Development of an Integrated Perspective on Strategy Implementation.

AuthorBhattacharyya, Som Sekhar


Thoughts on strategy has been as old as human thoughts on business are (Freedman, 2015). It often stemmed from military perspectives where the overwhelming notion was about winning (Kay, McKiernan, Faulkner & Campbell, 2003). In business parlance, strategic management has been deliberating upon the mechanisms towards attainment of Competitive Advantage (CA) (Barney & Hesterly, 2009). CA could be achieved upon two contexts namely, organizational (Miles, Snow, Meyer & Coleman Jr, 1978; Wooldridge & Floyd, 1990) or economic (Williamson, 1991; Hansen & Wernerfelt, 1989). The Resource Based View (RBV) theorists had advocated that possession of valuable, rare, in-imitable and non-substitutable resources and capabilities led to CA (Barney, 2001). Such resources and capabilities possessed by firms helped them to secure a higher level of customers Willingness To Pay (WTP) (Hanemann,1991; Wertenbroch & Skiera, 2002) relative to the associated Opportunity Cost (OC) incurred by them (Buchanan, 1991; Spiller, 2011). The former is grounded in the organizational perspective the latter being the economic perspective (Hansen & Wernerfelt, 1989). This is in turn based upon the industrial organization perspective (Rumelt, 1991). The work of Porter (1980;1985) had deliberated that CA could be achieved better by three generic strategies namely a firm being the lowest cost producer (thus offering the lowest cost to customers), by charging higher price to customers (because of differentiation) or by focusing on a niche segment in product and services offerings made by the firm. Porter (1980; 1985) had also talked about the concept of dual advantage (that is achieving both low cost as well as differentiation simultaneously). It was Mauborgne & Kim (2005) who anchored this extant literature as Blue Ocean Strategy (BOS). Thus, firm strategy ultimately led to superior firm performance and apart from the classing measures of performance (emphasizing financial and economic perspectives) like stock price appreciation (for listed firms) profit by sales ratio appreciation and such others (Snow & Hrebiniak, 1980; Richard, Devinney, Yip & Johnson, 2009). There were more holistic performance evaluation measures developed (Steers, 1975; Maltz, Shenhar & Reilly, 2003). These were by Kalpan and Norton (1996; 2001a; 2001b; 2006) and they evaluated firm performance in terms of market superiority, financial gains, organizational processes and learning. One could argue that strategy planning led to superior firm performance however, there was an existential element in between namely Strategy Implementation (SI) (Hrebiniak, 2006; Beer & Eisenstat, 2000). SI deliberated upon the mechanism and process constructed to convert the strategic plans into activities and finally the proper execution of these action initiatives into superior firm performance (Noble, 1999; Atkinson, 2006; Neilson, Martin & Powers, 2008; Higgins, 2005). One could note the equation:

Firm Performance = Strategy Planning (SP) X Strategy Implementation (SI)

One must remember that performance was multiplication of SP and SI. If there was poor SI, then performance suffered irrespective of the strength of the robust SP (Miller, 1997; Higgins, 2005). Strategy planning has been increasingly becoming dynamic (Dibrell, Down & Bull, 2007; Andersen, 2004), yet strategy implementation had always been real time (Govindarajan, 1988). Thus, strategy implementation became challenging as SP had been classically static relative to SI (MacLennan, 2010; Wilson & Jarzabkowski, 2004).

Importance of Broad & Industry Environment in SP & SI

Inbetween the journey from SP to SI, many change factors played roles. These are like broad environmental (Bourgeois III, 1980; Miller & Friesen, 1983) and industry levers (Rumelt, 1991). Broad environmental levers consisted of technological changes, macro- economic, regulatory changes and change in customer preferences (Miller & Friesen, 1983; Bourgeois III, 1980; Ho, 2014). Industry analysis entails Porter's five force factors including bargaining power changes and new entry (Porter, 2008). All these changes transpired over a period of time as these levers changed levers altered fast it became imperative value sometimes at breakneck speed but that firm SI adapted quickly. This has sometimes at snail's pace. When these been depicted in Fig. 1.

Fig. 2 depicts the grand plan of strategy SP as being made up of small units of strategy Pi and it got affected by the business environmental levers as discussed and depicted in Fig. 1 (Venkatraman & Camillus, 1984; Hitt, Ireland & Stadter, 1982).

New Paradigm on SP &SI

As mentioned earlier, in classical SM literature SP and SI were two separate functions with SP preceding SI but in the present-day world SP and SI needed to be moving in tandem (Floyd & Wooldridge, 1992). This was because in a dynamic world the environmental and industrial levers act continuously, and this entailed that SP adjusted continuously (Andersen, 2004), which in turn also required that SI also altered and adapted continuously (Noble, 1999). It was important to note that the levers (environmental and industrial) both mediated and moderated the stages between SP and SI (Dibrell, Down & Bull, 2007). SP necessitated that SI created a set of initiatives that are carried out over a period of time (Noble, 1999; Andersen, 2004). One must note that SP initiatives were undertaken as a plan, as a rational intended course of action prior to roll out of SI interventions (Andersen, 2000). SI interventions and initiatives in turn were composed of a set of activities (Johnson, Melin & Whittington, 2003; Jarzabkowski, 2005). The classical model of SP and SI has been depicted in Fig. 3.

The new perspective on SP and SI has been depicted in Fig. 4.

As mentioned, in the past firms undertook SP as an event towards planning for the next 5-7-10 years. Post defining SP, the firm management would roll out SI (Fig. 3) while in the present-day context as indicated in Fig. 4, SP and SI are simultaneous interwoven actions. For SP to be a successful, culture has been the glue that cohesively motivated and ushered employees to work toward the set objectives through an array of SI initiatives (Barney, 1986; Smircich, 1983). Thus, increasingly strategic management has been seen as process or tapestry interwoven with SP and SI (Wooldridge & Floyd, 1990). The more a firm management was connected to its customer, supplier, and kept abreast with technological and regulatory realities the faster the firm was able to make an adjustment (Ramaswamy, 2009a; 2009b). This was even true for social community interactions (Bhattacharyya, 2010; 2012). The faster SPi changed to SPi' the faster SI could be adjusted to SIi'. Thus, it was important for firms to monitor these levers (Simons, 1994). The stimuli coming from the lever had to be captured and converted into information that could be used for decision making and course correction (Lyles & Thomas, 1988). Often these stimuli had non-linear repercussion. Thus, there would be a requirement of pace injection from information to action transforming from SP to SI...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT