Please enable JavaScript.
Coggle requires JavaScript to display documents.
Chapter 10: Strategy implementation in tourism and hospitality businesses …
Chapter 10: Strategy implementation in tourism and hospitality businesses
Strategy implementation and the strategic management process
Strategic implementation
Definition
System-wide action by firm members aimed at accomplishing formulated strategies
key to a successful strategy
3 aspects
Resources
How should the strategy resourced?
The way in which the organization obtains
requisite finance
HR (skilled employees)
physical resources (equipment, buildings)
intellectual/tangible resources
Configuration
How should the culture and structure of the organization be configured to ‘fit’ the proposed strategy?
Structure of the organization & organization culture are fit for purpose
Change
How should the changes arising from the strategy be managed and led?
Changes to aspects of the organization, how it positions itself
Example: Service product
Characteristics: Intangibility
Implementation issues
Resources
Physical and virtual marketing materials must be of a high standard
Effective distribution of the products is essential
Tangible addition to the product often important
Configuration
Structure
Front-line sales force must be well-trained and able to sell the product attributes competently
Culture
Delivering excellent service is of utmost importance to all employees
Change
Building brand loyalty difficult and time consuming and brand switching is common
Managers must devote resources to positioning & buildings brand, recognize and manage risks to the brand.
Strategic management process
Strategic analysis
Internal & external analysis
Identification of internal strengths and weaknesses
Identification of external opportunities and threats
Strategic selection
Identification of key issues arising from the strategic analysis
Formulating strategic options
Evaluation of each option
Selection of the most appropriate strategic options
Strategic implementation
Putting the chosen strategy into action
Resourcing the strategy
Configuring the organizations structure and culture to 'fit' the strategy
Leading and managing the change
Cascading and organizing implementation
Resources and strategy implementation
Resources - the key inputs
4 categories
Physical resources
land, buildings, plant, equipment
Financial resources
share & loan capital required
for development & expansion
HR
obtaining the requisite number of
appropriately skilled employees
Intellectual or
‘intangible’ resources
non-physical inputs that may be necessary in some industries (databases, legal permissions, brand or design registration, contacts)
Matching strategy
with resources
Minimal change strategies
Slight increase in finance
fund modest expansion
Recruitment/retraining of staff
meet skill shortage in 1-2 areas
Disposal of non-essential assets
Growth-oriented strategies
Internal reallocation of resources
Reducing resources deployment in 1 area, moving it across to where it is needed
Purchasing of fresh resource inputs from external suppliers
Decline management strategies
Reduction of resource base
Reinvestment in profitable areas
Workforce downsizing
Resource audit
Purpose
Check for sufficiency, adequacy, and availability
Types of audits
Human
Resources
Skills and workforce availability
Financial Resources
Capital allocation and funding sources
Physical Resources
Land, buildings, equipment
Intellectual
Resources
Legal permissions, customer data, market knowledge
Example
An audit of a hotel group's chain of hotels (physical resources)
Sufficient
Number of rooms for current needs/planned expansion
Adequacy
Location of the hotels relative to customers & those of competitors
State of repair & decoration of the hotels
Ability to support prevailing business
Availability
Required of resources & needed development of lands/buildings
Additional property/land for development
Resources development and control
Financial
planning
Capital budgeting and funding strategies
Financing via retained profits, debt, shares, or bonds
Human resources
planning
Forecasting workforce needs
Addressing skill gaps via training or recruitment
Physical resource
planning
Acquisition of land, buildings, and equipment
Long-term planning for
resource-intensive assets (e.g., aircraft, ships)
Strategic location selection
Intellectual resource
planning
Legal permissions, patents, regulatory compliance
Market intelligence, customer databases
Managing change
in strategy implementation
The need for change
Strategy is about change in resources, culture, and structure.
Change can be:
continuous or discontinuous;
incremental or transformational;
proactive or reactive; and
broad or narrow in its scope.
Inertia – identifying
barriers to change
Resistance comes from
Lack of understanding
Lack of trust in management
Fear (job security, social status)
Uncertainty about the future
Kurt Lewin’s three-step model
Unfreezing
Mobilization for change
Moving
Movement to a new level)
Refreezing
Sustaining change
Understanding the context of change
Time – How quickly change is needed.
Scope – Degree of change required.
Preservation – What must remain unchanged.
Diversity – Different approaches for different areas.
Experience & Capability – Organization’s ability to handle change.
Capacity – Availability of resources.
Readiness – Employees’ willingness to change.
Power – Leaders’ ability to enforce change.
Types of change
Adaptation
Nature: Incremental
End result: Realignment
Reconstruction
Nature: Big Bang
End result: Realignment
Evolution
Nature: Incremental
End result: Transformation
Revolution
Nature: Big bang
End resultL Transformation
Role of Change Agents
Can be internal (leaders, managers)
or external consultants.
Responsibilities include
Mobilizing commitment.
Developing shared vision.
Supporting, not forcing change.
Institutionalizing change through systems & procedures.
Leadership &
Management in change
Management – Plans, controls,
and structures the change.
Leadership – Creates vision,
anticipates change, and inspires people.
Organizational culture
and strategy implementation
Organization culture
Cultural suitability
Assessment of a organization's
readiness to undetake certain courses of action
Miles and Snow's typology
and cultural postures
Culture types divided according to how they approach strategy
4 categories of organizational culture
Defender
Operates in stable, well-defined, and relatively mature markets
Focus on market penetration & existing market position
Avoids diversification & new market development
Prospector
Continually seeking new markets & products
Creates change & uncertainty
More able to develop new markets and products
Analyser
Hybrid of Defender & Prospector cultures
Maintains stability in some areas, flexibility in others
Adjusts to both stable and changing markets
Reactor
Lacks strategic focus
Reacts to environmental changes rather than anticipating them
Tends to emulate competitors rather than innovate
Purposes
Cultural change is required
to a lesser extent
Organizational structure
and strategy implementation
Organizational structure
Definition
The "shape" of the organization
There's no "perfect structure"
Importance
Helps determine the suitability for certain strategies and operational activities
The key is to study how organizational structure relates to the successful implementation of strategy
Key issues
Division of labor
Source of authority
Relationships
Evaluation of organizational structure
Height
Definition
Number of layers in the organization
Types
Tall structure
More layers of management suitable for larger organization in complex environment
Example
Multinational travel groups
Flat structures
Fewer layers of management
Suitable for smaller organization in simpler environments
De-layering trend
Quicker decision making
Faster communication
Width
Definition
the extent the organization is centralized or decentralized.
Types
Centralized
Little or no power
is devolved from the centre.
Decentralized
Decision-making power is distributed across different units.
Complexity
The extent to which the organization observes a formal
hierarchy in its reporting relationships
Matrix structures
Able to carry out many more tasks
Common in larger companies with greater complexity
Methods of divisionalization
5 methods
Functional specialis
Geographic concentration
Product specialism
Customer focus
Holding company