Page 70 - DCOM102_DMGT101_PRINCIPLES_AND_PRACTICES_OF_MANAGEMENT

Principles and Practices of Management

Notes 3.6.3 Reasons why a Strategy Fails

There are many reasons why strategic plans fail, especially:
1. Failure to understand the customer:

Examples: (a) Why do they buy?
(b) Is there a real need for the product?
(c) Inadequate or incorrect marketing research

2. Inability to predict environmental reaction: The reasons may involve many things

Examples: (a) Failure to forecast what will the competitors do, whether the
government will intervene
(b) Fighting brands
(c) Price wars

3. Over-estimation of resource competence: The mangers should be able to estimate the
following correctly so as to avoid the over estimation of resource competence.
(a) Can the staff, equipment, and processes handle the new strategy

(b) Failure to develop new employee and management skills
4. Failure to coordinate: The reasons for this may be the following:
(a) Reporting and control relationships not adequate
(b) Organisational structure not flexible enough

5. Failure to obtain senior management commitment: The reasons for this may be the
following:
(a) Failure to get management involved right from the start

(b) Failure to obtain sufficient company resources to accomplish task
6. Failure to obtain employee commitment: The reasons for this may be the following:
(a) New strategy not well explained to employees
(b) No incentives given to workers to embrace the new strategy

7. Under-estimation of time requirements: The reasons for this may be no critical path analysis
8. Failure to follow the plan: The reasons for this may be the following:
(a) No follow through after initial planning
(b) No tracking of progress against plan

(c) No consequences for above
9. Failure to manage change: The reasons for this may be the following:
(a) Inadequate understanding of the internal resistance to change
(b) Lack of vision on the relationships between processes, technology and organisation

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