 Financial Reporthttps://investors.generalmills.com/home/default.aspx
Week 2 Response #1
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posted May 28, 2019 2:24 PM
It is my personal observation and viewpoint that every organization is different and the organizational culture of one differ from the other. The organizational culture is the backbone which decides how the organization works and deal with its day to challenges. The whole system that includes the operation of production, logistics, PR, marketing, customer care and relationship with customer falls under the organizational culture. So, we can say that the organizational culture is a very important strategic control component. The management of this culture must be effectively done and it should be aligned with the mission and vision of the company or the objectives the company aim to achieve. It must ensure that the uncertainties are reduced and the value must be added to the company which will increase the performance and the total profit levels. The strategic implementation is also supported by the culture and close scrutiny must be done in the stages of planning, execution and evaluation. All these steps must be in close coordination with the operational objectives and strategic plans of the organizational culture. This will ensure proper and effective operations (Hitt, Ireland & Hoskisson, 2007).
The organization culture cannot be handles by just one person and it is not a matter of individual effort. Each and every stakeholder must be involved and responsible which includes the employees, suppliers and customers. Collective effort is the key here. Full support and cooperation is needed to uphold a strong organizational culture. The organizational culture therefore encompasses the people as well as the processes. Leadership also plays an important role in organizational culture and both concepts are intertwined. Organizational culture also encompasses the implementation of code of conduct and alignment with the public service management. So we can say that when employees of a company is engaged and empowered the organizational culture is managed in a efficient manner (Rhoades & Covey, 2011). The employee plays a key role here as he has to ensure that the culture maintained properly or not and whether is in line with the aspirations of the company. Managers must invest in the talent development of the organization. They can do this by providing training, rewards, recognition and team bonding- all these will imbibe the core values of the company which will consequently give benefit to the company by giving them strong employees who are well aware of the company’s organizational culture. So, we can say the organizational culture can be developed by strengthening the cross functional collaboration, providing support in all areas, cooperation among team members and team work – all these will most definitely guarantee a proper organizational performance (Pfister, 2009).
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2007). Strategic management: Competitiveness and globalization; [concepts and classes]. Mason, Ohio [u.a.: Thomson South-Western.
Pfister, J. (2009). Managing organizational culture for effective internal control: From practice to theory. Berlin: Physica.
Rhoades, A., & Covey, S. R. (2011). Built on Values: Creating an Enviable Culture that Outperforms the Competition. Hoboken: John Wiley & Sons.
Week 2 Response #2
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posted May 28, 2019 2:25 PM
Can organizational culture be managed? Absolutely, but it is not an overnight thing. Apple Incs organizational culture did not just happen. PepsiCo’s organizational culture did not just happen. Amazon’s organizational culture did not just happen. These cultures were developed, transformed, and managed once it got to a certain point.
But there is a process that every culture has to go through. It has to go through an initial evaluation process -so the company can figure out where it currently stands. Then it has to define its culture, which direction does it want to go? What is the company’s preferred culture? After defining your preferred culture, the leadership at the company has to design and deploy. After deployment, that is when you regularly monitor your company’s culture through the use of policies, procedures, your mission, vision, principles, and strategic controls. Every year or two, you have to continue to evaluate and define your culture since our society is continuously changing (VanDeusen, n.d.).
VanDeusen, J. (n.d.). Organizational culture: does it matter? Can it be managed?Date retrieved from https://curriemanagement.com/2016/12/20/organizational-culture-matter-can-managed/
Module 4 – Background
STRATEGY IMPLEMENTATION AND STRATEGIC CONTROLS
Strategy is implemented using organizational design (structure), people, culture, and control systems. Strategy must successfully work through these elements in order to produce performance. No matter how well a strategy is conceived, if an organization’s people cannot implement it, if the culture cannot support it, if the structure cannot coordinate it, and if the systems cannot measure and control it—the strategy will fail.
We will start by considering how of each of these components individually link to strategy. By way of the Case analysis, we will examine the integration or “fit” between the various components and strategy.
Organizational structure refers to the manner in which the lines of communication of authority are established, the manner in which work is divided up among organizational members, and the way that communication and work are coordinated. Different types of structures support different types of strategies. The key elements of structure that have the greatest effect on the success or failure of strategy implementation are centralization, boundaries, networks, and virtual organization.
- Centralization refers to the level of concentration of decision making. In a highly centralized organization, decisions are made by a relatively small number of people, usually concentrated at the highest levels of the organization. Standardization is common in centralized organizations, thus favoring economies of scale and efficient value chains.
- Decentralized organizations are characterized by flexible and autonomous decision-making groups at operational levels in the organization. Such groups have the ability to rapidly adjust to changes in the marketplace and are well-suited to strategies that require innovation. However, because of duplication, economies of scale are difficult to achieve.
- Borderless Organizations: Taking cross-functional teams to a new level, the borderless organization does not just assemble teams with members from different organizational levels and functions. Instead, the borderless organization removes barriers both vertically (between levels) and horizontally (between functions or departments). The implications for strategy implementation include increased information, transparency, and flexibility.
- Alliance Networks: These are collections of suppliers, distributors, customers, and even competitors who have the ability to bring needed assets to bear on an urgent problem where there is insufficient time to develop the needed resources and capacities in-house. Organized and coordinated online, these networks can be mobilized and put to work instantaneously.
- Virtual Corporations: An extension of Alliance Networks, the virtual corporation is an extra-organizational coalition of people and organizations brought together expressly to work on a specific problem or project. They can be assembled rapidly and dispersed as soon as the project is over, representing the ultimate in flexibility and speed in strategy implementation.
The following reading is an exposition on how various types of teams can be useful in strategy implementation:
Pryor, M.G., Singleton, L.P., Taneja, S., and Toobs, L.A. (2009). Teaming as a strategic and tactical tool: An analysis with recommendations. International Journal of Management, 26 (2), 320-334. Retrieved on November 6, 2012, from ProQuest.
Review this presentation on Organizational Design by Professor Anastasia M. Luca, Ph.D. MBA.
STRATEGIC CONTROLS (SYSTEMS)
Three organizational systems are essential to controlling strategy implementation:
Accounting and budgeting systems: These systems can be complex and not easily adapted. If a new strategy requires data that is not easily accessible through existing accounting systems, implementation can be slowed, and a potentially successful implementation can be jeopardized. If a new proposed strategy does not fit a familiar pattern, decision making can be become risky and unpredictable.
Information Systems: Information technology is playing an ever greater role in strategy implementation. IT provides point-of-sale information between retailers and manufacturers, streamlines logistics and distribution, and controls inventories. IT systems must be capable of providing the right information in the right format to the right people at the right time.
Measurement and Reward Systems: Rewards can be used to shape behavior in the direction of meeting strategic objectives. Rewards must be connected to measures of goal attainment (e.g., specific increases in market share), and proper time horizons (future rewards for future goals).
Review this presentation on Strategic Controls by Professor Anastasia M. Luca, PhD MBA.
Strategies that are based on distinctive competencies or unique capabilities are often dependent on people and their skills to carry them out. Thus, for successful implementation, sufficient numbers of people with the right skill sets are essential.
In-house or Import? Hiring raw talent and growing employees with the needed qualifications maximizes fit, but it can take years. Retraining existing workers with new skills can be problematic when old employees resist “learning new tricks.” Hiring employees with needed skills external to the organization is faster, but there is no guarantee that even they will fit well within the organization’s culture.
Motivation: It is not enough to have the right number of people with the right skills; people must also be motivated to work toward successful strategy implementation. Much is known about motivation, and many tools are available; these include tangible rewards (e.g., bonuses) and intangible rewards such as self-fulfillment. Perhaps the motivator with the most potential for eliciting long-term commitment to fulfilling the firm’s strategic goals is that of empowerment, which gives employees the discretion and autonomy to use their initiative.
The following article highlights the importance of having the right people in place to achieve strategic goals:
Garrow, V. and Hirsh, W. (2008). Talent management: Issues of focus and fit. Public Personnel Management, 37(4), 389-403. Retrieved on August 29, 2014 from ProQuest.
The fit between an organization’s culture and its strategy is critical. If a firm is depending on innovation to achieve differentiation, but the culture is risk averse or has a tendency to punish mistakes, the strategy will in all likelihood fail. Culture can support the strategy when three elements are in alignment:
- Shared values that are aligned with the corporate vision and strategic focus along with a management style that fosters behavior that will support the competencies that confer competitive advantage.
- Norms can act as strong controls for strategic implementation. They encourage behavior that is in alignment with shared values. People can circumvent rules, and they cannot be watched all of the time, but norms can promote the desired behavior even when nobody is watching.
- Symbols model for employees what values and norms are important. Some important symbols include the vision and style of the founder of the company and folklore or stories that embody company values, rituals, and routines, and which reinforce the types of events and behaviors that are most desired and celebrated.
The following reading ties together the importance of systems, strategy, structure, and culture. It is highly readable and will help you see how all of these elements are interdependent and must align to achieve successful implementation:
Heneman, R. L., Fisher, M. M., and Dixon, K. E. (2001). Reward and organizational systems alignment: An expert system. Compensation & Benefits Review, 33(6), 18-29. Retrieved on November 6, 2012, from ProQuest.
Aligning organizational culture with business strategy. (2013, November). Towers Watson. Retrieved on August 29, 2014 from http://www.towerswatson.com/en-US/Insights/Newsletters/Global/strategy-at-work/2013/viewpoints-qa-aligning-organizational-culture-with-business-strategy
Durden, C. (2012). The linkages between management control systems and strategy: An organic approach. Proceedings from The International Conference on Accounting and Finance. Singapore: Global Science and Technology Forum. Retrieved on August 29, 2014 from ProQuest.
Klosowski, S. (2012). The application of organizational restructuring in enterprise strategic management process. Management, 16(2), 54-62. Retrieved on August 29, 2014 from ProQuest.