Staffing in Strategy Implementation

What is Organizational Staffing?

The implementation of new strategies and policies calls for different use of personnel and new human resource management priorities.

Such staffing issues involve hiring new people with new skills, firing people with inappropriate or substandard skills, or training existing employees to learn new skills.

Selection and development of staff are important not only to ensure that people with the right mix of skills and experiences are initially hired but also to help them grow on the job so that they might be prepared for future promotion.

Examples:

If growth strategies are to be implemented, new people may need to be hired and trained. Experienced people with the necessary skills need to be found for promotion to newly created managerial positions.

When a corporation follows a growth through acquisition strategy, it may find that it needs to replace several managers in the acquired company. The organization may also lose a lot of highly skilled people who are difficult to replace.

If a corporation adopts a retrenchment strategy, a large number of people may need to be laid off or fired. Sometimes corporations find it easier to close or sell off an entire division than to choose which individuals to fire.

Key Concepts in Organizational Staffing

Key 1: Designing Jobs to Implement Strategy

Job design refers to the study of individual tasks to make them more relevant to the company and to the employees.

Modern corporations have turned to new job design techniques: (1) job enlargement, which is to combine tasks and give a worker more of the same type of duties to perform), (2) job rotation, which is to move works through several jobs to increase variety, and (3) job enrichment, which is to alter the jobs by giving the worker more autonomy and control over activities.

With the increasing emphasis on reengineering, many companies are beginning to rethink their work processes with a target to phase unnecessary people and activities out of the process. Process steps that have traditionally been performed sequentially can be improved by performing them concurrently using cross-functional work teams.

Restructuring through needing fewer people would require broadening the scope of jobs and encouraging teamwork. The designing of jobs and job performance are increasingly being considered as sources of competitive advantages.

Key 2: Matching the Manager to the Strategy

Executive characteristics influence strategic outcomes for a corporation.

It is possible that a current CEO may not be appropriate to implement a new strategy. The most appropriate type of general manager needed to effectively implement a new corporate or business strategy depends on the desired strategic direction of that firm or business unit. Executives with a particular mix of skills and experiences may be classified as an executive type and paired with a specific corporate strategy.

Top management of a company changes as a firm moves from one stage of development to another. Because priorities certainly change over an organization’s life, successful corporations need to select managers who have skills and characteristics appropriate to the organization’s particular stage of development.

A change in the environment leading to a change in a company’s strategy also leads to a change in the top management.

Key 3: Changing Hiring and Training Requirements

There is a strong connection between strategy and training. Having formulated a new strategy, a corporation may find that it needs to either hire different people or retrain current employees.

One way to implement a company business strategy such as cost leadership is through training and development. Training is also especially important for differentiation strategy emphasizing quality and customer services. Modern corporations are especially concerned with attaining the highest quality possible in all their operations.

Training is also important when implementing a retrenchment strategy. Successful downsizing means that a company has to invest in its remaining employees.

Key 4: Identifying Abilities and Potential of Employees

There are several ways to identify and prepare employees for important positions.

The first way is to use a performance appraisal system.

This approach identifies good performers with promotion potential. The company selects people with promotion potential to be in an executive development training program.

A company should examine its human resource system to ensure not only that people are being hired without regard to their racial, ethnic, or religious background, but also that they are being identified for training and promotion in the same manner.

The second way is to use assessment centers.

This approach evaluates a person’s suitability for an advanced position. Because each is specifically tailored to its corporation, these assessment centers are unique and are used to assess the potential of employees for specific positions.

Promotions into these positions are based on performance levels in the assessment center.

The third way is job rotation.

This approach moves people from one job to another. It is also used in many large corporations to ensure that employees are gaining an appropriate mix of experiences to prepare them for future responsibilities. Rotating people among divisions is one way that a corporation can improve the level of organizational learning.

Companies that grow internally attempt to transfer important knowledge and skills throughout the corporation in order to achieve some sort of synergy. Companies that pursue diversification strategies through internal development make greater use of interdivisional transfers of people than do companies that grow through unrelated acquisitions.

Key 5: Performance and Pay to Strategies

How can an organization’s reward system be more closely linked to strategic performance? How can decisions on salary increases, promotions, merit pay, and bonuses be more closely aligned to support the long-term strategic objectives of the organization?

A combination of reward strategy incentives, such as salary raises, stock options, fringe benefits, promotions, praise, recognition, criticism, fear, increased job autonomy, and awards, can be used to encourage managers and employees to push hard for successful strategic implementation.

Five tests are often used to determine whether a performance-pay plan will benefit an organization.

They are as follows: (1) Does the plan capture attention? Are people talking more about their activities and taking pride in early successes under the plan? (2) Do employees understand the plan? Can participants explain how it works and what they need to do to earn the incentive? (3) Is the plan improving communication? Do employees know more than they used to about the company’s mission, plans, and objectives? (4) Does the plan payout when it should? Are incentives being paid for desired results, and being withheld when objectives are not met? and (5) Is the company or unit performing better? Are profits up? Has market share grown? Have gains resulted in part from the incentives?

A dual bonus system based on both annual objectives and long-term objectives is becoming common.

The percentage of a manager’s annual bonus attributable to short-term versus long-term results should vary by hierarchical level in the organization. It is important that bonuses not be based solely on short-term results because such a system ignores long-term company strategies and objectives.

Gainsharing is another criterion widely used to link performance and pay to strategies.

Gainsharing requires employees or departments to establish performance targets. If actual results exceed objectives, all members get bonuses.

Bonus system is another widely adopted tool.

Criteria such as sales, profit, production efficiency, quality, and safety could also serve as bases for an effective bonus system. If an organization meets certain understood, agreed-upon profit objectives, every member of the enterprise should share in the harvest. A bonus system can be an effective tool for motivating individuals to support strategy implementation efforts.

Key 6: Managing Resistance to Strategic Change

Because of diverse external and internal forces, change is a fact of life in organizations. The rate, speed, magnitude, and direction of changes vary over time by industry and organization.

Resistance to change can be considered the single greatest threat to successful strategy implementation.

The strategic management process itself can impose major changes on individuals and processes. Reorienting an organization to get people to think and act strategically is not an easy task.

Successful strategy implementation hinges upon managers’ ability to develop an organizational climate conducive to change. Change must be viewed as an opportunity rather than as a threat by managers and employees.

Resistance regularly occurs in organizations in the form of sabotaging production machines, absenteeism, filing unfounded grievances, and an unwillingness to cooperate.

The reason for people to resist change is that the thought of change raises anxieties because people fear economic loss, inconvenience, uncertainty, and a break in normal social patterns.

Almost any change in structure, technology, people, or strategies has the potential to disrupt comfortable interaction patterns. People often resist strategy implementation because they do not understand what is happening or why changes are taking place.

Resistance to change can emerge at any stage or level of the strategy implementation process.

Management should strive to create a work environment in which change is recognized as necessary and beneficial so that individuals can more easily adapt to change. Adopting a strategic management approach to decision-making can itself require major changes in the philosophy and operations of a firm.

Although there are various approaches for implementing changes, 3 commonly used strategies are a force change strategy, an educative change strategy, and a rational or self-interest change strategy.

Tactic 1: Force Change

A force change strategy involves giving orders and enforcing those orders; this strategy has the advantage of being fast, but it is plagued by the low commitment and high resistance.

Tactic 2: Educative Change

An educative change strategy is one that presents information to convince people of the need for change. The disadvantage of an educative change strategy is that implementation becomes slow and difficult.

However, this type of strategy evokes greater commitment and less resistance than does the force change strategy.

Tactic 3: Rational Change

Third, a rational or self-interest change strategy is one that attempts to convince individuals that the change is to their personal advantage. When this appeal is successful, strategy implementation can be relatively easy. However, implementation changes are seldom to everyone’s advantage. The rational change strategy is the most desirable. Managers can improve the likelihood of successfully implementing change by carefully designing change efforts.

A rational or self-interest change strategy as consisting of four steps.

Step 1: Employees are invited to participate in the process of change and in the details of transition; participation allows everyone to give opinions, to feel a part of the change process, and to identify their own self-interests regarding the recommended change.

Step 2: Some motivation or incentive to change is required; self-interest can be the most important motivator.

Step 3: Communication is needed so that people can understand the purpose of the changes.

Step 4: Giving and receiving feedback everyone enjoys knowing how things are going and how much progress is being made.

Resources

Related Concepts

Strategy Implementation Essentials

References

Hitt, M. A., Ireland, D. R., & Hoskisson, R. E. (2019). Strategic Management: Concepts and Cases: Competitiveness and Globalization (MindTap Course List) (13th ed.). Cengage Learning.
Hill, C. W. L., & Jones, G. R. (2011). Essentials of Strategic Management (Available Titles CourseMate) (3rd ed.). Cengage Learning.
Mastering Strategic Management. (2016, January 18). Open Textbooks for Hong Kong.
Wheelen, T. L. (2021). Strategic Management and Business Policy: Toward Global Sustainability 13th (thirteenth) edition Text Only. Prentice Hall.

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