Strategy Implementation

Authored by Phineas Chauke

As a dynamic, interactive and complex process, strategy implementation comprises a series of

decisions and activities by managers and employees – affected by a number of interrelated internal
and external factors – to turn strategic plans into reality in order to achieve strategic objectives.
There are many factors that influence the success of strategy implementation, ranging from the
people who communicate or implement the strategy to the systems or mechanisms in place for
coordination and control. Strategy implementation is important because its success or failure rate
may have a significant impact on the success and sustainability of the business.

Strategy implementation is a mystery in many organizations due to the complexity involved. In fact,
most managers would rather participate in the formulation of a strategy rather that the
implementation of the strategy. This is because the success of strategy implementation is not
assured. Strategy Implementation is recorded to have an unsatisfying low success rate (only 10 to
30percent) of intended strategies (Raps and Kauffman, 2005).

Strategy implementation involves the organization of resources and motivation of staff in order to
achieve the objectives and key performance indicators set out in the strategic plan. Strategy
implementation may be faced by a set of challenges which may emanate from the leadership and
the management, the resources, the organization structure and culture, the organization politics,
the motivation of staff, the involvement and participation of staff, the perception and resistance
emanating from staff and other stakeholders (Okumus, 2003) . In addition, lack of fit of strategy may
also challenge its successful implementation (Porter, 2004, Awino et al, 2012, Machuki and Aosa,
2011).

Strategy implementation challenges may include poor leadership and management, inadequate
resources, the lack of fit between strategy and organization structure and culture, unhealthy
organization politics, lack of motivation of staff, the lack of involvement and participation of staff,
the negative perception and resistance emanating from staff and other stakeholders (Okumus,
2003).

Strategy implementation is informed by various theories. These include the resource based theories
of the firm; The Institutional Theory; Industrial Organization Theories (IO) among others. The theory
that best informs strategic management challenges is the Institutional Theory since it explains the
internal challenges that inhibit strategy implementation. The theory explains why institutions
behave the way they do and this can be a starting point of understanding the challenges of strategy
implementation..

Strategy implementation is a complex phenomenon (Noble and Mokwa, 1999). Strategy

implementation is the putting into action a formulated strategy. It involves organization of the firm's
resources and motivation of the staff to achieve objectives (Ramesh, 2011). Although formulating a
consistent strategy is a difficult task for any management team, making that strategy work, that is,
implementing it throughout the organization is even more difficult (Hrebiniak, 2006). A myriad of
factors can potentially affect the process by which strategic plans are turned into organizational
action.

Unlike strategy formulation, strategy implementation is often seen as something of a craft, rather
than a science, and its research history has previously been described as fragmented and eclectic
(Noble, 1999). It is thus not surprising that, after a comprehensive strategy or single strategic
decision has been formulated, significant difficulties usually arise during the subsequent
implementation process.

The fatal problem with strategy implementation is the de facto success rate of intended strategies.
In research studies it is as low at 10 percent (Judson, 1991). Despite this abysmal record, strategy
implementation does not seem to be a popular topic at all. In fact, some managers mistake
implementation as a strategic afterthought and a pure top-down approach.

The second major process of strategic management is implementation, which involves

decisions regarding how the organization's resources (i.e., people, process and IT systems)
will be aligned and mobilized towards the objectives. Implementation results in how the
organization's resources are structured (such as by product or service or geography),
leadership arrangements, communication, incentives, and monitoring mechanisms to track
progress towards objectives, among others.

Running the day-to-day operations of the business is often referred to as "operations

management" or specific terms for key departments or functions, such as "logistics
management" or "marketing management," which take over once strategic management
decisions are implemented.

Without implementation, strategy is just a fantasy, yet many, perhaps most strategic plans are not
implemented as intended. Instead, interdepartmental in-fighting and self-serving managers mean
that what happens on the ground is very different from what the firm’s leaders instructed. Worse
still, much of our traditional management practices - payment by results, team building, and
stretching targets – actually make this situation worse.

Strategy is all about managing change. Resistance to change is one of the greatest threats to strategy
implementation. Strategic change is the movement of an organization from its present state to
toward some desired future state to increase its competitive advantage (Hill and Jones, 1999). The
behaviour of individuals ultimately determines the success or failure of organizational endeavors
and top management concerned with strategy and its implementation must realize this (McCarthy et
al, 1986). Change may also result to conflict and resistance. People working in organizations
sometimes resist such projects and make strategy difficult to implement (Lynch, 2000). This may be
due to anxiety or fear of economic loss, inconvenience, uncertainty and break in normal social
patterns.

Studies by Okumus (2003) found that the main barriers to the implementation of strategies include
lack of coordination and support from other levels of management and resistance from lower levels
and lack of or poor planning activities. Freedman (2003), lists out a number of implementation
pitfalls such as isolation, lack of stakeholder commitment, strategic drift, strategic dilution, strategic
isolation, failure to understand progress, initiative fatigue, impatience, and not celebrating success.

Sterling (2003), identified reasons why strategies fail as unanticipated market changes; lack of senior
management support; effective competitor responses to strategy application of insufficient
resources; failure of buy in, understanding, and/or communication; timeliness and distinctiveness;
lack of focus; and bad strategy poorly conceived business models. Sometimes strategies fail because
they are simply ill conceived. For example business models are flawed because of a
misunderstanding of how demand would be met in the market.

Strategy Implementation Obstacles

The strategy implementation obstacles is based on eight dimensions which are purchasing,
construction facilities, human resource, financial aspect, operation, management information
system, sales and environment. The mean and standard deviation score for the eight dimensions are
shown in Table 5 through Table.

The main objective of this study is to identify the various strategy implementation obstacles that are
generally encountered by construction firms with problem construction projects.
The results of the study suggest that the obstacles can be viewed along eight strategy
implementation dimensions which are purchasing, construction facility, human resource, finance,
operations, management information system, sales, and environment.. The results of the study also
indicate that the three most serious obstacle that have to be dealt with when implementing trouble
projects are those pertaining to the environment, management information systems, and human
resource. This is followed by two other obstacles pertaining to finance and sales. The three
somewhat least serious problems are those pertaining to purchasing, construction facility, and
operations.The results of the study suggest that problems related to the environment dimension are
most serious. This is not surprising as many studies in strategic management characterized the
environment as complex and unpredictable. Unpredictable changes in the various elements of the
environment such as attitude of local populace, inflation rate, physical and site conditions can

have impact on implementation. The findings from other studies too such as those in [20] indicate

that environmental factors are one of the crucial obstacles to effective strategy implementation. The
second most challenging obstacle consists of those problems under management information
system dimension. According to [8], a good management information system allows for information
sharing that provides adequate information for effective implementation decision while on the other
hand a poor management information system such as withholding of information can only result in
poor coordination. The studies in [15] and [20] observed that firms need to give greater attention to
their management of information systems as it can work to the detriment of a firm if it is not
properly managed. In the study some of the management information system problems include poor
communication, slow feedback obtained from construction firms, consultants, and variation orders
from the Department. The third serious obstacle comprises the human resource dimension. More
specifically, the results of the study indicate that technical competencies and knowledge of the
contracting firm workers and their sub-contractors workers are rather lacking. The studies in [22]
and [20] also revealed that human resource particularly competencies and skill of the employees is
another dimension which can be an obstacle to successful implementation The next category of
obstacle consists of financial problems. The studies by Abd. El Razak, Bassioni & Mobarak [23], Al-
Khalil & Al-Ghafly [24] also revealed that financial issues can also act as obstacles to strategy
implementation. There are several ways in which financial matters can affect strategy
implementation. In this study financial problems can be in the form of financial shortage, making
late payments to subcontractors, inaccurate project costing and late progress payment made to the
contractor.
In this study the sales dimension mostly involves the time management of the sales contract or the
tenor of the sales contract. The contract period can be a problem when it does not provide enough
time for the contractor to complete the project.

Obstacles arising from operation, construction facility, and purchasing dimension seem to be less
critical to strategy implementation as compared to the earlier dimensions. Nevertheless they can
still adversely affect strategy implementation. In this study firms with operational obstacles tend to
experience problems such as poor design, outdated technology, inappropriate construction method,
lack of site investigation and insufficient feasibility study. The operation aspect is another factor that
can pose as problem to strategy implementation as noted by studies such as [25] and [24].

Another dimension that can be an obstacle to successful strategy implementation is the construction
facility employed by the firms. There are a number of ways in which the construction facility can be
obstacles to strategy implementation among them such as frequent breakdown, high maintenance
cost, and shortage of spare parts. Other studies such as those in [26]and [23] showed that the
construction facility is among the factors that can affect implementation.

The least serious obstacle to strategy implementation for the construction firms in the study is
purchasing. As in a number of other studies such as [26] and [27], this study identifies that
purchasing can be an obstacle to successful implementation. This is especially so when the project
experience substandard quality of supplies, late delivery and shortage of supplies, price fluctuation,
and incompetent suppliers. Nevertheless in this study the construction firms that are implementing
the project seem able to manage the purchasing dimension than other implementation dimensions.

Conclusion

In general the study reveals the presence of various strategy implementation obstacles in most of
the problem construction project. In this study the obstacles are broken down into eight dimensions
which are purchasing, construction equipment, human resource, finance, operations, management
information system, sales, and environment. The three most challenging obstacles are those
pertaining to the environment, management information systems, and human resource.

On the other hand the three obstacles that posed less serious threats to the firms are operation,
construction facility, and purchasing. Most of the obstacles identified in the study are in line with
those obstacles which are identified in earlier studies.

The study also point out to some valuable messages for those who are directly responsible for
implementing government projects such as consultants, project managers, government officers, and
contractors. Those involved should always be on the alert on the threat and challenges that can
develop from the various obstacles. As this study show, greater attention should be given to the
three serious obstacles. Attention should be given on environmental changes, level of competencies
required to complete a project and finally, the free flow and amount of information needed to make
decision. A proactive approach on the part of those involved in implementing strategy or project
could reduce the risk of the obstacles becoming a much bigger threat.

Developing a strategic plan takes discipline, foresight, and a lot of honesty. Regardless how well you
prepare, you’re bound to encounter challenges along the way.

Unwillingness or inability to change. Your company and your strategic plan must be nimble
and able to adapt as market conditions change.

Having the wrong people in leadership positions. Management must be willing to make the
tough decisions to ensure the right individuals are in the right leadership positions. The
“right” individuals include those who will advocate for and champion the strategic plan and
keep the company on track.

Not understanding the environment or focusing on results. Planning teams must pay attention to
changes in the business environment, set meaningful priorities, and understand the need to pursue
results.

Not having the right people involved. Those charged with executing the plan should be involved
from the onset. Those involved in creating the plan will be committed to seeing it through execution.

Ignoring marketplace reality, facts, and assumptions. Don’t bury your head in the sand when
it comes to marketplace realities, and don’t discount potential problems because they have
not had an immediate impact on your business yet. Plan in advance and you’ll be ready
when the tide comes in.

No accountability or follow through. Be tough once the plan is developed and resources are
committed and ensure there are consequences for not delivering on the strategy.

Unrealistic goals or lack of focus and resources. Strategic plans must be focused and include
a manageable number of goals, objectives, and programs. Fewer and focused is better than
numerous and nebulous. Also be prepared to assign adequate resources to accomplish
those goals and objectives outlined in the plan.

By avoiding these pitfalls, you can create an effective planning process, build a realistic
business direction for the future, and greatly improve the chances for successful
implementation of your strategy.

When an organization’s environment is stable and predictable, strategic planning can provide
enough of a strategy for the organization to gain and maintain success. The executives leading the
organization can simply create a plan and execute it, and they can be confident that their plan will
not be undermined by changes over time. But as the consultant’s experience shows, only a few
executives—such as the manager of the Panama Canal—enjoy a stable and predictable situation.
Because change affects the strategies of almost all organizations, understanding the concepts of
intended, emergent, and realized strategies is important . Also relevant are deliberate and non-
realized strategies.

Lack of fit between the intended strategy and the structure.

When there is a lack of harmony between the organisational structure and the strategy that has
been adopted it becomes quite difficult if not impossible to implement the strategy. Each strategy
calls for a suitable organisational structure for its successful implementation.

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