CHAPTER THREE STRATEGIC MANAGEMENT FRAMEWORK AND PROCESS
In Chapter Two, strategic change management was discussed from a theoretical perspective. The discussion focused on transformational change as a type of change, among other sub-topics. In this chapter, the focus of discussion is on the strategic management framework with specific reference to theoretical perspectives regarding strategic management, strategic planning and the strategic management process. The discussion of the strategic management process hinges on strategic analysis, strategy formulation, strategy implementation and strategy evaluation
THEORETICAL PERSPECTIVES ON STRATEGIC MANAGEMENT
To clarify the terms used in this chapter, in this section, the researcher considers strategy in context by defining what is meant by ‘strategy’. The meaning of strategy in a business management and a military context is discussed.
Strategy in context
The term ‘strategy’ was adopted from the military and adapted for use in the business context (Nickols, 2012:2). For the purposes of clarifying the concept of strategy and placing it in context, the definition of strategy is explored and models of strategy, dimensions of strategy and levels of strategy is discussed.
In the military, strategy may be intended as a manoeuvre to outwit an opposing force by using an artful plan (Grattan, 2011:14). In concert with this definition, Nickols (2012:2) postulates that strategy often refers to the manoeuvring (that is deployment) of troops into positions before the opposing force is actually engaged, and that once the opposing force is engaged, the focus changes to tactics. In this situation, the employment of forces becomes central in engaging the opposing forces. Therefore, strategy in a military sense is about a well-considered and clever plan to outmanoeuvre and engage the opposing forces.
According to Karami (2007:3), in business and management, the concept of strategy is analogous to that in the military. In a business and management context, ‘strategy’ is defined by Robson (1997:5) as the pattern of resource allocation decisions made throughout an institution. A more expanded view is shared by Deffner (2003:2), who contends that strategy is the means and methods required to satisfy the conditions necessary to achieve the ultimate goal of a system. Sharing a similar view, Veettil (2008:35) sees strategy as the direction and scope of an institution over the long term, which achieves an advantage in a changing environment through its configuration of resources and competencies with the aim of fulfilling stakeholders’ expectations.
However, an expanded definition is that offered by Bryson (2004:183), who posits strategy as a pattern of purposes, policies, programmes, actions, decisions and resource allocations that defines what an institution is, what it does, and why it does it. Strategy, therefore, is pattern of deliberate actions that an institution undertakes to out-perform its rivals (Ehlers & Lazenby, 2005:2). However, it is imperative to note that to create a pattern of deliberate actions, strategy should be applied consciously and consistently over time (Nillson, Olve & Parment, 2011:14).
In the same vein, De Kluyver and Pearce (2012:2) contend that strategy is about positioning an institution to gain a competitive advantage, and involves making choices about industries in which to participate and which products and services to offer, and making decisions regarding the allocation of resources. In concert with these definitions, strategy is said to be the art and science of planning and marshalling resources for their most efficient and effective use (Maalu & Wekesa, 2012:176).
The above definitions and explications have two common essential characteristics (Karami, 2007:4), namely:
they are made in advance of the actions to which they apply; and
they are developed consciously and purposefully.
It is important to note that in the above definitions, the emphasis is on making decisions about resource allocation that is providing the means for realising the vision, and achieving the goals and objectives of the institution. Therefore, stemming from these explications is the fact that strategy is about planning and defining goals and objectives and ensuring that resources are allocated to realise the plans. In addition, strategy provides guidance to institutions on how to achieve their vision and strategic goals.
Furthermore, Mintzberg et al. (2003:3) identified five interrelated definitions of strategy as plan, ploy, pattern, position, and perspective.
Strategy as plan is viewed as a consciously intended course of action, and a guide to deal with a situation (Karami, 2007:4). This definition, according to Mintzberg et al. (2003:4), can be dissected into two essential characteristics. First, the plan is a conscious and purposeful effort, and secondly, it is prepared in advance, that is, before the action takes place.
However, it is interesting to note that ‘strategy’ is often considered interchangeable with ‘plan’ since both are consciously intended courses of action (Karami, 2007:4). Strategy as a plan is some sort of intended course of action or a set of guidelines to deal with a situation and shows an institution how to reach its intended position from its current state (Veettil, 2008:35). A plan, therefore, is a deliberately and carefully crafted path that an institution follows in order to improve its status to reach its intended situation.
Strategy as ploy: Mintzberg et al. (2003:4) argue that the plan itself might be meant to achieve a specific purpose, or it might be just a general approach to solve general challenges. Mintzberg at al. (2003:4) further postulate that plan to achieve a specific purpose is called a ploy, and a ploy can be used to outmanoeuvre the opposing forces in war or outwit competitors in business. In concert with this definition, Veettil (2008:35) contends that a ploy could be a specific manoeuvre intended to outwit an opponent or competitor so that the competitive scenario changes in the favour of the manoeuvre. A ploy, therefore, is a specific move designed to outsmart the opposing force, or in the business sense, to gain an advantage over competitors.
Strategy as pattern is linked to the resultant behaviour once the planned strategy is employed in an institution. When resultant behaviour is seen to be consistent, it can be called a pattern, hence, strategy as a pattern (Mintzberg et al., 2003:4). In addition, strategy as a pattern refers to patterns in a stream of actions and by this definition, strategy is consistency in behaviour whether or not intended (Veettil, 2008:35). This means that a pattern is the degree of consistency in the strategic actions of an institution. However, the challenge that can emanate from this consistency is predictability, which a competitor or opposing force can use to predict which course of action will be taken (Grattan, 2011:14).
Strategy as position is seen as a means of locating an organisation within the larger outside environment (Karami, 2007:4). In other words, the organisation must be able to define its reason for existence within the context of what is happening in the broader business environment (Mintzberg et al., 2003:6). Sharing the same view, Veettil (2008: 35) posits that strategy as a position is a means of locating an institution in an environment and by this definition, strategy becomes a mediating force between institution and environment. In business terms, this means finding a niche in a market where the available resources could be concentrated to the best advantage. Practically, the niche and the decisive point have to be discovered by the strategist and are not always obvious (Grattan, 2011:14).
Stemming from this definition, ‘strategy’, therefore, is a means of locating an institution in the environment, and matching the institution to its environment relative to its competitors or the opposition.
Strategy as perspective refers to an ingrained way of seeing the world from an institutional point of view (Mintzberg et al., 2003:7). This refers to the world outlook according to the institution. In this case, the institution is represented by its executives, and strategy is the perspective shared by the members of the institution through their intentions and/or by their actions (Karami, 2007:4). This definition looks inside the institution. In this respect, strategy is to the institution what personality is to the individual (Veettil, 2008:35). The definition of strategy as a perspective, suggests that strategy is a concept (Veettil, 2008:35). Strategy then arises from the institution paradigm: how members of an institution think the world looks and works (Grattan, 2011:14).
In this section, the definition of strategy was discussed and it was found that strategy provides the means for realising the vision and achieving the goals and objectives of an institution. Above all, strategy is concerned with planning and defining goals and objectives and with ensuring that resources are allocated to realise the objectives as enshrined in the plans. Finally, strategy is not a panacea for all the ills of an institution but rather guidance to institutions on how to realise their vision and strategic goals. Added to the discussion of the definition of strategy were five interrelated definitions of strategy, namely as plan, ploy, pattern, position, and perspective.
In the next section, the researcher provides a brief discussion of what strategic planning is and what it entails
In the previous section, the researcher dealt with the definition of strategy, thereby laying the foundation for a discussion of strategic planning. In this section, the researcher gives a summary of the definition of strategic planning
Defining strategic planning
Strategic planning starts with the full understanding by the firm of the business in which it operates (Zimmerman & Blythe, 2013:37). This understanding of business is followed by strategic planning, which is a process of developing and maintaining consistency between the objectives and resources of the organisation and its changing opportunities (Robson, 1997:17). In addition, strategic planning is defined by Bryson (1988, cited in Poister & Streib, 1999:309) as “a disciplined effort to produce fundamental decisions and actions that shape and guide what an institution is, what it does, and why it does it”.
To expand on these definitions, Bryson (2004:15–16) posits that strategic planning is about clarifying the mission, mandates, vision, goals and the nature of the common good and public value to be achieved. In tandem with this definition, Belcourt and Bohlander (2011:44) assert that strategic planning involves a set of procedures for making decisions about the long-term goals and strategies of the institution.
Furthermore, strategic planning is used to manage institutions effectively and to enhance their performance. Strategic planning is seen as a rational, top-down process through which management can programme future success and decision-making responsibilities. In this situation, strategic planners are expected to provide careful analyses of internal and external data (Rothaermel, 2013:39). Thereafter, executives tie the allocation of resources to the strategic plan and constantly monitor the ongoing performance accordingly. In this process, the strategy formulation is separated from the strategy implementation (Rothaermel, 2013:39).
Strategic planning, according to Poister and Streib (1999:309), is a “big picture” approach that –
is concerned with identifying the most fundamental issues facing an institution and responding to them;
addresses the subjective question of purpose and the often competing values that influence mission and strategies;
emphasises the importance of external trends and forces as they are likely to affect the agency and its mission;
attempts to be politically realistic by taking into account the concerns and preferences of internal, and especially external, stakeholders;
relies heavily on the active involvement of senior-level managers and sometimes elected officials, assisted by support staff where needed;
requires the candid confrontation of critical issues by key participants to build commitment to plans;
is action-orientated and emphasises the importance of developing plans for implementing strategies; and focuses on implementing decisions now to position the institution favourably for the future.
In this section, strategic planning was described as a disciplined effort to produce fundamental decisions and actions that shape and guide what an institution is all about. It is during strategic planning that the mission, mandates, vision and goals are clarified so that everyone in the institution works towards the achievement of these. Participation in the process of strategic planning is dominated by management, meaning that it is a top-down approach.
In the next section, the strategic management process is discussed
STRATEGIC MANAGEMENT PROCESS
In this section, the researcher discusses the strategic management process by first defining what strategic management is. Then the focus shifts to the discussion of strategic analysis, the formulation of vision and mission statements, strategy formulation, strategy implementation, and strategy evaluation and control.
Definition of strategic management
The strategic management process can be described as an objective, systematic approach for making major decisions in a business enterprise (Fredrickson, 1990:40). In addition, according to Robson (1997:6), strategic management is the process whereby all the institutional functions and resources are integrated and coordinated to implement existing and agreed-upon strategies. Such strategies are aligned with the environment, with the aim of achieving the long-term objectives of the institution. Secondly, Kamara (2007:12) defines strategic management as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an institution to achieve its objectives. Analysing and considering this definition further, Kamara (2007:12) asserts that strategic management is a broad activity that encompasses mapping out strategy, putting strategy into action, and modifying strategy or its implementation to ensure that the desired outcomes are reached. Agreeing with this definition, Barney and Hesterly (2010:4) define the strategic management process as a sequential set of analyses and choices that could increase the likelihood that an institution would choose a good strategy. Furthermore, Coultier (2013:5) defines strategic management as a process of analysing the current situation, developing appropriate strategies, put these strategies into action and evaluating and changing those strategies where the need arises.
Strategic management as a process, then entails specifying the mission, vision and objectives of the institution, developing policies and plans which are designed to achieve these objectives, and then to allocate resources to implement the policies and plans that result in projects and programmes (Jagdish, 2013:19). Finally, Chemingich (2013:3) views strategic management as a process by which top management determines the long-term direction and performance of the institution by ensuring that careful formulation, effective implementation and continuous evaluation of strategy take place. This implies that strategic management is the process of coordinating and integrating the management function in a structured manner to achieve institutional goals and objectives.
Permeating throughout the above definitions are characteristics pertinent to strategic management as identified by Coulter (2013:5), such as that strategic management:
is interdisciplinary, encompassing all functional areas;
has an external focus, which involves interaction with its environment; and
has an internal focus, which involves assessing the resources and capabilities of the institution.
In addition, the process of strategic management is the domain of the analysis of top management of the environment in which the institution operates prior to formulating a strategy, as well as the plan for the implementation and control of the strategy (Parnell, 2014:2). It can also be argued that the environmental analysis of top management is the reflection of their own perceptions about the environment (Parnell, 2014:2).
It can therefore be concluded that the strategic management of an institution entails three ongoing processes, as identified by Dess, Lumpkin and Taylor (2005:2).
An analysis of strategic goals such as vision, mission and strategic objectives. This is done simultaneously with the analysis of the internal and external environments of the institution. Based on this analysis, leaders should make strategic decisions.
Such decisions by leaders address two fundamental questions:
– Which industries should the institution compete in?
– How should the institution compete in those industries?
Actions that should be taken to implement the strategies
TABLE OF CONTENTS
TABLE OF CONTENTS
LIST OF FIGURES
LIST OF TABLES
LIST OF ACRONYMS AND ABBREVIATIONS
1. CHAPTER 1: OVERVIEW
1.2 BACKGROUND AND RATIONALE
1.3 PROBLEM STATEMENT
1.4 RESEARCH OBJECTIVES
1.5 RESEARCH QUESTIONS
1.6 SIGNIFICANCE OF THE STUDY
1.7 TERMINOLOGICAL CLARIFICATION
1.8 RESEARCH METHODOLOGY
1.9 EXPOSITION OF CHAPTERS
2 CHAPTER 2: INSTITUTIONAL CONTEXT OF STRATEGIC CHANGE MANAGEMENT
2.2 THE NATURE AND SCOPE OF STRATEGIC CHANGE MANAGEMENT
2.3 SOURCES OF CHANGE
2.4 FIRST AND SECOND-ORDER CHANGE AS AN APPROACH
2.5 CHANGE MANAGEMENT STRATEGIES
2.6 APPROACHES TO MANAGING CHANGE
2.7 SYSTEMS APPROACH TO MANAGING CHANGE
2.8 RESISTANCE TO CHANGE
2.9 METHODS TO OVERCOME RESISTANCE TO CHANGE
3 CHAPTER 3: STRATEGIC MANAGEMENT FRAMEWORK AND PROCESS
3.2 THEORETICAL PERSPECTIVES ON STRATEGIC MANAGEMENT
3.3 STRATEGIC PLANNING
3.4 STRATEGIC MANAGEMENT PROCESS
4 CHAPTER 4: INSTITUTIONAL CULTURE
4.2 THEORETICAL POSITIONING: THE BASIC NATURE OF INSTITUTIONAL CULTURE
4.3 TYPES OF ORGANISATIONAL CULTURE
4.4 INSTITUTIONAL CULTURE: STRONG AND WEAK
4.5 MILITARY CULTURE
5 CHAPTER 5: THE EVOLUTION OF THE SOUTH AFRICAN MILITARY CULTURE: A HISTORICAL PERSPECTIVE
5.2 A COMPENDIUM OF THE SOUTH AFRICAN MILITARY PRIOR TO1912
5.3 HISTORICAL OVERVIEW OF THE EVOLUTION OF SOUTH AFRICAN MILITARY: 1912–2014
5.4 CREATIION OF SOUTH AFRICAN NATIONAL DEFENCE FORCE (SANDF) AND THE NEW INCLUSIVE MILITARY CULTURE
6 CHAPTER 6: LEADERSHIP
6.2 LEADERSHIP DEFINED
6.3 LEADERSHIP VERSUS MANAGEMENT
6.4 TRANSACTIONAL AND TRANSFORMATIONAL LEADERSHIP APPROACH
6.5 STRATEGIC CHANGE MANAGEMENT IN THE SANDF
7 CHAPTER 7: INSTITUTIONAL CULTURE
7.2 RESEARCH METHODOLOGY
7.3 RESEARCH DESIGN
7.4 METHODS OF DATA COLLECTION
7.5 POPULATION AND SAMPLE
7.6 DATA COLLECTION
7.7 ETHICAL CONSIDERATIONS
7.8 DATA PROCESSING AND ANALYSIS
8. CHAPTER 8: RESEARCH ANALYSIS AND INTERPRETATION OF FINDINGS
8.2 ANALYSIS OF THE QUANTITATIVE STUDY
8.3 ANALYSIS OF THE QUALITATIVE STUDY
9. CHAPTER 9: FINDINGS, RECOMMENDATIONS AND CONCLUSIONS
9.2 RESEARCH PURPOSE AND RESEARCH OBJECTIVE
9.3 SYNTHESIS OF CHAPTERS
9.4 RESEARCH FINDINGS
9.6 PROPOSED STRATEGIC CHANGE MANAGEMENT MODEL
9.8 LIMITATIONS TO THE STUDY
9.9 FUTURE RESEARCH
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