Page 224 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Strategic Management

Notes Introduction

Successful strategy formulation does not at all guarantee successful strategy implementation. It
is always more difficult to actually carry out something than to say you are going to do it.
Strategy implementation requires support, discipline, motivation and hard work from all
managers and employees. Managers should pay careful attention to a number of key issues
while executing the strategies. Chief among them are how the organisation should be structured
to put its strategy into effect and how such variables as leadership, power and organisational
culture should be managed to enable employees to work together while implementing the
firm’s strategic plans. Organisations in stable, predictable environments often become relatively
tall, with many hierarchical levels and narrow spans of control. On the other hand, companies in
dynamic, rapidly changing environments usually adopt flat structures with few hierarchical
levels and wide spans of control.

12.1 Stakeholders and Strategy

A firm’s stakeholders are the individuals, groups, or other organisations that are affected by and
also affect the firm’s decisions and actions. Depending on the specific firm, stakeholders may
include government, employees, shareholders, suppliers, distributors, the media and even the
community in which the firm is located among many others.

1. When it comes to corporate mission values stakeholders will maximise the value for all
stakeholders, as opposed to shareholders who only maximise the value for themselves.
2. Stakeholders also play a role in the decision making process in a business. Although since
employees and customers are included in being stakeholders they too are considered
when it comes to decision making.

3. When it comes to accountability it does not just come down to being accountable to
themselves. Accountability lies with the customer, suppliers, government, community
and employee stakeholders.

Stakeholder Management

An organisation needs to have an effective stakeholder management system in place, which
provides a great support in achieving its strategic objectives. It interprets and influences both
the external and internal environments and creates positive relationships with stakeholders
through the appropriate management of their expectations and agreed objectives. Stakeholder
Management is a process and control that must be planned and guided by underlying principles.

Stakeholder Management, within business or projects, prepares a strategy that utilises information
or intelligence collected during the following common processes:
1. Stakeholder Identification: identify the parties, either internal or external to organisation,
that are affected by the business. For this purpose, a stakeholder map can be used.
2. Stakeholder Analysis: identify and acknowledge stakeholder’s needs, concerns, wants,
authority, common relationships, interfaces, and put this information in line within the
Stakeholder Matrix.
3. Stakeholder Matrix: position the stakeholders on a matrix based on their level of influence,
impact or enhancement they may provide to the business or its projects.
4. Stakeholder engagement: engaging stakeholders does not seek to develop the project/
business requirements, solution or problem creation, or establishing roles and
responsibilities. The process focuses on knowing and understanding each other, at the

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