STRATEGY IMPLEMENTATION

The implementation of organization strategy involves the application of the management

process to obtain the desired results. Particularly, strategy implementation includes
designing the organization's structure, allocating resources, developing strategic control
systems.

Strategy implementation is "the process of allocating resources to support the chosen

strategies". This process includes the various management activities that are necessary
to put strategy in motion, institute strategic controls that monitor progress, and ultimately
achieve organizational goals.

The Relation between Strategy Formulation and Strategy Implementation

Successful strategy formulation does not guarantee successful strategy implementation.

Strategy implementation is fundamentally different from strategy formulation. Strategy formulation
and implementation can be contrasted in the following ways:

STRATEGY FORMULATION STRATEGY IMPLEMENTATION

Strategy formulation is positioning Strategy implementation is managing

forces before the action. forces during the action.

Strategy formulation focuses on Strategy implementation focuses on

effectiveness. efficiency.

Strategy formulation is primarily an Strategy implementation is primarily

intellectual process. an operational process.

Strategy formulation requires good Strategy implementation requires

intuitive and analytical skills. special motivation and leadership
skills

Strategy formulation requires Strategy implementation requires

coordination among a few individuals combination among many
individuals.
PLANS, PROGRAMMES, AND PROJECTS

The strategic plan devised by the organization proposes the manner in which the
strategies could be put into action. Strategies, by themselves, do not lead to action.
They are, in a sense, a statement of intent: implementation tasks are meant to realize
the intent. Strategies, therefore, have to be activated through implementation.

Strategies should lead to plans. For instance, if stability strategies have been
formulated, they may lead to the formulation of various plans. One such plan could be a
modernization plan. Plans result in different kinds of programmes. A programme is a
broad term, which includes goals, policies, procedures, rules, and steps to be taken in
putting a plan into action. Programmes are usually supported by funds allocated for plan
implementation. An example of a programme is a research and development
programme for the development of a new product.

Programmes lead to the formulation of projects. A project is a highly specific

programme for which the time schedule and costs are predetermined. It requires
allocation of funds based on capital budgeting by organizations. Thus, research and
development programmes may consist of several projects, each of which is intended to
achieve a specific and limited objective, requires separate allocation of funds, and is to
be completed within a set time schedule.

Implementation of strategies is not limited to formulation of plans, programmes, and

projects. Projects would also require resources. After that is provided, it would be
essential to see that a proper organizational structure is designed, systems are
installed, functional policies are devised, and various behavioural inputs are provided so
that plans may work.

STRATEGIC IMPLEMENTATION PROCESS

S.Certo and J. Peter proposed a five-stage model of the strategy implementation

process:

1. Determining how much the organization will have to change in order to

implement the strategy under consideration.

2. Analyzing the formal and informal structures of the organization.

3. Analyzing the "culture" of the organization.

4. Selecting an appropriate approach to implementing the strategy.

5. Implementing the strategy and evaluating the results.

Galbraith suggests that several major internal aspects of the organization may need to
be synchronized to put a chosen strategy into action. Major factors are technology,
human resources, reward systems, decision process and structure. This factors tend to
be interconnected, so a change in one may necessitate change in one or more others.

HAMBRICK AND CANNELLA DESCRIBED FIVE STEPS FOR EFFECTIVE

STRATEGY IMPLEMENTATION:

1. Input from a wide range of sources is required in the strategy formulation stage
(i.e., the mission, environment, resources, and strategic options component).

2. The obstacles to implementation, both those internal and external to the

organization, should be carefully assessed.

3. Strategists should be use implementation levers or management tasks to initiate

this component of the strategic management process. Such levers may come
from the way resources are committed, the approach used to structure the
organization, the selection of managers, and the method of rewarding
employees.

4. The next step is to sell the implementation. Selling upward entails convincing
boards of directors and seniors management of the merits and viability of the
strategy. Selling downward involves convincing lower level management and
employees of the appropriateness of the strategy. Selling across involves
coordinating implementation across the various units of an organization, while
selling outward entails communicating the strategy to external stakeholders.

5. The process is on-going and a continuous fine tuning, adjusting, and responding
is needed as circumstance change.

RESOURCE ALLOCATION

The resources may be existing with a company or many be acquired through capital
allocation. Resources include physical ,financial and human resources essential for
implementing plans. Resources are broadly of four categories.

i) Money

ii) Facilities and equipments

iii) Materials, supplies and services

iv) Personnel
Decisions involved in allocation of resources have vital significance in strategy
implementation. In single product firms it may involve assessment of the resource
needs of different functional departments. In the multi divisional organization it implies
assessing the resource needs of different SBUs or product divisions Redeployment or
reallocation of resources becomes necessary when changes take place. The
redeployment of resources is quite critical when there are major changes and shifts in
strategic posture of company. Redeployment of resources may arise due to strategies
of a company to grow in certain areas and withdraw from the other.

Methods of Resource allocation

(i) Based on percentages:

Usually, companies have been following system of allocation of resources by

percentages. It may not serve much purpose these days. They may be of help only in
making some comparisons. The allocation of resources should not be based on their
availability or scarcity as it may prove to be counterproductive. The resource allocation
should be made with regard to strategies of a company for its future competitive position
and growth. The decisions of resource allocation are also closely connected with the
objectives of a company.

(ii) Based on modern methods

Other methods include -Portfolio models, product life-cycle charts, balance sheets, profit
and loss statements income statements. When retrenchment or turnaround strategies
are implemented zero-based budgeting is used. During mergers, acquisitions and
expansion, capital budgeting techniques are suggested. Resource allocation is not
purely a rational technique but is based on several behavioral and political
considerations. The other analytical conceptual models used for strategic choice are
growth share matrix, ‘stop light’, and Directional Policy Matrix used in multi divisional
firms. A more comprehensive approach to management decisions on resource
allocation is provided by the budgeting system carefully geared to the chosen strategy.

Problems in resource allocation

There are several difficulties in resource allocation. The following are some of the
identified problems.

i) Scarcity of resources.

Financial, physical, and human resources are hard to find. Firms will usually face
difficulties in procuring finance. Even if finance is available, the cost of capital is a
constraint. Those firms that enjoy investor confidence and high credit worthiness
possess a competitive advantage as it increases their resource-generation capability.
Physical resources would consist of assets, such as, land, machinery, and equipment.
In a developing country like India, many capital goods have to be imported. The
government may no longer impose many conditions but it does place a burden on the
firm’s finances and this places a restriction on firms wishing to procure physical
resources. Human resources are seemingly in abundance in India but the problem
arises due to the non-availability of skills that are specially required. Information
technology and computer professionals, advertising personnel, and telecom, power and
insurance experts are scarce in India. This places severe restrictions on firms wishing to
attract and retain personnel. In sum, the availability resources are a very real problem.

ii) Restrictions on generating resources

In the usual budgeting process these are several restrictions for generating resources
due to the SBU concept especially for new divisions and departments.

iii) Overstatement of needs

Over statement of needs is another frequent problem in a bottom-up approach to

resource allocation.

The budgeting and corporate planning departments may have to face the ire of those
executives who do not get resources according to their expectations. Such negative
reactions may hamper the process of strategic planning itself.

DESIGNING ORGANIZATION STRUCTURE

An organizational structure is the pattern or arrangement of jobs and groups of jobs

within an organization. Organizational Design is the process of creating or reshaping
an organizational structure optimized to support strategic decisions.  

The elements of organization structure and design are

 Division of labor

 Departmentalization

 Delegation of authority

 Span of control

A) DIVISION OF LABOR:

It is the process of dividing work into relatively specialized jobs to achieve advantages
of specialization
Division of Labor Occurs in Three Different Ways:

Personal specialties

e.g., accountants, software engineers, graphic designers, scientists, etc.

Natural sequence of work

e.g., dividing work in a manufacturing plant into fabricating and assembly (horizontal
specialization)

Vertical plane

e.g., hierarchy of authority from lowest-level manager to highest-level manager

B) DEPARTMENTALIZATION:

Departmentalization is the process of grouping of work activities into departments,

divisions, and other homogenous units. It takes place in various patterns like
departmentalization by functions, products, customers, geographic location, process,
and its combinations.

i) Functional Departmentalization

Functional Departmentalization is the process of grouping activities by functions

performed. Activities can be grouped according to function (work being done) to pursue
economies of scale by placing employees with shared skills and knowledge into
departments for example human resources, finance, production, and marketing.
Functional Departmentalization can be used in all types of organizations.

Advantages:

Advantage of specialization

Easy control over functions

Pinpointing training needs of manager

It is very simple process of grouping activities.

Disadvantages:

Lack of responsibility for the end result

Overspecialization or lack of general management

It leads to increase conflicts and coordination problems among departments.

ii) Product Departmentalization

Product Departmentalization is the process of grouping activities by product line. Tasks

can also be grouped according to a specific product or service, thus placing all activities
related to the product or the service under one manager. Each major product area in the
corporation is under the authority of a senior manager who is specialist in, and is
responsible for, everything related to the product line. Dabur India Limited is the India’s
largest Ayurvedic medicine manufacturer is an example of company that uses product
Departmentalization. Its structure is based on its varied product lines which include
Home care, Health care, Personal care and Foods.

Advantages

It ensures better customer service

Unprofitable products may be easily determined

It assists in development of all around managerial talent

Makes control effective

It is flexible and new product line can be added easily.

Disadvantages

It is expensive as duplication of service functions occurs in various product divisions

Customers and dealers have to deal with different persons for complaint and
information of different products.

iii) Customer Departmentalization

Customer Departmentalization is the process of grouping activities on the basis

of common customers or types of customers. Jobs may be grouped according to the
type of customer served by the organization. The assumption is that customers in each
department have a common set of problems and needs that can best be met by
specialists. UCO is the one of the largest commercial banks of India is an example of
company that uses customer Departmentalization. Its structure is based on various
services which includes Home loans, Business loans, Vehicle loans and Educational
loans.

Advantages

It focused on customers who are ultimate suppliers of money

Better service to customer having different needs and tastes

Development in general managerial skills

Disadvantages

Sales being the exclusive field of its application, co-ordination may appear difficult
between sales function and other enterprise functions.
Specialized sales staff may become idle with the downward movement of sales to any
specified group of customers.

iv) Geographic Departmentalization

Geographic Departmentalization is the process of grouping activities on the basis of

territory. If an organization's customers are geographically dispersed, it can group jobs
based on geography. For example, the organization structure of Coca-Cola Ltd has
reflected the company’s operation in various geographic areas such as Central North
American group, Western North American group, Eastern North American group and
European group

Advantages

Help to cater to the needs of local people more satisfactorily.

It facilitates effective control

Assists in development of all-round managerial skills

Disadvantages

Communication problem between head office and regional office due to lack of means
of communication at some location

Coordination between various divisions may become difficult.

Distance between policy framers and executors

It leads to duplication of activities which may cost higher.

v) Process Departmentalization

Geographic Departmentalization is the process of grouping activities on the basis of

product or service or customer flow. Because each process requires different skills,
process Departmentalization allows homogenous activities to be categorized. For
example, Bowater Thunder Bay, a Canadian company that harvests trees and
processes wood into newsprint and pulp. Bowater has three divisions namely tree
cutting, chemical processing, and finishing (which makes newsprint).

Advantages

• Oriented towards end result.

• Professional identification is maintained.

• Pinpoints product-profit responsibility.

Disadvantage

• Conflict in organization authority exists.

• Possibility of disunity of command.

• Requires managers effective in human relation

vi) Matrix Departmentalization

In actual practice, no single pattern of grouping activities is applied in the organization
structure with all its levels. Different bases are used in different segments of the
enterprise. Composite or hybrid method forms the common basis for classifying
activities rather than one particular method,. One of the mixed forms of organization is
referred to as matrix or grid organization’s According to the situations, the patterns of
Organizing varies from case to case. The form of structure must reflect the tasks, goals
and technology if the originations, the type of people employed and the environmental
conditions that it faces. It is not unusual to see firms that utilize the function and project
organization combination. The same is true for process and project as well as other
combinations. For instance, a large hospital could have an accounting department,
surgery department, marketing department, and a satellite center project team that
make up its organizational structure.

Advantages

Efficiently manage large, complex tasks

Effectively carry out large, complex tasks

Disadvantages

Requires high levels of coordination

Conflict between bosses

Requires high levels of management skills

C) DELEGATION OF AUTHORITY

Delegation of authority can be defined as subdivision and sub-allocation of powers to

the subordinates in order to achieve effective results.

Centralization and Decentralization are two opposite ways to delegate authority and to
change the organizational structure of organizations accordingly.

i) Centralization:

It is the process of transferring and assigning decision-making authority to higher levels

of an organizational hierarchy. The span of control of top managers is relatively broad,
and there are relatively many tiers in the organization.

Advantages

Provide Power and prestige for manager

Promote uniformity of policies, practices and decisions

Minimal extensive controlling procedures and practices

Minimize duplication of function

Disadvantages

Neglected functions for mid- level, and less motivated beside personnel.

Nursing supervisor functions as a link officer between nursing director and first-line
management.

ii) Decentralization:

It is the process of transferring and assigning decision-making authority to lower levels

of an organizational hierarchy. The span of control of top managers is relatively small,
and there are relatively few tiers in the organization, because there is more autonomy in
the lower ranks.

Advantages

Raise morale and promote interpersonal relationships

Relieve from the daily administration

Bring decision-making close to action

Develop Second-line managers

Promote employee’s enthusiasm and coordination

Facilitate actions by lower-level managers

Disadvantages

Top-level administration may feel it would decrease their status

Managers may not permit full and maximum utilization of highly qualified personnel

Increased costs. It requires more managers and large staff

It may lead to overlapping and duplication of effort

 There must be a good balance between centralization and decentralization of authority

and power. Extreme centralization and decentralization must be avoided.

D) SPAN OF CONTROL

Span of Control means the number of subordinates that can be managed efficiently and
effectively by a superior in an organization. It suggests how the relations are designed
between a superior and a subordinate in an organization.

Factors Affecting Span of Management:

Capacity of Superior:

Different ability and capacity of leadership, communication affects management of

subordinates.

Capacity of Subordinates:

Efficient and trained subordinates affect the degree of span of management.

Nature of Work:

Different types of work require different patterns of management.

Degree of Centralization or Decentralization:

Degree of centralization or decentralization affects the span of management by affecting

the degree of involvement of the superior in decision making.

Degree of Planning:
Plans which can provide rules, procedures in doing the work higher would be the
degree of span of management.

Communication Techniques:

Pattern of communication, its means, and media affect the time requirement in
managing subordinates and consequently span of management.

Use of Staff Assistance:

Use of Staff assistance in reducing the work load of managers enables them to manage
more number of subordinates.

Supervision of others:

If subordinate receives supervision form several other personnel besides his direct
supervisor. In such a case, the work load of direct superior is reduced and he can
supervise more number of persons.

Span of control is of two types:

i) Narrow span of control: Narrow Span of control means a single manager or supervisor
oversees few subordinates. This gives rise to a tall organizational structure.

Advantages:

Close supervision

Close control of subordinates

Fast communication

Disadvantages:
Too much control

Many levels of management

High costs

Excessive distance between lowest level and highest level

ii) Wide span of control: Wide span of control means a single manager or supervisor
oversees a large number of subordinates. This gives rise to a flat organizational
structure.

Advantages:

More Delegation of Authority

Development of Managers

Clear policies

Disadvantages:

Overloaded supervisors

Danger of superiors loss of control

Requirement of highly trained managerial personnel

Block in decision making

DESIGNING STRATEGIC CONTROL SYSTEMS

Strategic control systems provide managers with required information to find out
whether strategy and structure move in the same direction. It includes target setting,
monitoring, evaluation and feedback system.

 The importance of strategic control

 Achieving operational efficiency

 Maintaining focus on quality

 Fostering innovation

 Insuring responsiveness to customers

Strategic control process

The basic control process involves mainly these steps as shown in Figure
a) The Establishment of Standards:

Because plans are the standards against which controls must be revised, it follows
logically that the first step in the control process would be to accomplish plans. Plans
can be considered as the criterion or the standards against which we compare the
actual performance in order to figure out the deviations.

Examples for the standards

Profitability standards: In general, these standards indicate how much the company
would like to make as profit over a given time period- that is, its return on investment.

Market position standards: These standards indicate the share of total sales in a
particular market that the company would like to have relative to its competitors.

Productivity standards: How much that various segments of the organization should
produce is the focus of these standards.

Product leadership standards: These indicate what must be done to attain such a
position.

Employee attitude standards: These standards indicate what types of attitudes the
company managers should strive to indicate in the company’s employees.

Social responsibility standards: Such as making contribution to the society.

Standards reflecting the relative balance between short and long range goals.

b) Measurement of Performance:

The measurement of performance against standards should be on a forward looking

basis so that deviations may be detected in advance by appropriate actions. The degree
of difficulty in measuring various types of organizational performance, of course, is
determined primarily by the activity being measured. For example, it is far more difficult
to measure the performance of highway maintenance worker than to measure the
performance of a student enrolled in a college level management course.

c) Comparing Measured Performance to Stated Standards:

When managers have taken a measure of organizational performance, their next step in
controlling is to compare this measure against some standard. A standard is the level of
activity established to serve as a model for evaluating organizational performance. The
performance evaluated can be for the organization as a whole or for some individuals
working within the organization. In essence, standards are the yardsticks that determine
whether organizational performance is adequate or inadequate.
d) Taking Corrective Actions:

After actual performance has been measured compared with established performance
standards, the next step in the controlling process is to take corrective action, if
necessary. Corrective action is managerial activity aimed at bringing organizational
performance up to the level of performance standards. In other words, corrective action
focuses on correcting organizational mistakes that hinder organizational performance.
Before taking any corrective action, however, managers should make sure that the
standards they are using were properly established and that their measurements of
organizational performance are valid and reliable. At first glance, it seems a fairly simple
proposition that managers should take corrective action to eliminate problems - the
factors within an organization that are barriers to organizational goal attainment. In
practice, however, it is often difficult to pinpoint the problem causing some undesirable
organizational effect.
Levels of strategic control

The various levels of strategic control are

Corporate level control:

The corporate level control is done by the top level management. They set controls
which provide context for the divisional level managers.

Divisional level control:

The divisional level control is done by the managers of the division. They set controls
which provide context for the functional managers.
Functional level control:
The functional level control is done by the managers of each department. They set
controls which provide context for the first level managers.

First level control:

The first level control is done by the first line managers. They set controls which
provide context for the workers.

Types of control systems

The various types of the control systems are
Financial Controls
Since one of the primary purposes of every business firm is to earn a profit, managers
need financial controls. Two specific financial controls include budgets and financial
ratio analysis.

Budgets act as a planning tool and control tools as well. They provide managers with
quantitative standards against which to measure and compare resource consumption.
Financial ratios are calculated by taking numbers from the organization's primary
financial statements the income statement and the balance sheet.
b) Operations Controls
Operations control techniques are designed to assess how efficiently and effectively an
organization's transformation processes are working. Many of these techniques were
covered in Chapter 19 as we discussed operations management. However, two
operations control tools deserve elaboration: TQM control charts and EOQ model.

Control charts show results of measurements over a period of time with

statistically determined upper and lower limits. They provide a visual means of
determining whether a specific process is staying within predefined limits
The EOQ model helps managers know how much inventory to order and how often to
order. The EOQ model seeks to balance four costs associated with ordering and
carrying inventory.
c) Behavioral Controls
Managers accomplish organizational goals by working with other people. It's important
for managers to ensure that employees are performing as they're supposed to. We'll be
looking at three explicit ways that managers control employee behavior: direct
supervision, performance appraisals, and discipline.

Direct supervision is the daily overseeing of employees' work performance and

correcting problems as they occur. It is also known as MBWA (management by walking
around).
Performance appraisal is the evaluation of an individual's work performance in order to
arrive at objective personnel decisions.
Discipline includes actions taken by a manager to enforce the organization's standards
and regulations. The most common types of discipline problems involve attendance, on-
the-job behaviors, dishonesty, and outside activities.

IMPLEMENTING STRATEGIC CHANGE

Levels of change

Change occurs at three levels

i) Individual level

ii) Group level and

iii) Organization level

At the individual level change is reflected in such developments as changes in a job

assignment, physical move to a different location, or the change in maturity of a person
which occurs overtime. It is said that changes at the individual level will seldom have
significant implications for the total organization. Most organizational changes have their
major effects at the group level. This is because most activities in organizations are
organized on a group basis. The groups could be departments, or informal work groups.
Changes at the group level can affect work flows, job design, social organization,
influence and status systems, and communications patterns. Changes at the
organization level involve major programmes that affect both individuals and groups.
Decisions regarding these changes are generally made by senior management and are
seldom implemented by only a single manager. Frequently, they occur over long
periods of time and require considerable planning for implementation. Example of these
changes would be reorganization of the organizational structure and responsibilities,
revamping of employee remuneration system, or major shifts in an organization’s
objectives.

Organizations that seek to create and sustain competitive advantage should be ready to
change and implement the proposed changes. The major forces for change are:
technical obsolescence and technical improvements; political, economic, and social
events; globalization; increase in organizational size, complexity, and specialization;
greater strategic awareness and skills of managers and employees; and competitive
dynamics. The level of change could be at values, culture, or styles of management;
objectives, corporate strategy, or organization structure; competitive strategies,
systems, and management roles; and functional strategies or organization of tasks. It is
crucial to clarify the level of change and tackle needs and problems appropriately.

The major types of strategic change are re-engineering, restructuring, and innovation.

Re-engineering: It is also known as Business Process Reengineering. It is fundamental

rethinking and radical redesign of business process to achieve dramatic improvements
in critical, contemporary measures of performance such as cost, quality, service and
speed. The strategist must completely think how the organization goes about its
business. Instead of focusing on company’s functions strategic managers make
business process the focus of attention.

Restructuring: It is the second form of change to improve the firm’s performance. There
are two basic steps to restructuring. First, an organization reduces its level of
differentiation and integration by eliminating divisions, departments or levels in the
hierarchy. Second, an organization downsizes by reducing the number of its employees
to reduce operating cost.
Innovation: It is the process by which organizations use their skills and resources to
create new technologies or goods and services so they can change and better respond
to the needs of their customer. Innovation can be done with the help of research and
development department.

Stages in the Change Process

STAGES IN THE STRATEGIC CHANGE PROCESS

Determine the need for change:

In this step the strategic managers must recognize a gap between actual performance
and desired performance, use a SWOT analysis to define the company’s present state
and then determine its desired future state.

Determine the obstacles to change:

Obstacles may prevent a company from reaching its desired future state. Conflict is also
major setback to change and managers must seek ways to resolve the conflict to
implement strategic change successfully.

Implement change:

Strategic managers play organizational politics to overcome obstacles to change,

resolve conflicts and bring about strategic change, resolve conflicts and bring about
strategic change. To play politics, managers must have power.

Evaluate change:

Strategic managers need to evaluate the results of each change process and use this
analysis to define the organization’s present condition so that they can start the next
change process.

POWER POLITICS AND CONFLICT

POWER
Power is the capacity to influence the behavior of others. There are different sources of
power. They are broadly divided into (a) interpersonal sources and (b) structural
sources.

(a) Interpersonal sources of power

Reward power: It is individual’s ability to influence others’ behaviors by rewarding their

desirable behaviors.

Coercive power: It is an individual’s ability to influence others’ behaviors by punishing

their undesirable behaviors.

Legitimate Power: It is power which comes from the position in the organization.

Expert power: It is an individual’s ability to influence others’ behaviors because of

recognized competencies, talents, or specialized knowledge.

Referent Power: It is an individual’s ability to influence others’ behaviors as a result of

being respected, admired, or liked.

(b) Structural sources of power

Structural sources of power are related to the division of labor and position in different
teams and departments work assignments, locations and roles. The positions in
hierarchy naturally result in a variety of situations in which there is unequal access to
information, resources, and decision making. Any of the situational factors could be a
source of power in an organization, which include knowledge, resources, decision-
making and networks.

Knowledge power – This power is from knowledge-information and know-how that

exists in an organization.

Resources power – Organizations need a variety of resources, including human

resources, money, equipment, materials, supplies, and customers, to survive.

Decision-making power – Decisions in organizations often are made sequentially, with

individuals, groups, or teams participating.

Network power – Managers and departments that have connecting links with other
individuals and departments in the organization will be more powerful than those who
don’t.

POLITICS
Politics is the art of acquiring and enhancing power. Employees have a certain role to
play. Therefore, their exercise of power is limited to a large extent by the role
obligations. Political behavior is of two types.

Legitimate - It includes normal every day’s politics. It includes:

Complaining to one’s superiors

By passing the chain of command

Forming coalitions

Obstructing organizational policies through excessive adherence to rules

Developing contacts outside through professional activities

Illegitimate – It includes influences that are extreme and violate the implied “rules of the
game.” Such activities include

disruption,

Whistle blowing,

Symbolic protest such as wearing unorthodox dress and

Groups of employees cumulatively calling in sick.

It may be stated that the vast majority of political actions are of the legitimate variety.
The reasons are pragmatic – the extreme and illegitimate forms of political behavior
pose a very real risk of loss of organizational membership, or extreme sanctions against
those who use them and then fall short in having enough power to insure that they work.

Factors causing political behavior

Research has indicated a number of factors, which can contribute to political behavior.
Some of these factors are individual and derived from the unique qualities of the
employees in the organization and others are derived from the organization’s internal
culture or environment.

a) Individual factors

A few prominent individual factors are examined here.

Need for power and high expectations of success - Some managers who are status and
ego driven often resort to politics to gain access to power corridors. They use the power
for their personal growth and pleasures. Some managers, who are in-charge of teams
or units, may also engage in politics to safeguard their positions and have more benefits
for their units.

Machiavellianism - Machiavellians are people who use dishonesty and opportunism in

interpersonal relations and manipulate others for their own purpose. Such
Machiavellists also have a skeptical view of the nature of other people and do not care
for conventional morality.

Locus of control - Locus of control refers to the extent to which individuals believe that
they can control events that affect them. Individuals with a high internal locus of control
believe that events result primarily from their own behavior and actions. Those with a
high external locus of control believe that powerful others, fate, or chance primarily
determine events. Those with a high internal locus of control have better control of their
behavior, tend to exhibit more political behaviors, and are more likely to attempt to
influence other people than those with a high external (or low internal respectively)
locus of control. Those with a high internal locus of control are more likely to assume
that their efforts will be successful. They are more active in seeking information and
knowledge concerning their situation.

(b) Organizational factors

Organizational factors also influence the politicking in organizations. These are as

follows.

Reallocation of resources – when organizations downsize the changes many stimulate

conflict and politicking to have advantage in allocation.

Advancement or promotion – people resort to politics for quickly getting advancement

or promotion in their careers

Low trust – A low trust within the organization can increase political behavior, which can
become illegitimate also.

Role ambiguity – When there is confusion in the scope and functions, employees resort
to politicking to have a favorable situation.

CONFLICT
Conflict is defined as a situation when the goal directed behavior of one group blocks
the goal-directed behavior of another. Conflict is necessary for organizational change as
it strikes at the root of the sources of organization inertia.

Sources of Organizational Conflict

The sources of conflict are:

a) Differentiation

-Differences in subunit orientations

b) Task relationships

-Overlapping authority

-Task interdependencies

-Incompatible evaluation systems

c) Scarcity of resources

-Distributing sources

Stages in the Conflict Process

The sources of conflict are inherent of the organization’s mode of operations. The
stages in the conflict process are:

Latent conflict

Perceived conflict

Felt conflict

Manifest conflict

Conflict aftermath
Conflict is a dynamic process that does not usually appear suddenly. In fact, conflict
generally passes through several stages:

Latent conflict - At this stage, the basic conditions for conflict exist but have not been
recognized by the involved parties.

Perceived conflict - The basic conditions for conflict are recognized by one or both of
the parties.

Felt conflict - Internal tensions begin to build in the involved parties, but the conflict is
still not out in the open.

Manifest conflict - The conflict is out in the open and the existence of the conflict
becomes obvious to other parties who are not involved.

Conflict aftermath - The conflict is stopped by some method. How the conflict is stopped
established new conditions that lead either to a new conflict or to more effective
cooperation between the involved parties.

A particular conflict situation does not necessarily pass through all of the stages. In
addition, the parties who are involved in the conflict may not be at the same stage at the
same time. For example, it is entirely possible for one party to be at the manifest stage,
while one party is at the perceived stage.

CONFLICT RESOLUTION STRATEGIES

Using authority when the function, which has equal power and authority, cannot solve
the conflict themselves, the CEO or corporate office interferes and imposes a solution.

Changing controls

Changing task relationship

Implementing strategic change

Changing the strategy [successful turnaround]

TECHNIQUES OF STRATEGIC EVALUATION AND CONTROL

The importance of strategic evaluation lies in its ability to coordinate the tasks
performed by individual managers, and also groups, division or SBUs, through the
control of performance. In the absence of coordinating and controlling mechanisms,
individual managers may pursue goals, which are inconsistent with the overall
objectives of the department, division, SBU or the whole organization. We will now
discuss evaluation and control in detailed way.

Strategic evaluation and control process

The process of evaluation basically deals with four steps:

1. Setting standards of performance-Standards refer to performance expectations.

2. Measurement of performance-Measurement of actual performance or results requires

appraisal based on standards.

3. Analyzing variances- The comparison between standards and results gives

variances.

4. Taking corrective action-The identifications of undesirable variances prompt

managers to think about ways of corrective them.

TECHNIQUES

The different types of strategic controls are discussed in brief here.

Premise control A company may base its strategy on important assumptions related to
environmental factors (e.g., government policies), industrial factors (e.g. nature of
competition), and organizational factors (e.g. breakthrough in R&D). Premise control
continually verifies whether such assumptions are right or wrong. If they are not valid
corrective action is initiated and strategy is made right. The responsibility for premise
control can be assigned to the corporate planning staff who can identify for assumptions
and keep a regular check on their validity.

Implementation control Implementation control can be done using milestone review.

This is similar to the identification-albeit on a smaller scale-of events and activities in
PERT/CPM networks. After the identification of milestones, a comprehensive review of
implementation is made to reassess its continued relevance to the achievement of
objectives.

Strategic Surveillance This is aimed at a more generalized and overarching control.

Strategic surveillance can be done through a broadbased, general monitoring on the
basis of selected information sources to uncover events that are likely to affect the
strategy of an organization.

Special Alert Control This is based on a trigger mechanism for rapid response and
immediate reassessment of strategy in the light of sudden and unexpected events.
Special alert control can be exercised through the formulation of contingency strategies
and assigning the responsibility of handling unforeseen events to crisis management
teams. Examples of such events can be the sudden fall of a government at the central
or state level, instant change in a competitor’s posture, an unfortunate industrial
disaster, or a natural catastrophe.

Strategic momentum control These types of evaluation techniques are aimed at finding
out what needs to be done in order to allow the organization to maintain its existing
strategic momentum.

Strategic leap control Where the environment is relatively unstable, organizations are
required to make strategic leaps in order to make significant changes. Strategic leap
control can assist such organizations by helping to define the new strategic
requirements and to cope with emerging environmental realities.