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Файл:Strategic analysis and planning. Textbook
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3. Strategic analysis.
4. Basic strategy (based on the results of strategic analysis).
5. Strategic Marketing Plan:
• concept of strategic marketing;
• analysis of the product (service) market;
• life cycle of products (services);
• segmentation of the product (service) market;
• classification and analysis of competitors;
• directions for improving products (services), taking into account the timing of
the stages of its life cycle;
• pricing strategy, pricing policy of the enterprise;
• planning of sales and distribution of products (services);
• planning an advertising campaign and sales promotion;
• service planning;
• marketing control system.
6. Strategic production plan:
• production strategy;
• total production volumes and by type of product (service) (total income,
production volume in physical terms);
• product range;
• manufacturing program.
7. Strategic plan for material support of production:
• strategy for material support of production;
• analysis of the enterprise's needs for basic material resources and identification
of new production requirements;
• establishing optimal relationships with resource suppliers;
• strategy for providing production with material resources;
• feasibility study and coordination of measures to implement the strategy.
8. Strategic organizational plan:
• organizational strategy;
• organizational structure;
• management personnel;
• enterprise personnel not related to management (need for personnel by
profession, qualification requirements, forms of recruitment, work schedule, etc.);
• salary;
• personnel policy;
• strategy for increasing labor productivity.
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9. Strategic financial plan:
• planning the cost of products (services);
• planning of income from various types of activities;
• planning of enterprise profit and its use;
• planning the profitability of the enterprise;
• planning the balance of income and expenses of the enterprise;
• drawing up financial budgets;
• tax planning.
10. Strategic innovation plan:
• innovation strategy;
• strategy for creating, developing new products and improving their quality;
• strategy for introducing advanced technology, mechanization and automation
of production;
• management system development strategy;
• resource saving strategy for the enterprise;
• feasibility study of innovative projects, their approval.
11. Strategic investment plan:
• investment strategy;
• increase in production capacity;
• commissioning of production capacities through the expansion of existing and
construction of new facilities;
• commissioning of production and non-production assets (including
environmental protection facilities);
• volume of required investments;
• feasibility study and approval of the investment plan.
12. Strategic social plan:
• social strategy;
• measures to change the socio-demographic structure of workers;
• measures to improve working conditions and safety, strengthen the health of
workers;
• measures to improve the socio-cultural and living conditions of workers and
members of their families.
13. Strategic environmental plan (nature protection and rational use of natural
resources), including environmental strategy.
14. Key indicators of the strategic plan (as guidelines for achieving strategic
goals).
15. Risk assessment.
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16. Applications.
The proposed structure of the strategic plan provides for the comprehensive
development and improvement of the economy and organization of production, and
outlines ways to implement the identified internal reserves of the enterprise.
It should be noted that the experience accumulated in the world convinces us
that the mechanical application of standardized procedures for the development of
strategic plans in the specific conditions of an enterprise’s economic activity is
ineffective. In each individual case, it is necessary to take into account the totality of
organizational and structural factors of an intra-production nature, the action of which
can significantly modify the initial regulations of strategic planning.
Enterprises in each industry need their own modified structure of the strategic
plan, taking into account the experience of the Soviet school, associated with a focus
on active marketing, with a reorientation to external problems, with the formation of a
new organizational culture of production that ensures efficient management, including
the characteristics of the industry and the specifics performance indicators.
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8. FEATURES OF IMPLEMENTATION
OF THE ORGANIZATION DEVELOPMENT STRATEGY
8.1. IMPORTANCE OF THE IMPLEMENTATION STAGE
OF THE ORGANIZATION DEVELOPMENT STRATEGY
After developing a strategy for an organization, the process of its implementation
begins. It is important to note that the implementation of a strategy does not play the
role of a passive means of its implementation in real life in relation to the adopted
strategy.
A significant property of strategy execution is that not only can it create
difficulties for an organization if it is poorly executed, but also that, if executed well,
it can give the organization a chance for success even if mistakes have been made.
when developing a strategy. Good execution of a strategy has the ability to compensate
for the negative consequences that may arise during the implementation of a strategy
due to its shortcomings or due to the appearance of unforeseen changes in the
environment.
8.2. STRATEGIC CHANGE IS THE CORE STRATEGY EXECUTION
All tasks related to the implementation of the strategy are solved through change.
Therefore, change is at the heart of strategy execution.
Strategic change is a change that is carried out in the process of implementing
a strategy.
Strategic change affects all aspects of an organization. However, we can
distinguish two sections of the organization that are fundamental when carrying out
strategic changes: organizational structure and organizational culture.
Carrying out changes in an organization leads to the creation of conditions
necessary for the implementation of activities that correspond to the chosen strategy.
Depending on factors such as the state of the industry, the state of the organization, the
state of the product and the state of the market, 4 types of changes can be distinguished.
Types of strategic changes:
• organizational restructuring is a fundamental change in an organization that
affects its mission and organizational culture. This type of change can occur when an
organization changes its industry and, accordingly, its product and place in the market
changes;
• a radical transformation of the organization is carried out at the stage of strategy
implementation in the event that the organization does not change industries, but at the
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same time radical changes occur, caused, for example, by its merger with a similar
organization. In this case, strong internal organizational changes are required,
especially regarding the organizational structure;
• moderate transformation occurs when an organization enters the market with a
new product and tries to attract buyers to it. In this case, the changes concern the
production process, marketing;
• normal changes are associated with reforms in the field of marketing in order
to maintain interest in the organization's product. These changes are not significant,
and their implementation has little impact on the activities of the organization as a
whole;
• the unchanged functioning of an organization occurs when it consistently
implements the same strategy. With this approach, it is very important to clearly
monitor changes in the external environment.
Challenges of making strategic changes
Carrying out strategic change in an organization is a very difficult task.
The first problem in solving this problem is primarily due to the fact that any
change encounters resistance (individual and group), which can sometimes be so
strong that those who carry out the changes cannot overcome it.
The second problem is the problem of control in the organization, which
generates partial or complete destabilization of organizational control, arising because
most formal organizational mechanisms are designed to operate the organization in a
relatively stable state, and not in a state of transition.
Causes of individual resistance:
• selfish interest; fear of losing position, power, formal connections. The bearers
of resistance, as well as the bearers of change, are people. In principle, people are not
afraid of change, they are afraid of being changed. People are afraid that changes in the
organization will affect their work and their position. Therefore, they try to prevent
changes in order not to find themselves in a new situation that is not entirely clear to
them, in which they will have to do a lot of things differently from what they are already
used to do, and do something different from what they did before;
• misunderstanding and lack of trust. This occurs in cases where employees do
not have the necessary information about the changes and / or do not trust those who
implement them;
• low level of readiness for change;
• different assessments of the need and consequences of changes.
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Group resistance stems from the fact that any organization can be viewed as a
political system in which there are groups with their own political interests. Their
response to change will depend largely on how the groups believe the change will affect
their influence and balance of power.
“Change — resistance” Matrix
Attitude to change can be considered as a combination of states of two factors:
1) acceptance or non-acceptance of the change;
2) open or hidden demonstration of attitude towards the change (fig. 25).
Fig. 25. “Change — resistance” matrix
Management, based on conversations, interviews, questionnaires and other
forms of information collection, should try to find out what type of reaction to changes
will be observed in the organization, which of the organization’s employees will take
the position of supporters of the changes, and who will end up in one of the three
remaining positions.
Reducing resistance to change
Reducing resistance to change is key in implementing change. The success of
change depends on how management implements it. When implementing changes,
managers should demonstrate a high level of confidence in their rightness and necessity
and try to be consistent in implementing the change program.
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The style of implementing the change has a great influence on the extent to
which management manages to eliminate resistance to change. A leader can be tough
and adamant in eliminating resistance, and can be flexible. It is believed that the
autocratic style can only be useful in very specific situations that require the immediate
elimination of resistance to making important changes. In most cases, a style in which
management reduces resistance to change by winning over those who were initially
opposed to change is considered more acceptable.
When resolving conflicts, managers can use different leadership styles:
• competitive style — based on persistence, assertion of one’s rights, based on
the fact that conflict resolution presupposes the presence of a winner and a loser;
• self-withdrawal style — management demonstrates low persistence and at the
same time does not strive to find ways to cooperate with dissenting members of the
organization;
• style of compromise — moderate insistence by management on the
implementation of its approaches to resolving the conflict and at the same time
moderate desire by management to cooperate with those who resist;
• adaptation style — the desire of management to establish cooperation in
resolving the conflict while weakly insisting on accepting the decisions they propose;
• collaboration style — the desire of management to implement their approaches
to change and establish cooperative relationships with dissenting members of the
organization.
It is impossible to say unequivocally that any of the named 5 styles is more
acceptable for resolving conflicts, and which is less. It all depends on the situation,
what change is being made, what problems are being solved and what forces are
resisting.
Stages of change:
Stage 1 — “unfreezing”, which is carried out by creating in employees a feeling
of dissatisfaction with the existing state of affairs. To do this, a visual comparison is
made of the current “unfavorable” situation and the planned “favorable” one.
Stage 2 — preparation of the change, which involves engaging employees in
the change process by informing them, holding seminars, consultations.
Stage 3 — the change itself, carried out with the direct participation of
employees. Direct involvement is an indispensable condition for the success of any
change, because employees:
1) will have detailed information about the progress of the change process;
2) they are unlikely to resist themselves. However, the degree of employee
involvement should be optimal, since with too active involvement, the likelihood of
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weakening or loss of control over changes increases, and the time for implementing
changes can also significantly increase.
Stage 4 — “freezing”, at which conditions are created for consolidating the
changes made. It is very important for the new state of affairs in the organization not
only to be formally established, but to be accepted by the members of the organization
and become a reality.
8.3. MOBILIZATION OF HUMAN
AND RESOURCE POTENTIAL TO IMPLEMENT THE STRATEGY
Regarding the strategy for using human potential, two remarks need to be made:
• the most important condition for the implementation of the strategy is the
commitment and dedication of the members of the organization to the business that the
organization is leading; Therefore, management must do everything possible to ensure
that members of the organization develop as much as possible a perception of strategy
as their own business;
• the success of implementing the strategy largely depends on the extent to which
members of the organization have the desire to achieve the best results in their
workplace; therefore, the focus of management should be on the ability to perform well
and the desire to perform even better.
The process of mobilizing resources begins with the fact that the mechanism for
using resource potential is brought into line with the strategy being implemented. The
basis of resource mobilization activities is the distribution of the organization's
resources among the individual components of the strategy. The most important
condition for the effective use of resources and, accordingly, the effective
implementation of the strategy is their correct distribution over time. Management must
organize the correct distribution of the organization's financial resources — such a
distribution in which the necessary funds would always be available at the right time.
The process of mobilizing resources at the stage of strategy implementation
involves assessing and retaining sources of capital. Management must not only be
aware of the sources it can use to raise money, the possibilities and limitations on their
use, and the cost of capital, but also do everything possible to maintain these sources
and acquire new ones if necessary, to implement strategies.
The main tool used to allocate resources is budgeting and execution. Budgets are
developed for each project. The advantage of budgets is that they not only answer the
question of how many and what resources are required, but also show the sources of
their replenishment. Most often, budgets are developed and assessed in monetary
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terms, but sometimes time, labor and other budgets are used. The adaptive nature of
strategic plans involves adjusting budgets in accordance with changing goals and
strategies of the organization.
8.4. ASSESSMENT OF THE EFFECTIVENESS
OF STRATEGY IMPLEMENTATION
The strategy is assessed by comparing the results of work with previously
outlined goals. The evaluation process is used as a feedback mechanism to adjust the
strategy. There are a number of criteria, both quantitative and qualitative, that are used
in the assessment process.
Qualitative criteria:
1. The ability to attract highly qualified managers.
2. Employee satisfaction.
3. Expanding the scope of services provided to clients.
4. Deepening market knowledge.
5. Reducing the number of hazards.
6. Taking advantage of opportunities.
Quantitative criteria:
1. Market share.
2. Increase in sales volume.
3. Days lost due to strikes.
4. Level of costs and sales efficiency.
5. Staff turnover.
6. Absenteeism from work.
7. Net profit.
8. Stock price.
9. Dividend rate.
10. Earnings per share.
11. Return on capital.
12. Payments on securities.
Actual indicators should be compared with benchmark or planned indicators in
order to assess the effectiveness of the implementation of the strategy.
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CONCLUSION
The authors of the textbook would like to draw the following conclusions.
1. In conditions of fierce competition and a rapidly changing situation,
organizations must not only focus on the internal state of affairs, but also develop a
long-term strategy of behavior.
2. Strategy management is the process of ensuring that an organization benefits
from the appropriate corporate strategy that best meets the organization's needs at a
given time.
3. A thoughtful, verified, clearly defined strategy of activity is the key to the
successful functioning of the organization. An organization that does not know where
to go will get nowhere or go to the wrong place.
4. The correct choice of strategy will allow you to take a position that will
provide protection from competitors and bring the organization profits above the
industry average.
5. It should be remembered that the world is constantly changing, so the strategy
itself cannot be stationary. It must be subject to constant monitoring and adjustment.
Implementing a continuously evolving strategy is a source of sustainable competitive
advantage that cannot be copied by rivals.
6. Experimenting with new strategies is an important component of dynamic
organizational growth. Continuously testing, adapting and evolving what made the
customer successful is the way forward.
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