12 – Behavioural Implementation

Introduction

The design of a successful plan does not guarantee the implementation of that strategy. It is always more challenging to do something than it is to claim you will do it. Strategy implementation necessitates the cooperation, discipline, motivation, and dedication of all managers and staff. While executing the strategy, managers must pay close attention to several critical challenges. Among these are how the organisation should be formed to put its strategy into action and how variables such as leadership, authority, and organisational culture should be controlled to allow employees to collaborate while implementing the firm’s strategic plans. In stable, predictable circumstances, organisations often grow very large, with several hierarchical levels and limited spans of influence. On the other hand, companies in dynamic, fast-changing contexts typically choose flat structures with few hierarchical levels and broad spans of control.

12.1 Stakeholders and Strategy

Individuals, groups, or other organisations that influence and affect the firm’s decisions and actions are referred to as stakeholders. Depending on the unique firm, stakeholders may include the government, employees, shareholders, suppliers, distributors, the media, and even the community in which the firm is based.

1. Regarding corporate purpose values, stakeholders will maximise value for all stakeholders instead of shareholders, who will maximise value for themselves only.

2. Stakeholders also play a part in a company’s decision-making process. Although employees and consumers are considered stakeholders, they are also considered when making decisions.

3. Accountability is not simply about being accountable to oneself. Customers, suppliers, governments, communities, and employees are all held accountable.

Stakeholder Management

An organisation must have an efficient stakeholder management strategy to help it achieve its strategic objectives. This strategy interprets and influences both external and internal settings, and it builds positive connections with stakeholders by appropriately managing their expectations and agreed-upon objectives. Fundamental ideas must guide and design the process and control of stakeholder management.

Within a firm or project, stakeholder management develops a plan that makes use of information or intelligence gathered via the following typical processes:

1. Stakeholder Identification:

Identify the parties affected by the business, whether internal or external to the organisation. A stakeholder map can be helpful for this.

2. Stakeholder Analysis:

Identify and recognise stakeholder needs, concerns, desires, authority, familiar relationships, and interfaces, and align this information with the Stakeholder Matrix.

3. Stakeholder Matrix:

Arrange stakeholders on a matrix based on their influence, impact, or contribution to the business or its projects.

4. Stakeholder engagement:

Engaging stakeholders does not aim to build project/business requirements, create solutions or problems, or define roles and responsibilities. At the Executive level, the approach emphasizes getting to know and understand one another. It provides an opportunity to debate and agree on communication expectations and a set of values and principles that all stakeholders will follow.

5. Communicating Information:

Expectations for managing communications between stakeholders are created and agreed upon – who receives communications, when, how, and to what extent of detail. Protocols with security and secrecy categories can be established.

12.2 Strategic Leadership

Leadership is the art and practice of persuading individuals to work voluntarily and enthusiastically towards attaining the organization’s goal. Specific leadership styles are frequently related to specific methods of strategy development and execution. The organization’s mission and strategy do not emerge through a dialogue process. Still, they are deliberately guided by an individual with a strategic vision, whom we call a “strategic leader.”

Strategic leadership establishes the firm’s direction by creating and expressing a vision of the future and inspiring individuals of the organisation to work in that direction. Strategic leadership, as opposed to managerial leadership, is concerned with identifying the firm’s strategy and direction, aligning the firm’s plan with its culture, modelling and conveying high ethical standards, and initiating changes in the firm’s strategy as necessary. The most effective leadership does not simply articulate an organization’s vision and goal in a cold, abstract manner but also communicates trust, passion, and dedication to strategy.

Examples include Bill Gates of Microsoft, Akio Morita of Sony, Jack Welch of General Electric, Gianni Agnelli of Fiat, and Narayana Murthy of Infosys.

“Visionary leadership inspires the impossible: fiction becomes truth,” as the saying goes.

Strategic leadership, therefore, improves the organization’s long-term prospects while maintaining its short-term financial stability.

12.2.1 Strategic Leadership’s Role

Leaders play a vital role in six critical and interrelated actions in strategy implementation:

1. Clarifying strategic intent:

Leaders inspire employees to accept change by presenting a clear vision of where the company’s strategy must lead.

2. Setting the Direction:

Leaders establish the course and scope of the organisation by developing appropriate corporate and business strategies.

3. Building the organisation:

Because leaders seek to embrace change, they are frequently obliged to rebuild their organisations to align them with the ever-changing environment and needs of the strategy. Such an attempt frequently entails overcoming opposition to change and tackling issues such as the following:

a. Creating a shared knowledge of organisational priorities.

b. Clarifying responsibilities among managers and organisational units

c. Empowering managers and pushing authority lower in the organisation

d. Identifying and correcting problems in coordination and communication across the organisation

e. Obtaining personal commitment from managers to a shared vision

f. Staying closely connected with “what’s going on in the organisation”

4. Shaping organisational culture:

Leaders have a critical role in developing and sustaining a strategy-supportive culture. They understand that the values and beliefs held throughout their organization will impact how the organization’s work is done. While seeking to embrace fast change, most leaders devote significant work to transforming their organization’s culture.

5. Creating a learning organisation:

Leaders must play an essential role in establishing a learning organisation. A learning organisation adjusts swiftly to change. The five central elements of a learning organisation are:

a. Inspiring and motivating people through a mission or purpose;

b. Empowering people at all levels throughout the organisation;

c. Accumulating and sharing internal knowledge;

d. Gathering external information; and

e. Challenging the status quo to stimulate creativity.

6. Instilling ethical behaviour:

Ethics can be defined as a set of rules that govern what is right and wrong. The application of general ethical norms to commercial companies is referred to as business ethics. A leader is crucial in instilling ethical behaviour in an organisation.

A leader’s ethical perspective is critical in supporting ethical behaviour among personnel. Leaders who uphold high ethical standards serve as role models for others in the organization, raising the organization’s overall level of ethical behaviour. Ethical behaviour must begin with the leader before employees can be expected to follow suit.

12.2.2 Leadership Approaches

According to research, some leadership techniques are more effective than others in organisational transformation. Transactional, transformational, and charismatic leadership are three forms of leadership that can have a significant impact. These forms of leadership are described briefly below:

1. Transactional Leadership:

Transactional leaders clarify subordinates’ roles and task requirements, initiate structure, provide appropriate rewards, and endeavour to be sensitive to and meet subordinates’ social needs. The ability of the transactional leader to satisfy subordinates may boost productivity. Transactional leaders succeed at management responsibilities. They are dedicated, tolerant, and fair. They take delight in ensuring that everything runs smoothly and efficiently. Transactional leaders frequently emphasise impersonal performance components, including plans, timelines, and budgets. They have a strong sense of devotion to the organisation and adhere to its standards and ideals. In brief, transactional leaders utilise their office’s authority to exchange rewards such as cash and status for people and, in general, attempt to steadily but not significantly improve an organization’s performance. In other words, while transactional leadership is essential in all organisations, leading change necessitates a different approach, namely transformational leadership.

2. Transformational Leadership:

Transformational leaders have a unique ability to foster creativity and transformation. They inspire their followers to challenge the status quo. They are capable of leading change in the organization’s mission, strategy, structure, and culture, as well as promoting product and technology innovation. Transformational leaders do not regulate specific transactions with followers simply through physical laws and rewards. They emphasise intangible elements such as vision, shared values, and ideas to develop relationships and discover common ground to enlist in the change process.

3. Visionary and Charismatic Leadership:

Charismatic leadership extends beyond transactional and transformational leadership. Charisma is a “fire that ignites followers’ energy and devotion, resulting in results that go above and beyond the call of duty.” Despite hurdles and personal sacrifice, the charismatic leader has the power to inspire and motivate people to achieve more than they would ordinarily do. Followers put their interests aside for the sake of the leader. Charismatic leaders are typically adept at visionary leadership. A vision is an appealing, ideal future that is plausible but not readily achievable. Visionary leaders see beyond the present and inspire their people to hope for a better future. They speak to their followers’ hearts, allowing them to be a part of something bigger than themselves. As a result, visionary leaders have a clear vision for the future and can inspire others to help them realise it. They emotionally influence subordinates because they are passionate about the goal and can express it to others in a way that makes the vision real, personal, and essential to others. When charismatic and visionary leaders respond to organisational difficulties, they can significantly benefit organisational performance.

12.3 Corporate Culture and Strategic Leadership

The beliefs and business ideas that management preaches and follows define a company’s culture.

Example: Culture can be shown in:

1. Corporate stories
2. Attitudes and behaviours of employees
3. Core values
4. Organisation’s politics
5. Approaches to people management and problem-solving
6. Relationships with stakeholders; and
7. Atmosphere that permeates its work environment

The culture of an organisation is akin to an individual’s personality. The common assumptions (beliefs and values) among a firm’s members impact the attitudes and behaviours within that firm, much as an individual’s personality influences his or her behaviour.

A founder or other early influential leader articulating the ideas, beliefs, and principles the firm should adhere to is frequently the source of company culture aspects. These components are incorporated into company policies, a creed or value statement, strategies, and operating procedures. These values and behaviours become shared by firm employees and managers over time. As a result, culture is passed down as follows:

1. New leaders act to strengthen them.

2. They are urged to be adopted and followed by new employees.

3. People’s and events’ stories are recounted and replayed.

4. Organization members are honoured and rewarded for demonstrating cultural norms.

12.3.1 Influence of Culture on Behaviour

The culture of an organisation can significantly impact the behaviour of its personnel and, as a result, a company’s capacity to implement new initiatives. A challenge for a strong culture is that any change in mission, objectives, strategies, or policies that contradict the company’s culture is unlikely to be successful. Corporate culture has a strong inclination to resist change since its existence sometimes depends on maintaining stable connections and behavioural patterns.

Example: The massive Mitsubishi Corporation’s male-dominated Japanese-centered corporate culture caused challenges for the corporation when it applied its growth strategy in North America. Female employees were allegedly sexually harassed by male bosses, prompting lawsuits and a boycott of the company’s autos by women groups.

There is no such thing as the best business culture. An ideal culture best supports the company’s mission and objectives. This means business culture, like structure and leadership, should help the plan. Unless the strategy is entirely in sync with the culture, any significant shift in strategy should be accompanied by a shift in the organization’s culture. Although corporate cultures can be transformed, it can take a long time and a lot of effort. As a result, “controlling company culture” is a critical managerial function. In doing so, management must examine what a specific change in strategy means for corporate culture, determine whether a culture change is required, and decide whether an attempt to change culture is worth the expected costs.

12.3.2 Creating Strategy Supportive Culture

It is difficult to change a plan once it has been established. The strategist must choose a strategy compatible with the organization’s current corporate culture. If this is not achievable, the strategy implementer should modify the company culture, which impedes effective plan execution.

Changing a Problem Culture

One of the most challenging management tasks is aligning a company’s culture with strategy. This is because profoundly held values and habits are deeply ingrained, and people emotionally cling to the old and familiar. Over time, it takes concerted management effort to root out undesired behaviours and install more strategy-supportive behaviours. Changing culture necessitates capable leadership at the top. To compel massive cultural change and overcome the springback opposition of entrenched cultures, enormous strength is required, and great power is generally only found at the top.

Changing a problem culture entails the four steps outlined below:

Step 1: Determine which current cultural truths are strategy-supportive and which are not.

Step 2: Clearly outline desirable new behaviours and essential characteristics of the “new” culture.

Step 3: Discuss openly the challenges of today’s culture and how new behaviours will boost performance.

Step 4: Take visible, proactive efforts to change culture.

Managing Culture Change

As previously stated in previous parts, the culture that an organisation seeks to establish is communicated through rites, rituals, myths, stories, acts, and so on. Only with courageous leadership and concentrated activity on multiple fronts will a corporation be able to tackle a significant culture transformation. Top leadership should be critical in conveying the need for cultural transformation and actively initiating activities to promote the culture to better align with strategy.

Cultural change necessitates both

(a) symbolic and

(b) substantive acts.

They necessitate substantial commitment from high management.

The following measures can aid in the development of a strategy-supportive culture:

1. Highlight key themes or dominant values:

Through internal company communications, leaders must highlight dominant values and reiterate at every opportunity why cultural transformation is beneficial to the firm.

2. Stories and legends:

Leaders must use stories, anecdotes, and legends to support their essential views. Members of the organisation must identify with them and share their ideals and values.

3. Rewards:

Rewarding persons who exhibit new cultural norms visibly and generously will gradually influence the culture.

4. Recruiting and hiring:

New managers and staff with the required cultural values must be sought.

5. Revising policies and procedures:

Revising policies and procedures to support the new culture.

6. Leading by example:

Suppose the organization’s strategy includes low-cost leadership. In that case, senior management must demonstrate this in their actions and decisions, such as low-cost executive suite decorations, conservative expense accounts and entertainment allowances, lean corporate allowances, few executive perks, etc.

7. Ceremonial events:

Companies must honour individuals and organisations who show cultural norms and award those who reach strategic milestones at ceremonial ceremonies.

8. Group gatherings:

Top management must participate in staff training programmes, among other things, to emphasise strategic priorities, values, ethical principles, and cultural norms.

Every group meeting must be viewed as a chance to reinforce and ingrain values, celebrate excellent deeds, reinforce cultural norms, and encourage changes to implement the plan. Thus, top organisations and executives efficiently employ symbols, role models, and ceremonial occasions to establish strategy-culture fit.

Managing Cultural Conflict

When merging or acquiring another company, top management must evaluate the possibility of a collision of corporate cultures. Integrating cultures is a huge difficulty for most businesses. It is risky to believe that the companies can be incorporated into the same reporting systems. The wider the cultural divide between the two organisations, the faster executives in the acquired firm resign, and significant talent is lost.

Methods of Managing the Culture of an Acquired Firm

There are four broad approaches to managing two distinct cultures.

(1) Integration:

Integration entails combining the two cultures so that the distinct cultures of both enterprises are preserved in the new culture.

(2) Assimilation:

In this case, the acquired firm willingly surrenders its culture and embraces the acquiring company’s culture.

(3) Separation:

The cultures of the two firms are separated here. They are structurally segregated, with no opportunity for cultural interchange.

(4) Deculturation:

This is the forced imposition of the acquiring firm’s culture on the acquired firm. This frequently leads to a great deal of uncertainty, conflict, resentment, and stress.

When AT & T purchased NCR Corporation in 1990 for its computer business, it replaced NCR executives with AT & T executives, reorganised sales, pushed employees to adhere to the AT & T code of values known as the “Common Bond,” and even altered the name of NCR. As a result, by 1995, AT&T had faced massive losses, and the NCR operation was sold in 1996.

12.4 Personal Ethics and Values

Personal values, fundamental values, and values all relate to the same idea. They are desired characteristics, standards, or ideals. Values are the motivating force behind a person’s behaviours and reactions.

Ethics is “the study of good and bad, right and wrong, or moral duty and obligation.”

Ethics are the moral principles and values that guide a person’s or group’s behaviour. Ethics assists us in determining what is good or bad, moral or immoral, fair or unfair in our actions and decisions. In another way, ethics is a “moral compass” that guides our conduct.

An individual’s ethics can be derived from various sources, including family history, religious beliefs, community standards and expectations, and so on.

12.4.1 Importance of Ethics

Over the last few years, there has been a surge in interest in corporate ethics. This could be due to recent business scandals involving companies such as Enron, Tyco, Texaco, and others. The possibility of an ethical crisis emerging in a company cannot be ruled out without a robust ethical culture. Companies bear considerable consequences in terms of financial and reputational loss, as well as the degradation of human capital and relationships with suppliers, customers, society at large, and governmental agencies.

Ethical values and integrity drive an ethical organization. Such values shape the organization’s search for opportunities, system design, and decision-making processes. They serve as a unifying force across different functions and employee groups by providing a common frame of reference. A corporation’s organizational ethics define what it is and what it stands for.

An ethical organisation has numerous potential benefits. A strong ethical perspective can benefit employee dedication and ambition to perform. This is especially true in today’s knowledge-intensive organisations, where human capital is vital to generating value and gaining a competitive advantage. An ethical organisation can also strengthen its relationships with its suppliers, customers, and government organisations.

A leader’s ethical perspective is critical in supporting ethical behaviour among personnel. Leaders who uphold high ethical standards are role models for others, raising the organization’s overall ethical behaviour. Ethical behaviour must begin with the leader, who is responsible for instilling ethical behaviour throughout the organization.

12.4.2 Approaches to Ethics

When confronted with an ethical quandary, there are four approaches to consider. These four approaches are as follows:

1. Utilitarian Approach:

According to this viewpoint, moral behaviour is defined as doing the most good for the most people.

2. Individualism Approach:

According to this viewpoint, acts are moral when they serve the individual’s best long-term interests and ultimately contribute to the larger good.

3. Moral – Rights Approach:

According to this viewpoint, fundamental rights and liberties should be respected in all choices. As a result, an ethically sound option best protects the rights of individuals affected by it. Six moral rights should be considered while making decisions:

1. Right of free consent
2. Right of privacy
3. Right of freedom of conscience
4. Right of free speech
5. Right to due process
6. Right to life and safety

Managers must avoid interfering with the rights of others when making ethical decisions.

4. Justice Approach:

According to this viewpoint, moral judgements must be based on equity, fairness, and impartiality. Managers are concerned about four categories of justices:

a. Distributive justice:

According to distributive justice, individuals should not be treated differently based on race, gender, religion, or country of origin. Similar individuals should be handled in the same way. As a result, men and women should not be paid differently for doing the same job.

b. Procedural justice:

Procedural justice necessitates that rules be applied fairly. Rules should be clearly defined and applied consistently and impartially.

c. Compensatory justice:

Compensatory justice requires that the party accountable reimburse individuals for the expense of their injuries. Furthermore, individuals should not be held responsible for events over which they have no influence.

d. Natural duty principle:

This principle represents a duty to assist others in need or danger, a duty not to create unnecessary pain, and an obligation to follow an institution’s just standards.

12.4.3 Building an Ethical Organisation

Before a company can become a highly ethical organisation, it must have several critical components. To ensure the firm’s success, the following factors must be consistently reinforced:

Role Model

Leaders, for better or worse, serve as role models in their organisations. Through their actions, leaders’ principles and character become visible to the organisation’s employees. Leaders must accept responsibility for ethical failings inside the organisation, which increases employee loyalty and commitment.

Code of Ethics

They are yet another crucial component of an ethical organisation. Such systems provide a statement and recommendations for norms, attitudes, and decision–making. They provide personnel with a clear awareness of the organization’s ethical principles. Many significant corporations have created such rules of conduct.

1. Reward and Evaluation Systems:

An effective reward and assessment system should consider the outcomes and the methods used to attain the organization’s goals and objectives. Individuals may do immoral activities as a result of ineffective reward systems.

2. Policies and Procedures:

Organisations’ unethical behaviour can be attributed to a lack of policies and procedures to guide behaviour. Properly crafting policies and procedures to govern behaviour is critical so that all employees are encouraged to act ethically. However, simply having policies “on the books” is insufficient. They must, instead, be effectively conveyed, enforced, and monitored. In addition, the corporation should adhere to sound corporate governance principles.

Ethics Training

The goal of ethics training is to promote ethical behaviour. Companies should provide appropriate ethical standards training. It enables managers to match their ethical behaviour with the aims of their organisations.

Ethics Audit

Companies should conduct periodic audits to ensure all organisational departments observe ethical standards.

Chief Ethics Officer

Some large corporations appoint a senior officer who is responsible for overseeing employees’ ethical behaviour. This officer serves as a moral watchdog.

a.  Ethics Committee:

An ethics committee creates policies governing ethical behaviour and resolves serious ethical quandaries confronting an organization’s personnel. The ethics committee’s responsibilities include organising frequent meetings to debate ethical concerns, finding potential code violations, enforcing the code, awarding ethical behaviour, etc.

 b. Ethics Hotline:

This dedicated phone line allows employees to report ethical dilemmas and problems without going through the usual channels. The line is usually handled by an executive who also investigates the topic and assists in resolving the employees’ difficulties.

12.5 Social Responsibility and Strategic
Management

Corporate social responsibility (CSR) is “activities that appear to serve some social good, beyond the firm’s interests.” It covers environmental ‘green’ issues, employee and supplier treatment, philanthropic activities, and other community-related issues.

Understanding that CSR compels businesses to go above and beyond what the law mandates is vital — simply doing the bare minimum is not enough. “Corporate social responsibility is concerned with how an organisation goes above and beyond the minimum commitments to stakeholders” (Johnson and Sholes, 2002).

Corporate Social Responsibility is thus a company’s obligation to conduct business in a way that minimises harm to other stakeholders and the environment and to consider the overall betterment of society in its decisions and activities. The essence of socially responsible behaviour is that a company should strive to balance its actions to benefit its shareholders while minimising any negative impact on other stakeholders such as employees, suppliers, customers, local communities, and society at large, as well as to proactively mitigate any adverse effects on the environment that its actions and business may have.

12.5.1 Responsibilities of Business

A business organisation is responsible for four things:

1. Economic responsibilities:

These are the most fundamental responsibilities of a business. This entails a business’s basic responsibility to provide goods and services to society at a reasonable cost. In carrying out that economic responsibility, the company creates productive jobs for its employees and pays taxes to the federal, state, and local governments.

2. Legal responsibilities:

Reflect on the firm’s need to follow the rules governing its activities, particularly consumer safety and pollution management.

3. Ethical responsibilities:

Reflect on the company’s understanding of appropriate or proper corporate behaviour. Ethical responsibilities extend beyond legal obligations. Firms are expected, but not legally required, to act ethically.

4. Discretionary responsibilities:

These are willingly adopted by businesses that take a citizenship approach. They contribute to ongoing charities, public-service advertising campaigns, donations, medical camps, and public welfare activities, among other things. A commitment to full corporate responsibility necessitates that strategic managers approach social challenges with the same zeal that they make commercial difficulties.

Business executives should remember that economic and legal responsibilities are required, ethical obligations are expected, and discretionary responsibilities are desirable.

The four responsibilities listed above are listed in order of priority. To meet its economic obligations, a business must first make a profit. A company must also abide by the law as a responsible corporate citizen. On the other hand, Carrol contends that commercial firms must fulfil their social responsibilities in addition to their economic and legal commitments. Social duty includes both ethical and discretionary responsibilities but does not include economic or legal obligations.

12.5.2 Need for CSR: The Strategy

After reviewing the reasons for and against CSR, it is clear that it is in corporations’ best interests to be good corporate citizens and contribute part of their resources and energies to their employees, the communities in which they operate, and society in general. There are five primary reasons why businesses should take on social responsibilities.

1. Self-interest of the Organisation:

Every organisation takes vital environmental inputs and turns them into goods and services for societal use. They assist shareholders in obtaining suitable returns on their investment during this process. It is required that organisations recognise and respond to the interests and demands of stakeholders other than their direct constituents — owners, customers, suppliers, and employees – such as citizens and society in general. That is, they must take into account the requirements of the larger community and act in a socially responsible manner.

2. It generates Internal Benefits:

Internal benefits of CSR include employee recruitment, workforce retention, and training. Organizations with a positive CSR reputation are likelier to attract and retain personnel than companies with a negative image. Some people feel better about working for a firm dedicated to improving society. This can help to reduce turnover and increase worker productivity. This also benefits the company by lowering the costs of worker recruiting and training. Employee commitment increases when good working circumstances are provided.

3. It Reduces Risks:

CSR reduces the risk of reputational damage and increases buyer patronage. Consumer, environmental, and human rights activists are eager to criticise companies that are not socially responsible. Pressure organisations can generate adverse publicity, organise boycotts, and persuade purchasers to avoid an offender’s products. According to research, negative publicity is more likely to trigger a company’s stock price drop.

4. In the Best Interest of Shareholders:

CSR is in the best interests of the company’s shareholders. Social responsibility plans that are well-thought-out benefit shareholders in a variety of ways. Socially responsible behaviour can aid in the avoidance or prevention of costly or burdensome legal and regulatory measures. According to a survey of significant organisations, environmental compliance and developing eco-friendly products can boost earnings per share, profitability, and the likelihood of getting contracts.

5. It gives Competitive Advantage:

Being known as a socially responsible company might give a company a competitive edge.

Eco-friendly businesses, for example, improve their company image. Many people in Western countries shun non-green products. Companies that take the lead in being environmentally friendly, such as using recycled materials, developing “green” products, and contributing to social welfare programmes, improve their corporate image.

Organisations that take social responsibility seriously can improve their corporate reputation and operational efficiency while lowering risk and fostering loyalty and creativity. Companies that go above and beyond the call of duty to safeguard the environment are involved in community affairs and are generous sponsors of charity causes are more likely to be regarded as excellent places to work or do business. This will also benefit the company’s shareholders.