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MNG3702 Study PACK - Summary Strategic Implementation
and Control IIIB
Strategic Implementation and Control IIIB (University of South Africa)
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MNG3702
EXAM REVISION PACK
Written by TWP 2017
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Welcome
If you are reading these notes you are studying MNG3701 with UNISA. These notes are being written in
collaboration with all our Together We Pass MNG3702 group members this term, and will be built upon year on
year to create the best set of study notes, with the most useful summaries, hints and tips we can possibly put
together.
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explanations as this is the BEST way of learning.
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PART 1
Topic 1: Strategy Implementation
1. Explain what Strategy implementation entails (5)

Strategy implementation can be defined as the process that turns selected strategy into action to
ensure that the stated goals (aligned with the vision and mission) are accomplished.

Strategy implementation deals with translating the strategic plan into action.

It is the phase in which management aligns or matches strategic leadership, organisational culture,
organisational structure, reward systems, policies and resource allocation with the chosen strategy
or strategies.

It is an essential component of the strategic management process, as it deals with the strategic
change required within an organisation to make the new strategy work and to achieve the desired
results.

It is the most difficult part of the strategic management process.
2. Differentiate between strategic planning and strategic implementation (8)
Strategic Planning
1
Is the intellectual or thinking phase
Strategy implementation
The thinking phase in which these
thoughts are operationalized and
turned into action.
2
3
4
5
Is mostly a market driven activity
Is an internal, operational driven
with an external focus
activity.
Requires good intuitive and
Requires strong motivation and
analytical skills
leadership skills.
Well structured, rational and
Not so well structured, rational and
controlled
controlled.
Takes place at top management
The responsibility of all levels of
and senior management
management and the entire work
force is involved.
6
Focus on effectiveness
Focus on efficiency
7
Positioning forces before the action
Managing forces during the action
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8
Requires co-ordination among a few
Requires co-ordination among many
individuals
individuals
3. Comment on the importance of strategy implementation as a component of the strategic
management process (5)

Strategy implementation is an essential part (the most important part) of strategic management
process.

Is the process that turns strategic plans into a series of actions tasks and ensures that these tasks
are executed in such a way that the objectives of the strategic plan are achieved?

It entails the communication, interpretation, adoption and enactment of strategic plans.

It is the phase in which management aligns strategic leadership, organisational culture,
organisational structures, reward systems, policies and resource allocation with the chosen strategy.

It involves taking management form thinking to actually doing.

It is also an important source of competitive advantage.
4. Discuss the problems organisations experience when attempting to implement their chosen
strategy (8) / Discuss 5 reasons why strategy implementation fails (5)

There is no alignment between the organisational structure and the strategy.

The information and communication systems are inadequate to report on the progress with strategy
implementation.

The coordination of implementation efforts was not sufficiently effective.

The leadership and direction provided by top and middle managers was inadequate.

Goals were not sufficiently defined and not well understood by employees.

The formulators of the strategy were not involved in implementation or left before the implementation
was complete.

Key changes in the responsibilities of employees were not clearly defined.
5. Discuss the barriers to successful strategic implementation (5)

Vision Barrier

Failure to communicate the vision and strategy may confuse the work force.

If lower levels of management and the work force do not know or understand the
organisations vision and strategy, they won’t understand their role in the implementation
process.
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
Management Barrier

Too often executives are focused on solving short term problems and not enough time is
spent on strategic management.

Some executives that were promoted from the functional areas and tent to remain involved in
functional issues.


Resource Barrier

Resource allocation plans or budgets are not linked to the chosen strategies.

Resources are not allocated in support of the strategy.
People Barrier

About 75% of managers do not have rewards and incentives inked to strategies.

Key responsibilities of employees are not clearly defined.
6. Strategy implementation and corporate governance (4)

It is the responsibility of the board of directors of an organisation to define the purpose of the
organisation and to identify the stakeholders relevant to the business of the organisation.

The board has to formulate a strategy based on these factors.

The King Report states that it is the board’s responsibility to ensure that management mot only
implements the formulated strategy, but also monitors that implementation.

Strategy implementation should take issues such as social responsibility, environmental
responsibility, stakeholder engagement and sustainability into consideration at all times.
7. Explain the different types of strategic change and the issues involved (10)
Different Types

Adaption. The current organisational setting can facilitate the incremental change that must happen
in order to achieve the desired goals. It is only necessary to adapt to this new situation.

Reconstruction. The current organisational setting can handle a change that involves a sudden
alteration in the market conditions. It may be that only the reconstruction of processes and policies is
required to implement the new strategy.

Evolution. This strategy involves fundamental changes in the way the organisation has to deal with
the situation, but it can happen over time.

Revolution. The strategy involves fundamental changes as a result of sudden and fast-changing
conditions.
Issues of Change

Time. How quickly is change needed; does the organisation have time to change?
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
Scope. What is the scope of change needed? Is dramatic revolutionary change needed, or only a
moderate change.

Diversity. What is the level of homogeneity in the organisation? A heterogeneous workforce can
hamper change.

Capacity. Does the organisation have the capacity in terms of the resources needed to change.

Readiness. Are the employees ready for change? This also refers to the level of resistance to
change.

Capability. Do the organisation’s employees and managers have the capabilities to implement
change?
8. Briefly comment on the strategic change process

Identify the areas of change

Manage resistance to change

Using Power and influence to persuade member of the organisation to support the changes.

How to become a learning organisation.
9. What are the main triggers or forces for strategic change?

Environment. Changes in the different macro and market environments of the organisation lead to
a demand for major strategic change.

Technology. Technological obsolescence and improvements can have a substantial impact on the
survival of companies.

Regulatory events. Many of these change pressures will be outside the control of organisations
and they have no option but to respond.

Business relationships. New alliances, mergers and other significant developments resulting from
a new strategy may require substantial changes in the organisational structure.

The strategic awareness and skills of managers and employees. Promotion expectations
require strategic development and growth in organisations.
10. List some of the reasons why employees resist change and some solutions that can be applied
to overcome resistance to change
Reason for resistance
How to overcome resistance
Opposing strategic proposals
Involve employees who are most resistant to
change
Pessimism
Build support networks
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Anxiety
Use effective communication and
discussions
Lack of interest
Give incentives
Different personal ambitions
Use managerial authority (If nothing else
helps
Irritation with the new (old) things
11. Provide guidelines for overcoming resistance to change (5)


Education and communication
o
Help people to understand the need for change.
o
Must be communicated so that it is clearly understood by all.
Participation and Involvement
o
If people are part of the strategy formulation process, they will be more supportive of
changes necessary to implement new strategy.

Facilitation and support
o

Negotiation and agreement
o

Influencing people to accept change and "buying-off" people to accept and promote change.
Giving clear direction
o

Linked to incentives and rewards.
Manipulation and co-optation
o

Building support networks helps to overcome resistance to change.
May use authority to set direction and impose means to implement change.
Explicit and implicit coercion
o
this may work in the short-term - unlikely that this will result in long term commitment from
employees
12. What are the important characteristics of a learning organisation.

Learning as a continuous process

Employees working and learning as a team

Management development and personal growth

The sharing of visions for the future
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
The realisation that people skills are the most important asset of the organisation

Rethinking of organisational habits, generalisations and corporate interpretations that are perhaps
no longer relevant.

Applying the systems approach when analysing and viewing the business environment
13. Discuss the ‘warm square’ in the modified McKinsey 7-S framework (5)

The warm square are style, skills, staff and shared values
o
Style

o
Staff

o
the people in the organisation
Skills

o
the leader and management style of the organisation
the organisations core competencies and source of competitive advantage
Shared values

the values the organisation believes in
14. Discuss the component of the McKinsey 7S framework

This model links the organisations strategy to the various factors that need to be addressed to
ensure successful implementation and consequently strategic success. The 7 –s are:

The framework distinguishes between a cold triangle and a warm square.

The warm square are style, skills, staff and shared values
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o
It refers to the people in the organisation.
o
Strategy

The organisations chosen strategy and the way it intends to achieve its strategic
goals and vision.
o
Structure

o
The way in which an organisation is structured.
Systems

Including systems such as reward systems, strategic control systems and operational
control systems.
o
Style

o
Staff

o
the people in the organisation
Skills

o
the leader and management style of the organisation
the organisations core competencies and source of competitive advantage
Shared values

the values the organisation believes in

The cold triangle refers to structure, strategy and systems of the organisation.

These issues cannot be isolated from one another.
15. Discuss the drivers of strategic implementation (5)

Leadership

This is vital in strategy implementation as it is only through effective leadership that
organisations are able to use strategic management successfully.

Organisational culture

Is a set of important beliefs, behavioural norms and values that the members of an
organisation share. It refers to the way we do things around here.

Reward system

Required to motivate managers and employees to ensure commitment to the
implementation of new strategies.

Organisational structure

Refers to the framework within which the strategic process must operate to achieve
the organisations goals. Identify the tasks necessary for strategy implementation and
how is responsible for the tasks.

Resource Allocation
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
is essential that resources be allocated in such a way that they supports the
organisations long-term goals, chosen strategy, structure and short term goals.
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Topic 2: The drivers of strategy implementation
16. Discuss attributes of emotional intelligence (10)

Self-awareness – self-awareness is the first component of emotional intelligence and refers to the
extent to which an individual is aware of his or her emotions, strengths, weaknesses, needs and
drives

Self-regulation – self-regulation refers to the extent that people are in control of their emotions,
feelings and impulses.

Motivation – One trait common to almost all effective leaders is motivation. Leaders have a deep
desire to achieve for the sake of achievement and not for large salaries or status and are driven to
exceed expectations.

Empathy – Empathy refers to the extent that a leader can thoughtfully consider employees’ feelings
in the process of making decisions. Empathy also refers to the extent that a leader is able to sense
and understand the viewpoints of his or her team.

Social Skills – Good social skills in the context of emotional intelligence do not simply imply
friendliness. They are about friendliness with the purpose of leading people in the desired direction,
being able to establish a rapport with anybody, being able to network and interact with a wide circle
of acquaintances, capable of managing teams and being able to build relationships throughout the
organisation.
17. Discuss the reasons why leadership is an important driver of strategy implementation (5)

Somewhere in the organisation someone must have a vision of the ideal state and be willing to
guide the organisation to the achievement of this vision through successful strategy implementation.

Such a person is a strategic leader.

Strategic leadership drives strategic change, and strong leadership is perhaps the most important
“tool” that a strategist can have in the implementation toolkit to give direction and purpose to
integrated strategy formulation, implementation and control.

Leadership is vital in strategy implementation as it is only through effective strategic leadership that
organisations are able to use the strategic management process successfully.

Successful strategy implementation and strategic change also depend on the leaders and managers
distributed throughout an organisation.
18. Discuss the key responsibilities of a strategic leader (6)

Developing an appropriate vision or strategic direction for the organisation in which as many
stakeholders as possible participated
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
Communicating the vision and strategic direction to all the employees and other stakeholders of the
organisation

Inspiring and motivating the employees to achieve the strategic goals of the organisation

With top management, designing appropriate reward systems and organisational structures

Developing and maintaining and effective organisational culture

With managers, ensuring that the organisation continually incorporates good corporate governance
principles into its strategies and operations.
19. Indicate the difference between management and leadership (5)
LEADERSHIP
MANAGEMENT
Coping with change
Coping with complexity
Concerned with guiding, encouraging and
Concerned with directing others in the
facilitating others in pursuit of ends by the
pursuit of ends and by the use of means,
use of means, both of which they have either
both of which have been selected by the
selected or approved.
manager
Tend to be more visionary, experimental,
Tend to be more analytical, structured and
flexible and creative
controlled
Value the quantitative science part of their
Value the intuitive side of their work
work
Focus on the bigger picture
Focus on the details
Inspire and apply influence
Instruct and apply authority
20. Differentiate between visionary and managerial leaders by identifying four key characteristics of
each (HINT use table) (8)
VISIONARY LEADERS
·
Are proactive, shape ideas, change
MANAGERIAL LEADERS
·
Are reactive, adopt passive attitudes
the way people think about what is desirable,
towards goals. Their goals arise out of
possible and necessary
necessity and not out of desires and dreams,
and are often are based on the past
·
Work to develop choice and fresh
·
View work as an enabling process
approaches to long-standing problems and
involving some combination of ideas and
work from high-risk positions
people interacting to establish strategies.
·
·
Are concerned with ideas, relate to
people in intuitive and empathetic ways
Relate to people according to their
roles in the decision-making process
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·
Feel separate from their environment;
·
See themselves as conservators and
they work in, but do not belong to,
regulators of the existing order. Their sense
organizations; in other words their sense of
of who they are depends on their role in the
who they are does not depend on their work
organization.
·
·
Influence the attitudes and opinions of
Influence the actions and decisions of
others in the organization
those with whom they work
·
·
Are concerned with ensuring the
future of the organization, especially through
Are involved in situations and contexts
characteristic of day-to-day activities
development and management of people
21. Discuss corporate governance and leadership in the light of the King II Report (4)

The King report on corporate governance 2002 (King II Report) emphasized the role of leadership in
corporate Governance.

It stated that corporate governance is essentially about leadership and that leadership comprises
four dimensions: efficiency, probity (honesty and decency); responsibility; and transparency and
accountability.

In order for organisations to compete effectively in the global economy, leadership must be efficient.

Leadership for probity is important as it assures investors that the management of an organisation
will behave honestly and with integrity towards its shareholders and other.

Addressing legitimate social concerns related to the organisation’s activities provides proof of
responsible leadership.

Above all, leadership must be transparent and accountable for its activities.
22. Discuss the key responsibilities of a strategic leader (6)

Develop appropriate strategic direction

Communication of vision and strategic direction

Motivate employees to achieve strategic objectives

Design appropriate reward systems and organisation structure

The development of strategic and operational control systems

Develop and maintain effective organisational culture

Ensure good corporate governance and management
23. Explain why different strategies require different leadership styles (5)

As the environment in which the organisation operates changes, so does the choice of strategies.
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
Strategic implementation is essential about creating a tight fit between strategy and leadership,
strategy with culture, strategy with reward systems, strategy with organisational structure and
strategy with short-term objectives.

Different types of strategy require different types of leadership style.

When a growth strategy is followed, it is important that the leader pays attention to managing
relationships, inspiring people and communicating the goals and strategies to them.

Corporate combination strategies require a leader who can integrate different cultures and value
systems, and identify synergies, and who possesses a combination of people and task skills.

Organisations that follow decline strategies need leaders who are task oriented and who focus on
reducing assets and costs; such a leader will often be more autocratic than when a growth strategy
is followed.
24. Discuss five moral duties for strategic leaders and company directors (5)

Conscience. Strategic leaders and directors should act with intellectual honesty in the best interests
of the organization and all its stakeholders and independence of mind should prevail.

Care. A director should devote serious attention to the affairs of the organization.

Competence. A director should have the knowledge and skills required for governing an organization
effectively.

Commitment. A director should be diligent in performing director’s duties and responsibilities.

Courage. A director should have the courage to take the risks associated with directing and
controlling a successful sustainable organization, but also have the courage to act with integrity in all
strategic decisions and activities.
25. Explain the importance of organisational culture in strategy implementation (5)

Organisational culture refers to “the way we do things around here”.

It can be defined as the set of important, often unstated, assumptions, beliefs, behavioural norms
and values that the members of an organisation share.

An organisational culture that is rare and not easily imitated can be a source of competitive
advantage.

When the organisation’s beliefs, visions and goals underpinning its chosen strategy are compatible
with its organisational culture, this culture serves as a valuable driver and simplifies strategy
implementation efforts.
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
Reshaping organisational culture is a complex and time-consuming task, yet in order to execute
strategies successfully, top management must establish a tight fit between the chosen strategy and
culture.
26. Explain the different aspects and levels of organisational culture (as identified by Thompson &
Martin 2005) (12)
The aspects and levels of culture can be grouped into manifestations, people and power.
MANIFESTATION
PEOPLE
POWER
Artefacts and symbols
Stories from the past
Ownership and structure
Values
Leadership and management Personal power
styles
Underlying assumptions
Communication
Politics
Behaviours

The most visible level of culture is artefacts and symbols. Artefacts include the physical and
social environment, written communications, advertisements and the reception that visitors to the
organisation receive.

Values are the second level and represent a sense of “what ought to be” based on the
convictions held by top management for example.

The underlying assumptions are the third level and they represent the taken-for-granted ways of
doing things or solutions to problems.

The people in an organisation are also an important part of culture. The way people do things
and their values and underlying assumptions are based on and influenced by stories from the
past, the leadership and management style of the organisation and by communication.

Another dimension of culture is power. Power is reflected in the ownership of the organisation.

Structural issues include the extent to which the organisation is centralised or decentralised and
will impact on control and reward systems.

Politics refers to the ways in which managers use power and influence to affect decisions and
actions.
27. Discuss the different types of organisational culture as identified by Charles Handy (6)

Power culture
o
It can be compared to a spider (power and influence source) and a web (functional area).
o
It depends on trust and empathy for effectiveness and personal communication
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o



It is strong and has the ability to move quickly.
Role culture
o
Is often stereotyped as bureaucracy where logic, rules and procedures dominate.
o
The role or job description is considered more important than the person who fills it.
o
It offers individual security.
Task culture
o
Is project-oriented and this type of culture is often found in organisations with matrix structures.
o
It seeks to bring together the right people, functional expertise and resources.
Person culture

Have the individual as the central point and the organisation only exists to serve the individual
within it.

This type of culture is formed when a group of people band together, like sharing space, services
and equipment.
28. Discuss the different cultural dimensions of Hofstede (5)

Power distance, that is. The extreme to which people accept that power is distributed unequally

Uncertainty avoidance. That is, the extent to which people feel uncomfortable with uncertainty
and ambiguity

Individualism/collectivism, that is, the extent to which there is a preference for belonging to a
tightly knit collective rather than a more loosely knit society

Masculinity/femininity, the extent to which gender roles are clearly distinct

Confusion/dynamism, the extent to which long-termism or short-termism tends to predominate.
29. Differentiate between adaptive, weak, strong and unhealthy cultures (8)

In a strong organisational culture, values, norms and beliefs are deeply ingrained and difficult to
eliminate. If a tight fit exists between the chosen strategy and a strong culture, it is a valuable
asset.

A weak organisational culture is a fragmented one. There are few traditions and few values and
beliefs shared.

An organisational culture is classified as being unhealthy if it has a politicised internal
environment where influential managers operate in autonomous “kingdoms”. Unhealthy
organisational cultures are also characterised by a hostile resistance to change and to people
who advocate new ways of doing things.
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
In an adaptive organisational culture, members share a feeling of confidence that the
organisation can neutralise the threats and exploit the opportunities that cross its path. Adaptive
cultures are characterised by receptiveness to risk taking. Innovation and experimentation.
30. Discuss actions that leaders can take to develop an ethical culture (6)

Establishing and communicating an ethical code or code of conduct

Continuously revising and updating the ethical code or code of conduct by including inputs from both
internal and external stakeholders.

Disseminating the ethical code or code of conduct to all stakeholders to inform them of the
organisations ethical standards and practices.

Developing and implementing methods and procedures to use in achieving the organisation’s ethical
standards.

Creating and using explicit rewards systems that recognise good ethical behaviour and encourage
employees to use proper channels and procedures to report wrongdoing.

Creating a work environment in which all people are treated with dignity.
31. Explain how the strategy culture relationship can be managed (6)
32. Explain the role of reward systems in strategy implementation (5)

Reward systems can be defined as the umbrella term for the different components considered in
performance evaluation and the assignment of monetary and non-monetary rewards to them.
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
Reward systems play an important role in strategy implementation and should be created in such a
way that they are tightly linked to the strategy, encourage a change in behaviour to support strategy
implementation, and reward managers for performance over the long term.

In addition, reward systems have to be tied to achieving the specific outcomes necessary to make
the new strategy work, and must emphasize rewarding people for showing 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 really be used for the entire workforce.
33. Describe any four monetary reward systems that can be used as drivers in the strategic
implementation process (8)
Monetary
1
Non-monetary
Salary increases
Status
Profit sharing
Recognition awards
Share options
Job security
Cash bonuses
Promotion
Retirement packages
Perks
34. Discuss the major types of executive bonus compensations plans (10)

Share options. The use of share options in the company as an executive reward system gained
increasing popularity during the information technology boom of the 1990s. Share option
programmes link individual rewards to organisational performance.

Restricted Share plan. A restricted share plan also uses company shares as an incentive for
executives. Under such a plan an executive is typically given a certain number of shares, but may
not sell them for a specified period of time.

Golden handcuffs. Another type of executive bonus compensation that offers an incentive for
executives to remain with the company is that of golden handcuffs. Under such a plan, cash
bonuses are deferred in a series of annual instalments. Should the executive leave the company
before a certain time, compensation is forfeited.

Golden Parachutes. In a similar vein to golden handcuffs, organisations also use golden
parachutes to retain talented executives. Under such a compensation plan, an executive retains a
substantial cash bonus regardless of whether he or she quits, resigns or is fired.
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
Cash bonuses. Another popular reward system is that of cash bonuses. Whereas share option
plans are often used to reward only executives and the top management team, the use of cash
bonuses as a reward system is more widespread in organisations.
35. Discuss recognition as a component of reward systems (6)

More and more organisations are realising that employees and managers not only want to be
rewarded, but also want recognition.

Recognition and its role in strategy implementation through employee and manager retention is still
a rather new concept in strategic management.

Various studies in the last few years have found that recognition is not only a very important
component of employee motivation, but also an important component of organisational mobilisation
and engagement during strategic change.
36. Discuss guidelines in aligning reward systems with the chosen strategy (5)

Organisations that are pursuing growth strategies in the start-up phase of the organisational life
cycle should incorporate large salaries and equity into their reward system.

In the rapid-growth phase of the organisational life cycle, reward systems should include a salary
plus large bonus for growth targets, plus equity for key people.

Organisations faced with maturity should link reward systems to efficiency and profit-margin
performance.

During the decline phase, reward systems should be linked to cost savings.
37. Discuss corporate governance and reward systems in the light of the King II Report (4)

According to the King II Report, one of the responsibilities of a board of directors is to monitor
remuneration.

It suggest that an organisation should appoint a remuneration committee to make recommendations
to the board of directors on the organisations framework of executive remuneration and to determine
specific remuneration packages for each of the executive directors.

Organisations should provide full disclosure of director remuneration and give details of earnings,
share options, restraint payments and all other benefits.

Reward systems should be designed in such a way that they provide incentives to perform at the
highest operational standards.
38. Guidelines for establishing a reward system (10)
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
The performance pay-off must be a major, not minor, piece of the total compensation package.

The incentive plan should extend to all managers and all workers, not just top management.

The reward system should be administered with fairness and transparency

The reward system must be tightly linked to achieving only those performance targets spelled out in the
strategic plan

The performance targets each individual is expected to achieve should involve outcomes that the
individual can personally influence in some way.

Keep the time between the performance review and payment of the reward short.

Make use of both monetary and non-monetary rewards.

Avoid skirting the system to find ways to reward non-performers.
Topic 3: Structural Drivers of Strategy Implementation
39. Discuss the role that organisational structure plays in implementing strategy /
Explain the concept structure follows strategy (5)

The concept “structure follows strategy” is widely used in strategic management literature.

It confirms or emphasises, that a change in the chosen strategy necessitates a change in structure.
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
When a tight fit between strategy and structure is absent, the organisations’ performance will decline, as
it will experience administrative problems, resource allocation problems and conflicting priorities
regarding strategy implementation tasks.

Strategy and structure has a reciprocal relationship.

As much as strategy influences structure, structure can also influence strategy.
40. Explain how organisational structures evolve over time (3)

As organisations grow and the environment changes, different types of strategy are selected at different
stages to ensure continued success.

Most organisations grow first by volume, then by geography, then by integration, and finally through
product/business diversification.

Therefore as organisations grow, structure generally change from simple (e.g. entrepreneurial or
functional) to complex.

Matrix and product-team structures are examples of complex structures.

Expound on the role that structures play in the implementing the chosen strategy (4)

To provide a formal allocation of work rules

Serves as channels for collaborative working

Set boundaries of authority and lines of communication

It’s a means of allocating power and responsibility

Prescriptive levels of formality and complexity.

Organisational design can be a source of competitive advantage if it ensures that organisational
structures are

Aligned with the chosen strategy

Functional

Difficult to copy

Make it easy for customers to do business with the organisation.
41. Discuss the essential parameters of organisational design (16)

In organisational design, the parameters of design are the elements that influence the division of
labour and coordination.

Job specialisation, which essentially focuses on what each person should do, how many distinct
tasks the job should contain and how much control a person should have over these tasks.

Behaviour formalisation, refers to the extent to which tasks are soecified and have to be carried out
in a certain manner.
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
Training, entails deciding what formal training is required for different positions and then selecting
appropriately trained people to fill these positions.

Socialisation, refers to the process by which a new employee learns and become part of the value
system, the norms and the required patterns of behaviour in the organisation.

Unit grouping refers to grouping different positions into units, each under its own manager, and
these units are in turn clustered together to form another unit, again with its own manager , until the
whole organisation has been grouped into one unit with the CEO as the strategic apex.

Unit size refers to the size of each unit and is determined by the extent to which standardisation is
used and the need for mutual adjustment.

Job specialisation, behaviour formalisation, socialisation, unit grouping and unit size determine an
organisational design framework.

To create linkages, planning and control systems and liaison devices are used.
42. Discuss the six basic coordination mechanisms used by organisations to coordinate activities
(12)

Mutual adjustment
o

The informal communication used to coordinate mechanisms.
Direct supervision
o
This is where one person is responsible for coordinating the work of others and gives orders
and instructions.

Standardisation of work processes
o

Standardisation of skills and knowledge
o

This is also a co-ordination but less formal. Employees know each other responsibilities.
Standardisation of outputs
o

Refer to the specifications how the work should be carried out.
This focus on the results that must be achieved.
Standardisation of norms
o
refer to the organisations culture, shared beliefs and values of the employees
43. Describe any five types of organisational structures (10)

Entrepreneurial structures - A simple structure typically consisting of the owner-manager and the
employees. The owner-manager makes all major decisions and monitors the employees.

Functional structures - Consist of a CEO supported by a limited number of corporate staff such as
legal advisors, accountants and functional managers.
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
Divisional structures - Activities and responsibilities are organized into a series of divisions, each
with its general manager and functional areas.

Strategic business units (SBU) - It is similar to the divisional structure.

Matrix structures - Dual lines of authority.

Network structure - Are loosely grouped business teams that come together or a single project.

Structures of the future - Are based on networks of temporary external and internal relationships,
linked primarily by information technology in order to share skills, costs and access to markets.
44. Provide guidelines for matching structures with strategies (4)

There is no one size fit all structure that all organisations can use, but below is several guidelines for
matching strategy with structure.

Functional structure :Single-product or dominant product organisations

Divisional structure: Organisations with several business lines

Strategic business units: Large, diverse organisations with unrelated business divisions

Matrix structure: Product development and innovation oriented organisations.
*** Chandler found that a particular structure sequence is often repeated as organisations grow and change
their strategy over time.
45. Discuss the five basic parts of an organisation (5)

Strategic apex
o

The home for top management and strategic leadership in an organisation.
Middle line
o
Includes all the managers in direct line relationships between strategic apex and the operating
core.

Operating core
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o
Occurs where the actual operating tasks for an organisation are performed to produce the
product/service.

Techno-structure
o
Includes all staff analyses who design the systems by which work processes are formally
designed.

Support staff
o
Includes the support for the organisation outside its operating workflow, corporate
communications, legal, etc.
46. Discuss the role of resource allocation in strategy implementation

Organisations differ from one another in terms of sets of experiences, assets, skills and organisational
culture.

These sets of resources and capabilities determine how effectively and efficiently an organisation
performs its activities.

It can therefore be concluded that an organisation will succeed if has the best and most appropriate
resources for its strategy.

To achieve successful strategy implementation, it is essential that the resources be allocated in such a
way that they support the organisation’s long-term goals, chosen strategy, structure and short term
goals.

Strategy implementation efforts will seldom succeed if the resource allocation plan or budget is not
linked to the strategy.
47. Identify the different types of resources in an organisation (3)

Tangible resources are often described as the resources that can be touch, feel or see.

Examples include property, land, buildings, equipment and shares (balance sheet items).

Intangible resources cannot be seen or touched.

It forms the core of an organisations competitive advantage. It’s classified into
o
human capital, (employees skills, talent and knowledge)
o
information capital (technology infrastructure, databases)
o
Organisation capital. (culture, leadership, teamwork)
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Topic 4: The instruments of Strategy implementation
48. Discuss the instruments in strategy implementation (5)

Short term objectives
o
Short term objectives must be suitable, achievable, acceptable, motivating, flexible and
understandable.
o
Each goal must indicate clearly who is responsible and the focus area, action require, how it
will be measured and the time frame.
o

It should be consistent across functional areas.
Functional tactics
o
Are the key activities that have to be performed in each functional are to provide the
organisations products and services.
o
It translates the organisations grand strategy into action to ensure that the short term goals
are attained.
o

It typically includes marketing, finance, operations and human resource management.
Policies
o
It entails specific guidelines, methods, procedures, rules and administrative practices that
direct thinking, decisions and actions of managers and employees in strategy
implementation.
o
Policies create empowerment.
o
It provides a basis for control and promotes coordination and consistency across
organisational units.
49. Discuss the balance scorecard as a strategy implementation and control system (7)
o
The balanced scorecard sets objectives, measures, targets and initiatives for four organisational
areas based on the vision or strategy.
o
The 4 processes of the balance scorecard that forms a framework for strategic control are:

Translating the vision


Ensures that the vision is translated into goals and measures linked to the strategy.
Communicating and linking

Ensures that the long term strategy is clearly understood by the entire organisation
through communicating and linking.
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
Business Planning

Forces organisations to link their business plans to the strategy through the setting of
targets or milestones.

Through this process organisations integrate their strategic planning and budgeting
processes.

Feedback an learning

Provides organisations with the capacity of strategic learning.

Strategic learning consists of gathering feedback, testing the assumptions on which
the strategy is based and making the necessary adjustments.
50. Explain how functional tactics differ from corporate and business strategies (5)
Differences
Functional tactics
Business strategy
Time
Identify tasks and activities that must be Grand strategies focus on the organisations
horizon
done in the near future
position in the next few years
Specificity
Identify the specific activities that needs
Provides general direction
to be performed
Developers
Developed within the operational areas
Developed at top management level
of the organisation
51. Explain the role of policies in strategy implementation (4)

The strategy implementation instruments are Short term objectives, functional tactics and policies.

Short term objectives
o
Short term objectives must be suitable, achievable, acceptable, motivating, flexible and
understandable.
o
Each goal must indicate clearly who is responsible and the focus area, action require, how it will be
measured and the time frame.
o

It should be consistent across functional areas.
Functional tactics
o
Are the key activities that have to be performed in each functional are to provide the organisations
products and services.
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o
It translates the organisations grand strategy into action to ensure that the short term goals are
attained.
o

It typically includes marketing, finance, operations and human resource management.
Policies
o
It entails specific guidelines, methods, procedures, rules and administrative practices that direct
thinking, decisions and actions of managers and employees in strategy implementation.
o
Policies create empowerment.
o
It provides a basis for control and promote coordination and consistency across organisational units.
52. Expound on the importance of having sound policies in place in strategic implementation (5)/
Defend the use of policies in the strategy implementation process

Policies guide the thinking, decisions and actions of managers and employees in the strategy
implementation process.

Policies inform employees about what is expected of them

Clarify what can and cannot be done in the pursuit of the short term goals

Standardise routine decisions, thus reducing the time to make decisions

Provide a basis for control and promote coordination and consistency across organisational units.
53. Discuss the role of the master budget and strategic funds in the strategy implementation (6)

The master budget of an organisation includes the monitoring of activities that is important for the
survival of the organisation.

Activities such as sales, manufacturing, administrative activities investment and cash management.

Projected sale are the foundation of budgeting.

Forecasting sales is critical because all other budgeted activities depend on these forecasts.

Strategic funds are expense items required for implementation of strategic actions, expected to
benefit the organisation in the long term.

The 3 main components of strategic funds are investment in tangible assets, development expenses
such as advertising increase or decrease in working capital.
54. Distinguish between the different levels of objectives (3)

The three levels of objectives are:
o
Strategic
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
o
Operational
o
Functional
You will have to discuss each of these in terms of the parties involved, time-frame, level of detail etc
Topic 5: Strategic Control and Evaluation
55. Discuss the different types of strategic control and indicate how strategic control can alter an
organisations chosen strategy (5)


Premise control

Check whether the assumptions on which the choice of a strategy was based are still valid.

Usually deals with the macro environment as well as the industry.
Strategic surveillance

The organisation identified both external and internal events that may affect the course of it strategy.
The sources could include conferences and conversations.

Special alert control

The rapid reconsideration of an organisations strategy in the light of a sudden event.

Like the terrorist attack on the world trade centre on 11 September 2001.

It support s strategic surveillance and premise control.
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
Implementation control

Assesses whether the overall strategy could be changed in the light of the results of the incremental
actions taken to implement it.

It provides management with information regarding the success of the implementation.
56. Diagrammatically depict the operational control process (5)
Set standards of
Measure actual
Identify
Initiate corrective
performance
performance
deviations from
action
57. Discuss the four “levers” that are considered when designing strategic control systems (8)

The 4 levers of control that should be taken into consideration in designing strategic control systems are

Diagnostic control systems
o
These systems are used to track the performance of departments, managers and employees, to
monitor goals and to measure progress towards profitability and revenue growth targets.

Belief systems
o
These systems relate to the organisations values and organisational culture and provide
guidelines for implementing decisions.

Boundary systems
o
These systems supplement diagnostic control systems and belief systems.
o
Diagnostic and Belief systems tell the managers and employees what should be done and what
behaviour is accepted, boundary system provide information on what should not be done and
what falls outside the scope.

Interactive control systems
o
Provides the managers with a sense of what is happening in different areas of the organisation.
58. Comment on the criteria used to evaluate strategies during the strategic control phase

Criteria for effective strategies include appropriateness, feasibility and desirability. Including the
questions for strategy evaluation.

Appropriateness strategic criterion questions
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


Is the strategy in line with the mission?

Is the strategy still appropriate taking the changes in external environment is consideration?

Is strategy still acceptable for all stakeholders?
Feasibility

Can it be carried out?

Still feasible in terms of resources?
Desirability

Have stakeholders preferences changed?

Has the strategy produces adequate results in the short term?
59. Explain how continuous improvement builds customer value and comment on the approaches to
sustain competitive advantage through continuous improvement (5)

Benchmarking

The comparison of selected performance measures or operational processes that serve as
challenging, yet comparable, yardsticks.


These include the organisations own history, major competitors or best in class/world performance.
Total quality management

A Culture, inherent in which is a total commitment to quality and attitude expressed by everybody’s
involvement in the process of continuous improvement of products and services by using innovative
scientific methods.

Re-engineering

An organisation is reorganized in a way that creates value for customers by eliminating barriers that
create distance between employees and customers.


As such cost are lowered and service to customers improved.
Six sigma approach

A methodology linking improvement to profitability.

Highly rigorous and analytic approach to quality and continuous improvement with the objective of
improving profits through defect reduction, yield improvement, improved customer satisfaction and
best in class performance.
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PART 2
TOPIC 1 – STRATEGY IMPLEMENTATION
Question 1 - Comment on the importance of strategy implementation as a component of the
strategic management process.
1. The importance of strategy implementation in strategic management process is more about creating
change that is timely and appropriate.
2. Organisations could in the past make incremental changes to keep pace, but change is increasingly
revolutionary and disruptive.
3. Organisations have to deal with products being made obsolete in a very short space of time, and
products have shorter life cycles. Moreover even if they are the leading competitor the disruption may
come not from the competitors in the same industry, but from organisations in other industries that
have a business model that is unexpected.
4. Overall strategic change that is not managed well will have little value if plans are not implemented
timely.
5. As plans themselves may be obsolete by the time a strategic plan is implemented.
Explain what strategy implementation entails.
1. Strategic implementation is the process that turns strategic plans into a series of actions tasks and
ensures that these tasks are executed in such a way that the objectives of the strategic plan are
achieved.
2. It entails the communication, interpretation, adoption and enactment of strategic plans.
3. It is the phase in which management aligns strategic leadership, organisational culture, organisational
structures, reward systems, policies and resource allocation with the chosen strategy.
4. It involves taking management form thinking to actually doing.
5. It involves management developing short term objective and policies.
6. It is the most important phase in the strategic management process.
Question 2 - Discuss five (5) reasons why strategy implementation in an organisation might fail. (5)
1. Vision barrier:
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a) The workforce does not understand the vision and strategy.
b) Vision may be poorly conveyed and lower levels of management may not understand their role in
the execution of the organisation’s strategy.
2. Management barrier:
a) Management teams may be too focused on solving short-term problems and not enough time is
spent on strategic issues.
3. Resource barrier:
a) Organisations do not link their resource allocation plans or budgets to the chosen strategy.
4. People barrier:
b) Managers have not linked rewards to strategy, which creates no incentives to change activities to
align with the organisation’s strategic plan.
5. Other reasons why strategy implementation fail may include:
a) Inadequate resources.
b) Poorly communicated strategy.
c) Implementation actions are not clearly defined.
d) Unclear accountability for implementation actions and initiatives.
e) The existence of organisational silos and a culture that resists change.
f)
Inadequate performance targets.
g) Inadequate rewards.
h) Poor leadership.
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Question 3 - Differentiate between strategic planning and strategy implementation.
Question 4 - Explain the different types of strategic change and the issues involved.
1. The four types of strategic change that can be identified are:
a) Adaptation is a form of change in which the current organisational setting can facilitate the
incremental change that has to happen in order for the organisation to achieve its desired
goals.
b) Reconstruction is a form of change in which the current organisational setting can handle a
change that involves a sudden alteration in market conditions.
c) Evolution is a form of change that involves fundamental changes in the way the organisation
deals with a situation and can happen over a period of time. The organisation has to become a
learning organisation in this regard to manage the change.
d) Revolution also involves fundamental changes as a result of sudden and fast changing
conditions, whereby the organisation has to implement a new strategy very fast.
4. Some of the strategic issues that must be managed and taken into consideration are:
a.
b.
c.
d.
e.
Time:
Scope:
Diversity:
Capacity:
Readiness:
f.
Capability:
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How quickly is change
needed; does the
organisation have the
time to change?
What is the scope of
change needed: If
dramatic revolutionary or
a moderate change is
needed? What is the
level of homogeneity or
heterogeneous can
hamper in the
organisation change?
Does the organisation
have the capacity in
terms of the resources
needed to change?
Are the employees ready
to change such as
resistance?
Do the organisation’s
employees and managers
have the capabilities to
implement change?
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Question 5 - Comment on the strategic change process.(7)
1. Managing strategic change involves a process.
2. Clarity about what changes are necessary is an obvious starting point for such a process.
3. Such a process entails:
a) Identifying the areas of change – when a gap is identified between the desired performance of
the organisation and its actual performance. Once the need has been determined, the source of
the problem must be identified through environmental analysis.
b) Managing resistance to change – change disrupts normality – employees and managers resist
change because of fear, uncertainty, and lack of interest or different personal ambitions.
Resistance to change is an obstacle to the successful strategy implementation process. Various
strategies exist to overcome resistance to change.
c) Power and influence – this stage involves persuading organisational members to support the
change. An appropriate organisational culture will support the desired changes in strategy.
Managers must have the necessary power to implement the decisions that will bring about
change. Managers need to use their power to influence people and to bring about the necessary
change.
d) The learning organisation – entails the ability to think continually about the strategy and to
create synergy by sharing knowledge and ideas, and by generating actions that will contribute
positively to the whole organisation. This deals with continuous learning.
Question 6 Explain why corporate governance is important in strategy implementation.
1. In the context of strategy implementation, corporate governance is the responsibility of the Board of
Directors to oversee the implementation of strategy.
2. The King reports on corporate governance and the Public Finance Management Act (PFMA) is
examples of corporate governance guidelines/frameworks.
3. Some reasons for its importance (there may be additional reasons, but these are some of the main
reasons why corporate governance is important in strategy implementation):
a) It focuses on sustainability.
b) It ensures that adequate controls are in place.
c) It promotes high ethical standards.
d) It makes sure that reward systems are reasonable and beneficial to the organisation.
e) It aims at reducing the risk of failure.
4. Good corporate governance and corporate citizenship are equally important in strategic planning and
implementation. The board of directors is responsible to ensure that management implements chosen
strategies and monitors that implementation.
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5. Strategy implementation should take issues such as social responsibility, environmental responsibility,
stakeholder engagement and sustainability into account.
Question 7 - Discuss the “warm square” in the modified McKinsey 7-S framework. (5)
- Discuss the components of the modified McKinsey 7-S framework. (5-12)
1. The “warm square” refers to the people in the organisation and to “soft” issues – it relates to the drivers
of strategy implementation and so contains elements that are people-centered; these drivers include
leadership, organisational culture and reward systems, as these all focus on people.
2. There are four components in the “warm square”:
a) Staff – the people in the organisation
b) Shared values – the values that the organisation believes in
c) Skills - the organisation’s core competencies and sources of competitive advantage d.
Style –
the leadership and management style of the organisation.
Question 8 - Describe the drivers of strategy implementation. (5)
1. Leadership: a strategic leader must have the ability to anticipate, envision, maintain flexibility and to
empower others to create strategic change and to motivate others.
2. Organisational culture: refers to the way an organisation does things. It is the beliefs, behavioural
norms and values that the members of an organisation share.
3. Reward systems: defined as the umbrella term for the different components considered in
performance evaluation and the assignment of monetary and non-monetary rewards.
4. Organisational structure: refers to the framework within the strategic process to achieve the
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organisation’s goals.
5. Resource allocation: it is essential that resources be allocated in such a way that they support the
organisation’s long-term goals, chosen strategy, structure and short-term goals.
Describe the instruments of strategy implementation.(5)
1. Short-term goals guide action and direct the activities of organisational members in identifying what
must be done to achieve long-term goals. It serves as standards of performance and as incentives for
managers and employees to perform, and are used to justify activities to the stakeholders. It helps to
establish departmental or divisional and organisational priorities, which in turn can be used as a basis
for allocating resources; it assist in monitoring the progress made towards the achievement of the longterm goals; it can be linked to reward systems and serve as a primary mechanism for evaluating
performance; it can be used as checkpoints for operational and strategic control.
2. Functional tactics support short-term goals and can be defined as the key routine activities that must
be undertaken in each functional area to achieve the organisation’s chosen strategies. Functional areas
include marketing, finance, operations and human resources management.
3. Policies define the specific guidelines, methods, procedures, rules, forms and administrative practices
that direct the thinking, decisions and actions of managers and employees in strategy implementation.
Question 9 - Discuss the concept of a learning organisation. (5)
1. The concept of a learning organisation entails the ability to think continually about strategy & to
create synergy by sharing knowledge & ideas, & by generating actions that will contribute
positively to the whole organisation
2. The idea behind a learning organisation is that it is easier to adapt to change if the organisation
first has the ability to learn
3. This means that the employees accept the importance of continuous learning
4. Becoming a learning organisation may also help with the process of managing strategic change
5. This approach to managing strategic change does not mean that a learning organisation will
suddenly adopt strategic change, but that it will be amenable to gradually seeking it.
Provide guidelines for overcoming resistance to change.
(5)
1. Education and communication: communication helps people to understand why it is necessary to
change and mutual trust is really important.
2. Explicit and implicit coercion: coercion is not a positive way to manage resistance to change. It may
work in the short term, but it is unlikely that it will change result in long-term commitment on the part of
employees.
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3. Facilitation and support: the building of support networks throughout the organisation is helpful in
overcoming resistance to change.
4. Giving clear direction: authority may be used to set the direction and impose the necessary means to
implement the change.
5. Manipulation and cooptation: manipulation is an attempt to influence or force people into accepting
the necessity for change; cooptation involves the “buying-off” of informal leaders by giving them
personal rewards to accept and promote change.
6. Negotiation and agreement: is normally linked to incentives and rewards
7. Participation and involvement: people will be more supportive of the strategic changes when they
form part of the strategy formulation process.
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TOPIC 2 – THE DRIVERS OF STRATEGY IMPLMENTATION
Question 1 - Discuss the reasons why leadership is an important driver of
strategy implementation.
- Discuss why leadership is an important driver of strategy implementation.
(5)
(5)
1. The role of leadership in strategy implementation.
a)
Leadership drives strategic change.
b)
Strategies cannot be implemented in isolation. Someone needs to lead and coordinate this
process.
2. Leadership is about influencing people so that they perform required tasks and activities.
3. Effective leaders typically have high levels of emotional intelligence (trait theory/ term social intelligence
is also used)
4. Leadership is very important for successful implementation.
5. Strategic leadership is the ability to anticipate, envision, maintain flexibility, and to empower others to
create strategic change necessary.
6. Leadership is necessary to ensure commitment among internal and external stakeholders to implement
strategies
Indicate the difference between management and leadership.
(5)
Question 2 - Discuss the attributes of emotional intelligence.
(10)
Emotional intelligence attributes are:





Self-awareness
Self-regulation
Motivation
Empathy
Social skills
focus on self-management skills
focus on individual ability to manage relationships with other people
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1. Self awareness refers to the extent to which an individual is aware of his/her emotions, strengths,
weaknesses, needs and drivers.
2. Self-regulation refers to the extent that people are in control of their emotions, feelings and impulse.
3. Motivation, leaders have a deep desire to achieve for the sake of achievement and not for large
salaries or status.
4. Empathy, the extent that a leader can thoughtfully consider employees feelings in the process of
making decisions.
5. Social skills, leading people in a desired direction and being able to build relationships throughout the
organisation.
Question 3 - Discuss the responsibilities of a strategic leader.
(6)
Leaders are not only a driving force behind the strategy implementation initiative but they also need to perform
certain tasks and take responsibility for the performance of activities such as:
1. Communicating the vision and strategic direction to all the employees and other stakeholders of
the organisation.
2. Developing an appropriate vision or strategic direction for the organisation in which as many
stakeholders as possible have participated.
3. Designing appropriate reward systems and organisational structures together with top
management.
4. Developing and maintaining an effective organisational culture.
5. Ensuring with managers that the organisation continually incorporates good corporate
governance principles into its strategies and operations.
6. Inspiring and motivating employees to achieve the strategic goals of the organisation.
Questions 4
- Discuss the aspects and levels of organisational culture.
(10)
- Explain the different aspects and levels of organisational culture (as identified by Thompson & Martin,
2005). (12)
The aspects/levels of culture can be grouped into manifestations, people and power.

Manifestation
o
The most visible level of culture is artefacts and symbols.
o
Artefacts include the physical and social environment, written communication, advertisements,
etc.
o
Symbols include the organisations logo, etc.
o
Values are the 2nd level and represent a sense of “what ought to be”/
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o
Underlying assumptions are the 3rd level and they represent the taken-for-granted way of doing
things.
o
Example of behaviours that become accepted on the basis of the values and underlying
assumptions, include working long hours, innovation, etc.

People
Is also an important part of an organisations culture.
The way people do things, their values and underlying assumptions are based on stories of the past, the
leadership and management style of the organisation and by communications.

Power
Is reflected in the ownership of the organisation.
Structural issues include the extent to which the organisation is centralized or decentralized and will impact on
control and reward systems.
Personal power is the power of key managers
Politics refers to the way in which managers use power to affect decisions and actions.
Question 5 - Explain why organisational culture is an important driver for strategy implementation. (5)
1. Organisational culture affects the way people in an organisation make decisions, think, feel and act in
response to opportunities and threats.
2. The culture of an organisation is therefore related to the people, their behaviour and the operation of the
structure.
3. When culture is strong, people know what is expected from them.
4. It’s also its policies, stakeholder relationships and its approach to corporate governance and ethics.
5. It can be a source of competitive advantage.
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Explain the importance of organisational culture in strategy implementation. (5)
1. Organisational culture is firstly of a tacit nature.
2. This means that organisational culture is a pervasive, unseen aspect that influences and often
reinforces certain kinds of behaviours.
3. The problem is that it’s very difficult to explain, decipher or even shape the culture of an organisation,
due to its tacit nature.
4. If the culture of an organisation reinforces certain kinds of behaviour that aligns with the strategy of an
organisation, then it is a valuable asset. If not aligned, then it poses a stumbling block.
5. If organisation culture is not aligned, the issue becomes how to manage the fit between strategy and
culture.
6. Reshaping culture to fit with strategy is a challenge and often managers or leaders will either manage
around culture or change the strategy.
Question 6
- Explain Hofstede’s five value dimensions of culture.
(10)
1. Power distance, that is the extent to which people accept that is distributed unequally
2. Uncertainty avoidance, that is, the extent to which people feel uncomfortable with uncertainty and
ambiguity
3. Individualism/collectivism, that is, the extent to which there is a preference for belonging to a tightly
knit collective rather than a more loosely knit society
4. Masculinity/femininity, the extent to which gender roles are clearly district
5. Confusion dynamism, the extent to which long-termism or short-termism tends to predominant
Explain why different strategies require different leadership styles.
(5)
1. As the environment in which the organisation operates changes, so does the choice of strategies.
2. Strategic implementation is essential about creating a tight fit between strategy and leadership, strategy
with culture, strategy with reward systems, strategy with organisational structure and strategy with
short-term objectives.
3. Different types of strategy require different types of leadership style.
4. Below are the matching leadership styles with the chosen strategy.

Growth strategy, leaders pay attention to managing relationships, inspiring people and
communicate the goals and strategies to the people.

Corporate Combination strategy, require leaders who can integrate different cultures and values
systems.

Decline strategy, leaders who are tasks orientated and who can focus on reducing assets and
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costs.

Start-up phase, needs a risk taker

Rapid growth phase, needs a caretaker

Mature phase, needs a surgeon

Death or decline phase, requires an undertaker
Question 7 - Differentiate between adaptive, weak, strong and unhealthy cultures.
- Differentiate between the different types of culture, as classified by Charles Handy.
1. Strong culture
a) Values, norms and beliefs are deeply ingrained and difficult to eliminate.
b) It is a valuable asset if a tight fit exits between the chosen strategy and strong culture.
2. Weak culture
a) Is a fragmented and there are very few traditions, values and beliefs that are shared.
3. Adaptive culture
b) Members share a feeling of confidence that the organisation can neutralized the threats and
exploit opportunities that cross its path.
5. Unhealthy culture
a) It has a politicised internal environmental where influential managers operate in autonomous
kingdoms.
Recommend a framework for managing the strategy-culture relationship. (Hint: Make use of the
framework developed by Pearce and Robinson, 2005) (5)
1. Pearce and Robinson, two well know authors in the domain of strategic management, developed a
matrix that can be used as a framework for managing the strategy-culture relationship.
2. In Cell A the organisation needs to make numerous changes to the organisational factors in order to
implement the new strategy. These changes are compatible with the current organisational cultures.
3. Organisations faced with a situation where there are only a few changes required and where these are
highly compatible with the existing organisational culture Cell B should reinforce the existing culture
and make use of the opportunity to remove any barriers to the desired culture.
4. In Cell C organisations are faced with the necessity of making a few majors changes that are mostly
incompatible with the current culture.
5. In Cell D, an organisation needs to make many major changes to key organisational factors. These
changes are incompatible with the current entrenched organisational culture and a complete
transformation of it is necessary
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Question 8 - Provide guidelines for structuring (establishing) effective
(5)
rewards systems.
- Identify five (5) guidelines for aligning reward systems with strategy.
(5)
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1. The performance pay-off must be a major piece of the compensation package. The pay-off for high
performing individuals and teams must be substantially larger than for below- average performers
2. The incentive plan should extent to all managers and all workers not just to top management
3. The reward system should be administered with fairness and transparency
4. The reward system must be tightly linked to achieving only those performance targets set out in the
strategic plan
5. The performance targets that each individual is expected to achieve should involve outcomes that
the individual can personally influence in some way
6. Keep the time between performance review and payment of the reward short
7. Make use of both monetary and non-monetary rewards
8. Avoid skirting the system to find ways to reward non-performers
Explain the role of reward systems in strategy implementation.
(5)
1. Reward systems can be defined as the umbrella term for the different components considered in
performance evaluation and the assignment of monetary and non-monetary rewards.
2. Reward systems should be tightly created and linked to the strategy, encouraging a change in
behaviour to support strategy implementation and reward managers for long term performance.
3. Reward systems must be tied to achieving the specific outcomes to make new strategies work by
showing results and not just dutifully performing assigned tasks.
4. Reward systems must reflect top management’s performance attitude with influencing the
organisational culture and leadership styles.
5. Reward systems should extend to middle and lower levels of management and be used for the entire
workforce.
6. Reward systems should focus on the individual and group performance.
Discuss the major types of executive bonus compensation plans.
(10)
1. Share options. A share option plan provides executives with the right to purchase company shares at
a fixed price in the future. The amount of compensation is based on the spread of or difference
between the share’s initial and selling price. Thus the executive receives a bonus only when the
wealth is created for the shareholders.
2. Restricted share plan uses company shares as an incentive for executives. An executive is typically
given a certain number of shares, but one may not sell them for a specified time or the shares are
forfeited before the period.
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3. Golden handcuffs refers to the deferred cash bonuses of annual instalments, or compensation is
forfeited before the period. This reward system is used to retain specialised skills as an executive
incentive.
4. Golden parachute is used to retain talented executives by retaining a substantial cash bonus
regardless of organisation’s success or failure.
5. Cash bonuses are used to reward only executives and the top management team by calculating
measures such as return on equity, earnings per share, growth ratios and profit sharing.
Question 9
- Discuss recognition as a component of reward systems.
(6)
- Discuss recognition as a component of reward systems and describe the recognition practice. (5)
1. Recognition and its role in strategy implementation through employee and manager retention is
still a rather new concept in strategic management.
2. Brun and Dugas identify four approaches to recognition namely the (1) ethical perspective, (2) the
humanistic and existential view, (3) the work psychodynamic school and (4) the behavioural
outlook.
3. These four approaches are expressed through four employee recognitions practices: existential
recognition, recognition of the way wok is performed, recognition of job dedication and recognition
of results.
4. In an organisation, recognition is expressed through various types of interaction.
5. On the organisational level, employee recognition is expressed through the organisation’s policies
and formal recognition programmes.
6. Interaction on a vertical or hierarchical level is related to the process of recognition between
manager and employee and horizontal interaction refers to recognition between peers and team
members.
Question 10 - Discuss corporate governance and reward systems in the light of the King III Report.(4)
1. Reward systems affect the kinds of norms, values and culture that develop in an organisation.
They also affect the way managers and employees behave.
2. Therefore, it is important to design reward systems in such a way that they ensure the
installment of good corporate governance practices within an organisation.
3. King lll has developed recommendations regarding executive reward and compensation,
namely:
a) The King lll Report is applicable to all companies, and not only JSE-listed companies.
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b) Companies should not pay "balloon payments to directors who leave, or termination
payments to directors who have been fired
c) Share prices should not be re-priced to benefit directors when the company's share are
not performing well or the share price is low.
d) Companies should publish a remuneration report that details directors remuneration
and explain why directors receive this remuneration, and this should be put to
shareholder vote.
Discuss corporate governance and leadership in the light of the King II Report.
(5)
 The King report on corporate governance 2002 (King II Report) emphasized the role of leadership in
corporate Governance
 It stated that corporate governance is essentially about leadership and that leadership comprises four
dimensions: efficiency, probity (honesty and decency); responsibility; and transparency and
accountability.
 In order for organisations to compete effectively in the global economy, leadership must be efficient.
 Leadership for probity is important as it assures investors that the management of an organisation
will behave honestly anD with integrity towards its shareholders and other.
 Addressing legitimate social concerns related to the organisation’s activities provides proof of
responsible leadership.
 Above all, leadership must be transparent and accountable for its activities.
Differentiate between visionary and managerial leaders by identifying five key characteristics of each.
(HINT: using a table may make it easier to answer the question.)
(10)
Match an organisation’s compensation plan to its chosen strategy or strategies.
 Start-up phase
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o
Organisations that pursue growth strategies should incorporate large salaries and equity into
their reward systems.
 Rapid growth phase
o
Reward systems should include a salary plus large bonuses for growth targets, plus equity for
key people.
 Maturity phase
o
Link reward systems to efficiency and profit-margin performance.
 Decline phase
o
Reward systems should be linked to cost savings
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TOPIC 3 – STRUCTURAL DRIVERS OF STRATEGY IMPLEMENTATION
Explain how organisational structures evolve over time.
1. As organisations grow and the environment changes, different types of strategy are selected at
different stages to ensure continued success.
2. Most organisations grow first by volume, then by geography, then by integration, and finally
through product/business diversification.
3. Therefore as organisations grow, structure generally changes from simple (e.g. entrepreneurial or
functional) to complex.
4. Matrix and product-team structures are examples of complex structures
Question 1 - Discuss the role that organisational structure plays in strategy implementation.
(5)
1. Structure is a framework within which the strategic process must operate to achieve organisation goals.
2. Structuring should not be carried out in isolation.
3. Structure plays an important role in identifying the tasks necessary for the strategy implementation,
group them together and ensure coordination of these tasks across the organisation.
4. Some of the main functions of an organisation structure are:
a) that its provides a formal allocation of works rules
b) channels for effective collaboration, boundaries of authority, line of communication
c) as well as means of allocating power and responsibility and that its prescribes levels of formality
and complexity.
Question 2 - Comment on the statement that “structure follows strategy”.
(5)
1. A tight fit is required between an organisation's structure and chosen strategy and changes to its
structure may be required to facilitate implementation thereof.
2. Failure to create alignment between the strategy and structure may result in various difficulties in
implementation and possible failure.
3. Structure is therefore a determinant of strategy and not the other way round - i.e. structure follows
strategy
4. It is important to note however that a reciprocal relationship exists between structure and strategy
though. The strategy, which is selected, should be implementable.
5. Where the existing organisational will be difficult to change, it may be necessary to adjust to strategy
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to be a better fit with the structure in question. The organisational structure must however never
dictate the strategy to be followed.
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Question 3
- Discuss the five basic parts of an organisation.
(10)
1. Strategic apex – this is where the top management and strategic leadership of an organization are to
be found.
 The members in this team are responsible for determining a vision and goals for the organization as well
as the strategic direction that will lead the organization towards those goals.
 They provide the necessary strategic leadership to the rest of the organization.
2. The middle-line – these are all the middle managers who are in direct line management positions
between the strategic apex and the operating core.
 They act as relays of the strategic vision, goals and desires of the top management by translating the
long term strategic goals into more manageable and doable short-term ones, operational tactics and
other day to day operational requirements.
3. The operating core – this is where the organization’s production tasks are undertaken resulting in
products and services being made available to customers.

All the staff members who do not hold a managerial or leadership position are fond in this part of the
organization.
4. Techno structure – in this section are all the staff analysts who are tasked with designing the systems
in which the work processes and outputs of others are designed.
5. Support staff – the members in this section support the organization outside its normal work-flow
processes and include, IT staff, specialists in legal, tax, press and public relations and so on.
Question 4 - Discuss the six basic coordinating mechanisms of organisational design.
(12)
1. Mutual Adjustment:
This is the informal communication used to coordinate work and achieve tasks. b. Simple,
entrepreneurial organisations use a high level of mutual adjustment.
2. Direct Supervision:
This is where one person is responsible for coordinating the work of others and for giving others orders
and instructions.
Direct supervision typically flows from the top, down the organisational hierarchy.
3. Standardisation of work processes:
This refers to the specifications or processes governing how the content of the work should be carried
out.
These could include standard operating procedures and policies
4. Standardisation of outputs:
This focuses on the results to be achieved.
The extent of the standardisation can be viewed in terms of the range of products the company
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produces.
5. Standardisation of skills and knowledge:
This is also a coordination mechanism but it is less formal.
In this instance, the employee possesses a certain set of skills and knowledge, and over time different
employees know what to expect from one another, ensuring coordination.
6. Standardisation of norms:
This refers to the organisational culture and the shared beliefs and values of the employees.
For example, if one of the organisational values is frugality, it serves as a coordination mechanism in
that all employees who share this value will collaborate and work towards frugality
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Discuss the essential parameters of organisational design.
(16)
1. Job specification.
Focuses on what each person should do, how many distinct tasks the job should contain and how much control a person should
have over these tasks.
2. Behaviour formalisation.
The extent to which tasks are specified and have to be carried out in a certain manner. Behaviour is formalised to reduce variability/
increase predictability and control.
3. Training.
Entails deciding on what formal training is required for different positions and then selecting appropriately trained people to fill these
positions.
4. Socialisation.
The process by which a new employee is induced into the workplace.
5. Unit grouping.
Grouping different positions into units, each under its own manager, and these units are in turn clustered together to form another
unit and so on- until the whole organisation has been grouped into one unit with the CEO at the strategic apex.
6. Unit Size refers to the size of each unit.
7. To create linkage refers to the planning and controlling systems and liaison devices are used.
8. Centralisation/ Decentralisation. The extent to which decision-making power is shared in an organisation.
Identify and discuss the different types of organisational structures.
(20)
1. Entrepreneurial structures
A simple structure typically consisting of the owner-manager and the employees
Owner makes all the major decisions and monitors the employees
High level of mutual adjustment and informal communication
2. Functional structures
Consist of a CEO supported by a limited number of corporate staff such as legal advisors,
accountants and functional managers.
Units and the tasks within units are grouped according to specialized functional areas.
3. Divisional structures
Activities and responsibilities are organized into a series of divisions, each with its general manager
and functional areas. 
Divisional clusters represent clusters of similar businesses.
4. Strategic business units (SBU)
It is similar to the divisional structure.
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It groups similar divisions into strategic business units and delegate responsibility for each unit to senior
executives who reports to the CEO.
5. Matrix structures
Dual lines of authority.
The matrix structure has both vertical and horizontal lines of
authority. 
Combines functional expertise with product-project spesicialisation.
6. Network structure
Are loosely grouped business teams that come together or a single project.
Characterised by informal coordination, a learning approach and regular change of
information.
7. Structures of the future
Are based on networks of temporary external and internal relationships, linked primarily by information
technology in order to share skills, costs and access to markets.
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Provide guidelines for matching structures to strategies.
(5)
1. There is no one size fit all structure that all organisations can use, but below is several guidelines for
matching strategy with structure.
a) Functional structure :Single-product or dominant product organisations
b) Divisional structure: Organisations with several business lines
c) Strategic business units: Large, diverse organisations with unrelated business divisions
d) Matrix structure: Product development and innovation oriented organisations.
*** Chandler found that a particular structure sequence is often repeated as organisations grow and change
their strategy over time.
Question 5 - Discuss the importance of human resources in strategy implementation.(5)
1. Human resources - not financial resources - are the key resource in organisations today, due to
the fact that we live in a knowledge era.
2. As a result, it is crucial for successful strategy implementation that people be allocated the most
useful tasks in implementing the strategy.
3. People are the heart of the strategy - no longer technology or finance as these two are easy to
obtain these days.
4. Organisations can no longer generate profits without the ideas, skills and talent of knowledge
workers
Question 6 – Discuss the role of resource allocation in strategy implementation.(5)
1. To achieve successful strategy implementation, the scarce resources must be allocated in such a
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way that they support the organisation long-term goals, chosen strategy, structure and short-term
objectives.
2. One of the barriers to successful strategy implementation is the resource barrier, therefore a change
in strategy requires a change in the resource allocation plan of the organisation.
3. There are 3 criteria to be used when allocating resources
a) The contribution of the proposal resource towards the fulfillment of the organisation' mission
and objectives.
b) Its support ok key strategies.
c) The level of risk association with the specific proposal
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Question 7 - Explain the role of the master budget in strategy implementation.(3)
1. The master budget of an organisation includes all those activities whose monitoring is judged to be
important for the survival of the organisation.
2. Among these activities are sales, manufacturing, administrative activities, investment and cash
management. Projected sales are the foundation of budgeting.
3. Forecasting sales is critical because all other budgeted activities depend on these forecasts.
4. A change in strategy often necessitates a change in the way resources are allocated.
Question 8 - Explain what organisational architecture entails.
(5)
1. Organisational architecture provides a useful tool for meshing the internal organisation by
combining key dimensions in a cohesive and concerted effort to ensure productive strategy
implementation.
2. Is an integrated strategic response that draws together key dimensions of the organisation (such
as organisational structure, leadership, organisational culture, policies and strategies) to guide
strategic planning and implementation.
3. It provides a blueprint of the internal and largely invisible workings of the organisation.
4. It is a formal document that clarifies the key strategic drivers.
5. It is unique to a specific organisation.
Question 9 - Describe the components of organisational architecture.
(7)
1. Capabilities are distributed to the various stakeholders through the different organisational processes.
2. The structure/system, KSA’s (knowledge, skills and abilities) and technology specific to each
organisation shape these processes, which are all in turn underscored by the organisational culture
3. The integrated organizational architecture is a strategic response that draws together key dimensions of
the organization (such include items as organizational structure, leadership, organizational culture,
policies and strategies, etc.) to guide strategic planning and implementation.
4. It provides a blueprint of the internal and largely invisible workings of the integrated organization.
Attached diagram of organisation architecture must be read from right to left.
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Explain how budgets can be used to implement the chosen strategy.
(3)
1. A budget is a resource plan, a guideline; a summary of what is available, planned expenditure or a list of
priorities.
2. Budgets support strategy implementation and should be based on the organisations short-term
objectives and operating results.
3. Budgets quantify, specify and prioritise the resources needed to ensure strategy implementation.
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TOPIC 4 – THE INSTRUMENTS OF STRATEGY IMPLEMENTATION
Question 1
- Comment on the role of the various instruments in strategy implementation.
(10)
The strategy implementation instruments are (1) short term objectives, (2) functional tactics and (3) policies.
1. The role of short term goals in strategy implementation.
The use of short term goals is a valuable strategy implementation instrument. It helps to establish departmental,
divisional and organisational priorities.
It also assists in monitoring the progress made towards the achievement of long term goals.
Further, short term goals can be used as checkpoints for operational and strategic control.
2. The role of functional tactics in strategy implementation
Functional tactics clarify the business strategy, and provide specific, short term guidance to managers and
employees in the functional areas.
Functional tactics are the key routine activities that need to be performed in each functional area in order to
achieve the objectives of the organisation.
The functional areas in the organisation include marketing, human resources, research and development,
finance, public relations and operations.
Functional tactics are essential to implement the chosen strategy - they give specific, short term guidance
to operational managers.
3. The role of policies in strategy implementation
Policies are specific guidelines, methods, procedures, rules, forms and administrative practices that direct the
actions of managers and employees in the organisation. In order to be a valuable strategy implementation
instrument, policies should support the chosen strategies.
Policies inform employees/ managers what is expected of them in strategy implementation. Policies need to
support a chosen strategy, and change in strategy may require a change in policy.
Policies guide day-to-day activities and procedures that ensure successful strategy implementation.
Policies provide a basis for control and promote coordination and consistency across organisational
units in strategy implementation.
Question 2 - Explain how long-term goals are translated into short-term goals.
(5)
1. Long-term goals are derived from the mission statement, which is in turn derived from the
organizations vision or strategic intent.
2. The short-term goals are set on the basis of the long-term goals to ensure that the mission and
strategic intent become a reality.
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3. Aligning short-term goals with the organizations mission and strategy confirms that the strategic
management process is interrelated and that a change in one component will trigger changes in
others.
4. An organisation’s mission statement provides guidelines in terms of the areas that the long-term
goals focus on, such as product, market, technology, profitability and corporate governance.
5. Short-term goals should incorporate these focus areas into key operational areas.
6. The link between long-term goals and short-term goals cascades through the organization, from
the broad vision and basic goals to specific short-term targets. This cascade can provide
clear reference for communication.
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Distinguish between the different levels of objectives
(3)
The three levels of objectives are:
o
Strategic
o
Operational
o
Functional

You will have to discuss each of these in terms of the parties involved, time-frame, level of detail etc
Differentiate between long-term goals and short-term goals.
Explain what constitutes a well-formulated short-term objective
Short term goals must be

Suitable

Achievable

Acceptable

Motivating

Flexible

Understandable
(3)
(5)
Unsuitable
unachievable
unacceptable
de-motivated
not flexible
not understandable
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
Each goal must indicate clearly who is responsible and the focus area, the action require, how it will be measured and the
time frame.

It should be consistent across functional areas.
Explain what a short term goals is.
(3)
1. Short term goals provide more specific guidance and a clear indication of the actions needed to
translate the vision into action.
2. Short term goals guide action and direct the activities of organisational members.
3. It adds breadth and specificity in identifying what must be done to achieve long-term goals.
4. Short term goals can serve as standards of performance and as incentives for managers and
employees to perform, and are also used to justify activities to the stakeholders
Question 3 - Explain what a functional tactic is.
(3)
1. Functional tactics support short term objectives and can be defined as the key routine activities that
must be performed in each functional area to achieve organisation's chosen strategies (marketing,
finance, operations, human resources mng).
2. They translate organisation's grand strategies into action to ensure that short term objectives are met.
3. It clarifies the business strategy. It provides specific short term guidance to managers and employees
in functional areas.
Question 4 - Explain how functional tactics differ from corporate and business strategies.
(6)
Question 5 - Explain the role of policies in strategy implementation.(4-5)
Expound on the importance of having policies in place in strategy implementation.
1. Policies are specific guidelines, methods, procedures, rules, forms and administrative practices that
direct the actions of the managers and employees in the organisation. In order to be a valuable
strategy implementation instrument, policies should support the chosen strategies.
2. Policies inform employees/ managers what is expected of them in strategy implementation.
3. Policies need to support a chosen strategy, and a change in strategy may require a change in
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policy.
4. Policies guide the day-to-day activities and procedures that ensure successful strategy
implementation.
5. Policies provide a basis for control and promote coordination and consistency across organisational
units in strategy implementation.
Explain how the balanced scorecard can be used to set short-term goals.
1. The balanced scorecard sets objectives, measures targets and initiatives for four organisational
areas based on the vision or strategy.
2. The 4 processes of the balance scorecard that forms a framework for strategic control are:
a) Translating the vision Ensures that the vision is translated into goals and measures linked
to the strategy.
b) Communicating and linking Ensures that the long term strategy is clearly understood by the
entire organisation through communicating and linking.
c) Business Planning Forces organisations to link their business plans to the strategy through
the setting of targets or milestones. Through this process organisations integrate their
strategic planning and budgeting processes.
d) Feedback and learning
Provides organisations with the capacity of strategic learning.
Strategic learning consists of gathering feedback, testing the assumptions on which the
strategy is based and making the necessary adjustments.
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TOPIC 5 – STRATEGIC CONTROL AND EVALUATION
Question 1 - Explain what strategic control entails.
(5)
1. Strategic control is the phase in the strategic management process that concentrates on evaluating the
chosen strategy in order to verify whether the results are produced by the strategy are in fact those
intended.
2. Strategies focus on the long term future of the organisation, and time elapses between the formulation
and implementation of a strategy and the achievement of the intended results.
3. Strategic control is the phase during which managers ensure that the implementation activities are
performed effectively and efficiently, and identify deviations from the strategic plan in order to take
corrective action.
4. Strategic control has two focal points: to review the content of the strategy and to evaluate and control
the implementation process.
Strategic control identifies and interprets critical events or changes/ triggers in the external environment
that require a response from the organisation.
Strategic control should initiate managerial questioning of performance, assumptions and expectations
in order to determine to what extent the organisation is achieving its short term objectives.
Differentiate between strategic control and operational control
1. Traditional management control focuses on the implementation process in all its details.
2. Strategic control focuses on the key success factors of the strategy.
3. Operational control focuses on the short term, while strategic control focuses on the long term.
4. Strategic control evaluates the organisation over an extended period, whereas operational control
provides feedback over shorter time periods.
5. In traditional and operational control, action is taken only after deviations from performance measures
have occurred.
6. Whereas strategic control is concerned with guiding the action as the strategy takes place and when the
end results are still several years away.
Question 2
Explain how strategic control can be introduced.
(6)
1. Strategic control has two focal points, namely to evaluate the content of the strategy and to monitor
strategy implementation activities.
that organisations can use: (1) premise control, (2) strategic surveillance,
There are types of strategic
control and (4) implementation
(3) special alert
The first three are used to review the content of a strategy and the last is used to evaluate strategy
implementation.
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a) Premise control is used to check, systematically and continually, whether the premises and
assumptions on which the strategy is based are still valid or a change in strategy may be required. It
is a focused type of trategic control.
b) Strategic surveillance reviews the content of a strategy.
c) Special alert control is the “thorough, and often rapid, reconsideration of the organisation’s strategy of
sudden unexpected event.
d) Implementation control must be exercised as the implementation process unfolds
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Question 3
Discuss corporate governance and strategic control with reference to the King III Report. (4)
1. The King III report contains several recommendations that impact on strategic control.
2. Among others, the King III report states that the board must retain full and effective control over the
company and must monitor management implementation of the board’s plans and strategies.
3. The board must also ensure that the adequate internal control exists and that the organisations
information systems can cope with the strategic direction in which the organisation is headed.
Discuss corporate governance and strategic control with reference to the King II report.
(5)
1. The King III Report contains several recommendations that impact on strategic control. Among others,
the King III Report states that the board must retain full and effective control over the company and must
monitor management’s implementation of board plans and strategies.
2. The board must also ensure that adequate internal controls exist and that the organisation’s information
systems can cope with the strategic direction in which the organisation is headed.
3. Corporate governance is critical in the strategic management process to control and evaluation with
regards to the following areas:
a) Clarifying the role of the audit committee in managing and overseeing strategy
implementation.
b) Determining checks and balances for strategy control.
c) Ensuring that executives are appropriately penalised or rewarded for failure or
success (responsibility of the director board).
Question 4
Discuss the balanced scorecard as a strategy-implementation and control system.
(10-15)
1. The use of a single measure, such as financial ratios, is not the most effective means of controlling the
implementation of strategy, because it may fail to take all perspectives into account. The reason for this
is that control measures are often applied in isolation and do not take measures such as customer
knowledge, internal business process evaluation and organisational; learning and growth criteria into
account
2. The balanced scorecard provides for the use of both financial and non-financial performance measures
3. It incorporates financial performance measures, customer knowledge; internal business processes
measures and criteria for assessing learning and growth prospects.
4. These measures are combined to monitor implementation of strategies in a holistic way, to ensure that
the implementation process is linked to long-term objectives of the organisation, through a series of
short-term actions.
5. There are 4 processes that make up the overall balanced scorecard framework: (1) translating the
vision; (2) communicating and linking; (3) business planning and (4) feedback and learning.
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6. Translating the vision it is the first process that forms the framework. It ensures that the strategy is
the reference point and it forces top management to gain consensus on the organisation's vision and
strategy. It ensures that the vision is translated into integrated measures and goals linked to the
strategy on which people can act.
7. Communicating and linking. Long-term strategies must be clearly understood by the entire
workforce. Communicating the strategy to all employees ensures that both the strategy and the critical
goals that have to be met are clear to the entire workforce. The balanced scorecard is also a means by
which the organisation's strategy can be communicated to its outside stakeholders. Communicating the
balanced scorecard promotes commitment and accountability to the organisation's strategy.
8. Business planning. The third process forces organisations to link their business plans to the strategy
through the setting of targets or milestones. Strategic initiatives are clearly identified and indicate where
investments should be made. Through this process organisations integrate their strategic planning and
budgeting processes, ensuring that the resources allocation plans support the chosen strategies.
9. Feedback and learning. Strategic learning consists of gathering feedback, testing the assumption on
which the strategy is based and making the necessary adjustments. The balanced scorecard supports
strategic learning as it tests, validate and modifies the assumption on which the strategy is based.
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Question 5 - Differentiate between the different types of strategic control.
(8)
1. Premise Control: Premise control is designed to check systematically and continuously whether the
premises or assumptions on which strategy is based, are still applicable.
2. Surveillance Control: Surveillance control is designed to monitor a broad range of events inside and
outside the organisation that are likely to affect the course of the strategy.
3. Special Alert Control: it entails the thorough, rapid reconsiderations strategy in view of a sudden,
unexpected event. Strategy is adapted to changed conditions.
4. Implementation Control: Implementation control is designed to assess whether the overall strategy
could be changed in the light incremental action taken to implement strategy. Two types of
implementation control can be used, namely strategic thrusts and milestone reviews. If actions are not
implemented properly or do not achieve the planned results, strategy must be altered. It provides
management with information regarding the success of the implementation.
Question 6 - Comment on the criteria used to evaluate strategies during the control phase.
(5)
1. During strategy selection, organisations make a choice between the different strategies that will help
the organisation to go to the next level of competitiveness.
2. During strategy formulation, top management teams would typically ask several questions pertaining
to these criteria.
3. During strategy evaluation and control, managers can again use these criteria to test whether the
strategy is still on track, whether it is achieving the expected outcomes and whether it is being or has
been successful.
4. The three criteria are:
a.
Appropriateness. Is the strategy in line with the mission?
b.
Feasibility. Can it be carried out?
c.
Desirability. What are the stakeholder preferences? Has the strategy produced adequate results in
the short term?
Question 7
Discuss the four “levers” that are considered when designing strategic control systems. (8)
The 4 levers of control that should be taken into consideration in designing strategic control systems are:
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1. Diagnostic control systems
a) These systems are used to track the performance of departments, managers and employees, to monitor
goals and to measure progress towards profitability and revenue growth targets.
2. Belief systems
These systems relate to the organisations values and organisational culture and provide guidelines for
implementing decisions.
3. Boundary systems
These systems supplement diagnostic control systems and belief systems.
Diagnostic and Belief systems tell the managers and employees what should be done and what behaviour is
accepted, boundary system provide information on what should not be done and what falls outside the scope.
4. Interactive control systems
Provides the managers with a sense of what is happening in different areas of the organisation.
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Question 8 - Diagrammatically depict and explain the four dimensions of the balanced
scorecard.(9)

The balanced scorecard serves as a guideline for translating vision into strategic or long-term
goals in four (4) perspectives: financial, customer, internal business process and learning and
growth.

These goals are of critical success factors for strategy to be successful.

Each of these long-term goals has measures that indicate how the achievement of the goal will be
measures that indicate how the achievement of the goal will be measured and tracked.

Within the balanced scorecard, these measures become drivers of performance. Short-term goals
are set for each of the measures. This translates the long-term goals into specific targets which
indicate the performance or leave of improvement needed. Key action programs or initiatives are
developed to achieve the goals. These can be compared to functional tactics.

The balanced scorecard sets goals, measures, targets and initiatives for four organisational areas
based on the vision or strategy
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Explain how continuous improvement builds customer value.
(9)
Organisations can achieve continues improvement by adopting practices such as
benchmarking, total quality management and re-engineering.
1. Benchmarking
a) The comparison of selected performance measures or operational processes
that serve as challenging, yet comparable, yardsticks.
b) These include the organisations own history, major competitors or best in
class/world performance.
2. Total quality management
A culture, inherent in which is a total commitment to quality and attitude expressed by
everybody’s involvement in the process of continuous improvement of products and
services by using innovative scientific methods.
3. Re-engineering
An organisation is reorganized in such a way that it creates value for customers by eliminating
barriers that create distance between employees and customers.
As such costs are lowered and service to customers improved.
4. Six sigma approach
A methodology linking improvement to profitability.
Highly rigorous and analytic approach to quality and continuous improvement with the
objective of improving profits through defect reduction, yield improvement, improved
customer satisfaction and best in class performance.
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