Competitive Strategy and Its Execution: A Conceptual Note.

• Author: Wasilewski, Nikolai

INTRODUCTION

Strategic management / planning processes are generally represented as a three-stage sequential process of strategic analysis (the derivation of the organization's strategic direction and analysis of the organization's internal and external environments), followed by strategy formulation (where alternate business and corporate strategies are formulated, evaluated, and selected for implementation), followed by strategy implementation (where the actions necessary to implement the selected strategies are specified and undertaken) (see for example, Dess, McNamara, Eisner, & Lee, 2021). There may be variations on this sequence, such as feedback loops from strategy formulation back to strategic analysis to obtain additional environmental data to enable enhanced assessment of alternative strategies, and feedforward loops from strategy formulation to strategy implementation to make preliminary assessments of the implementability of a strategy as a criterion for strategy selection (Wasilewski, 2013). Nevertheless, the strategic management / planning processes generally follow the above-described sequence (Miller, 1998).

Faced with finite strategic resources (e.g., time, money, people), organizations often need to decide how to allocate these resources among the stages of the strategic management process. Such strategic resource allocation decisions often result in decisions of the degree of emphasis placed on the quality of strategy versus the quality of the strategy implementation. (In this paper, for purposes of simplicity, the idea of 'quality' refers to the containing of generally desirable attributes, which is further explored in subsequent sections of this paper.) The resultant debates have often been characterized as 'strategy vs execution' (Bughin, LaBerge, & Mellbye, 2017; Frigo, 2003), that is, whether to focus 'on the strategy to implement' versus 'on the implementation of the strategy' (Collis, 2019). (In this paper the terms implementation and execution may be used interchangeably.)

This conceptual paper begins with brief discussions of the conceptualizations of strategy followed by strategy implementation. Then the 'strategy versus execution' debate is discussed. Then the interrelationship of strategy and strategic implementation is related to the purpose of the strategic management process in terms of competitive advantage. Finally, a concluding discussion is presented.

STRATEGY

Working backward on the aforementioned three-stage sequential process of strategic management / planning, "the purpose of strategy implementation is to implement those strategies that promote and improve the short-and long-term viability and success of the organization, through sustained value creation (Frery, 2006). These strategies stem from the strategy formulation stage, where alternate strategies are formulated, evaluated, and selected for implementation. As such, the strategy formulation stage addresses those 'strategic conditions / considerations' in the organization's internal and external environments which are of concern and consequential to sustained value creation. These 'strategic conditions / considerations' are the input to strategy formulation, and since that input is the output from strategic analysis, the purpose of strategic analysis is to provide an output that clearly identifies and describes the 'strategic conditions / considerations. 'Strategic conditions / considerations' are commonly referred to as 'strategic issues', and it is generally acknowledged that strategic analysis is to aid in understanding the strategic issues rather than to generate solutions (Grant, 2009). The strategic analysis stage may be deemed completed, and the strategy formulation stage commenced, when the strategic issues have been sufficiently identified and described for use in strategy formulation" (Wasilewski, 2011, p. 81). Thus, a strategy resulting from the strategy formulation stage is deemed to be of greater quality as it provides for a more effective and efficient addressing of the strategic issues.

STRATEGY IMPLEMENTATION

Regarding strategy implementation, "the 7S Framework (Waterman, Jr., 1982; Waterman, Jr., Peters, & Phillips, 1980a, 1980b) has been applied as a means to understand and enhance effectiveness of the strategy implementation stage (Bhatti, 2011)....the simplicity, conceptual appeal, and versatility of the 7S model has resulted in its being a widely utilized / applied tool in many diverse studies from both diagnostic and prescriptive perspectives [see Wasilewski, 2013]...." The 7S model asserts that strategy implementation in an organization may be represented by seven distinct interrelated elements: strategy, structure, systems, staff, skills, style, shared values, with first three elements classified as the 'hard Ss', which are relatively easier to identify, quantify, and measure, and the latter four elements classified as the 'soft Ss', which are relatively more qualitative, subjective, and more difficult to identify and measure (Peters & Waterman, 1982):

Strategy. The positioning and actions taken by an enterprise, in response to or anticipation of changes in the external environment, intended to achieve competitive advantage.

Structure. The way in which tasks and people are specialized and divided, and authority is distributed; how activities and reporting relationships are grouped; the mechanisms by which activities in the organization are coordinated. Systems. The formal and informal procedures used to manage the organization, including management control systems, budgeting and resource allocation system, and management information systems.

Staff. The people, their backgrounds and competencies; how the organization recruits, selects, trains, socializes, manages the careers, and promotes employees.

Skills. The distinctive competencies of the organization; what is does best along dimensions such as people, management practices, processes, systems, technology, and customer relationships.

Style/culture. The leadership style of managers-how they spend their time, and what they focus attention on, what questions they ask of employees, how they make decisions; also the organizational culture...