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THESIS

1.1 INTRODUCTION The focus of this study will be on the achievement of the University of South Africa‟s (Unisa‟s) strategic objectives (2015), and more specifically, on the correlation between its strategic objectives and operational plans to ensure the effective and efficient achievement of these strategic objectives. The current correlation levels of the strategic objectives and operational plans of Unisa will be compared and measured – as reflected in the Unisa 2015 strategic plans and the 2009/10/11 institutional operational plans – more specifically the plans of the Directorate: Student Admissions and Registrations. Outcomes and achievement (results) will be matched against initial intent and plans (aims). Through this study, the researcher will attempt to determine what the correlation levels between strategic objectives and operational plans are; what they should be and how acceptable and desirable correlation levels can be created to ensure the effective and efficient execution of operational and strategic plans at this institution. Various strategic planning and strategic management approaches and models towards the achievement of strategic objectives will be investigated, analysed and described to determine their role in creating the most suitable (not necessarily the highest) correlation levels between strategic objectives and operational plans (see section 1.9.4.2). These include customer-driven, specificdriven, and comprehensively integrated approaches. This introductory chapter provides a background to and rationale for the study, explaining the ongoing problem of organisations when striving to achieve their strategic objectives effectively and efficiently. Subsequently the significance of the study is addressed. The problem statement, aim and objectives, research questions as well as a hypothesis, are also provided. The approach to the study is 2 set out briefly and to clarify this approach, it is necessary to explain the research method. In the conclusion, an overview of this study will be provided.

 

1.2 BACKGROUND TO THE STUDY Can non-profit organisations, such as colleges and universities, effectively utilise a potentially powerful and promising function such as strategic planning and development? According to Rowley, Lujan and Dolence (1997: 60), if they engage in effective strategic planning processes, these will ultimately lead to an increase in the effectiveness of strategic management. However, the challenge is to   execute strategic intent, and therefore strategic decisions must influence actions at all appropriate levels. Rowley et al. (1997) continue: “There is nothing as constant as change. The possibilities for reacting to change vary widely as organisations scramble to cope. Many hope that change will cease and that the good old days will once again return. That just is not going to happen. Could the resistance to change be one of the major factors leading to poor execution? Our own experience has demonstrated that at least in the settings of higher education, where we have conducted strategy planning, top-down planning has not been successful and participative planning has proven to be much more effective” (Rowley et al. 1997 : 60). Investigation into the South African transformation process confirms the global experience: public sector transformation is a complicated process requiring more than just the generation of creative ideas and their formalisation in policy documents or strategic planning scenarios. Transformation requires an expert, skilful and dedicated workforce which is able to operationalise ideas. Currently, however, the requirements are not only transformation from apartheid rule to democratic principles and a representative public sector, but rather transformation and renewal as a shift from the mere existence of representative public institutions to centres delivering quality public services. It is time for real reform, which means adjustments that will enhance efficiency, effectiveness and productivity. “The Batho Pele principles (The White Paper on Transforming Public Service Delivery in South Africa, 1997: 18-20) emphasise this as they were developed by Government to 3 consult with the wider community including the public sector, non-governmental and community-based organisations, academic institutions and citizens themselves in order to improve service delivery. Issues such as service standards, courtesy, openness and transparency, better value for money and consultation were highlighted” (Kroukamp, 2001: 22-37). Unisa has released its strategic plan, with 2015 set as target date, to accomplish its strategic destination. Among others, it was clearly stated by the (then) Principal, Prof Pityana, that the Unisa workforce needs to change the way things have been done until now; that Unisa should aim at becoming the university in Africa, and that Unisa should approach its obligations as a business operating within a competitive environment. Prof Pityana stated further that “in interrogating our performance in relation to the objectives set in the 2006 operational plan of Unisa, it becomes evident that there may be a disjunctive between operational planning and the strategic objectives (2015). Consequently an increased emphasis has been placed this year (2007) on integration and connectivity between operational planning and strategic planning” (Unisa 2007 Operational Plan, 2007: 3). Furthermore it is stated that the Unisa 2015 strategic plan is permeated by a discourse of change and transformation. It will continue to liberate Unisa‟s capacities and redirect its resources to address the most pressing challenges confronting society. The challenges faced in closing the gap between strategic objectives and operational plans must receive high priority. The result was that during 2006, the first year of the actual implementation of the Unisa 2015 operational plans, the need to close the gap between strategy and operations was confirmed (Unisa 2007 Operational Plan, 2007: 3). This lack of correlation (also referred to as the alignment gap) between intent (the what) and the accomplishments (the how), or strategic objectives and operational implementation plans, is often the result of many complex factors. Some of these relate to the dynamics of individual and group behaviour as well as to organisational systems/processes and the remainder relate to the very nature of the implementation process itself. “Public institutions often have multiple objectives that are both vague and conflicting. There is no bottom line that can be used as a proxy 4 measure of success. Instead, the demands of interest groups and manipulation of important stakeholders create a complex and confusing set of expectations” (Nutt & Backoff, 1992: 44). A lack or absence of proper correlation levels between operational plans and strategic objectives may increase the risks and the ineffective management of the implementation of operational plans. It slows down the execution of institutional strategy. Ultimately, the institution may be unable to introduce timely change management and enhancement to processes and systems. All role players within a specific process must work in concert, thereby moving in the same direction towards the collective implementation of identified strategic objectives. During the past 27 years as an employee of Unisa and the past 15 years as executive official accountable for one of the core support functional departments at Unisa, namely the Directorate: Student Admissions and Registrations, the researcher‟s experience has shown that within a constant changing environment, the lack of effective and efficient process identification and management by results becomes evident. The lack of a clear communication plan in respect of the introduction of the strategic objectives to the relevant role players responsible for the achievement of strategic objectives within a specific process was also evident (specifically during various Unisa strategic information sessions held by a variety of members of Top Management). At strategic planning level, for instance, important workshops and planning sessions were conducted without the involvement of key roleplayers accountable for the execution process (Directorate: Student Admissions and Registrations‟ Strategic Planning Sessions and Workshops 2009 – 2010). Draft plans in respect of operational objectives and eventual final strategic objectives for implementation were finalised and circulated for execution purposes. Further, based on the researcher‟s observations, the same flawed processes unfold in the determination of operational plans where the involvement of all roleplayers, specifically those at strategic level is lacking. Split ownership, duplication and overlapping occurs which results in vague and misaligned execution exercises and poorly formulated policies and procedures. 5 Efficient and effective operationalisation of strategic objectives becomes extremely difficult and sometimes impossible in such circumstances. Against this background, various departments and units (administrative and academic) embarked on alignment exercises to streamline their operations following the merger between the former Technikon Southern Africa (TSA) and Unisa and to support the Unisa business strategy during 2006. Emanating from the above, it has become evident that the Directorate: Student Admissions and Registrations of which the role and impact of service delivery will be explained in detail in Chapter 4, should embark on a process of aligning its specific business strategy and operations with that of the new strategic objectives of Unisa to enable the possible improvement of service delivery. Once the alignment has been properly attended to, it should serve as foundation for sound business systems and knowledge management and to enable the introduction of operational plans for effective implementation and execution towards the achievement of set strategic objectives.

 

1.3 SIGNIFICANCE OF THE STUDY “Organisations often fail to execute their strategy – failure rates may range as high as 60 to 90 percent” (Kaplan & Norton, 2005: 2 - 4). These writers posit that it is impossible to manage what one cannot measure and one cannot measure what one cannot describe. “Strategic decisions are those that align an organisation with its changing environment. To be effective, strategic decision must influence action at all appropriate levels” (Rowley et al. 1997: 40). From the above statements and the researcher‟s own observation it becomes clear that strategic planners often look for a planning event that will recognise change or meet the challenge of re-orienting the institution in some way and then allow it to return to “business as usual”. 6 Various literature reviews and research topics on strategic management focus either on strategic planning or strategic implementation as two separate processes. These include the works of inter alia Pierce and Robinson (1994); Rowley, Lujan and Dolence (1997); Smit and Cronje (1993); Bryson (1989); Hussey (1998); Van der Waldt and Du Toit (1999) and Griffin (1993). Literature focusing on Strategy Implementation are, inter alia, Purth (2003); Labovitz and Rosansky (1997); Dolence (1996); Brache and Bodley (2006) and Van der Waldt and Knipe (1998). Usually the what (intent), or the how (accomplishments) are clearly defined, within separate contexts. However, a few publications such as Barry (1994); Mintzberg (1994); David (1989); Morrisey, Below and Acomb (1988); Ehlers and Lazenby (2007) and Judson (1996), address the challenge of connecting the pursuit of strategic objectives with operational plans to ensure successful implementation and execution of these plans. Even fewer literature reviews (referred to in the present literature study) either indicate the relationship or correlation levels between strategic objectives and operational plans of an organisation, or indicate the desirable level which will ensure the effective pursuit of strategic objectives. The researcher hopes that this study will contribute to determine the most appropriate and proper correlation levels between strategic objectives and implementation action plans. The outcomes of this study should further contribute to the identification of measures, mechanisms, processes and models to ensure connectivity and alignment between intent (the what) and accomplishment (the how) of an institution as one integrated process – thus, management by results (see section 2.3.4.4). More specifically, will the contribution of an improved process management model at the Directorate: Student Admissions and Registrations ensure the effective achievement of the strategic objectives of Unisa? A strategic plan is unlikely to have much impact without a supporting operational plan to serve as an implementation vehicle. “Strategy and more specifically strategic objectives only point an institution in a direction, it is implementation through strategic initiatives that provides the forward movement – it is all about results” (Brache & Bodley, 2006 : viii). 7

 

1.4 PROBLEM STATEMENT The first question that arises and that forms the core focus of this study, is to what extent do the operational action plans of Unisa’s student administrative functions, activities and procedures as well as their implementation correlate with the strategic objectives of Unisa? In other words, what is the current contribution of the function of the Directorate: Student Admissions and Registrations towards the achievement of the strategic objectives of Unisa? A study of literature, for example (Wilson, 1992, Hardy, 1990 in Rowley et al. 1997: 259 – 261). indicating what theorists and case writers have said about implementation, shows that there is a general lack of specific tactical substance that gives adequate methods and advice to those who actually attempt to implement the results of strategic planning (Rowley et al. 1997: 259 - 261). The following paragraph from “The Power of Alignment” by Labovitz and Rosansky (1997: X) endorses this statement: “Our research and experience have convinced us that growth and profit are ultimately the result of adjustment between people, customers, strategy and processes”. Further, these authors state: “Alignment gives managers at every level of the organisation the ability to: Rapidly deploy the coherent business strategy; Be totally customer-focused; Develop world-class people; and Continuously improve business processes – at all times”. In his published article “Does your operational plan complement your company‟s strategic plan” Balovich (2005: 16) writes: “As 2005 draws to a close many professionals are preparing or analysing the goals and objectives for the coming year. All too often these operational goals fall short for one simple reason. They fail to complement the organisation‟s strategic plan: most companies repeatedly fail to motivate their people to work together to achieve 8 the corporate objectives. Too often they struggle to translate the strategy into action plans that enable their strategy to be a success”. “Strategic planners must worry about implementation at the very beginning of the planning process” (Rowley et al. 1997: 260). He elaborates further: “Process involvement is a bridge that educates those involved in planning about how to link planning with actual governance and decision-making to solve real implementation problems”. Labovitz et al. (1997: 13) emphasises this by stating “alignment is not about the management of quality, it is about the quality of management”. However, in contrast, low efficient and low effective correlation levels between strategic objectives and operational plans will result in people doing the wrong things right, since there will be no alignment in respect of policies, procedures and processes within a specific execution process. Very often a number of tasks will be executed very efficiently, but will lack a sense of direction. So, in order to be effective, the identification of relevant prioritised goals and tasks that will ensure direction towards the implementation of strategic objectives should come first. If planners fail to prioritise the right things to support execution at the beginning of planning, they may fail (See explanation of dependencies in section 1.9.6). The second question (sub-problem) which arises and which forms a further important focus of this study is whether the reasons for the poor execution of strategic objectives/plans at Unisa are bad strategy or merely the poor implementation of the strategy. In other words, are action plans ineffective and is insufficient emphasis placed on the what is to be done and how is it to be done? In view of this, the question may be asked: What is the ideal and proper correlation or alignment level to ensure that strategic objectives (the what) are effectively promoted to those responsible for carrying out the plan (the how)? (See definitions of effective and efficient correlation levels in section 1.9.4.1 and 1.9.4.2: Terminology). Could an improved process management model at the Directorate: Student Admissions and Registrations ensure the effective achievement of some strategic objectives at Unisa? 9 The major problem or challenge in this research, however, remains to identify adequate processes/models, sequences of events, measures and tactics to ensure proper/appropriate correlation levels to keep the implementation process alive and in alignment with strategic objectives – i.e. to match outcomes and achievements with intent and strategic plans. Overcoming these challenges is, however, subject to a clear explanation of effective and efficient correlation levels (see section 1.9.4.1 and 1.9.4.2).

 

1.5 AIM AND OBJECTIVES OF THE STUDY In view of the problem statement, the aim and focus of this study will be to reflect on, observe, analyse, compare, measure and describe the correlation between strategic objectives and operational plans of Unisa and more specifically within the Directorate: Student Admissions and Registrations. The focus, therefore, will be on comparing and measuring outcomes and achievements with initial intent and plans. Possible outcomes in respect of this approach could determine the most appropriate correlation levels between intent (strategic objectives) on the one hand and implementation and execution of action plans on the other. It could further contribute to more effective and efficient pursuit of strategic objectives as well as the measures, mechanisms, sequence of events, processes and model to ensure connectivity between strategic plans (intent, i.e. the what) and the execution of the plans (i.e. the how - accomplishment). In order to achieve the aim of the study, the following objectives of the research will be pursued: To identify key concepts and approaches involved in strategic management towards the achievement of strategic objectives; To identify and explain effective and efficient correlation levels between strategic objectives and operational plans; 10 To identify a comprehensively-integrated-aligned-strategic-managementprocess- approach to ensure effective and efficient correlation between strategic objectives and operational plans; To introduce and explain the importance of an aligned standardised administrative framework to support the achievement of the strategic objectives of Unisa in respect of the operational implementation plans of the Directorate: Student Admissions and Registrations; and To introduce and explain the benchmarking findings in respect of the accomplishments of strategic objectives specifically as far as the Directorate: Student Admissions and Registrations is concerned. Within the scope of this research and in alignment with Chapter 3 the researcher‟s point of departure will be to assume that the University‟s other administrative directorates will adopt a similar standardised framework/structure (as indicated in Chapter 3) to ensure legitimate ownership and acceptable functionality and uniformity within specific processes for the implementation of the strategic plans of the institution. This process will ensure alignment across those directorates which are identified roleplayers in the pursuit of specific objectives in one process by using the same key performance indicators, measures and enablers. The abovementioned standardised administrative structure is of crucial importance to enable the process of comparison and measurement in respect of the correlation levels and alignment of activities between units accountable for the execution of tasks within the same process. “Turning strategy into action by linking identified performance factors with strategic initiatives and projects designed to develop and optimise departmental and individual activities are essential enablers toward effective execution. The real need here is to creatively bring strategy to life by creating operational plans/goals and objectives that are designed to not only meet the strategic plan, but also complement all other units‟ goals and objectives as well” (Balovich, 2005: 16). In conclusion, Balovich (2005 : 18) confirms that the challenge of every departmental head is to turn theory into practice, make something happen and translate strategic plans into real business results. This will be accomplished only 11 when there is synergy or connectivity between strategic and operational planning. The present research will focus specifically on possible solutions to address this.

 

1.6 RESEARCH QUESTIONS Since the focus of the study will be on how to measure correlation levels between strategic objectives and operational plans and more specifically the identification of effective/efficient correlation levels in respect of the above to ensure successful pursuit of strategic objectives, it is imperative to explain the concepts effective and efficient correlation levels (see section 1.9.4.1 – 1.9.4.2). Emanating from this, the following questions are relevant to this study: Should there be ineffective correlation levels between strategic objectives and operational plans, will this be the result of shortcomings in the processes, systems, strategic planning (the what) or the execution process of plans (the how)? Is there a lack of connectivity between strategic planning and operational planning, i.e. is there a lack in respect of vertical and horizontal alignment? (See section 1.9.1). Is it likely that the application of a process management model for the Directorate: Student Admissions and Registrations will contribute towards the achievement of the strategic objectives of Unisa – in view of the current lack of any clearly defined implementation model / procedures? The above are the key questions concerning the effective and efficient implementation and execution of operational plans that need to be clarified and are closely related to the problem statement of the study. 1.7 HYPOTHESIS A hypothesis consists either of a suggested explanation for a phenomenon or of a reasoned proposal suggesting a possible correlation between phenomena. Scientific methods require one to test a scientific hypothesis. Scientists generally base such hypotheses on previous observations or an extension of scientific 12 theories. Further, a hypothesis is a prediction or proposed solution to a problem, based on prior knowledge or information gathered. It is an educated guess about the outcome of the experiment and it must be possible to test a hypothesis. (Wiki/hypothesis, 2009: 1). In correlation with the above statement (hypothesis) the following hypothesis has been formulated for this study: There is a low or weak level of correlation between strategic objectives and operational action plans within the Directorate: Student Admissions and Registrations at Unisa. The hypothesis is in alignment with the aim of the study namely to determine whether correlation levels between strategic objectives and operational plans are determining factors (interdependencies) to ensure successful implementation and execution of the plans by matching accomplishments (results) with initial intent (strategic plans).

 

1.8 RESEARCH METHODOLOGY The Concise Oxford Dictionary (2006: 993) defines research as “careful search or enquiry after or for; the endeavour to discover new facts by scientific study of a subject course; critical investigation”. This definition focuses on two aspects of the concept: the process (search enquiry, endeavour, scientific study, critical investigation) and the goal (discovery) of new facts and principles (Wessels & Pauw, 1999: 363). Mouton elaborates on the goal of research: the “predominant purpose of all research is to arrive at results that are as close to the truth as possible i.e. the most valid findings possible” (Mouton, 1996: 28; Wessels & Pauw, 1999: 363). The research for this study will be carried out mainly through a (i) literature survey pertaining to strategic management approaches towards the achievement of strategic objectives, (ii) an analysis of official documents, (iii) observation, (iv) personal interviews, (v) group discussions during strategic sessions as well as (vi) 13 descriptive research. A participation action research model, therefore a qualitative approach will be followed where the focus will be on participation and observation to understand and describe relationships between variables (correlation levels). Qualitative research acts on inductive logic with no specific and predetermined conceptual framework and aims at a better understanding of human behaviour (Mouton 1996 in Garbers 1996: 186 - 187, 291; Mouton & Marais, 1992: 164). Action research is a model of enquiry and provides a practical framework for qualitative investigations aiming at solving shortcomings in educational activities (Gabel, 1995: 1 - 2). Critical reflection and forward thinking in respect of the above approaches, specifically observation and participation, also form an important part of the research. To determine the correlation levels between strategic objectives and operational plans, as much evidence/data as possible will be collected by conducting group discussions, participant observations and reading and noticing of events. Specific target areas will be: Human behaviour and characteristics: o Executive officers. o Senior managers, supervisors and task team convenors. o Narratives and case studies. Products of human behaviour: o Policy and strategic documents and more specifically the Unisa 2015 Strategic Plan and Unisa Operational Plan 2010/11. o Strategic documents for example business plans, self assessment plans and implementation strategy of the Directorate: Student Admissions and Registrations which will be matched and benchmarked against Unisa‟s strategic and operational plans to determine existing correlation levels. o Outcomes of strategic sessions, workshops and meetings. The outcomes of the above processes will be categorised into specific tendencies in respect of views, interpretation, perceptions, thinking/reflections, findings, suggestions, solutions/proposals and experiences to determine the most 14 appropriate and proper correlation/alignment levels between intent (strategic objectives) and execution processes (operational plans). Proposals made could contribute to the more effective and efficient correlation between strategic objectives and operational plans through, among others, the identification of measures, mechanisms, processes and models to enhance connectivity/alignment between strategic plans (intent/the what) and execution (accomplishments/the how).

 

1.9 TERMINOLOGY Comprehensive conceptual clarifications of terms specific to this research appear in the appropriate chapters. However, to avoid uncertainty and ambiguity in the interpretation of concepts, terms utilised throughout this dissertation are concisely defined below. 1.9.1 Alignment Alignment strategies should enable the investigator to look beyond simply providing descriptions of the objectives of organisations. They should enable him/her to analyse the information that is necessary for the workforce to meet those objectives: the how and the what of workforce alignment (Harvey, 2006: 1). Alignment is the continuous process of mobilising institutional resources to effectively achieve objectives; in other words a process in which key components of an institution are linked and made compatible with each other in order to address joint responsibilities. It relates to a situation where all those responsible for a specific execution process pull together in the same direction. 1.9.1.1 Vertical alignment Vertical alignment comprises the rapid movement of an institutional strategy through the organisation, turning intentions into actual work. Vertical alignment energises people, provides direction and offers opportunity for 15 involvement, thereby aligning activities with intentions (Labovitz et al. 1997: 27, 74). 1.9.1.2 Horizontal alignment Because processes generally cut across various functions in an institution, they are called “horizontal”. Horizontal alignment links an institution‟s actions with customer needs in ways that delight and create loyalty. It aligns processes with customer expectations (Labovitz et al. 1997: 32). 1.9.2 Barriers Barriers usually block progress or forward movement. Barriers are formations or structures which prevent or hinder movement or action (Konsult/Strategy/Barriers, 2010: 1; Ehlers & Lazenby, 2007: 304-307). 1.9.3 Continuous improvement plans These are plans originating from the monitoring and evaluation of current performance outcomes which enable managers to reorganise and respond immediately to situational variables as they arise (i.e. forward-thinking and proactive reaction) (Unisa 2008 to 2010 Operational Planning Manual, 2007: 4). 1.9.4 Correlation Correlation is a measurement of the strength of the relationship between strategic objectives and operational plans (achievement of strategic objectives) (Kaplan & Norton, 2004: 72 – 80). The higher the correlation levels, the greater the connectivity between strategic objectives and their successful achievement. Effective and efficient correlation levels between strategic objectives and operational action plans could be described as follows (Kaplan & Norton, 2004: 72 – 80). 16 1.9.4.1 Effective correlation levels Effective correlation levels between strategic objectives and operational plans will result in people doing the right things at the right time with the right resources and relates directly to effective leadership involvement, establishing direction, aligning people, involving people and eventually producing change and productivity (which will lead to results) (Kaplan and Norton, 2004: 1 – 4; Barry, 1994: 48 – 49). 1.9.4.2 Efficient correlation levels Efficient correlation levels between strategic objectives and operational plans will result in people doing the right things right and relates directly to management responsibilities. It refers to process and system involvement in respect of planning and budgeting, organising and staffing control and problem-solving and producing order and predictability (Kaplan and Norton, 2004: 1 – 4; Barry, 1994: 48 – 49). The integration/utilisation of both effectiveness and efficiency (i.e. leadership and management skills) in respect of the creation of proper correlation levels will eventually ensure successful strategy implementation. A results-driven process may ensure connectivity and alignment between strategic objectives and action plans (researcher‟s observation). 1.9.5 Directorate: Student Admissions and Registrations’ operational plan This is a plan that specifies details regarding how aligned prioritised objectives are to be achieved, with specific reference to tactics, actions, performance measures, targets and timelines. It also indicates the responsible people as well as supportive tools/resources. The intent is to identify specific actions aligned with strategic objectives for execution, within a specific process (Unisa 2008 to 2010 Operational Planning Manual, 2007: 4). 17 1.9.6 Dependencies A dependency refers to the relation between activities, to the extent that one requires input from the other. A dependency is defined as an activity that is likely to impact on a project during its lifecycle. It also refers to the logical relationships between tasks (University of Kansas: 1). 1.9.7 Enablers An enabler can be defined as the means, knowledge, opportunity and tools to activate or enable action or operational activity successfully. It could also comprise policies, rules and decisions to ensure a supportive platform for implementing plans (researcher‟s observation). 1.9.8 Focus area Focus areas are those areas which are intended to guide the definition of an institution‟s vision and create an awareness of how to realise the vision by aligning operational objectives with the focus areas in a specific timeframe (Unisa 2008 to 2010 Operational Planning Manual, 2007: 4). 1.9.9 Organisation An organisation is the result of an official legitimate organised infrastructure of an institution, through which individuals cooperate systematically to perform activities or to pursue certain collective goals. An organisation is characterised by having a formal set of rules/policies that is hierarchical and a well-defined division of labour (McNamara, 1999: 1). 18 1.9.10 Performance measurement This refers to a particular criterion used to measure the extent of achievement of, or progress towards, a strategic and operational objective, which may be expressed in a qualitative or quantitative way (Unisa 2008- 2010 Operational Planning Manual, 2007: 4). 1.9.11 Process A process is the organisation of people (utilising procedures, mechanisms and materials) into work activities needed to produce a specified end result (work product). It is a sequence of activities characterised as having measurable input(s), value-adding activities, measurable output(s) and repeatable activities (Barry, 1994: 39). 1.9.12 Project A project can be defined as an unrepeated activity. A project is objectiveoriented and it brings about change. A project can also be defined as a temporary endeavour undertaken to create a unique product or service. Despite the temporary or “single-pass” nature of projects themselves, project management processes recur repetitively throughout the life cycle of each project (Johnson, Joyner & Martin, 2010: 1 - 2; Van der Waldt, 2004: 59). 1.9.13 Public sector The public sector is a collective term which refers to the public service as well as to local government, statutory bodies, quasi-government institutions, parastatals and similar bodies (Clapper, 2000: 18). 19 1.9.14 Public service Within public administration there is a public service which should be functional and be structured in terms of national legislation and which should scrupulously execute the lawful policies of the government of the day (Government Gazette, Constitution of the Republic of South Africa, 1996). 1.9.15 Strategic intent Strategic intent is the process of creating a priority through the setting of an overarching, ambitious goal that stretches the organisation and focuses on winning in the long run (Ehlers & Lazenby, 2007: 65). 1.9.16 Strategic issues A strategic issue is defined as a trend or event arising inside or outside an organisation that can have an important influence on the organisation‟s ability to reach its desired objectives (Ambler, 2009: 1). 1.9.17 Strategic management Strategic management can be defined as the process whereby all the organisational functions and resources are integrated and coordinated to implement formulated strategies which are aligned with the environment, in order to achieve the objectives of the organisation and therefore add value for stakeholders (Ehlers & Lazenby, 2007: 2-5). The strategic management process involves five distinct but related tasks, namely mission development, goal setting, strategy development and selection, strategy implementation and evaluation, review and adjustment. 20 1.9.18 Strategic objectives A strategic objective is a concrete statement describing what an institution aims to achieve over a specific timeframe through a particular action. A wellformulated objective will be specific, measurable, attainable, achievable, realistic and time bound – therefore smart (Unisa 2008 to 2010 Operational Planning Manual, 2007: 4). 1.9.19 Strategic operational plan This is a medium-term rolling plan that sets out prioritised institutional objectives in support of the overall strategic vision of an institution, which comprises operational objectives, action and performance measures, and targets and indicates the people responsible and the deployment/utilisation of resources – i.e. operational plans (wiki/operational planning, 2009: 2). The relationship between strategic planning, operational plans and strategic operational plans can be defined as the specific sequence of events within different levels to create connectivity within an implementation process and to ensure effective and efficient execution of the strategic objectives of an organisation (researcher‟s observation). Chapter 5 of this dissertation indicates the specific sequence of events (see section 5.3), the 2015 Strategic Plans of Unisa, par 5.5, the 2010 Operational Plans of Unisa and lastly par 5.6 of the Directorate: Student Admissions and Registrations‟ Strategic Operational Framework. Smit and Cronje (1997: 123) identify strategic planning as a plan that typically states the organisation‟s mission and describes a set of goals to move an organisation into the future. Operational planning, according to Smit and Cronje (1997: 123) focuses on short term achievements and is specific. Operational planning translates the broad concepts of the strategic plan into clear numbers, specific steps and measurable objectives. 21 1.9.19.1 Strategy implementation Strategy implementation can be defined as the process that turns strategic operational plans into a series of action tasks, and ensures that these tasks are executed in such a way that the objectives of the strategic plans are achieved (Ehlers & Lazenby, 2007: 212). 1.9.20 Strategic planning “Strategic thinking requires commitments to concentrate the use of resources and to focus on priorities in their use” (Rowley et al. 1997). “Strategic planning is a formal process designed to help an organisation identify and maintain optimal alignment with the most important elements of its environment” (Rowley et al. 1997). The main purpose of strategic planning is to improve the productivity and effectiveness of institutional objectives and to identify steps to achieve these objectives. Strategic planning is the process that develops strategic management (Bryson, 1989: 123). 1.9.21 Strategy Swanepoel, Erasmus, van Wyk & Schenk (2003: 209) indicate that a strategy has the following characteristics: it is longterm and future-oriented; it focuses on matching or creating the necessary fit between the internal and external environments of the organisation (which is competitive and constantly changing) and it is concerned with the mission and objectives of the organisation as a whole and therefore with its success within this environment of competition and change. For the purpose of this study the researcher embraces the above definition of strategy by Swanepoel et al. 22 1.9.22 The concept “what” “The first, or the what, is called declarative knowledge”. Declarative knowledge is knowledge of what the strategy or goals are and what they are meant to do. “Declarative knowledge of a strategy begins with awareness of it (ReadingQuest. 2007: 2). 1.9.23 The concept “how” “Knowing how the strategy works or is implemented is called procedural knowledge. What are the steps, the process, the procedure? What does one do first, then next, then subsequently?” Knowing that a strategy exists is meaningless if one does not know how to implement it (ReadingQuest. 2007: 2). For the purpose of this study the above definitions are subscribed to by the researcher, specifically in relation to the successful implementation of Unisa‟s strategic objectives. 1.9.24 Universities as institutions “A University can be defined as a diverse organisation of higher learning created to educate for life and for a profession and to grant degrees” (Wiki/university, 2009: 1). Universities are largely value-driven, meaning that their activities should be judged as much by the values they uphold as by the ends they produce. Given that fundamental values are imbued with emotion, institutions of higher education tend to be more tradition-bound than economic organisations are. Greater care is needed, therefore, to adapt strategic planning to the culture and traditions of educational institutions. In applying strategic planning to higher education, one should be wary of standards formulated, and only loosely adopted ideas and practices from the management arena: the 23 formulation of policies and procedures for implementation without the consent/involvement of responsible individuals. The planning process should generate a reasonable level of consensus on direction, emphasis and priorities, even though there may be considerable disagreement on specifics or details. “The fundamental point is that the “bottoms up” feature of strategic planning is more important in a university than elsewhere”. (Unisa Management Committee, 2006: 1; Wiki/University, 2009: 1). 1.9.25 University of South Africa (Unisa) On 1 January 2004, the University of South Africa (Unisa) merged with Technikon Southern Africa (TSA) to become the new comprehensive University of South Africa. On 2 January of that year, the new university incorporated the distance education campus of Vista University (Vudec) to become the only dedicated public distance education institution in South Africa. The merger and incorporation took place as a result of a new vision for the higher education landscape envisaged in the National Plan for Higher Education (NPHE 2001). The merger created a comprehensive higher education institution that is a combination of technikon and university approaches and programmes. At the time of the merger, the University had 1239 academic employees, 2046 administrative and professional staff, and 145 043 students; in addition, it had a nationwide regional infrastructure which offered contact tutorials for students. At the time of writing (2010) a number of 316 201 students are registered at Unisa (Unisa 2015 Operational plans, 2010: 4 – 6).

 

1.10 DELIMITATIONS AND LIMITATIONS OF THE STUDY This study will not attempt to establish competencies of top management at Unisa over the entire spectrum of strategic management. In addition the study will not attempt to cover all areas of the spectrum of strategic planning and strategic management. This study will focus on the correlation levels between strategic objectives and operational plans and more specifically to measure and to propose processes that should create a more appropriate and higher correlation level or 24 connectivity between strategic objectives and operational plans. It aims at ensuring the possible achievement of these by introducing integrated comprehensive-specific process-management by means of a results-driven model. The study will therefore be limited within the parameters of the above rationale and to the Directorate: Student Admissions and Registrations. The focus of the analyses and research will cover the period 2003 to 2011. During this period the former Technikon Southern Africa (TSA) and former University of South Africa (Unisa) underwent a merger process. Various documents and processes pertaining to transformation, realignment, restructuring, strategic objectives and operational plans are available to support the research scope. 1.11 OVERVIEW OF CHAPTERS Chapter 1 serves as an orientation and background study to the dissertation. It includes the background to, rationale for and significance of the study. The problem statement and questions, research aim and objectives, hypothesis, research methodology and sequence of this study are provided. Finally, the chapter concludes with a terminology section and overview of each chapter of the dissertation, delimitations and limitations of the study. Chapter 2 deals mainly with the literature review based on opinions and views from various sources, and from different researchers and authors whose works are significant in this particular research field. In this way, various models, key concepts and definitions, as well as theories that can be used to determine the effective and efficient (most adequate and appropriate) correlation levels between strategic objectives and operational plans are dealt with. Chapter 3 deals with the analysis and explanation of relevant institutional and literature review documents for the possible identification of primary and supporting approaches, processes or models that could bridge/narrow or enhance the correlation levels between strategic objectives and operational action plans: i.e. to connect/link intent (strategic objectives) with accomplishment (execution). A 25 specific model that could enable possible alignment between intent and execution within a specific process is explained. Chapter 4 focuses on the importance of the activities, functions and operational action plans of the Directorate: Student Admissions and Registrations in alignment with the strategic objectives of Unisa. The impact, value contributions and ripple effect of the activities and operations of the Directorate on the achievement of Unisa‟s strategic objectives within a specific process are analysed and described. Chapter 5 focuses on the importance of an aligned standardised administrative framework to support a more effective achievement of strategic objectives of Unisa within a specific process. Key strategic objectives of Unisa, specific to the Directorate: Student Administration, are identified and aligned with the operational action plans of Unisa, which will again be matched and aligned with the operational action plans of the Directorate (the sequence of events or value chain of activities within a specific process). The benchmarking of accomplishments with strategic objectives are analysed using vertical and horizontal alignment criteria and the primary findings and perceptions in respect of the accomplishments of strategic objectives are emphasised. Chapter 6 is the concluding chapter of this dissertation. It relates specifically to the research questions, the problem statement, the aim and objectives of the study and the hypothesis on which the dissertation is founded. It provides conclusions that relate specifically to the hypothesis. In particular, a summary, conclusions and some proposals as well as a topic for possible further research arising from the dissertation, are the subject of this concluding chapter. 26 1.12 SUMMARY In Chapter 1 the researcher provides an introduction to the main concepts and context of this study. The problem statement, research aims and objectives as well as an outline of the research methodology are provided. The researcher also provides a synopsis of the significance of the study and an exposition of the chapters that will constitute this research dissertation. 27

 

 

SECOND

CHAPTER 2 LITERATURE REVIEW – A CONCEPTUAL ANALYSIS OF STRATEGIC MANAGEMENT APPROACHES TOWARDS THE ACHIEVEMENT OF STRATEGIC OBJECTIVES

 

 2.1 INTRODUCTION “Better a first-class implementation procedure for a second-class strategy than vice versa. Strategies will not exist unless the organisation‟s managers have thought through what needs to be done, when and by whom, using which resources, to achieve what objectives” (Anon 1982 in Okumus & Roper, A., 1999: 21 - 39). “However, despite the importance of the strategic execution process, far more research has been carried out into strategy formulation than into strategy implementation. The reasons why strategic researchers have paid less attention to this area may be because they have viewed strategy implementation as a mere detail of the planning process” (Alexander, 1991: 1). This Chapter will deal mainly with a literature review based on opinions and views from various resources and from different researchers and authors whose works are significant in this particular research field. In this way, various models, key concepts and definitions, and theories which will be used to understand the aim of this study (to measure the correlation levels between strategic objectives and operational plans) are dealt with. Comparisons and descriptions of various strategic management approaches and processes are analysed to determine the correlation between strategic objectives and their execution. Key concepts and approaches involved in strategic management and achievement of strategic objectives are analysed in an attempt to determine the most appropriate method to measure correlation levels between strategic objectives and operational plans. 28 Specific reference will be made to the customer-driven approach, specific management-driven approaches and a comprehensively-integrated processmanagement approach. The Chapter ends by summarising the key findings of the review and also gives further information about the most appropriate model and the reasons for this choice.

 

2.2 STATEGIC PLANNING VERSUS STRATEGIC MANAGEMENT IN RESPECT OF THE ACHIEVEMENT OF STRATEGIC OBJECTIVES It should be emphasised that the purpose of this study is not to attempt to cover all areas of the spectrum of strategic planning and strategic management, but to focus on how to determine the most appropriate level of correlation between strategic objectives and operational plans to ensure its possible achievement /implementation, with specific reference to the Directorate: Student Admissions and Registrations at Unisa. Mintzberg and Quinn (1996) argues that conceptualising the strategic management process as one in which analysis is followed by optimal decisions and their subsequent meticulous implementation neither describes the strategic management process accurately nor prescribes ideal practice. In his view the business environment is far from predictable, thereby limiting the ability for analysis. Further, decisions in an organisation are seldom based on optimal rationality alone given the political processes that occur in all organisations (Mintzberg in Dess, Lumpkin & Taylor, 2005: 1). Few strategies are implemented entirely in the form in which they were formulated. Similarly, the reasons for success when analysed retrospectively may be different from what was expected initially. Part of a strategy may therefore be the recognition of the patterns that seem to have led to success even if those patterns arose by chance rather than as a result of planned actions (Macmillan & Tampoe, 2000: 24). These multiple aspects of strategy are separable but not usually contradictory. Several attempts have been made to classify existent literature on strategic 29 management. Two of the best classifications are by Whittington (2001: 117 - 120) and Mintzberg, Ahlstrand and Lanpel (1998: 67 - 75). According to Macmillan and Tampoe (2000: 24 – 25), Whittington defines four distinct schools, namely the classical, evolutionary, systematic and procedural, differentiated by their stances on two axes. The first axis separates those who believe that leaders and managers are able to determine what their strategies should be by a deliberate process of thinking. The opposite view is that managers have a very limited ability to determine outcomes and that strategy emerges as events unfold. This axis distinguishes between a deterministic view and an emergent view of strategy. The second axis differentiates between those who see strategy-seeking as a single goal (usually a financial goal in business) and those who see organisations as having conflict of internal policies. This axis therefore distinguishes between those who take a single dimensional view of purpose (satisfying the needs of society) and those who place greater emphasis on complexity and politics in the reality of business. The two directions of each of the two axes lead to the four schools. Whittington postulated that each of the four schools tended to be derived from different thinking about strategic management based on different disciplines. He stated further, that each school had tended to be dominant, at least among academic writers, in a particular decade. “Writing in 1993, Whittington saw sociology as having an increasingly important role in thinking about strategic management. It might be possible to defend this point of view in a debate but it is certainly not true that economic pressures (particularly the search for shareholder value) nor the importance of people and their psychology have in any way reduced in importance during the 1990s. The four schools therefore may be more usefully seen as complementary perspectives rather than evolving truth” (Macmillan & Tampoe, 2000: 24 - 25). 30 Table 2.1: Whittington’s four schools of strategy Whittington’s four schools of strategy compared Characteristics Classical Processual Evolutionary Systemic Deterministic/ emergent Single goal/pluralistic Strategy style Influences Decade of influence Deterministic Single Formal Economics/military 1960s Deterministic Plural Crafted Psychology 1970s Emergent Single Efficiency Economics/ Biology 1980s Emergent Plural Embedded Sociology 1990s Source: Macmillan & Tampoe, (2000: 25) More recently, Mintzberg, Ahlstrand and Lanpel (1998: 67 – 75) outlined three prescriptive and seven descriptive schools of strategic thought, which differ according to their premises and the nature of the strategy process. The characteristics of the schools are summarised in the table below (Macmillan & Tampoe, 2000: 25 - 27). Table 2.2: Three prescriptive schools Three prescriptive schools of thought School Nature of process Principal relevance Design Conception Emphasis on chief executive‟s responsibility and overall simplicity of successful strategies. Planning Formal planning Currently blamed for the failure of formal strategic planning departments. Positioning Analysis Particularly strong in large companies and where management consultants have an analytical role. 31 Seven Descriptive Schools Entrepreneurial Vision Emphasis on vision for the future. Relevance for business start-ups, turnarounds, or whether there is a charismatic leader. Cognitive Mental process Examines the mental processes and maps of leaders. Examines the flashes of insight from which strategy may originate. Learning Emergent Sees planning as leading to learning. An organisation which can learn and adapt may succeed in an uncertain world. Power Negotiation Examines the processes of power and negotiation by which strategies are formed in organisations. Cultural Collective process Strategies derive from a collective process and the culture of the organisation which may be unique and hence a source of advantage. Environmental Reactive process Organisations cluster in distinct ecological niches until resources become scarce or conditions hostile. Then they die. Configuration Transformational process Organisations exist in stable configurations for considerable periods but then have to transform themselves. Source: Adapted from Mintzberg et al. (1998: 66 - 75) 2.2.1 Planning Planning in organisations is the organisational process of creating and maintaining a plan and the psychological process of thinking about activities required to create a desired goal on some scale. As such, it is a fundamental property of intelligent behaviour. This process is essential to the creation and refinement of a plan or integration of it with other plans, i.e. it combines forecasting of developments with the preparation of scenarios of how to react to them (wiki/planning, 2009: 1). Planning could have different meanings depending on the political or economic context. Two attitudes to planning need to be held in tandem. On the one hand one should be prepared for what may lie ahead, which may mean contingencies and 32 flexible processes. On the other hand, one‟s future is shaped by consequences of one‟s own planning and actions (wiki/planning, 2009: 2). A plan / planning serves the following three critical functions: It helps management to clarify, focus and research its organisation‟s development and prospects. It provides a considered and logical framework within which an organisation can develop and pursue strategies over the next three to five years and it offers a benchmark against which actual performance can be measured and reviewed. In this way, planning bridges between where one is and where one wants to go. Planning is a process for accomplishing purpose. It helps in determining objectives both in quantitative and qualitative terms. (wiki/planning, 2009: 2; Hailey, Barnes & Ryan, 1990: 1 – 4). 2.2.2 Strategic management Strategic management can be defined as the process whereby all organisational functions and resources are integrated and coordinated to implement formulated strategies which are supposed to be aligned with the environment, in order to achieve the objectives of the organisation and thereby adding value for stakeholders (Ehlers & Lazenby, 2007: 2-5). These writers state further that the strategic management process involves five distinct but related tasks namely: mission development, goal setting, strategy development and selection, strategy implementation and evaluation, review and adjustment. The effectiveness of an organisation‟s strategic management can critically impact upon its viability and there are many reasons why the strategic management process may fail. Some of these are failure to: Think critically and creatively about the likely effects of plans and decisions; Obtain external / internal participation and commitment; and Co-ordinate and control resources. 33 2.2.3 Strategic planning “Strategic thinking requires commitments to concentrate the use of resources and to focus on priorities in their use. Strategic planning is a formal process designed to help an organisation identify and maintain optimal alignment with the most important elements of its environment” (Dolence, Rowley & Lujan, 1997: 13 – 14). In order for the process to be effective, strategic planning must be followed by strategic management and by strategic operational thinking (strategic decisions and actions), i.e. where one is now / where one wants to go / how one will get there (researcher‟s observation). Van der Waldt and Du Toit (1999: 285) state that strategic planning enables public managers to evaluate, select and implement alternatives for rendering effective services. The main purpose of strategic planning is to improve the productivity and effectiveness of institutional activities in order to achieve these objectives. Strategic planning relates to learning and creativity with the recognition that college and university leaders need to challenge assumptions and consider radically changing existing structures and processes. “A strategy is the pattern of a plan which integrates organisations‟ major goals, policies and action sequences into a cohesive whole”, taking into account its internal competencies and shortcomings, anticipated changes in the environment and social demands. Strategic planning, to put it simply, is what to do, why it should be done, how it should be done and who should do it (Quinn, 1980: 1; Mintzberg & Quinn, 1996: 18 - 26). In conclusion, the researcher offers the following summary of the relationship between strategic management and strategic planning: Strategic management is a comprehensive term encompassing the total management of the institution. Strategic management entails the implementation of strategies developed to give new direction to an institution that is in the midst of change or a transitional process. It enables the institution to fulfil its responsibilities in a rapidly changing environment (Mercer, 1991: 20). Strategic management refers to the overall process, which includes not only strategic planning, but also organising, leading, controlling and related decisions and actions in an institution. 34 Strategic planning is a tool of strategic management and forms an important component of it. Strategic planning enables public managers to evaluate, select and implement alternatives for rendering effective service (Mercer, 1991: 20). Therefore, effective application of strategic planning and management causes better utilisation of the state‟s resources. 2.2.4 Operational planning An operational plan in the context of this dissertation is an implementation management-level plan that provides a compass to an institution as a whole on the key operational priorities. Moreover, it is the central frame of reference for allocating resources, focusing effort and measuring individual and institutional performance (Unisa 2009 Operational Plan, 2009: 3). Operational planning is the “how do we get there” and should form an integrated part of the institutional strategic plan. An operational plan is therefore a subset of a strategic work plan. It describes a work plan. It describes short term ways of achieving strategic goals/milestones and explains how or what portion of a strategic plan will be put into operation during a given operational period. An operational plan is the basis for, and justification of, an annual operation request. Operational plans should establish the activities and budgets for each part of the organisation for the following one to three years. They link/align the strategic plan with the activities the organisation will deliver and the resources required to deliver them. Like a strategic plan, an operational plan addresses four questions: Where are we now? Where do we want to be? How do we get there? How do we measure our progress? Operational plans should be prepared by those people who will be involved in the implementation. There is often a need for significant cross-departmental dialogue 35 as plans created by one part of the organisation inevitably have implications for other parts during execution (wiki/operational planning, 2009: 1). Operational planning should contain: Clear objectives; Activities to be delivered; Quality standards; Desired outcomes; Staffing and resource requirements; Implementation timetables; A process for monitoring; Measuring progress; A budget; and Ownership. (wiki/operational planning, 2009: 1). 2.2.5 Strategic alignment Alignment strategies should look beyond simply providing descriptions of the objectives of organisations. They should analyse the information that is necessary for the workforce to meet those objectives – the how and the what of workforce alignment (Harvey, 2007: 1). Strategic alignment is the continuous process of mobilising institutional resources to effectively achieve objectives, in other words a process where key components of an institution are linked and made compatible with each other to address joint responsibilities. It relates to a situation where everyone responsible for a specific execution process pulls together in the same direction (Harvey, 2007: 1). Vertical alignment is the rapid movement of an institution‟s strategy through the organisation, turning intentions into actual work. Vertical alignment energises people, provides direction and offers opportunities for involvement, thereby aligning activities with intentions (Labovitz et al. 1997: 27, 24). 36 As work processes generally cut across a variety of functions of an institution, alignment can also be horizontal. Horizontal alignment links an institution‟s actions with customer needs in ways that delight and create loyalty, thereby aligning processes with customer expectations (Labovitz et al. 1997: 32). In conclusion, Balovich (2005: 16) confirms that the challenge of every departmental head is to turn theory into practice, to make something happen and to translate strategic plans into real business results. This will be accomplished only when there is alignment between strategic and operational planning.

 

2.3 APPROACHES TO STRATEGIC MANAGEMENT AND THE ACHIEVEMENT OF STRATEGIC OBJECTIVES FOR EFFECTIVE PERFORMANCE 2.3.1 Background General overarching strategic management approaches can be categorised into two main approaches, namely the Industrial Organisational Approach (also see par 2.2), which is aligned to the value members of society get for their tax money (economics-related) and the Sociological Approach (also see par 2.2) where greater emphasis falls on the sociological perspective. The Industrial Organisational Approach is based on economic theory and deals with issues such as competitive rivalry, resource allocation and economies of scale. The Sociological Approach primarily deals with human interactions in respect of service delivery (wiki/strategic management, 2009: 1). As far as strategy implementation in particular is concerned, the following diverse views have emerged from the literature study. The first group emphasises the significance of planning to achieve clear objectives and the common terminology used by scholars in this group appears to reflect the planning or rational approach. In the second group, the emphasised theme is that strategy development and implementation are a learning and incremental process 37 (or emergent approach to strategic management). The main theme of the third group is that there is no one best way to develop and implement strategy and that the most appropriate strategic management process will depend on the situation; this approach is referred to as contingency theory. Meanwhile, scholars such as Mintzberg (1994), Johnson and Scholes (1993) and Richardson (1989) have attempted to combine these three schools of thought under one single dimension entitled the configurational or comprehensive school of thought. However, Mintzberg and Quinn (1996) and Stacey (1996) claim that even this view has limitations and they propose that one should look beyond configurations and evaluate the complexities and dynamics of the strategic process. They label this final approach beyond configuration (Mintzberg & Quinn, 1996) or the chaos and complexity (Stacey, 1996) school of thought. From the above-mentioned approaches derived from the literary study the researcher will attempt to categorise various approaches within three specific overarching approaches, namely the customer-driven approach, specific-driven approach and lastly the comprehensive-integrated-management-process-approach. 2.3.2 The customer-driven approach (external factors) The customer-driven approach focuses on the needs/requirements of external customers to enable alignment with the internal factors, thereby ensuring the delivery of services that will add value to the external environment (Ehlers & Lazenby, 2007: 122 – 123). The external customer environment will eventually drive the internal organisational environment. According to Ehlers and Lazenby (2007: 135), strategy is about positioning the organisation for a longterm competitive advantage. To be successful, organisations must ensure that their strategies are related to their structures and systems (see section 2.3.2.3) as well as to the demands of the environment and operating context. Implementing a customer-driven strategic management process is of critical importance. The strategy will help to “mistake-proof” the decision-making process. The strategy will lead the institution into intelligent selection regarding which 38 technologies to pursue in which sequence so that customer satisfaction can be increased rapidly without overloading people. Because of competitive threats, domestic and otherwise, this needs to be done quickly (Wallace, 1992: 218; Pearce & Robinson, 2000: 98 - 106). Key elements indicative of customer- service-driven organisations are the following: A mission statement or sense of mission which makes customer service a priority; Customer service standards which are clearly defined; Client satisfaction levels which are constantly measured; and Customer service goals which have an impact on organisational action. Barry (1994: 32) is of the opinion that customer expectations are created by the organisation and they are driven by strategic planning. He further elaborates that customers not only demand knowledge of the organisation‟s strategic process for excellence; they also want their ideas incorporated. “The external customer environment will drive the internal organisational environment” (Barry, 1994: 32). When the management of an organisation is able to develop a profile of present and prospective customers, it improves the ability of the organisation to successfully plan for the needs of the market/social environment. Identifying an organisation‟s main customers and producing the products and services they want is, therefore, a key factor affecting the organisation‟s success. It is also important to realise that all the aspects of the market environment and especially of customer behaviour are directly influenced by different variables in the macro-environment. For example, demographic trends, a social environmental issue, affect the number of customers while inflation and interest rates as economic environmental aspects determine their disposable income (Ehlers & Lazenby, 2007: 122-123). 39 2.3.2.1 Adapt to the changing political, economical, social and technological factors (PEST) The strategic environment is the long-term internal (micro) and external (macro) environment in which the organisation will exist. The internal environment comprises conditions that exist within the organisation and the external environment comprises those conditions outside the organisation. Environmental changes depend on many factors outside the organisation‟s control. However, if current conditions are closely researched and understood, one can project a strategic environment. Again, it is not “bluesky”‟ it is strategic thinking. Current environments and knowledge can be used in combination with some forecasting trends to develop a good feel for future environments (Barry, 1994, 30 – 31). From the above it is, however, important to bring about some degree of balance amongst the seemingly never-ending stakeholders/external demands in order to ensure that the institution‟s core business does not become secondary to its core purpose and that the institution does not eventually become a mere place of employment (researcher‟s observation). The internal and external organisational environment will be a key factor in organisational design. It will become one of the major driving forces behind decisions that will determine the structure of the future organisation (Barry, 1994: 31). Labovitz and Rosansky (1997: 109 - 111) are of the opinion that horizontally aligned companies use the customer‟s voice as a beacon and a driver for the way the company thinks, works and is managed. From the above the assumption could be made that the external customer environment will eventually drive the internal organisational environment. Therefore, the key to the success of this accomplishment will be the ability to forecast the environment and become proactive instead of reactive. Ehlers and Lazenby (2007: 102) indicate that the external environmental analysis focuses its attention on identifying and evaluating trends and events beyond the control of a single organisation and also reveals key 40 opportunities and threats confronting the organisation which could have a major influence on the organisation‟s strategic actions. Varying dimensions in the macro-environment are grouped into five environmental segments: Political, governmental and legal forces; Economic forces; Social, cultural and demographic forces; Technological forces; and Ecological forces. (Ehlers & Lazenby, 2007: 106). Examples of the elements that should be analysed in these different environments are the following (see Figure 2.1). Figure 2.1 : Elements of the macro environment  Political / legal environment Labour Training Law Economic environment Inflation rates Interest rates ↘ ↓ ↙  Socio-cultural environment Demographic changes MACRO ENVIRONMENT  Technological environment Product innovation New communication technologies ↗ ↖  Ecological environment Land, water and air pollution 41 A continuous process of external environmental analysis is, however, important and includes four interrelated activities, namely scanning, monitoring, forecasting and assessing (Ehlers & Lazenby, 2007: 102). 2.3.2.2 Best practices / the competitive environment “Strategy is about positioning organisations for long-term competitive advantage. Successful firms are careful to ensure that their strategies are related to their structures and to the demands of the environment and operating context” (Ehlers & Lazenby, 2007: 135). According to Porter (1980: 35 – 40), competitive strategy refers to those activities an organisation undertakes to gain a competitive advantage in a particular industry. The competitive advantage should elevate the organisation above its competition. This competitive advantage should fulfil the following criteria. It must: Relate to an attribute with value and relevance to the targeted customer segment; Be perceived by the customer as a competitive advantage; and Be sustainable i.e not easily imitated by competitors (Ehlers & Lazenby, 2007: 138 – 139). Consequently, the competitive advantage that an organisation selects should be based on its resources, strengths or distinctive competencies, relative to competitors, but must also be perceived as such by its customers (Ehlers & Lazenby, 2007: 138). In order to achieve long-term strategic success and a competitive advantage, organisations should perform all strategic management activities within the context of continuous improvement. Organisations can achieve continuous improvement through the adoption of practices such as benchmarking, total quality management and re-engineering. Total quality management is 42 continuous improvement and requires the organisation and its members to improve on something every day – improvement is never-ending. Total quality management focuses on designing and delivering quality products to customers and can dramatically improve organisational performance. Reengineering and total quality management are interrelated and complementary. Once business processes have been re-engineered, total quality management principles can be used to continuously improve the new processes and find better/improved ways to manage tasks and roles. Ehlers and Lazenby (2007: 285), state that benchmarking is the comparison of selected performance measures or operational processes against some challenging yardsticks. These yardsticks could be comparisons with the organisation‟s own history; against key competitors or against best-in-class performers. Subsequently these best practices should be incorporated into strategy implementations and strategic control systems. 2.3.2.3 Change management Models for organisational change are usually distinguishable based on methodology and approach, processes, focus areas for change and the extent of change required. The systems approach as an important factor of the customer-driven approach, requires that the essential properties of the organisation be taken as a whole, assuming that each element in the system has as effect on the behaviour of the whole system. Therefore, when a system is taken apart it loses its essential properties. The planned change process type of models are characterised by a thoroughly planned process and a transparent communication strategy which are managed by authorised and empowered persons within the organisation (Geldenhuys, Naude & Veldsman, 2003: 53 – 64). Problems within the organisation are jointly identified and solutions developed based on consensus during consultative working sessions. The focus on the unfreezing - change - refreezing approach is primarily on the preparation of 43 the organisation for change, the implementation of change, and finally the stabilisation and reinforcement of change. The survey-guided approach requires surveys to be carried out to access the current state of organisational functioning and the effectiveness of the activities used to adjust and correct processes (Geldenhuys et al. 2003: 53 – 64). Based on the abovementioned, one can conclude that change management models consist of phases dealing with: Preparation and awakening, which involves the establishment of a competent leadership team and an acknowledgement of the need for change; Mobilisation, which entails the gearing up for the change journey in terms of a more detailed intention, indicating the involvement of people and the required abilities and resources; Conversation, which deals with assessing alternative strategic choices, formulating change actions for implementation and evaluating support systems. Strong emphasis is placed on the continuous management of the process together with transparent and ongoing communication; and Stabilisation, which involves institutionalising change (Geldenhuys et al. 2003: 53 – 64). 2.3.3 Specific driven approach (internal factors) A specific driven approach focuses on what and how an organisation can implement its core objectives in alignment with the benchmarking (outcomes) of needs and requirements from external customers to ensure timely change management as well as the development of resources, structures, processes, capabilities and operational plans towards the effective and efficient execution of strategic objectives (Ehlers & Lazenby, 2007: 80, 83, 91). The rapid developments and changes in the components of the external environment make it difficult for organisations to keep up their competitive 44 advantage and reputation if they do not also understand the internal environment of the organisation (Ehlers & Lazenby, 2007: 80). Ehlers and Lazenby (2007: 85 - 87) further indicate that an organisation cannot decide on a specific strategic direction to follow if it does not know what it can and cannot do and which assets it has and does not have. When an organisation is able to match what it can do with what it might do, this allows the organisation to develop its vision or strategic intent, to pursue its strategic mission and to select and implement its strategies. It is however, important to stress that the link between the organisation‟s vision of what it wants to become and the internal environmental situation cannot be overlooked. The outcome resulting from an internal analysis will determine what an organisation can do, while the outcome of an external environmental analysis will identify what the organisation may choose to do. The task of identifying, developing and deploying resources, capabilities and core competencies is essential before any strategic management decision can be taken. 2.3.3.1 Strengths and weaknesses (internal / micro factors) According to Macmillan and Tampoe (2000: 92) the strengths, weaknesses, opportunities and threats (SWOT) diagram is one technique that cannot be omitted from a textbook on strategy. The internal analysis tends to reveal the strengths and weaknesses of the organisation. External analysis tends to reveal opportunities and threats. It should be noted that in many cases the same external change may represent both a threat and an opportunity. An appropriate response can change a threat into an opportunity. One particular contribution of the SWOT diagram is that it may highlight the relationships of strategic intent and strategic choice to strategic assessment. Strengths and weaknesses are not only related to competitors but also to where the organisation wants to go and how it intends to get there. An ideal strategy would use its strengths to exploit opportunities while at the same time defending against threats and hiding weaknesses. In practice, it is rarely so simple (Macmillan & Tampoe, 2000: 90-92). 45 The SWOT analysis includes both external and internal environments. While the strengths and weaknesses relate to the internal or micro-environment, the opportunities and threats are the identified external factors in the market, in industry and in the macro-environment. Although managers rely on SWOT analyses to stimulate discussions about how to improve their organisations and position them for success, they have their limitations. The SWOT analysis is a static approach and is also sometimes focused only on a single dimension. SWOT analyses cannot show the organisation how to achieve a competitive advantage. In order to achieve this, greater in-depth analysis is needed. SWOT is a good starting point, but because of some inherent limitations, it must be complemented by other approaches such as a resourced-based view (organisational capabilities, competencies and resources) and the value chain analysis (chain of activities through which inputs are transferred into outputs). A SWOT analysis cannot therefore be an end in itself – it actually only stimulates self-perception and the discussion about important issues in the organisation (Ehlers & Lazenby, 2007: 80-83). 2.3.3.2 Management for objectives (MFO) A majority of organisations use some type of management by objectives (MBO) system. Barry (1994: 47) recommends management for objectives (MFO). The focus should be to manage the process, not the outcome. If management performance and reward systems are built based on process management (MFO), key processes identification steps in the performance system can be incorporated. The organisation should drive its performance measurement based on process management while watching the outcome. The type of thinking that will be required on a strategic basis, however, is MFO. The focus is on managing the entire key process cycle and producing an outcome of success. The level and type of success or objective will be defined by the uniqueness of that specific public or private sector organisation (Barry, 1994: 47). Management by objectives, therefore, is operational thinking while 46 management for objectives is strategic thinking. Creating organisational environments for quality is an outcome of strategic planning. The principle behind MFO is to make sure that everybody within the organisation has a clear understanding of the aims/objectives of the organisation as well as an awareness of his or her own role and responsibilities in achieving those aims. 2.3.3.3 Balanced Scorecard Several years ago, Kaplan and Norton (1996) published an article in the Harvard Business Review indicating what managers should measure entitled “The Balanced Scorecard: Measures that drive performance”. Their article affirmed what successful executives have told us (Labovitz & Rosansky, 1997: 151): Measures should tie back to the company‟s main thing, in Kaplan and Norton‟s words the company‟s “vision and strategy”. With the vision and strategy in mind, they counsel executives to create measures that answer four key questions: How do customers see us? What must we excel at? Can we continue to improve and create value? How do we look to shareholders? (Labovitz & Rosansky, 1997: 151). The Balanced Scorecard can be introduced as a framework according to which strategic or long-term goals could be set. The Balanced Scorecard further provides a guideline for setting short-term objectives for each of these long-term goals. Furthermore, the Balanced Scorecard, in the form of initiatives, also lightly links functional tactics to short-term objectives and to strategic objectives in each perspective. The Balanced Scorecard closes the gap between long-term plans and short-term actions, thereby aiding the strategy implementation process (Ehlers & Lazenby, 2007: 160). 47 A Balanced Scorecard approach generally has four perspectives (Ehlers & Lazenby, 2007: 160): Financial; Internal business processes; Learning and growth; and Customer. Each of these four perspectives is inter-dependent – improvement in just one is not necessarily a recipe for success in the other areas. A Balanced Scorecard should eventually result in: Improved processes; Motivated / educated employees; Enhanced information systems; Monitored progress; Greater customer satisfaction; and Increased financial usage. (Ehlers & Lazenby, 2007: 280 - 283). However, even those executives who deploy balanced scorecards intelligently tend to look at the instrument panels that reflect the ongoing operation only in areas such as on-time delivery, customer retention, safety and employee satisfaction. Rarely do these dashboards provide insights into the return on the increasingly large investment in initiatives (Brache & Bodley, 2006: 135). 2.3.3.4 Six Sigma approach First launched by Motorola in the late 1980s, the Six Sigma approach has been hailed as the new TQM (Total Quality Management). At the core of the Six Sigma approach is a methodology and framework for linking improvement to profitability (efficiency and effectiveness), irrespective of the functional area. The Six Sigma approach comprises five steps namely define, measure, analyse, improve and control (Ehlers & Lazenby, 2007: 48 286). Pearce and Robinson (2000 : 376) describe Six Sigma as a highly rigorous and analytical approach to quality and continuous improvement with an objective to improving profits (efficiency and effectiveness) through defect reduction, yield improvement, improved customer satisfaction and best-in-class performance. Six Sigma complements TQM by focusing on management leadership, continuous education, customers and statistics. The Six Sigma scorecards have been developed and can be linked to the organisation‟s overall strategic goals and vision by linking the Six Sigma scorecard to the Balanced Scorecard (Ehlers & Lazenby, 2007: 286). 2.3.3.5 Performance and rewards Probably one of the more important items to include in any alignment audit is the assessment of whether or not the performance appraisal and/or organisational reward system are tied to the mission statement in a clear, systematic way. Should management want everyone to focus on the customer service mission, it should ensure that all policies and procedures/processes are in complete alignment with the mission. The concept of aligning everything that the organisation does with its mission seems simple and obvious, but is surprisingly difficult to execute. A casual review of any organisation shows how many policies, procedures and systems get in the way of the mission instead of remaining focused on the goal. If the organisation must rely on its employees to ensure that it meets its mission, managers should spend the time and make the effort to audit everything that they do to ensure that they all send the same message to their employees and customers (Crotts, Dickson & Ford, 2005: 3). Execution will suffer if people are rewarded for doing the wrong things. Execution will fail when no one has a stake in the game. Feedback on performance is also needed for the organisation and employees to evaluate whether the right things are indeed being accomplished in the strategyexecution process. In essence, what is required for successful strategy 49 implementation is the careful development of incentives and controls as an important factor to create the right connectivity between strategic objectives and implementation. On the one hand, incentives/rewards motivate or guide performance. On the other, controls provide feedback about whether desired performance outcomes are being attained. Control allows for the revision of incentives and other execution-related factors if desired goals are not being met. Incentives/rewards support key aspects of the strategy-execution model. They must reinforce the “right” things if implementation is to succeed. Controls, in turn, must provide timely and valid feedback when needed about organisational performance so that change and adaptation become part and parcel of the implementation effort (Hrebiniak, 2006: 12 – 31). A key success factor is motivating managers and employees to give their commitment to the implementation of a chosen strategy. Rewards as a driver for strategy implementation can be defined as the umbrella term for the various components considered in performance evaluation and the assignment of monetary and non-monetary rewards to them. Reward systems should be created in such a way that they are tightly linked to the strategy, that they encourage a change in behaviour to support strategy implementation, and that they reward managers and employees for performance in the long-term. In addition, reward systems should be tied to achieving the specific outcomes necessary to make the new strategy work and should emphasise rewarding people for accomplishing results, not just for dutifully performing assigned tasks. In order to be an effective motivator for strategy implementation, reward systems should extend to middle and lower levels of management and should apply to the entire workforce (Ehlers & Lazenby, 2007: 229 – 230). 50 2.3.4 A comprehensively-integrated-aligned-strategic-management-processapproach The comprehensively-integrated-aligned-strategic-management-process-approach represents a total view of an organisation‟s strategic management and control system and consists of the strategic plan, operational plan and results management, thus an implementation plan. The challenge is to group together what belongs together within specific processes to ensure alignment and connectivity of the sequence of events towards a more appropriate correlation level between strategic objectives and the operational plans of an organisation (Morrisey et al. 1988: 7 – 11). The overall process goals should serve as the basis for the establishment of subgoals throughout the process. Once process sub-goals have been established, functional goals can be developed. Any strategic and operational goals established should be modified, if necessary, to reflect maximum functional contributions to the process goals and sub-goals. Since the purpose of a function is to support processes, it should be measured against the degree to which it serves those processes. When one establishes functional goals that bolster processes, one ensures that each department meets the needs of its internal and external customers (Rummler & Brache, 1990: 53). Rummler and Brache (1990: 62) state further that the critical process management questions are: Have appropriate process sub-goals been set? Is process performance managed? Are sufficient resources allocated to each process? Are the interfaces between process steps being managed? Work gets done in an organisation through its customer and administrative processes. If one is to understand the way work is done, to improve the way work is done, and to manage the way work is done, processes should be the focus of one‟s attention and actions (Rummler & Brache, 1990: 76 – 79). 51 2.3.4.1 Vertical and horizontal alignment Vertical alignment rapidly moves an institution‟s strategy through the organisation, turning intentions into actual work. Vertical alignment energises people, provides direction and offers opportunity for involvement, thereby aligning activities with intentions (Labovitz and Rosansky, 1997: 27, 74). When vertical alignment is reached, employees understand organisation-wide goals and their roles in achieving them. Because processes generally cut across the various functions of an organisation, they are referred to as horizontal: Horizontal alignment links are an organisation‟s actions with customer needs in ways that delight and create loyalty, thereby aligning processes with customer expectations (Labovitz and Rosansky, 1997: 32). Horizontally aligned organisations are so “hardwired” to customer requirements that the needs of their customers resonate with employees and influence the organisation‟s strategy, processes and behaviour. Despite the growing understanding of processes, many organisations continue to review activities individually and try to improve them in isolation. Process thinking and improvement are essential ingredients of horizontal alignment (Labovitz and Rosansky, 1997: 127 – 130). Vertical and horizontal alignment should be brought into alignment with each other. Neither a great strategy nor the full commitment of managers and employees will have the right result if an organisation‟s processes for creating and delivering value have targeted the wrong customers – or worse, if they have targeted the right customers with the wrong product. Nor will the organisation that is fully aligned on the horizontal dimension succeed if its strategy or implementation is flawed. When alignment is achieved in both dimensions, a dynamic relationship exists between four elements: strategy → people → processes → customers. With both the vertical and horizontal dimensions aligned, the strategy and employees are synchronized with 52 customer focus and process capabilities (Labovitz and Rosansky, 1997: 35- 37). The above statement could be a possible approach to ensure a more appropriate/stronger correlation level between an organisation‟s strategy objectives and operational plans (see section 1.4, problem statement). 2.3.4.2 Prioritise (sequence of events) A process is a series of activities, often repeated over and over with the basic flow of transforming inputs into outputs. The activities that make up the process are not the same. Some activities add value to a process and others fail to add value. Therefore, one way to regard “process improvement” is to think in terms of removing non-value-adding activities. One of the more common practices for improving a process is to reduce the number of hands-off or transfers that take place (i.e. to shift the accountability of activities in the same process, to other units/departments in the organisation). This is usually accomplished by mapping out the process using a flowchart to streamline the process (Sifri, 2003: 3 - 7). Process-mapping is regularly used to depict the flow of major activities within a process (Rummler & Brache, 1990: 48 – 53). A process map ranges from simple block diagrams to more elaborate swim-type diagrams showing the “connectivity” flows to and from major functional or organisational units that play a role within a process. In order to flowchart or map a process, one will need to understand the activities; what triggers the activity (inputs); who is involved; the sequential steps and the outputs associated with the step. Process maps allow one to see the big picture, clarifying sub-processes, sequences and activities. Process maps should be prepared showing critical information flows and where possible, the various players involved. It is useful to document cycle times in different steps, especially wait times. Critical questions can be asked in this regard: Can one eliminate or reduce certain activities? 53 Can one complete the process in less time by changing the process? Can one improve the meeting of customer requirements by changing the process? Finally, if one is unsure about which processes to map, one should start with those processes which have high impact in terms of costs, time, resources consumed or waste. Core processes are sometimes easier to map due to the existing documentation and easy access to the internal players as opposed the external players (Evans, s.a.: 1, Rummler & Brache, 1990: 48 – 55). 2.3.4.3 Workforce involvement / commitment In order to steer strategy implementation efforts in the right direction, organisations make use of several implementation drivers (Ehlers & Lazenby, 2007: 216 – 217): Leadership; Organisational culture; Reward systems; Organisational structure; Resource allocation; and Training / performance management. The first three drivers, leadership, organisational culture and reward systems are critical to the contemporary organisation as they concern the people of the organisation. Since the 1990s the environment has been increasingly characterised by uncertainty, rapid change and turbulence. Strategic change requires strong leadership and adaptive organisational cultures. Managers and employees must be motivated to accomplish strategy implementation goals (Ehlers & Lazenby, 2007: 216 - 217). 54 2.3.4.4 Strategic-process-management-by-results approach (create connectivity) Strategic management by results closes the loop on the total planning process. It provides management with ongoing mechanisms for executing and monitoring the implementation and results of both the strategic and operational plans (Morrisey et al. 1988: 7 - 10). Results management is concerned primarily with plan execution. In order to ensure that planning is a continuous dynamic process within an organisation, particular attention and emphasis must be paid to results management. Another important ingredient in the process is the active involvement and commitment of people within the organisation. As those people who need to make the organisation more successful become better informed and more actively involved in various planning steps, their commitment to significant results will become increasingly substantial. The purpose of planning is not only to produce plans; its main purpose is to produce results, thereby ensuring that strategic objectives will eventually be implemented successfully by creating effective and efficient correlation levels between strategic objectives and operational plans. The primary role of the operational plan is to identify short-term results and actions needed to carry out the organisation‟s needs (Morrisey et al. 1988: 7-10). Morrisey et al. (1988: 116) refer to Management by Objectives and Results (MOR) to be primarily directed at individual managerial efforts rather than those of the total organisation. Although a manager is held responsible for the results of a unit in the organisation, there are certain key result areas (key managerial responsibilities) such as people development and organisational relationships that the manager should pay attention to, in order to ensure that employees will be inspired to align their activities with the strategic objectives of the organisation. It is also useful as a basis for performance appraisal. 55 An ongoing assessment of organisational process needs should direct the process management priorities. In addition, a cornerstone of process management is the monitoring and improvement of the job-performer level. To manage the performance of a process, one must manage the performance of the people who work within the process. To manage people‟s contributions to process effectiveness, one must manage the variables of the human performance system – performance specifications, task interference, consequences, feedback, skills and knowledge and individual capacity (Rummler & Brache, 1990: 38 – 139). 2.3.4.5 Process and project-driven management A project can be defined as a temporary endeavour undertaken to create a unique product or service. Despite the temporary or “single-pass” nature of projects themselves, project management processes recur repetitively throughout the life cycle of each project. A process is a repeatable series of actions, changes or functions with the aim of bringing about a result. The key to success for any project management is effective management of the numerous processes that are woven through the life cycles of various projects. To be effective, a process should be well understood by project stakeholders and consistently enforced by management (Johnson, Joyner & Martin, 2010: 1). An organisation should drive its performance measurement based on process management while watching the outcome. The focus is on managing the entire key process cycle and producing an outcome of success (Barry, 1994: 47 – 48). All strategic decisions in process and project management have the following characteristics (Grűnig & Kűhn, 2005: 85 – 87): They deal with complex relationships. They occur at irregular intervals. 56 They are always unique in their scope, in their questions and in the framework of preconditions to be met. They have a long-term influence on the fate of the organisation. This description of strategic decision-making highlights features which are typically used to characterise projects. Approaching strategy development as a project is an obvious step to take first of all because of the good fit of these characteristics, since the approach could categorise priorities and timelines, costs as well as persons accountable for the possible execution of specific goals and objectives (Grűnig & Kűhn, 2005: 85). Managing organisations through project and process-portfolio programmes is gaining popularity. Process and project management is an implementation tool that delivers organisational benefits resulting from aligned corporate, business unit and operational strategies. It facilitates the coordinated and integrated management of portfolios of projects, tasks and processes that bring about strategic transformation, innovative continuous improvement and customer service excellence in organisations. Process-portfolio management in organisations is operational in character and focuses on improved internal and external customer service, guided by strategic initiatives from executive leadership (Rosemann, 2006: 1 - 2; Barry, 1994: 47 - 49; Rummler & Brache, 1990: 25-39).

 

 

TWO

CHAPTER 2 LITERATURE REVIEW – A CONCEPTUAL ANALYSIS OF STRATEGIC MANAGEMENT APPROACHES TOWARDS THE ACHIEVEMENT OF STRATEGIC OBJECTIVES

 

 2.1 INTRODUCTION “Better a first-class implementation procedure for a second-class strategy than vice versa. Strategies will not exist unless the organisation‟s managers have thought through what needs to be done, when and by whom, using which resources, to achieve what objectives” (Anon 1982 in Okumus & Roper, A., 1999: 21 - 39). “However, despite the importance of the strategic execution process, far more research has been carried out into strategy formulation than into strategy implementation. The reasons why strategic researchers have paid less attention to this area may be because they have viewed strategy implementation as a mere detail of the planning process” (Alexander, 1991: 1). This Chapter will deal mainly with a literature review based on opinions and views from various resources and from different researchers and authors whose works are significant in this particular research field. In this way, various models, key concepts and definitions, and theories which will be used to understand the aim of this study (to measure the correlation levels between strategic objectives and operational plans) are dealt with. Comparisons and descriptions of various strategic management approaches and processes are analysed to determine the correlation between strategic objectives and their execution. Key concepts and approaches involved in strategic management and achievement of strategic objectives are analysed in an attempt to determine the most appropriate method to measure correlation levels between strategic objectives and operational plans. 28 Specific reference will be made to the customer-driven approach, specific management-driven approaches and a comprehensively-integrated processmanagement approach. The Chapter ends by summarising the key findings of the review and also gives further information about the most appropriate model and the reasons for this choice.

 

2.2 STATEGIC PLANNING VERSUS STRATEGIC MANAGEMENT IN RESPECT OF THE ACHIEVEMENT OF STRATEGIC OBJECTIVES It should be emphasised that the purpose of this study is not to attempt to cover all areas of the spectrum of strategic planning and strategic management, but to focus on how to determine the most appropriate level of correlation between strategic objectives and operational plans to ensure its possible achievement /implementation, with specific reference to the Directorate: Student Admissions and Registrations at Unisa. Mintzberg and Quinn (1996) argues that conceptualising the strategic management process as one in which analysis is followed by optimal decisions and their subsequent meticulous implementation neither describes the strategic management process accurately nor prescribes ideal practice. In his view the business environment is far from predictable, thereby limiting the ability for analysis. Further, decisions in an organisation are seldom based on optimal rationality alone given the political processes that occur in all organisations (Mintzberg in Dess, Lumpkin & Taylor, 2005: 1). Few strategies are implemented entirely in the form in which they were formulated. Similarly, the reasons for success when analysed retrospectively may be different from what was expected initially. Part of a strategy may therefore be the recognition of the patterns that seem to have led to success even if those patterns arose by chance rather than as a result of planned actions (Macmillan & Tampoe, 2000: 24). These multiple aspects of strategy are separable but not usually contradictory. Several attempts have been made to classify existent literature on strategic 29 management. Two of the best classifications are by Whittington (2001: 117 - 120) and Mintzberg, Ahlstrand and Lanpel (1998: 67 - 75). According to Macmillan and Tampoe (2000: 24 – 25), Whittington defines four distinct schools, namely the classical, evolutionary, systematic and procedural, differentiated by their stances on two axes. The first axis separates those who believe that leaders and managers are able to determine what their strategies should be by a deliberate process of thinking. The opposite view is that managers have a very limited ability to determine outcomes and that strategy emerges as events unfold. This axis distinguishes between a deterministic view and an emergent view of strategy. The second axis differentiates between those who see strategy-seeking as a single goal (usually a financial goal in business) and those who see organisations as having conflict of internal policies. This axis therefore distinguishes between those who take a single dimensional view of purpose (satisfying the needs of society) and those who place greater emphasis on complexity and politics in the reality of business. The two directions of each of the two axes lead to the four schools. Whittington postulated that each of the four schools tended to be derived from different thinking about strategic management based on different disciplines. He stated further, that each school had tended to be dominant, at least among academic writers, in a particular decade. “Writing in 1993, Whittington saw sociology as having an increasingly important role in thinking about strategic management. It might be possible to defend this point of view in a debate but it is certainly not true that economic pressures (particularly the search for shareholder value) nor the importance of people and their psychology have in any way reduced in importance during the 1990s. The four schools therefore may be more usefully seen as complementary perspectives rather than evolving truth” (Macmillan & Tampoe, 2000: 24 - 25). 30 Table 2.1: Whittington’s four schools of strategy Whittington’s four schools of strategy compared Characteristics Classical Processual Evolutionary Systemic Deterministic/ emergent Single goal/pluralistic Strategy style Influences Decade of influence Deterministic Single Formal Economics/military 1960s Deterministic Plural Crafted Psychology 1970s Emergent Single Efficiency Economics/ Biology 1980s Emergent Plural Embedded Sociology 1990s Source: Macmillan & Tampoe, (2000: 25) More recently, Mintzberg, Ahlstrand and Lanpel (1998: 67 – 75) outlined three prescriptive and seven descriptive schools of strategic thought, which differ according to their premises and the nature of the strategy process. The characteristics of the schools are summarised in the table below (Macmillan & Tampoe, 2000: 25 - 27). Table 2.2: Three prescriptive schools Three prescriptive schools of thought School Nature of process Principal relevance Design Conception Emphasis on chief executive‟s responsibility and overall simplicity of successful strategies. Planning Formal planning Currently blamed for the failure of formal strategic planning departments. Positioning Analysis Particularly strong in large companies and where management consultants have an analytical role. 31 Seven Descriptive Schools Entrepreneurial Vision Emphasis on vision for the future. Relevance for business start-ups, turnarounds, or whether there is a charismatic leader. Cognitive Mental process Examines the mental processes and maps of leaders. Examines the flashes of insight from which strategy may originate. Learning Emergent Sees planning as leading to learning. An organisation which can learn and adapt may succeed in an uncertain world. Power Negotiation Examines the processes of power and negotiation by which strategies are formed in organisations. Cultural Collective process Strategies derive from a collective process and the culture of the organisation which may be unique and hence a source of advantage. Environmental Reactive process Organisations cluster in distinct ecological niches until resources become scarce or conditions hostile. Then they die. Configuration Transformational process Organisations exist in stable configurations for considerable periods but then have to transform themselves. Source: Adapted from Mintzberg et al. (1998: 66 - 75) 2.2.1 Planning Planning in organisations is the organisational process of creating and maintaining a plan and the psychological process of thinking about activities required to create a desired goal on some scale. As such, it is a fundamental property of intelligent behaviour. This process is essential to the creation and refinement of a plan or integration of it with other plans, i.e. it combines forecasting of developments with the preparation of scenarios of how to react to them (wiki/planning, 2009: 1). Planning could have different meanings depending on the political or economic context. Two attitudes to planning need to be held in tandem. On the one hand one should be prepared for what may lie ahead, which may mean contingencies and 32 flexible processes. On the other hand, one‟s future is shaped by consequences of one‟s own planning and actions (wiki/planning, 2009: 2). A plan / planning serves the following three critical functions: It helps management to clarify, focus and research its organisation‟s development and prospects. It provides a considered and logical framework within which an organisation can develop and pursue strategies over the next three to five years and it offers a benchmark against which actual performance can be measured and reviewed. In this way, planning bridges between where one is and where one wants to go. Planning is a process for accomplishing purpose. It helps in determining objectives both in quantitative and qualitative terms. (wiki/planning, 2009: 2; Hailey, Barnes & Ryan, 1990: 1 – 4). 2.2.2 Strategic management Strategic management can be defined as the process whereby all organisational functions and resources are integrated and coordinated to implement formulated strategies which are supposed to be aligned with the environment, in order to achieve the objectives of the organisation and thereby adding value for stakeholders (Ehlers & Lazenby, 2007: 2-5). These writers state further that the strategic management process involves five distinct but related tasks namely: mission development, goal setting, strategy development and selection, strategy implementation and evaluation, review and adjustment. The effectiveness of an organisation‟s strategic management can critically impact upon its viability and there are many reasons why the strategic management process may fail. Some of these are failure to: Think critically and creatively about the likely effects of plans and decisions; Obtain external / internal participation and commitment; and Co-ordinate and control resources. 33 2.2.3 Strategic planning “Strategic thinking requires commitments to concentrate the use of resources and to focus on priorities in their use. Strategic planning is a formal process designed to help an organisation identify and maintain optimal alignment with the most important elements of its environment” (Dolence, Rowley & Lujan, 1997: 13 – 14). In order for the process to be effective, strategic planning must be followed by strategic management and by strategic operational thinking (strategic decisions and actions), i.e. where one is now / where one wants to go / how one will get there (researcher‟s observation). Van der Waldt and Du Toit (1999: 285) state that strategic planning enables public managers to evaluate, select and implement alternatives for rendering effective services. The main purpose of strategic planning is to improve the productivity and effectiveness of institutional activities in order to achieve these objectives. Strategic planning relates to learning and creativity with the recognition that college and university leaders need to challenge assumptions and consider radically changing existing structures and processes. “A strategy is the pattern of a plan which integrates organisations‟ major goals, policies and action sequences into a cohesive whole”, taking into account its internal competencies and shortcomings, anticipated changes in the environment and social demands. Strategic planning, to put it simply, is what to do, why it should be done, how it should be done and who should do it (Quinn, 1980: 1; Mintzberg & Quinn, 1996: 18 - 26). In conclusion, the researcher offers the following summary of the relationship between strategic management and strategic planning: Strategic management is a comprehensive term encompassing the total management of the institution. Strategic management entails the implementation of strategies developed to give new direction to an institution that is in the midst of change or a transitional process. It enables the institution to fulfil its responsibilities in a rapidly changing environment (Mercer, 1991: 20). Strategic management refers to the overall process, which includes not only strategic planning, but also organising, leading, controlling and related decisions and actions in an institution. 34 Strategic planning is a tool of strategic management and forms an important component of it. Strategic planning enables public managers to evaluate, select and implement alternatives for rendering effective service (Mercer, 1991: 20). Therefore, effective application of strategic planning and management causes better utilisation of the state‟s resources. 2.2.4 Operational planning An operational plan in the context of this dissertation is an implementation management-level plan that provides a compass to an institution as a whole on the key operational priorities. Moreover, it is the central frame of reference for allocating resources, focusing effort and measuring individual and institutional performance (Unisa 2009 Operational Plan, 2009: 3). Operational planning is the “how do we get there” and should form an integrated part of the institutional strategic plan. An operational plan is therefore a subset of a strategic work plan. It describes a work plan. It describes short term ways of achieving strategic goals/milestones and explains how or what portion of a strategic plan will be put into operation during a given operational period. An operational plan is the basis for, and justification of, an annual operation request. Operational plans should establish the activities and budgets for each part of the organisation for the following one to three years. They link/align the strategic plan with the activities the organisation will deliver and the resources required to deliver them. Like a strategic plan, an operational plan addresses four questions: Where are we now? Where do we want to be? How do we get there? How do we measure our progress? Operational plans should be prepared by those people who will be involved in the implementation. There is often a need for significant cross-departmental dialogue 35 as plans created by one part of the organisation inevitably have implications for other parts during execution (wiki/operational planning, 2009: 1). Operational planning should contain: Clear objectives; Activities to be delivered; Quality standards; Desired outcomes; Staffing and resource requirements; Implementation timetables; A process for monitoring; Measuring progress; A budget; and Ownership. (wiki/operational planning, 2009: 1). 2.2.5 Strategic alignment Alignment strategies should look beyond simply providing descriptions of the objectives of organisations. They should analyse the information that is necessary for the workforce to meet those objectives – the how and the what of workforce alignment (Harvey, 2007: 1). Strategic alignment is the continuous process of mobilising institutional resources to effectively achieve objectives, in other words a process where key components of an institution are linked and made compatible with each other to address joint responsibilities. It relates to a situation where everyone responsible for a specific execution process pulls together in the same direction (Harvey, 2007: 1). Vertical alignment is the rapid movement of an institution‟s strategy through the organisation, turning intentions into actual work. Vertical alignment energises people, provides direction and offers opportunities for involvement, thereby aligning activities with intentions (Labovitz et al. 1997: 27, 24). 36 As work processes generally cut across a variety of functions of an institution, alignment can also be horizontal. Horizontal alignment links an institution‟s actions with customer needs in ways that delight and create loyalty, thereby aligning processes with customer expectations (Labovitz et al. 1997: 32). In conclusion, Balovich (2005: 16) confirms that the challenge of every departmental head is to turn theory into practice, to make something happen and to translate strategic plans into real business results. This will be accomplished only when there is alignment between strategic and operational planning.

 

2.3 APPROACHES TO STRATEGIC MANAGEMENT AND THE ACHIEVEMENT OF STRATEGIC OBJECTIVES FOR EFFECTIVE PERFORMANCE 2.3.1 Background General overarching strategic management approaches can be categorised into two main approaches, namely the Industrial Organisational Approach (also see par 2.2), which is aligned to the value members of society get for their tax money (economics-related) and the Sociological Approach (also see par 2.2) where greater emphasis falls on the sociological perspective. The Industrial Organisational Approach is based on economic theory and deals with issues such as competitive rivalry, resource allocation and economies of scale. The Sociological Approach primarily deals with human interactions in respect of service delivery (wiki/strategic management, 2009: 1). As far as strategy implementation in particular is concerned, the following diverse views have emerged from the literature study. The first group emphasises the significance of planning to achieve clear objectives and the common terminology used by scholars in this group appears to reflect the planning or rational approach. In the second group, the emphasised theme is that strategy development and implementation are a learning and incremental process 37 (or emergent approach to strategic management). The main theme of the third group is that there is no one best way to develop and implement strategy and that the most appropriate strategic management process will depend on the situation; this approach is referred to as contingency theory. Meanwhile, scholars such as Mintzberg (1994), Johnson and Scholes (1993) and Richardson (1989) have attempted to combine these three schools of thought under one single dimension entitled the configurational or comprehensive school of thought. However, Mintzberg and Quinn (1996) and Stacey (1996) claim that even this view has limitations and they propose that one should look beyond configurations and evaluate the complexities and dynamics of the strategic process. They label this final approach beyond configuration (Mintzberg & Quinn, 1996) or the chaos and complexity (Stacey, 1996) school of thought. From the above-mentioned approaches derived from the literary study the researcher will attempt to categorise various approaches within three specific overarching approaches, namely the customer-driven approach, specific-driven approach and lastly the comprehensive-integrated-management-process-approach. 2.3.2 The customer-driven approach (external factors) The customer-driven approach focuses on the needs/requirements of external customers to enable alignment with the internal factors, thereby ensuring the delivery of services that will add value to the external environment (Ehlers & Lazenby, 2007: 122 – 123). The external customer environment will eventually drive the internal organisational environment. According to Ehlers and Lazenby (2007: 135), strategy is about positioning the organisation for a longterm competitive advantage. To be successful, organisations must ensure that their strategies are related to their structures and systems (see section 2.3.2.3) as well as to the demands of the environment and operating context. Implementing a customer-driven strategic management process is of critical importance. The strategy will help to “mistake-proof” the decision-making process. The strategy will lead the institution into intelligent selection regarding which 38 technologies to pursue in which sequence so that customer satisfaction can be increased rapidly without overloading people. Because of competitive threats, domestic and otherwise, this needs to be done quickly (Wallace, 1992: 218; Pearce & Robinson, 2000: 98 - 106). Key elements indicative of customer- service-driven organisations are the following: A mission statement or sense of mission which makes customer service a priority; Customer service standards which are clearly defined; Client satisfaction levels which are constantly measured; and Customer service goals which have an impact on organisational action. Barry (1994: 32) is of the opinion that customer expectations are created by the organisation and they are driven by strategic planning. He further elaborates that customers not only demand knowledge of the organisation‟s strategic process for excellence; they also want their ideas incorporated. “The external customer environment will drive the internal organisational environment” (Barry, 1994: 32). When the management of an organisation is able to develop a profile of present and prospective customers, it improves the ability of the organisation to successfully plan for the needs of the market/social environment. Identifying an organisation‟s main customers and producing the products and services they want is, therefore, a key factor affecting the organisation‟s success. It is also important to realise that all the aspects of the market environment and especially of customer behaviour are directly influenced by different variables in the macro-environment. For example, demographic trends, a social environmental issue, affect the number of customers while inflation and interest rates as economic environmental aspects determine their disposable income (Ehlers & Lazenby, 2007: 122-123). 39 2.3.2.1 Adapt to the changing political, economical, social and technological factors (PEST) The strategic environment is the long-term internal (micro) and external (macro) environment in which the organisation will exist. The internal environment comprises conditions that exist within the organisation and the external environment comprises those conditions outside the organisation. Environmental changes depend on many factors outside the organisation‟s control. However, if current conditions are closely researched and understood, one can project a strategic environment. Again, it is not “bluesky”‟ it is strategic thinking. Current environments and knowledge can be used in combination with some forecasting trends to develop a good feel for future environments (Barry, 1994, 30 – 31). From the above it is, however, important to bring about some degree of balance amongst the seemingly never-ending stakeholders/external demands in order to ensure that the institution‟s core business does not become secondary to its core purpose and that the institution does not eventually become a mere place of employment (researcher‟s observation). The internal and external organisational environment will be a key factor in organisational design. It will become one of the major driving forces behind decisions that will determine the structure of the future organisation (Barry, 1994: 31). Labovitz and Rosansky (1997: 109 - 111) are of the opinion that horizontally aligned companies use the customer‟s voice as a beacon and a driver for the way the company thinks, works and is managed. From the above the assumption could be made that the external customer environment will eventually drive the internal organisational environment. Therefore, the key to the success of this accomplishment will be the ability to forecast the environment and become proactive instead of reactive. Ehlers and Lazenby (2007: 102) indicate that the external environmental analysis focuses its attention on identifying and evaluating trends and events beyond the control of a single organisation and also reveals key 40 opportunities and threats confronting the organisation which could have a major influence on the organisation‟s strategic actions. Varying dimensions in the macro-environment are grouped into five environmental segments: Political, governmental and legal forces; Economic forces; Social, cultural and demographic forces; Technological forces; and Ecological forces. (Ehlers & Lazenby, 2007: 106). Examples of the elements that should be analysed in these different environments are the following (see Figure 2.1). Figure 2.1 : Elements of the macro environment  Political / legal environment Labour Training Law Economic environment Inflation rates Interest rates ↘ ↓ ↙  Socio-cultural environment Demographic changes MACRO ENVIRONMENT  Technological environment Product innovation New communication technologies ↗ ↖  Ecological environment Land, water and air pollution 41 A continuous process of external environmental analysis is, however, important and includes four interrelated activities, namely scanning, monitoring, forecasting and assessing (Ehlers & Lazenby, 2007: 102). 2.3.2.2 Best practices / the competitive environment “Strategy is about positioning organisations for long-term competitive advantage. Successful firms are careful to ensure that their strategies are related to their structures and to the demands of the environment and operating context” (Ehlers & Lazenby, 2007: 135). According to Porter (1980: 35 – 40), competitive strategy refers to those activities an organisation undertakes to gain a competitive advantage in a particular industry. The competitive advantage should elevate the organisation above its competition. This competitive advantage should fulfil the following criteria. It must: Relate to an attribute with value and relevance to the targeted customer segment; Be perceived by the customer as a competitive advantage; and Be sustainable i.e not easily imitated by competitors (Ehlers & Lazenby, 2007: 138 – 139). Consequently, the competitive advantage that an organisation selects should be based on its resources, strengths or distinctive competencies, relative to competitors, but must also be perceived as such by its customers (Ehlers & Lazenby, 2007: 138). In order to achieve long-term strategic success and a competitive advantage, organisations should perform all strategic management activities within the context of continuous improvement. Organisations can achieve continuous improvement through the adoption of practices such as benchmarking, total quality management and re-engineering. Total quality management is 42 continuous improvement and requires the organisation and its members to improve on something every day – improvement is never-ending. Total quality management focuses on designing and delivering quality products to customers and can dramatically improve organisational performance. Reengineering and total quality management are interrelated and complementary. Once business processes have been re-engineered, total quality management principles can be used to continuously improve the new processes and find better/improved ways to manage tasks and roles. Ehlers and Lazenby (2007: 285), state that benchmarking is the comparison of selected performance measures or operational processes against some challenging yardsticks. These yardsticks could be comparisons with the organisation‟s own history; against key competitors or against best-in-class performers. Subsequently these best practices should be incorporated into strategy implementations and strategic control systems. 2.3.2.3 Change management Models for organisational change are usually distinguishable based on methodology and approach, processes, focus areas for change and the extent of change required. The systems approach as an important factor of the customer-driven approach, requires that the essential properties of the organisation be taken as a whole, assuming that each element in the system has as effect on the behaviour of the whole system. Therefore, when a system is taken apart it loses its essential properties. The planned change process type of models are characterised by a thoroughly planned process and a transparent communication strategy which are managed by authorised and empowered persons within the organisation (Geldenhuys, Naude & Veldsman, 2003: 53 – 64). Problems within the organisation are jointly identified and solutions developed based on consensus during consultative working sessions. The focus on the unfreezing - change - refreezing approach is primarily on the preparation of 43 the organisation for change, the implementation of change, and finally the stabilisation and reinforcement of change. The survey-guided approach requires surveys to be carried out to access the current state of organisational functioning and the effectiveness of the activities used to adjust and correct processes (Geldenhuys et al. 2003: 53 – 64). Based on the abovementioned, one can conclude that change management models consist of phases dealing with: Preparation and awakening, which involves the establishment of a competent leadership team and an acknowledgement of the need for change; Mobilisation, which entails the gearing up for the change journey in terms of a more detailed intention, indicating the involvement of people and the required abilities and resources; Conversation, which deals with assessing alternative strategic choices, formulating change actions for implementation and evaluating support systems. Strong emphasis is placed on the continuous management of the process together with transparent and ongoing communication; and Stabilisation, which involves institutionalising change (Geldenhuys et al. 2003: 53 – 64). 2.3.3 Specific driven approach (internal factors) A specific driven approach focuses on what and how an organisation can implement its core objectives in alignment with the benchmarking (outcomes) of needs and requirements from external customers to ensure timely change management as well as the development of resources, structures, processes, capabilities and operational plans towards the effective and efficient execution of strategic objectives (Ehlers & Lazenby, 2007: 80, 83, 91). The rapid developments and changes in the components of the external environment make it difficult for organisations to keep up their competitive 44 advantage and reputation if they do not also understand the internal environment of the organisation (Ehlers & Lazenby, 2007: 80). Ehlers and Lazenby (2007: 85 - 87) further indicate that an organisation cannot decide on a specific strategic direction to follow if it does not know what it can and cannot do and which assets it has and does not have. When an organisation is able to match what it can do with what it might do, this allows the organisation to develop its vision or strategic intent, to pursue its strategic mission and to select and implement its strategies. It is however, important to stress that the link between the organisation‟s vision of what it wants to become and the internal environmental situation cannot be overlooked. The outcome resulting from an internal analysis will determine what an organisation can do, while the outcome of an external environmental analysis will identify what the organisation may choose to do. The task of identifying, developing and deploying resources, capabilities and core competencies is essential before any strategic management decision can be taken. 2.3.3.1 Strengths and weaknesses (internal / micro factors) According to Macmillan and Tampoe (2000: 92) the strengths, weaknesses, opportunities and threats (SWOT) diagram is one technique that cannot be omitted from a textbook on strategy. The internal analysis tends to reveal the strengths and weaknesses of the organisation. External analysis tends to reveal opportunities and threats. It should be noted that in many cases the same external change may represent both a threat and an opportunity. An appropriate response can change a threat into an opportunity. One particular contribution of the SWOT diagram is that it may highlight the relationships of strategic intent and strategic choice to strategic assessment. Strengths and weaknesses are not only related to competitors but also to where the organisation wants to go and how it intends to get there. An ideal strategy would use its strengths to exploit opportunities while at the same time defending against threats and hiding weaknesses. In practice, it is rarely so simple (Macmillan & Tampoe, 2000: 90-92). 45 The SWOT analysis includes both external and internal environments. While the strengths and weaknesses relate to the internal or micro-environment, the opportunities and threats are the identified external factors in the market, in industry and in the macro-environment. Although managers rely on SWOT analyses to stimulate discussions about how to improve their organisations and position them for success, they have their limitations. The SWOT analysis is a static approach and is also sometimes focused only on a single dimension. SWOT analyses cannot show the organisation how to achieve a competitive advantage. In order to achieve this, greater in-depth analysis is needed. SWOT is a good starting point, but because of some inherent limitations, it must be complemented by other approaches such as a resourced-based view (organisational capabilities, competencies and resources) and the value chain analysis (chain of activities through which inputs are transferred into outputs). A SWOT analysis cannot therefore be an end in itself – it actually only stimulates self-perception and the discussion about important issues in the organisation (Ehlers & Lazenby, 2007: 80-83). 2.3.3.2 Management for objectives (MFO) A majority of organisations use some type of management by objectives (MBO) system. Barry (1994: 47) recommends management for objectives (MFO). The focus should be to manage the process, not the outcome. If management performance and reward systems are built based on process management (MFO), key processes identification steps in the performance system can be incorporated. The organisation should drive its performance measurement based on process management while watching the outcome. The type of thinking that will be required on a strategic basis, however, is MFO. The focus is on managing the entire key process cycle and producing an outcome of success. The level and type of success or objective will be defined by the uniqueness of that specific public or private sector organisation (Barry, 1994: 47). Management by objectives, therefore, is operational thinking while 46 management for objectives is strategic thinking. Creating organisational environments for quality is an outcome of strategic planning. The principle behind MFO is to make sure that everybody within the organisation has a clear understanding of the aims/objectives of the organisation as well as an awareness of his or her own role and responsibilities in achieving those aims. 2.3.3.3 Balanced Scorecard Several years ago, Kaplan and Norton (1996) published an article in the Harvard Business Review indicating what managers should measure entitled “The Balanced Scorecard: Measures that drive performance”. Their article affirmed what successful executives have told us (Labovitz & Rosansky, 1997: 151): Measures should tie back to the company‟s main thing, in Kaplan and Norton‟s words the company‟s “vision and strategy”. With the vision and strategy in mind, they counsel executives to create measures that answer four key questions: How do customers see us? What must we excel at? Can we continue to improve and create value? How do we look to shareholders? (Labovitz & Rosansky, 1997: 151). The Balanced Scorecard can be introduced as a framework according to which strategic or long-term goals could be set. The Balanced Scorecard further provides a guideline for setting short-term objectives for each of these long-term goals. Furthermore, the Balanced Scorecard, in the form of initiatives, also lightly links functional tactics to short-term objectives and to strategic objectives in each perspective. The Balanced Scorecard closes the gap between long-term plans and short-term actions, thereby aiding the strategy implementation process (Ehlers & Lazenby, 2007: 160). 47 A Balanced Scorecard approach generally has four perspectives (Ehlers & Lazenby, 2007: 160): Financial; Internal business processes; Learning and growth; and Customer. Each of these four perspectives is inter-dependent – improvement in just one is not necessarily a recipe for success in the other areas. A Balanced Scorecard should eventually result in: Improved processes; Motivated / educated employees; Enhanced information systems; Monitored progress; Greater customer satisfaction; and Increased financial usage. (Ehlers & Lazenby, 2007: 280 - 283). However, even those executives who deploy balanced scorecards intelligently tend to look at the instrument panels that reflect the ongoing operation only in areas such as on-time delivery, customer retention, safety and employee satisfaction. Rarely do these dashboards provide insights into the return on the increasingly large investment in initiatives (Brache & Bodley, 2006: 135). 2.3.3.4 Six Sigma approach First launched by Motorola in the late 1980s, the Six Sigma approach has been hailed as the new TQM (Total Quality Management). At the core of the Six Sigma approach is a methodology and framework for linking improvement to profitability (efficiency and effectiveness), irrespective of the functional area. The Six Sigma approach comprises five steps namely define, measure, analyse, improve and control (Ehlers & Lazenby, 2007: 48 286). Pearce and Robinson (2000 : 376) describe Six Sigma as a highly rigorous and analytical approach to quality and continuous improvement with an objective to improving profits (efficiency and effectiveness) through defect reduction, yield improvement, improved customer satisfaction and best-in-class performance. Six Sigma complements TQM by focusing on management leadership, continuous education, customers and statistics. The Six Sigma scorecards have been developed and can be linked to the organisation‟s overall strategic goals and vision by linking the Six Sigma scorecard to the Balanced Scorecard (Ehlers & Lazenby, 2007: 286). 2.3.3.5 Performance and rewards Probably one of the more important items to include in any alignment audit is the assessment of whether or not the performance appraisal and/or organisational reward system are tied to the mission statement in a clear, systematic way. Should management want everyone to focus on the customer service mission, it should ensure that all policies and procedures/processes are in complete alignment with the mission. The concept of aligning everything that the organisation does with its mission seems simple and obvious, but is surprisingly difficult to execute. A casual review of any organisation shows how many policies, procedures and systems get in the way of the mission instead of remaining focused on the goal. If the organisation must rely on its employees to ensure that it meets its mission, managers should spend the time and make the effort to audit everything that they do to ensure that they all send the same message to their employees and customers (Crotts, Dickson & Ford, 2005: 3). Execution will suffer if people are rewarded for doing the wrong things. Execution will fail when no one has a stake in the game. Feedback on performance is also needed for the organisation and employees to evaluate whether the right things are indeed being accomplished in the strategyexecution process. In essence, what is required for successful strategy 49 implementation is the careful development of incentives and controls as an important factor to create the right connectivity between strategic objectives and implementation. On the one hand, incentives/rewards motivate or guide performance. On the other, controls provide feedback about whether desired performance outcomes are being attained. Control allows for the revision of incentives and other execution-related factors if desired goals are not being met. Incentives/rewards support key aspects of the strategy-execution model. They must reinforce the “right” things if implementation is to succeed. Controls, in turn, must provide timely and valid feedback when needed about organisational performance so that change and adaptation become part and parcel of the implementation effort (Hrebiniak, 2006: 12 – 31). A key success factor is motivating managers and employees to give their commitment to the implementation of a chosen strategy. Rewards as a driver for strategy implementation can be defined as the umbrella term for the various components considered in performance evaluation and the assignment of monetary and non-monetary rewards to them. Reward systems should be created in such a way that they are tightly linked to the strategy, that they encourage a change in behaviour to support strategy implementation, and that they reward managers and employees for performance in the long-term. In addition, reward systems should be tied to achieving the specific outcomes necessary to make the new strategy work and should emphasise rewarding people for accomplishing results, not just for dutifully performing assigned tasks. In order to be an effective motivator for strategy implementation, reward systems should extend to middle and lower levels of management and should apply to the entire workforce (Ehlers & Lazenby, 2007: 229 – 230). 50 2.3.4 A comprehensively-integrated-aligned-strategic-management-processapproach The comprehensively-integrated-aligned-strategic-management-process-approach represents a total view of an organisation‟s strategic management and control system and consists of the strategic plan, operational plan and results management, thus an implementation plan. The challenge is to group together what belongs together within specific processes to ensure alignment and connectivity of the sequence of events towards a more appropriate correlation level between strategic objectives and the operational plans of an organisation (Morrisey et al. 1988: 7 – 11). The overall process goals should serve as the basis for the establishment of subgoals throughout the process. Once process sub-goals have been established, functional goals can be developed. Any strategic and operational goals established should be modified, if necessary, to reflect maximum functional contributions to the process goals and sub-goals. Since the purpose of a function is to support processes, it should be measured against the degree to which it serves those processes. When one establishes functional goals that bolster processes, one ensures that each department meets the needs of its internal and external customers (Rummler & Brache, 1990: 53). Rummler and Brache (1990: 62) state further that the critical process management questions are: Have appropriate process sub-goals been set? Is process performance managed? Are sufficient resources allocated to each process? Are the interfaces between process steps being managed? Work gets done in an organisation through its customer and administrative processes. If one is to understand the way work is done, to improve the way work is done, and to manage the way work is done, processes should be the focus of one‟s attention and actions (Rummler & Brache, 1990: 76 – 79). 51 2.3.4.1 Vertical and horizontal alignment Vertical alignment rapidly moves an institution‟s strategy through the organisation, turning intentions into actual work. Vertical alignment energises people, provides direction and offers opportunity for involvement, thereby aligning activities with intentions (Labovitz and Rosansky, 1997: 27, 74). When vertical alignment is reached, employees understand organisation-wide goals and their roles in achieving them. Because processes generally cut across the various functions of an organisation, they are referred to as horizontal: Horizontal alignment links are an organisation‟s actions with customer needs in ways that delight and create loyalty, thereby aligning processes with customer expectations (Labovitz and Rosansky, 1997: 32). Horizontally aligned organisations are so “hardwired” to customer requirements that the needs of their customers resonate with employees and influence the organisation‟s strategy, processes and behaviour. Despite the growing understanding of processes, many organisations continue to review activities individually and try to improve them in isolation. Process thinking and improvement are essential ingredients of horizontal alignment (Labovitz and Rosansky, 1997: 127 – 130). Vertical and horizontal alignment should be brought into alignment with each other. Neither a great strategy nor the full commitment of managers and employees will have the right result if an organisation‟s processes for creating and delivering value have targeted the wrong customers – or worse, if they have targeted the right customers with the wrong product. Nor will the organisation that is fully aligned on the horizontal dimension succeed if its strategy or implementation is flawed. When alignment is achieved in both dimensions, a dynamic relationship exists between four elements: strategy → people → processes → customers. With both the vertical and horizontal dimensions aligned, the strategy and employees are synchronized with 52 customer focus and process capabilities (Labovitz and Rosansky, 1997: 35- 37). The above statement could be a possible approach to ensure a more appropriate/stronger correlation level between an organisation‟s strategy objectives and operational plans (see section 1.4, problem statement). 2.3.4.2 Prioritise (sequence of events) A process is a series of activities, often repeated over and over with the basic flow of transforming inputs into outputs. The activities that make up the process are not the same. Some activities add value to a process and others fail to add value. Therefore, one way to regard “process improvement” is to think in terms of removing non-value-adding activities. One of the more common practices for improving a process is to reduce the number of hands-off or transfers that take place (i.e. to shift the accountability of activities in the same process, to other units/departments in the organisation). This is usually accomplished by mapping out the process using a flowchart to streamline the process (Sifri, 2003: 3 - 7). Process-mapping is regularly used to depict the flow of major activities within a process (Rummler & Brache, 1990: 48 – 53). A process map ranges from simple block diagrams to more elaborate swim-type diagrams showing the “connectivity” flows to and from major functional or organisational units that play a role within a process. In order to flowchart or map a process, one will need to understand the activities; what triggers the activity (inputs); who is involved; the sequential steps and the outputs associated with the step. Process maps allow one to see the big picture, clarifying sub-processes, sequences and activities. Process maps should be prepared showing critical information flows and where possible, the various players involved. It is useful to document cycle times in different steps, especially wait times. Critical questions can be asked in this regard: Can one eliminate or reduce certain activities? 53 Can one complete the process in less time by changing the process? Can one improve the meeting of customer requirements by changing the process? Finally, if one is unsure about which processes to map, one should start with those processes which have high impact in terms of costs, time, resources consumed or waste. Core processes are sometimes easier to map due to the existing documentation and easy access to the internal players as opposed the external players (Evans, s.a.: 1, Rummler & Brache, 1990: 48 – 55). 2.3.4.3 Workforce involvement / commitment In order to steer strategy implementation efforts in the right direction, organisations make use of several implementation drivers (Ehlers & Lazenby, 2007: 216 – 217): Leadership; Organisational culture; Reward systems; Organisational structure; Resource allocation; and Training / performance management. The first three drivers, leadership, organisational culture and reward systems are critical to the contemporary organisation as they concern the people of the organisation. Since the 1990s the environment has been increasingly characterised by uncertainty, rapid change and turbulence. Strategic change requires strong leadership and adaptive organisational cultures. Managers and employees must be motivated to accomplish strategy implementation goals (Ehlers & Lazenby, 2007: 216 - 217). 54 2.3.4.4 Strategic-process-management-by-results approach (create connectivity) Strategic management by results closes the loop on the total planning process. It provides management with ongoing mechanisms for executing and monitoring the implementation and results of both the strategic and operational plans (Morrisey et al. 1988: 7 - 10). Results management is concerned primarily with plan execution. In order to ensure that planning is a continuous dynamic process within an organisation, particular attention and emphasis must be paid to results management. Another important ingredient in the process is the active involvement and commitment of people within the organisation. As those people who need to make the organisation more successful become better informed and more actively involved in various planning steps, their commitment to significant results will become increasingly substantial. The purpose of planning is not only to produce plans; its main purpose is to produce results, thereby ensuring that strategic objectives will eventually be implemented successfully by creating effective and efficient correlation levels between strategic objectives and operational plans. The primary role of the operational plan is to identify short-term results and actions needed to carry out the organisation‟s needs (Morrisey et al. 1988: 7-10). Morrisey et al. (1988: 116) refer to Management by Objectives and Results (MOR) to be primarily directed at individual managerial efforts rather than those of the total organisation. Although a manager is held responsible for the results of a unit in the organisation, there are certain key result areas (key managerial responsibilities) such as people development and organisational relationships that the manager should pay attention to, in order to ensure that employees will be inspired to align their activities with the strategic objectives of the organisation. It is also useful as a basis for performance appraisal. 55 An ongoing assessment of organisational process needs should direct the process management priorities. In addition, a cornerstone of process management is the monitoring and improvement of the job-performer level. To manage the performance of a process, one must manage the performance of the people who work within the process. To manage people‟s contributions to process effectiveness, one must manage the variables of the human performance system – performance specifications, task interference, consequences, feedback, skills and knowledge and individual capacity (Rummler & Brache, 1990: 38 – 139). 2.3.4.5 Process and project-driven management A project can be defined as a temporary endeavour undertaken to create a unique product or service. Despite the temporary or “single-pass” nature of projects themselves, project management processes recur repetitively throughout the life cycle of each project. A process is a repeatable series of actions, changes or functions with the aim of bringing about a result. The key to success for any project management is effective management of the numerous processes that are woven through the life cycles of various projects. To be effective, a process should be well understood by project stakeholders and consistently enforced by management (Johnson, Joyner & Martin, 2010: 1). An organisation should drive its performance measurement based on process management while watching the outcome. The focus is on managing the entire key process cycle and producing an outcome of success (Barry, 1994: 47 – 48). All strategic decisions in process and project management have the following characteristics (Grűnig & Kűhn, 2005: 85 – 87): They deal with complex relationships. They occur at irregular intervals. 56 They are always unique in their scope, in their questions and in the framework of preconditions to be met. They have a long-term influence on the fate of the organisation. This description of strategic decision-making highlights features which are typically used to characterise projects. Approaching strategy development as a project is an obvious step to take first of all because of the good fit of these characteristics, since the approach could categorise priorities and timelines, costs as well as persons accountable for the possible execution of specific goals and objectives (Grűnig & Kűhn, 2005: 85). Managing organisations through project and process-portfolio programmes is gaining popularity. Process and project management is an implementation tool that delivers organisational benefits resulting from aligned corporate, business unit and operational strategies. It facilitates the coordinated and integrated management of portfolios of projects, tasks and processes that bring about strategic transformation, innovative continuous improvement and customer service excellence in organisations. Process-portfolio management in organisations is operational in character and focuses on improved internal and external customer service, guided by strategic initiatives from executive leadership (Rosemann, 2006: 1 - 2; Barry, 1994: 47 - 49; Rummler & Brache, 1990: 25-39).

 
 

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