Dlodlo Factors 2011 Eight propositions were posited after a detailed review of literature on strategy implementation and middle managers. These were tested in relation to the results

FACTORS AFFECTING STRATEGY IMPLEMENTATION AND

THE ROLE OF MIDDLE MANAGERS IN IMPLEMENTATION

Thobani Dlodlo

Mini research report presented in partial fulfilment

of the requirements for the degree of

Master of Business Administration

at the University of Stellenbosch

Supervisor: Professor Laetitia van Dyk

Degree of confidentiality: A March 2011

ii

DECLARATION

By submitting this research report electronically, I Thobani Dlodlo, declare that the entirety of the

work contained therein is my own original work, that I am the owner of the copyright thereof (unless

to the extent explicitly otherwise stated) and that I have not previously in its entirety or in part

submitted it for obtaining any qualification.

T. Dlodlo 31 January 2011

Copyright © 2010 Stellenbosch University All rights reserved

iii

ACKNOWLEDGEMENTS

I wish to express my sincere gratitude to:

South African Breweries management, for giving me the opportunity to take a year off work

and complete my studies as a full-time student;

Prof. Laetitia van Dyk, my supervisor, for her guidance and support;

my lovely wife and beautiful kids, for enduring the long months during my absence. I could

not have achieved this degree without their unerring understanding and support;

my parents, for their support and encouragement; and

all the respondents, for their enthusiasm and patience in enduring the long interviews. Your

input has been invaluable.

iv

ABSTRACT

The global business environment has evolved since 1990. This change has brought companies

new realities in the form of new business opportunities for growth and, at the same time has

exposed them to new competitors.

This has caused companies to invest many resources in devising new effective strategies to take

advantage of the new opportunities, whilst protecting their market positions, which are crucial to

their continued economic existence.

Effective implementation of strategy has become the goal of many organisations. However, in

translating their grand plans into action, unacceptably high rates of failure have been reported

among many companies. In most organisations, this responsibility has been left to lower levels of

management.

The purpose of this research was to establish what factors affected the implementation of strategy

and more specifically, what role lower levels of management play in the implementation process. A

qualitative study was undertaken where in-depth interviews were held with a senior executive and

middle managers of a global company.

Eight propositions were posited after a detailed review of literature on strategy implementation and

middle managers. These were tested in relation to the results of the research and conclusions

were then drawn. The data was analysed using content analysis and frequency tables.

The research findings showed that middle managers play a critical role in facilitating the effective

implementation of strategy. It also showed that the execution process is fraught with numerous

challenges, some of which are lack of sufficient budgets, high staff turnover affecting continuity and

the destructive nature of internal competition.

v

CONTENTS

DECLARATION ii

ACKNOWLEDGEMENTS iii

ABSTRACT iv

LIST OF TABLES ix

LIST OF FIGURES x

CHAPTER ONE INTRODUCTION 1

1.1 INTRODUCTION 1

1.2 THE RESEARCH PROBLEM 1

1.3 THE OBJECTIVES OF THE RESEARCH 2

1.4 RESEARCH METHODOLOGY 2

1.5 DEFINITION OF CONCEPTS AND TERMS 2

1.5.1 Middle Management 2

1.5.2 Uncertainty 3

1.5.3 Implementation 3

1.5.4 Competitiveness 3

1.6 LIMITATIONS OF THE RESEARCH 3

1.7 SUBSEQUENT CHAPTERS OF THE REPORT 3

CHAPTER TWO REVIEW OF RELEVANT LITERATURE 5

2.1 MIDDLE MANAGERS 5

2.2 UNCERTAINTY 5

2.3 BUILDING A DEFINITION OF STRATEGY 6

2.4 STRATEGIC PLANNING 7

2.5 NINE SCHOOLS OF THOUGHT 9

2.6 STRATEGY AS A COMPETITIVE POSITION 11

2.7 STRATEGY AS A SYSTEMIC PROCESS 13

2.8 STRATEGY AS A LEARNING PROCESS 13

2.9 RESOURCES AS STRATEGY 14

2.10 BLUE OCEAN AND RED OCEAN STRATEGIES 15

vi

2.11 FACTORS AFFECTING IMPLEMENTATION 15

2.12 STRATEGY IMPLEMENTATION AND MIDDLE MANAGERS 20

2.13 MCKINSEY 7S MODEL 22

2.14 CONCLUSION 23

CHAPTER THREE CASE BACKGROUND 24

3.1 INTRODUCTION 24

3.2 SOUTH AFRICAN BREWERIES 24

3.3 STRATEGIC THRUSTS AND INTENTS 27

Table 3.1: SAB‟s strategic thrusts and intents 27

3.4 THE VISION, MISSION AND VALUES OF SAB 27

3.4.1 Vision 27

3.4.2 Mission 28

3.4.3 Values 28

3.5 THE SUCCESS OF SAB‟S STRATEGY 28

CHAPTER FOUR RESEARCH METHODOLOGY 30

4.1 INTRODUCTION 30

4.2 SITUATIONS FAVOURING QUALITATIVE INTERVIEWS 30

4.3 INTERVIEWS AND INTERVIEW SAMPLE 31

4.4 METHOD OF ANALYSIS 32

4.5 SUMMARY OF RESEARCH PROPOSITIONS 32

4.5.1 Proposition 1 32








CHAPTER FIVE THE RESULTS 35

5.1 PARTICIPATION 35

5.2 SENIOR EXECUTIVE‟S VIEW 35

5.3 UNDERSTANDING OF STRATEGY BY MIDDLE MANAGERS 36

vii

5.4 SAB STRATEGIC INTENTS 37

5.5 ROLE OF MIDDLE MANAGERS 38

5.6 PROGRESS MADE BY SAB WITH ITS STRATEGY 39

5.7 BARRIERS TO IMPLEMENTATION 39

5.9 COMPETENCES 43

5.10 DEVELOPMENT OF CORE CAPABILITIES 44

5.11 STRATEGY AND STRUCTURE AT SAB 45

5.12 OTHER ISSUES RELATED TO SAB‟S STRATEGY IMPLEMENTATION 48

5.13 COMMUNICATION EFFECTIVENESS 48

5.14 COMMUNICATION CHANNELS 49

5.15 SAB REWARD AND RECOGNITION EFFECTIVENESS 50

5.16 REWARD AND RECOGNITION AND PERFORMANCE 51

5.18 ADDITIONAL ROLE FOR MIDDLE MANAGERS 53

CHAPTER SIX INTERPRETATION OF RESULTS 54

6.1 INTRODUCTION 54

6.2 PROPOSITION ONE 54

6.3 PROPOSITION TWO 55

6.3 PROPOSITION THREE 57

6.4 PROPOSITION FOUR 58

6.5 PROPOSITION FIVE 59

6.6 PROPOSITION SIX 60

6.7 PROPOSITION SEVEN 61

6.8 PROPOSITION EIGHT 62

6.10 RECOMMENDATIONS FOR SAB 62

CHAPTER SEVEN CONCLUSION 64

7.1 1INTRODUCTION 64

7.2 SUMMARY OF FINDINGS 64

7.3 MANAGERIAL IMPLICATIONS 65

7.4 RECOMMENDATIONS FOR FUTURE RESEARCH 67

viii

REFERENCES 68

APPENDIX 1 LETTER TO THE SELECTED PARTICIPANTS 73

APPENDIX 2 LIST OF PARTICIPANTS 74

APPENDIX 3 INTERVIEW SCHEDULE FOR GENERAL MANAGER 75

APPENDIX 4 INTERVIEW SCHEDULE FOR MIDDLE MANAGERS 76

APPENDIX 5 INTERVIEW PROTOCOL 77

ix

LIST OF TABLES

Table 2.1: Nine schools of thought on strategy by Mintzberg 10

Table 3.1: SAB's key strategic thrusts and intents 27

Table 3.2: Progress in terms of the Five Key Strategic Thrusts 28

Table 5.1: General Manager's response on strategy 36

Table 5.2: General understanding of what strategy is by middle managers 37

Table 5.3: SAB‟s strategy 37

Table 5.4: Role of middle managers 38

Table 5.5: Views on progress made by SAB‟s strategy 39

Table 5.6: Barriers to strategy implementation at SAB 41

Table 5.7: Factors that have aided strategy implementation 42

Table 5.8: Core capabilities for middle managers and how these assisted implementation 44

Table 5.9: Core capabilities and how they were developed 45

Table 5.10: Strategy and structure at SAB and its perceived limitations 47

Table 5.11: Other strategy implementation related issues 48

Table 5.12: Communication 49

Table 5.13: Communication channels at SAB 50

Table 5.14: Reward, recognition and performance 51

Table 5.15: How performance is measured at SAB 52

Table 5.16: Involvement of middle managers in strategy formulation 53

Table 5.17: Additional role for middle managers 53

x

LIST OF FIGURES

Figure 2.1: The main components of the Strategic Planning Process 8

Figure 2.2: Porter‟s Five Forces Framework 11

Figure 2.3: Strategy as a systemic process 13

Figure 2.4: Ansoff‟s Matrix 14

Figure 2.5: Strategy Implementation 16

Figure 2.6: Implementation Plan 19

Figure 2.7: The importance of middle managers during change in an organisation 21

Figure 2.8: McKinsey 7S model 22

Figure 3.1: SAB‟s business model 25

Figure 3.2: SAB‟s Business Strategy 26

1

CHAPTER ONE

INTRODUCTION

1.1 INTRODUCTION

In a highly competitive business environment in South Africa, companies have been known to

adapt to change and implement new strategies as dictated by the changing competitive landscape.

They implement these changes in order to remain competitive (Grant, 2002). Changing market

demands, the introduction of new technologies and ever increasing shareholder expectations for

growth are some of the major factors driving change in organisations. However, the failure rate of

large scale change efforts in companies has been reported to be as high as fifty percent

(Majchrzak, 1988), fifty seven percent (Economist Intelligence Unit, 2004) to seventy percent

Burnes (2002). This failure rate needs to be addressed due to the substantial loss of time and

financial resources for employees and their organisations.

Free market forces and globalisation have enabled companies to access bigger markets and this

has lessened the ability of companies to differentiate themselves from their competitors.

Companies are finding it easy to copy each other‟s strategies, but where they are failing is in the

implementation of these strategies. The role and challenges faced by middle managers in

organisational change continue to receive little attention from senior management.

1.2 THE RESEARCH PROBLEM

South Africa returned to the international business arena after the first democratic elections in

1994. This re-entry came with a mixture of effects. Companies had to right size in order to remain

competitive. This resulted in the flattening of hierarchical structures in companies and created

more workload and responsibilities for middle management. Because this right sizing translated

into job losses for middle managers, they were typically viewed as resistant to change (Wai-

Kwong, Priem & Cycyota, 2001). This flattening of the structures also brought with it the need to

manage and solve more complex problems by middle managers.

Middle managers are the link between a company and the employees. They have the difficult task

of implementing new strategies to the satisfaction of their seniors, whilst managing the

performance of their employees without the latter feeling victimised. The author has studied South

African Breweries to provide a more detailed example of the problems of implementation and the

role played by middle managers.

2

1.3 THE OBJECTIVES OF THE RESEARCH

In light of the above, the primary objective of the current research is to gain insights into the factors

that affect strategy implementation and the role played by middle managers in the implementation

of that strategy. It will hopefully uncover what has made the middle managers successful and what

challenges they have faced in carrying out their task.

This study will contribute towards the current body of knowledge of the role played by middle

managers in strategy implementation. A framework for successful strategy implementation by

middle managers will be proposed. The findings from the survey will be shared with South African

Breweries management and they will be able to use the insights from the research and build these

into their future implementation plans.

The research goals are set out below.

Research Goal 1: To identify and define the factors which act as barriers or enable the

implementation of strategy by middle managers.

Research Goal 2: To establish the level of involvement of middle managers in strategy formulation

Research Goal 3: To establish what channels are used to communicate strategy and their

effectiveness.

1.4 RESEARCH METHODOLOGY

The approach is qualitative and will involve the researcher interviewing one general manager and

twenty middle managers from South African Breweries Egoli region. The participants will be

deliberately chosen to fit the definition of middle managers of Frohman and Johnson‟s (1992) and

would have had responsibility and played a role in strategy implementation that took place over

the last three years. The author will conduct the interviews personally in a relaxed atmosphere and

will then collate the responses that emerge into a spreadsheet for analysis.

1.5 DEFINITION OF CONCEPTS AND TERMS

The important definitions applicable to this study are discussed below.

1.5.1 Middle Management

Middle managers can be defined broadly as managers holding positions between the first level

supervisor and the level of executives, below those who have company-wide responsibilities

(Frohman & Johnson, 1992).

3

1.5.2 Uncertainty

According to Brashers (2001) and Kramer, Dougherty and Pierce (2004), uncertainty can be

described as ambiguity about the outcomes of various actions, when the situation is unpredictable

and when the situation is predictable.

1.5.3 Implementation

This is defined as the process of transforming wide-reaching ideas into action to achieve broad

company objectives.

1.5.4 Competitiveness

It is about achieving a sustainable winning performance, not delivering one action that simply

wounds, but consistently beating the rest who are working, most likely toward the same or very

similar goals as one‟s own company (Fleisher & Bensoussan, 2007).

1.6 LIMITATIONS OF THE RESEARCH

A few factors potentially limit the extension and generalisation of the results of this research and

these are presented below.

The sample studied was restricted to the population of middle managers in the sales and

distribution division of the Johannesburg Region of South African Breweries. Perhaps a

broader pool of middle managers would have given more insights into the challenges they

face in implementing the rest of the strategy.

The research focused on the implementation of the five key thrusts only and not other

change events that have taken place.

Differences based on geography and other cultural factors could have further influenced the

results.

There are many strategic issues affecting the ability of South African companies to

implement their strategies. A detailed review of all the issues is beyond the scope of this

study. This is mainly due to the constraints of time.

1.7 SUBSEQUENT CHAPTERS OF THE REPORT

The structure of the rest of the report is set out below.

4

CHAPTER TWO: REVIEW OF RELEVANT LITERATURE

This chapter focuses on a review of strategy implementation and the role of middle managers. It

starts by looking at how various authors have defined strategy and implementation. It also looks at

why implementation is important in a competitive environment and why companies fail in

implementing strategy.

CHAPTER THREE: CASE BACKGROUND

In this section, the context of the company to be researched is given. Also discussed are its

strategy, vision, mission and values.

CHAPTER FOUR: RESEARCH METHODOLOGY

In the section, the pilot study undertaken to establish the factors perceived to affect implementation

of strategy is analysed. The method used to collect data, which involved designing discussion

questionnaires, together with a justification, is outlined.

CHAPTER FIVE: ANALYSIS OF RESULTS

The results are presented.

CHAPTER SIX: INTERPRETATION OF RESULTS

This chapter focuses on the meaning and interpretation of the results. The propositions are then

tested and recommendations on implementation are presented

CHAPTER SEVEN: CONCLUSION

The results of the research are summarised and management implications discussed. Finally,

recommendations for future research are outlined.

5

CHAPTER TWO

REVIEW OF RELEVANT LITERATURE

This chapter is a review of the concept of strategy and implementation. It begins by examining the

role of middle managers in strategy implementation and then explores several definitions and

perspectives on strategy, and various ways of implementing it in organisations. Different authors

have put forward interesting views on strategy and the chapter will endeavour to discuss them

here. It also examines the factors that affect its successful implementation in organisations.

2.1 MIDDLE MANAGERS

There are several similar studies that have been done on this topic in South Africa and the rest of

the world. Companies have been known to change strategies on an on-going basis in response to

a changing business environment. This change in strategy always results in a change

management process being implemented. Those managers at the forefront of strategy

implementation are middle managers.

Their role is to facilitate effective communication between senior management and employees

(Peters & Waterman, 1988). They are also responsible for translating the strategy into small

sections that are easy to implement.

Technology and globalisation have created a competitive environment where it has become more

and more difficult for companies to differentiate themselves in terms of product features and design

alone, as these are easier to imitate. Successful companies are differentiating themselves by

means of skills and competences (Boyatzis, 1982; Druker, 1992; Meldrum & Atkinson, 1998) that

lie in their staff and hence the role of middle managers in strategy implementation is gradually

becoming important. In the past, it would appear that strategy implementation was regarded as

being less important than strategy formulation as companies and researchers invested very little

resources in it (Alexander, 1991).

Alexander (1991) noted that implementation was seen as being less glamorous than strategy

formulation. It was overlooked because of a belief that anyone could implement a properly

formulated strategy; however, it has been found that people do not actually know what it includes,

where it starts and where it ends.

2.2 UNCERTAINTY

The literature review emphasises the fact that middle managers do experience a great deal of

uncertainty during change processes and it is important for senior management to be mindful of

6

this, as it will affect the quality of execution in the end. The literature though is not conclusive

concerning the nature of uncertainty experienced.

It was apparent that in most organisations, the only time that middle managers get to know about

the strategy is closer to execution time. This actually means that they have not had sufficient time

to engage with it and also to have their concerns addressed. According to McKinley and Scherer

(2000), this normally leads to the middle managers feeling unsure about how best to move on.

The following factors were identified as helping to reduce the uncertainty:

involvement in strategy formulation;

support from senior management;

improved communication flow;

pre implementation meetings with their staff;

role clarity during implementation; and

peer interaction during implementation.

Schwenk (1984) shared a different view in that he saw uncertainty as being a catalyst that would

encourage innovation and adaptability. That creative tension leads the middle managers to find

ways to cope which in some instances may be groundbreaking.

2.3 BUILDING A DEFINITION OF STRATEGY

As this author mentioned earlier in his introduction, there is no common definition of what strategy

is. Various authors have put forward interesting views and perspectives on what it is.

Strategy means making clear-cut choices about how to compete and win. Hough, Arthur,

Thompson, Strickland and Gamble (2008) support that view; they say that a company‟s strategy is

management‟s action plan for running the business and conducting its operations. They see

strategy as being all about how management intends to grow the business, how it will build a loyal

clientele and out-compete its rivals, and how each functional piece of the organisation will

contribute to the sum total and how performance would be boosted and sustained.

Andrews (1971) defined strategy as a match between what a company was capable of doing within

the reality of what it could possibly do. This it does by trying to match the company‟s strengths and

weaknesses with the environmental opportunities and threats.

According to Hough et al. (2008), a company‟s strategy consists of the competitive moves and

business approaches that managers are employing to grow the business, attract and please

7

customers, compete successfully, conduct operations and achieve the targeted levels of

organisational performance.

Hill and Jones (2001) give an all encompassing definition of strategy: “A strategy is an action that a

company takes to attain one or more of its goals, the overriding goal being to achieve superior

performance”.

There seems to be agreement that one cannot be strategic about the past. Strategies tend to be

both proactive and reactive, depending on the market conditions and will evolve over time, as

companies endeavour to stay ahead of their competitors in terms of market share, profitability and

customer service.

Even though the focus of this research is more on strategy implementation than formulation, the

author believes it is important to review how implementation fits into the broader strategic planning

process.

2.4 STRATEGIC PLANNING

Hill and Jones (2001) propose a basic strategic planning process as shown in Figure 2.1 below.

8

Figure 2.1: The main components of the Strategic Planning Process

Source: Hill and Jones (2001)

In the framework above they propose five stages. The first stage deals with the setting out of the

company‟s vision, mission and goals. These provide the context within which strategies are then

formulated. In the mission statement, the company will explain how it intends taking into account

stakeholder claims. The vision is what the company is trying to achieve in the mid to long term. The

values then shape how the company is going to conduct itself in doing business. The values form

the heart of the organisational culture.

Stage two deals with the analysis of the external environment. Here the company seeks to

understand what growth opportunities are available and also what threats, if any, need to be

monitored. Stage three analyses the internal environment for any strengths and weaknesses. After

understanding both the internal and external dynamics, the next stage is the formulation of

appropriate strategies. The formulation stage is critical to the growth and survival of the company.

External

Analysis

SWOT

Strategic Choice

Internal

Analysis

Corporate Level Strategy

Global Strategy

Business Level Strategy

Functional Level Strategy

Business Vision

Mission & Goals & Values

Designing organisational structure

Structure

Matching Strategy Structure & Controls

Designing Control Systems

Managing Strategic

change

Change

STRATEGYY IMPLEMENTATION

Feedback

9

The company seeks to utilise its strengths to enable it to pursue opportunities, whilst seeking to

counter external threats by correcting its weaknesses. The final stage of implementation has the

following elements (Hill & Jones, 2001):

designing the organisational structure;

designing control systems;

matching strategy, structure and controls; and

managing strategic change.

In the framework above, the strategic plans developed then last for between two to five years. The

framework allows for a yearly review to change or reiterate existing strategy and structure.

Interestingly, Hough et al. (2008) offer a different framework from the one above. Theirs has four

stages as outlined below.

Start by thinking strategically about the external and internal environment.

Then outline a strategic vision of where the company needs to head.

Identify various strategic options with potential.

Finally, select the best strategy and business model for the company.

2.5 NINE SCHOOLS OF THOUGHT

Mintzberg (1990) identified nine schools of thought on strategy. This indeed confirms that the

concept of business strategy has evolved over the last few decades owing to the work done by

many researchers and authors. These schools are: design, planning, positioning, entrepreneurial,

cognitive, learning, political, cultural and environmental. The dimensions on which they are based

are the main differentiators, and their approach ranges from a prescriptive or normative approach

to a descriptive approach, as shown in Table 2.1 below.

10

Table 2.1: Nine schools of thought on strategy by Mintzberg

Dim

en

sio

n

Desig

n

Pla

nn

ing

Po

sit

ion

En

tre

pre

ne

uri

al

Co

gn

itiv

e

learn

ing

Po

liti

ca

l

Cu

ltu

ral

En

vir

on

me

nta

l

Key A

uth

or(

s)

Andrews,

1965

Ansoff,

1965

Porter,

1980

Schumpeter

1934

Simon

1976

Lindblom

1959

Quinn,

1980

Allison

1971

Perrow

1970

Normann,

1977

Hannan

and

Freeman

1977

Base

Dis

cip

lin

e

None Systems

Theory

cybernetics

Economics None Psychology Psychology Political

Science

Anthropology Biology

Vo

ca

bu

lary

SWOT

Model & Fit

Formalising

programming

& budgeting

Analysing

generic

ttrategy

Vision

leadership

innovation

Bounded

rationality,

mental

model

reframe

Incremental

emerging

Power

Coalition

Dominant

Ideology

Values

Reaction

Selection

Retention

Cen

tral A

cto

r

President

Director

Planner Analysts Leaders Brain Everybody

who learns

Everybody

with

power

Collectively Stake

holder

En

vir

on

me

nt

Opportunity

& Threats

Stable &

controlled

Analyse in

economic

variables

Manoeuvrable Cognition Demanding Intractable

Malleable

Incidental Dominant

Str

ate

gy

Explicit

perspective

Explicit

plan

Explicit

generic

positions

Implicit

perspective

Mental

perspective

Implicit

patterns

Positions,

plays

Collective

perspective

Specific

position

Source: Mintzberg (1990)

Ungerer et al. (2007) agree with the viewpoint that various perspectives exist and propose that six

key viewpoints on the definition and scope of strategy have surfaced. These are set out below.

Structure and design. The major thrust here is that structure follows strategy. This allows the

organisations to alter its structures in response to changing strategies as a result of changing

market dynamics. manoeuvrable

Strategic Planning. Here planning is emphasised. The basis is that strategic planning is a

process with very clear steps that must be followed to produce the plan.

Competitive Position. Porter proposes that it is important to analyse one‟s position in the

industry relative to one‟s competitors.

11

Dynamic Competition. This view point identifies implementation and action as being more

critical, because the environment in which a company operates, is always changing hence

this nullifies static planning and positioning frameworks.

Core Competency. A company has to build a set of key core capabilities that it exploits to

enhance its position in the market.

Business Ecosystem. The emphasis here, is that a company must take into consideration its

own business ecosystem and other ecosystems when implementing strategic change.

2.6 STRATEGY AS A COMPETITIVE POSITION

A number of researchers see strategy as a competitive position that a company pursues relative to

its competitors. Porter (1979) emphasised the need to choose the right industries and within them

the most competitive positions. He also stressed the importance of understanding the forces that

shape the industry as shown in Figure 2.2 below. After the analysis has been completed, it results

in some action to change a company‟s position strategically in the market place.

Figure 2.2: Porter’s Five Forces Framework

Source: Porter (1979)

1. Threat of Potential Entrants – the level of difficulty for companies to enter an industry is

defined by the barriers. High barriers result in fewer companies able to enter and the

profitability levels of existing companies are not affected.

2. Bargaining Power of Suppliers – the suppliers have the ability to influence the cost,

availability and quality of input materials to firms in the industry.

Rivalry amongst existing companies

Power of

Buyers

Power of

Suppliers

Potential New Entrants

Substitute Products

12

3. Bargaining Power of Buyers – the buyers play two major roles in influencing industry

structure. They can raise their quality expectations or force prices down through comparing

prices with rival suppliers.

4. Threats of Substitute Products – existing products or potential substitutes have the potential

to take market positions from a company‟s product.

5. Rivalry Among Existing Competitors – this refers to the level of competition amongst existing

firms and is probably the most influential of the five forces

Fleisher and Bensoussan (2007) observed that a company positions itself relative to its

competitors. They identify four directions that any competitive strategy could follow. The first

relates to developing and building on a firm‟s position. This may be seen as moving from a niche

position to wider market control. The second is maintaining and holding a firm‟s strong market

position. This is normally the case where there is no scope for growth and the company would like

to continue earning its revenue from the same market base that it holds. The third concerns

defending a dominant position where a company wants to secure its position against any major

competitors. The final direction is withdrawal from the market with minimal loss. This direction

normally applies where there are major market declines being experienced and the company

wants to protect itself against further erosion of value.

Porter (1980) argued very much along the same lines, stating that the major differences when it

comes to competitive strategies are firstly, whether a company‟s market target is broad or narrow

and secondly, whether the company is aiming for a competitive advantage based on low costs or

product differentiation.

Hough et al. (2008) modified the four generic competitive strategies of Porters (1980) and

proposed the following:

a low cost provider strategy, where the company aims to appeal to a wider market by

achieving overall costs which are lower that its competitors;

a broad differentiation strategy, where a company seeks to appeal to a broad base of

customers whilst differentiating its product offering;

a best cost provider strategy, where the customers are offered value for their money with

products that have good quality features that compare very well with competitors‟ products

yet have the least costs;

a focused strategy based on low costs, where a company seeks to outdo its rivals by offering

to few customers at lower costs; and

A focused strategy based on differentiation, where fewer customers are pursued and offered

better customised products than the competitor.

13

2.7 STRATEGY AS A SYSTEMIC PROCESS

Ungerer, Pretorius and Herholdt (2007) express a different view to that put forward by Porter

(1980), in that they see strategy as a systematic landscaping process that utilised systems thinking

as an invaluable tool in assisting to make strategic thinking visible, as shown in Figure 2.3 below:

Figure 2.3: Strategy as a systemic process

Source: Ungerer et al. (2007)

In the framework above, the company starts by establishing current reality and possible future

positions. Here time is spent understanding the environment better and developing insights. The

insights then lead to a number of options being developed which are of high quality.

The clearer the options are, the easier it becomes to develop a robust and sustainable strategic

architecture for the company. The next critical step is the translation of the strategy into actionable

business plans. This is where many companies fall short. Ungerer et al. (2007) emphasise the

importance of ensuring that the strategy is translated and owned by all levels of the organisation, if

it is going to be effective. Following implementation is the important task of tracking progress and

providing feedback into the strategy process. They point out that sustainable strategy is a

continuous process allowing for reinvention and never a one-off event

2.8 STRATEGY AS A LEARNING PROCESS

Senge (1998) viewed strategy as a learning process. He paid particular attention to the value that

an organisation got when people strategised together. He argued that the people involved in the

discussions, used them as springboards for experiments and initiatives. He asserted that people

Quality of thinking (about where we are and where we want to be)

Quantity and Quality of Options and Choices

Clarity about the strategic architecture

Robustness and sustainability of the strategy

Ease of translation into executable business plans

Quality of monitoring and feedback about viability

14

learnt in a cyclical fashion as put forward by Kolb and Englewood (1994). Their views are

supported by Elfring and Volberda (2001) whose dynamic school of thought describes strategy as

a collective learning process intended to develop distinctive capabilities that are not easy for others

to replicate.

2.9 RESOURCES AS STRATEGY

Prahalad and Hamel (1990) supported a resource-based approach where core competence, core

processes and strategic assets are emphasised. They highlight the importance of building a certain

level of skill and competence in an organisation and management‟s ability to use these skills to

exploit the opportunities in the market.

In Figure 2.4 below, Ansoff (1987) defined four alternative growth strategies as:

market penetration, where the company seeks increased sales for its present products in its

present market through more aggressive promotion and distribution;

market development, where the company seeks increased sales by taking its present

products into new markets;

product development, where the company seeks increased sales by developing improved

products for its present markets; and

diversification, where the company seeks increased sales by developing new products for

new markets.

Figure 2.4: Ansoff’s Matrix

Source: Ansoff (1987)

15

In the matrix above, each quadrant has a certain level of risk and, depending on what strategic

option the company pursues, the plan of action will be different.

2.10 BLUE OCEAN AND RED OCEAN STRATEGIES

Kim and Mauborgne (2004) believe that high performance and returns are difficult to maintain in a

traditional markets where there are numerous competitors. They call the existing market dynamic a

red ocean due to the fierceness of competition. They propose an alternative market space called a

“blue ocean” due to the growth opportunities it offers. They challenge traditional thinking that

companies have to compete in order to grow and force them to shift their paradigms about sources

of sustainable business growth. Kim and Mauborgne (2004) see a blue ocean strategy as having

the ability to render competitors irrelevant. The strategy is based on the six principles discussed

below.

Reconstruction of market boundaries. Here a company creates uncontested markets thereby

creating new demand for its products and services.

Focusing on the big picture and not the numbers. The company should not see a trade-off

between value and costs, but should rather aim to achieve differentiation and low costs

simultaneously.

Reaching beyond existing demand: this is done by shifting focus from existing customers

base where all other competitors are focused, effectively creating new revenue streams.

Getting the strategic sequence right: this is achieved by aligning activities to achieve

differentiation and low cost.

Overcome key organisational hurdles: this is achieved by aligning the different departments

in the company to support the strategy.

Build execution into strategy: this is achieved by having a clear execution plan with clear

roles, responsibilities, budgets and timelines.

2.11 FACTORS AFFECTING IMPLEMENTATION

Various authors have looked at the dilemma of implementation, specifically as it relates to strategy

with (Pfeeffer, 1996) commenting that implementation is one of the more difficult business

challenges facing today‟s managers. They say that a strategy is as good as its implementation.

Since this research also aims to understand the factors that affect implementation, it is significant

at this point to review some of the literature on strategy implementation and the factors that are

seen to influence it.

Ungerer et al. (2007) suggest a cycle that must be followed to enable the implementation of

strategic plans. The stages involved are an evaluation of current position and an understanding of

16

potential futures, the development of various options and choices, formulation of a robust strategy

architecture and then implementation as shown in Figure 2.5 below.

Figure 2.5: Strategy implementation

Source: Ungerer et al. (2007)

Ungerer et al. (2007) state that implementation is the ultimate source of competitive advantage.

Knowledge related to strategy is only useful if one does something about it. Effective

implementation is going to be achieved by being able to follow the steps detailed in the diagram

above.

Evaluation of the company‟s current position is a good point to start a strategic conversation

because it shows the company‟s current reality. This stage also involves reflecting on the current

business domain and segment descriptions. Whilst the past is important, it cannot be the only

basis for looking at the future of the organisation (Ungerer et al. 2007). They see a dilemma in the

past having an overwhelming influence on present thinking ability. The past should not be used as

the only reference point because the future is not merely a continuation of the past.

The next stage is developing a robust strategy architecture that will influence the behaviour within

that structure. Ungerer et al. (2007) identify the following aspects as making up strategy

architecture.

Evaluate/understand current position and

potential futures

Develop options and

choices

Develop a robust strategy architecture

Strategy planning and implementation

17

purpose and vision of the company;

selected business domain;

profit model;

value propositions;

competitive positioning; and

business model.

Ungerer et al. (2007) argue that energy in the organisation will flow according to the design,

topography or architecture of the landscape.

With the first three steps in place, the next step would be strategic planning which really is about

gap closing activities that will realise the desired future state sooner and more quickly.

As various authors have argued that implementation is not without challenges, Ungerer et al.

(2007) identify the following difficulties of implementing strategy.

Desired direction is not clear and lacks an actionable proposition. This means that the

required effort is unclear.

Mobilising resources takes time, energy, commitment, courage and leadership.

Strategies are seen as fixed, not open to creative adaptation, closed to feedback from reality.

Intellectual talk is seen as more important than actual doing.

It is a mistake to want to plan everything before moving.

Strategy is only a reality for a select few.

Wanting to implement it all at once is also a mistake.

Fear of talking risks and making mistakes: learning costs money and someone must be held

accountable.

Destructive internal competition: energy is focused internally and not externally.

Competitors have an increasing ability to catch up with the company‟s current best

innovations.

The life span of new ideas is getting shorter.

Information is easily and freely available and accessible.

Prahalad and Hamel (1990) argued that it is not enough to imagine the future; one also has to build

it. In building this future, Kim and Mauborgne (1992) proposed a framework that can be used to

develop options and choices. They refer to the concept of different lenses to find unoccupied

territory. They identify 10 points to consider listed below:

across substitute industries;

across strategic groups within industries;

18

across buyer groups;

across complimentary product and service offering;

across functional – emotional orientations;

across time;

in digital space;

through service quality;

through customer centric approaches; and

by identifying choke points.

Mintzberg (1978) had a different view on strategy implementation. He argued that it depended on

what one‟s view was on strategy. He questioned whether strategy formulation came first before

implementation or vice versa. In his view, one‟s perspective on strategy greatly influenced how one

viewed implementation. It could be seen as executing what had been planned already, otherwise

the alternate view is that strategies emerge and evolve.

Raps (2005) found that strategy implementation requires much more energy and time than the

mere formulation of the strategy. He compiled the following ten-point checklist to improve and

overcome difficulties in implementation.

Commitment of top management. He argues that employees take their cues from senior

management when it comes to commitment to implementation. Their energy and

demonstrable commitment will send a positive signal to the employees.

Involve middle manager’s valuable knowledge. The success of the implementation effort

depends on the level of commitment and involvement of middle managers. Often the input of

the middle managers‟ knowledge is underestimated in strategy formulation and it is not

surprising that Kaplan and Norton (2001) found that as few as five percent of a typical

workforce understand their organisation‟s strategy.

Communication is what implementation is all about. Miniace and Falter (1996) stated that

communication stands out as the key success factor when it comes to strategy

implementation. It is imperative for an organisation to develop a comprehensive

communication plan in order to improve the success rate of its implementation programme,

as shown in Figure 2.6 below.

19

Figure 2.6: Implementation plan

Source: Adapted Raps (2005)

Integrative point of view. Miniace and Falter (1996) assert that companies need to take an

integrative view point where not only the organisational structure, but cultural aspects and

other human resource issues are taken into account. They see implementation being a

boundary less set of activities working together to achieve the change needed.

Clear assignment of responsibilities. Vagueness of the assignment of duties and

responsibilities often results in failure. Miniace and Falter (1996) argue that employees tend

to think and see only in their „own‟ department structures and companies need to ensure a

cross-functional effort in order to improve their implementation plans. A detailed plan detailing

activities and who is responsible prevents power struggles between departments and within

hierarchies.

Preventative measures against change barriers. Organisations that have the ability to

understand the challenges that managers face, are more successful in implementation than

those that pay lip service to difficulties line management might be experiencing. These

barriers may lead to a complete breakdown of the formulated strategy.

Emphasise teamwork activities. Often team work is downplayed when it comes to

implementation and yet, it is indisputable that teams can play an important part in

promoting the implementation.

Respect the individual’s different characteristics. Human resources are emerging as

the key success factor in strategy implementation. This means that fit between the intended

Participants Who will be

involved in the

communication process?

Message What needs

to be communicated?

Timing When will the

communication need to

be placed?

Work Plan What time

and effort is

required?

Milestones How and

when are results

measured?

Media What methods

are adequate for

communicating?

20

strategy and the specific personality profile of the implementation key players in different

departments is desirable.

Take advantage of supportive implementation instruments. Companies implementing

change need to develop a balanced scorecard to ensure that all employees‟ efforts are

focused on one goal. This will ensure that the strategic objectives are linked to adequate

operative measures. The balance scorecard should be used in conjunction with a software

solution to avoid the manual tracking of implementation.

Calculate buffer time for the unexpected incidents. Estimation of time frames for

implementation is one of the critical challenges in strategy implementation. To improve this,

managers of affected divisions should be consulted, and extra time should be allowed for

the unexpected incidents that might occur.

2.12 STRATEGY IMPLEMENTATION AND MIDDLE MANAGERS

In most companies it seems that middle managers are involved more with strategy implementation

than formulation, and yet there is a case for their involvement in formulation (Wai-Kwong et al.,

2001; Woolridge and Floyd, 1990). They can contribute to higher levels of performance.

Much of literature has been written about challenges faced by middle managers in implementing

strategy. Senior management has tended to focus on strategy formulation and relegate the

judgement of how to implement it to middle management. According to McKinley and Scherer

(2000), this may result in managers feeling uncertain about the best course of action to follow. This

uncertainty can lead to ineffective implementation of strategy.

Various reasons have been advanced for the failure of middle management to implement strategy

effectively. Miniace and Falter (1996) argue that communication has been poor most frequently

between senior management and middle managers. Senior management has tended to hold on to

information until it is about time to implement the strategy. This does not allow the middle

managers sufficient time to support the strategy and have all their concerns addressed on time.

Because they have not fully bought into the strategy, they struggle to convince their employees to

support the new strategy.

Bott and Hill (1994) are of the view that that senior management must develop enough “disciples‟

in the ranks of middle management in order to drive implementation forward on a day to day basis.

Middle managers communicate frequently with most employees and their actions and words can

be very influential, as shown in Figure 2.7 below.

21

Figure 2.7: The importance of middle managers in a change in an organization

Source: Harrington and Williams (2004)

Allio (2005) identified the following reasons why implementation stumbles.

Need to get back to my real job. Employees see implementation of change programmes as

being separate from their day to day activities and are pre-occupied with getting back to

normal.

Cannot translate ideas into actions. Failure to break down the strategy into smaller chunks

creates inertia and it cannot be implemented.

No reward for sticking with it. Lack of clear reward and recognition programmes for

excellent achievement acts as a de-motivator for employees. They do not feel the urge to

go an extra mile.

Implementing Total

Quality Management

The Middle

Manager

Development / Sustainability

of teams

Problems of

resistance

Enabling change in

culture

People

Management

22

Lose track/cannot easily monitor. If there are no tracking systems in place it becomes

difficult to keep track.

Everyone is responsible/nobody is responsible. It is important to ensure clear

responsibilities and activities otherwise it is a recipe for disaster

Reality intrudes: plans lose relevance. A constant reality check is needed otherwise the

plan becomes irrelevant if it does not deal with the real issues.

2.13 MCKINSEY 7S MODEL

Waterman et al. (1980) put forward a conceptual framework to assist in the process of strategy

implementation. Whilst other authors, like Porter (1980), have emphasised the importance of hard

aspects such as strategy, structure and systems, they identified four additional soft facts namely

shared values, skills, style and staff, as represented in Figure 2.8 below.

Figure 2.8: McKinsey 7S model

Source: Waterman et al. (1980)

Waterman et al. (1980) demonstrated the interconnectedness of these seven elements. They

showed that any intervention in any one of them would affect the others. This challenged the

traditional management thinking that “structure follows strategy”. This framework allows for

questions to be asked concerning where the organisation is in terms of each element. Adjustments

and realignment can then be effected before the implementation process starts. They argued that

this improved the chances of success.

23

2.14 CONCLUSION

The literature review has demonstrated that there are various different perspectives and schools of

thought about strategy. The review has also demonstrated that there are some key themes that

seem to cut across most of the perspectives. Some of these are goals, internal and external

environments, business models, resources, organisational structure and most importantly, the

target market and the product offering.

The literature review has also shown that a disproportionately high focus and resources have been

dedicated to the strategy formulation process than to the implementation process. The role of

middle managers has also been highlighted as being critical in ensuring an effective

implementation, whilst several reasons have been put forward as to why strategies succeed and

why they have failed.

24

CHAPTER THREE

CASE BACKGROUND

3.1 INTRODUCTION

One of the objectives of this research is to understand the factors affecting effective strategy

implementation in an organisation. It is thus essential for the author to give a brief context of some

strategic changes that have taken place at SAB in the recent past. The history of the company will

be highlighted and also the current competitive dynamic in the South African beer market.

3.2 SOUTH AFRICAN BREWERIES

South African Breweries (SAB) is a local subsidiary of SABMILLER which is a global operation

covering 75 countries on six continents and employing over 70 000 people. Their portfolio of

businesses is divided into six regions and is well balanced between developed and emerging

markets. Between the six regions, they produce over 200 different brands and sell 213 million litres

of lager a year. SAB recently embarked on a strategy initiative. This initiative comprised two

aspects of strategy, i.e. the development of a new strategy for the company and the subsequent

efforts to turn it into reality.

SAB has been in existence since 1895 and has grown over the last twenty years from being a

South African operation into a truly global brewing giant with listings on the London and New York

Stock Exchanges. For purposes of this study, the author will limit his focus to the operation in

South Africa.

In 2008, a new managing director was appointed. On his appointment, he acknowledged that there

were significant changes taking place in the external environment which needed immediate

intervention. It had been more than twenty years since the end of the “beer wars” and in the last

sixteen years, SAB had had an unchallenged opportunity to grow locally and expand

internationally.

He noted that the environment was going through a rapid change and this would affect SAB‟s

ability to continue generating the revenue it had become accustomed to and also to maintain its

share of the market which currently stood above ninety five percent of the beer market.

The new managing director acknowledged the following changes to the external environment.

25

A strong competitor had emerged. Heineken‟s investment in a new brewery signalled its long-

term intent and their impending shift to local production was rapidly changing the basis of

competition in South Africa.

The retail environment was going through deregulation which meant more vigorous

competition between previously unlicensed operators and the licensed trade. SAB derived in

excess of seventy per cent of its revenue from this market segment.

The consumers were more informed and more demanding due to the wider choice of brands

now available in the market.

The South African retailer environment was undergoing a rapid evolution, calling for a bi-

modal distribution system.

There was a growing anti-alcohol lobby which put new pressures on the company to be seen

to be more socially responsible in its operations.

In October 2008, the new MD invited the senior executive forum (SEF) to a three-day strategy

workshop in George. The SEF is made up of the top 100 senior managers drawn from across the

value chain: Human Resources, Finance, Sales and Distribution, Marketing, Manufacturing,

Corporate Affairs and Supply Chain.

At the workshop, the MD shared the new business model, as shown in Figure 3.1 below.

Leverage scale for efficiencies

Grow to expand scale

Fund market-facing investments

& capabilities

Our business model - Driving the virtuous cycle

Figure 3.1: SAB’s business model

Source: Leaders Magazine(2009)

26

At the end of the three days, a new strategy framework had been developed. It was made up of the

following five strategic thrusts: Stabilise the Foundation; Engage the Competitor; Ensure Brands

Resonate with Consumers; Superior Route to Market and Restoring Societal Leadership (see

Figure 3.2 below).

Winning with 5toDrive

2. Engage the competitor

3. Ensure key brands resonate

4. Shape superior routes to market

Winning with scale & skills 1. Stabilise the foundation

Winning sustainably 5. Restore societal leadership

“Winning our way” and the SAB business strategy

Figure 3.2: SAB’s Business Strategy

Source: Leaders Magazine (2009).

The strategy calls for greater investment in market-facing, brand-related activities, that is,

everything that touches consumers, retailers, government and the community. To this end, SAB is

striving to ensure that all possible efficiencies from non-market-facing operations, such as

production, supply chain and administration and channelling the savings into its brands, marketing

and distribution. The aim is to achieve a virtuous circle whereby SAB‟s size in the marketplace

presents opportunities for higher efficiency, which creates more funding for marketing and sales,

which drives demand, which generates further scale efficiencies.

Ten cross-functional work streams were formed and were given the task of refining each strategic

thrust over the following month for approval by the management operating committee (MOC) and

then the board of directors (BOD). A series of workshops then followed where the strategy was

rolled out to employees.

27

3.3 STRATEGIC THRUSTS AND INTENTS

Table 3.1: SAB’s strategic thrusts and intents

Strategic Thrust Intent

1. Stabilise Foundation Shifting resources from non-market facing to market

facing which means more sales reps, more tools for

selling and brand building which has to result in

revenue growth.

2. Engage The Competitor Ensuring the competitive game is played based on

our strengths and the competitors‟ weakness

3. Ensure Key Brands Resonate Create the portfolio needed to win now and over the the

long term by strengthening our Power and Contributorutor

Brands while properly seeding our premium brands for the

future

4. Shape Superior Routes To

Market

To create the sales and distribution capability required

to :

capitalise on the current market structures

out-execute the competitor through the

differentiated use of the six levers by Key

Class of Trade and outlet

5. Restore Societal Leadership Create a positive operating environment turning our

societal liabilities into strengths

3.4 THE VISION, MISSION AND VALUES OF SAB

The five Strategic Thrusts are aligned and in support of the vision, mission and values below.

3.4.1 Vision

The vision is to be the most admired company in South Africa. This will be measured by the

following criteria:

investment of choice;

employer of choice; and

partner of choice.

28

3.4.2 Mission

The mission is to own and nurture those local and international brands, which are the first choice of

the consumer.

3.4.3 Values

Our people are our enduring advantage.

Accountability is clear and personal .

We work and win in teams.

We understand and respect our customers and consumers.

Our reputation is indivisible.

3.5 THE SUCCESS OF SAB’S STRATEGY

The new strategy was launched in 2008 and recent results are showing that SAB is restoring its

momentum. The strategy seems to be appropriate and effective. The new managing director

recently commented that there was a need to continue executing with competitiveness. The author

will now show progress made in terms of each strategic thrust so far in table 3.2 below.

Table 3.2: Progress in terms of the Five Key Strategic Thrusts

Strategic Intent

Progress made so far

1.

Sta

bili

se

th

e F

ou

nd

atio

n

The out of stocks situation has been eliminated with about 95% of customers now receiving their correct orders and on time.

They have managed to improve the reliability of their breweries to greater that 95%.

There has been great improvement on working capital management against target.

Savings have been realised from general spend to the tune of R201 million against a target of R233 million.

Critical skills vacancies have been reduced from 15% to less than 5% and further improvements achieved on time to competence of these critical positions.

2.

En

ga

ge t

he

co

mp

etito

r

SAB losses have slowed in recent months.

SAB has experienced gain in key channels of trade.

The Amstel brand has recorded declines in the latest Markinor results.

There has been increased marketing innovation in key areas.

29

3.

En

sure

Ke

y B

rand

s R

eson

ate

The power brands have been revitalised and are showing the following growth trends:

- Carling Black Label has stabilised

- Hansa Pilsener 7.4%

- Castle Lager 15.3%

- Castle Lite 35%

A Global Brands unit was set up and it has started executing much sharper brand propositions.

Excellent through the line execution has been achieved.

4.

Sh

ap

e

Su

pe

rior

Ro

ute

s

to M

ark

et

They have stepped up their service to four key channels.

They have built strategic partnerships with key stakeholders especially the redistributors who are critical to their distribution strategy.

They have started the development of capacity and capability to support the through-the-line execution.

5.

Re

sto

re

So

cie

tal

lead

ers

hip

A new alcohol strategy was developed and rolled out.

An innovative Broad Based Economic Empowerment deal (BEE) was rolled out.

SAB is shaping the intellectual debate on competition.

Head of Sustainable Development has been appointed

Source: SEF Conference (2010)

30

CHAPTER FOUR

RESEARCH METHODOLOGY

4.1 INTRODUCTION

The research problem stated in section 1.2 has aspects that are not easy to quantify. The various

aspects of the research problem are processes, viewpoints, tools and competences. The nature of

the author‟s study requires him to explore various themes that will emerge in the discussions and

hence he has taken a qualitative approach. This approach allows for a much wider range of

possibilities to be examined compared to a quantitative analysis (Bryman, 1992). The author will

use a combination of semi-structured and unstructured interviews. These themes, according to

Saunders, Lewis and Thornhill (2007), can then be explored in-depth to gain a better

understanding. The discussions will be recorded by means of a combination of audio recording and

note taking.

The author considered using questionnaires, but found them to be unsuitable for this kind of

research, as he would not have had control over who completed the questionnaire and also

because of the sensitive nature of the information that would be discussed.

4.2 SITUATIONS FAVOURING QUALITATIVE INTERVIEWS

The use of qualitative interviews is dependent on the four factors listed below (Saunders et al.,

2007).

The purpose of the research: The participants are going to be using different words and ideas

during the discussions and this will allow the researcher to follow up and probe the meanings

thereby adding significant depth to the data. The environment also allows the participants to

hear themselves thinking aloud about things they might not have thought about before.

The significance of establishing personal contact. Research has shown that many managers

would rather respond to an interview rather than complete a questionnaire. Personal contact

also gives them an opportunity to be reassured about the use and confidentiality of the

information that will be shared. Saunders et al. (2007) also argue that personal interviews,

when used appropriately, tend to achieve higher response rates. This notion is also shared

by Healey (1991:2006).

The nature of the data collection questions. Easterby-Smith et al. (2002) agree with Saunders

(2007) that when there are many issues to be answered which are either complex or open

ended, an interview will indeed be more appropriate.

31

The length of time required and the completeness of the process. An interview allows for

flexibility to negotiate with the respondent as to when would the best time be to conduct the

interview and generally it has been found that participants are flexible and would end up

giving a researcher more time to explore the issues being discussed, especially if those are

topical issues and issues of interest to them.

Pirow (1990) shares similar views and outlines the following advantages for open ended questions.

Flexibility: It allows for complex issues to be explored without limiting ideas.

Recording non verbal behaviour: The interviewer is able to assess non-verbal behaviour

from the participant as well as other characteristics.

Control over the environment: It allows the interviewer to set up and conduct the interview

in privacy and with minimal disruption.

Spontaneity: This allows for respondent to express what they feel without modifying or

censoring themselves.

Correct respondent: The information is directed at the right target market.

All the questions are answered: Interviews allow researchers to probe for more specific

answers and ask clarifying questions where necessary.

4.3 INTERVIEWS AND INTERVIEW SAMPLE

The author conducted a pilot phase in order to establish how much time was needed to conduct

the interview and also to test understanding of questions. This test phase was administered on six

middle managers from Cape Region who did not participate in the research. This process allowed

the author to paraphrase some of the questions. The researcher kept the sample size small at

twenty to allow for insight and information of the highest quality.

Participants in the research were purposefully selected from those who fitted the definition of

middle managers formulated by Frohman and Johnson (1992). They had to fulfil the conditions

listed below.

They had to be line managers responsible for at least employees and responsible for

implementing strategy.

They had to have been line managers for at least three years at South African Breweries‟

Egoli operations.

32

They had to be acquainted with strategy issues and to have been involved with SAB‟s recent

strategic change in order to minimise any reframing or memory effects (Caldwell, Herold &

Fedor, (2004).

4.4 METHOD OF ANALYSIS

Content analysis was used to analyse the data and the researcher then collated the results of the

analysis into frequency tables. This was followed by interpretation and evaluation of the responses.

4.5 SUMMARY OF RESEARCH PROPOSITIONS

From the literature review discussed in Chapter 2, the author developed a number of propositions

in order to establish and analyse what factors affect strategy implementation in a large organisation

and the role played by middle managers. These propositions will be tested using the results from

the in-depth interviews.

4.5.1 Proposition 1

Middle managers have a major role to play in the successful implementation of strategy and they

need first to understand their role very well and secondly, understand what the strategy is.

The literature suggested that middle managers have a more important role to play in strategy

implementation than has previously been acknowledged. They are the ones who manage their

teams on a daily basis and continuously give instructions. The employees believe them to be

better, because the managers have influence over things, like pay increases and bonuses. If they

do not have a good grasp of the strategy, then they will not be able to simplify it and communicate

it to their teams.

4.5.2 Proposition 2

Strategy implementation faces many barriers and this need to be understood and overcome if

implementation is to succeed.

Managers are faced with a myriad of barriers when trying to implement strategy. Researchers have

identified a number of problems ranging from poor management support of implementation, poor

communication of strategy, to poor clarity of roles and responsibilities and insufficient budgetary

support. Insufficient time is spent by management in drawing up implementation plans and

anticipating likely problems. There is a tendency to leave the implementation part to the line

managers who usually lack the experience and the technical knowledge.

33

4.5.3 Proposition 3

Building a core set of capabilities helps the company in implementing its strategy.

The literature review showed that successful implementation of strategy requires a more

disciplined approach than just leaving it to chance. Companies need to invest in building soft and

hard skills in their people. These skills need to be augmented by relevant software that assists in

tracking implementation progress.

4.5.4 Proposition 4

There is a strong link between the structure of the organisation and its ability to implement

strategy.

The literature has shown that the structure of the organisation should be geared towards

supporting the strategy of the organisation. The structure needs to be reviewed continuously to

ensure that silos do not develop and different departments work in union and not against each

other. The structure should also address issues like internal competition, which can be detrimental

to the successful implementation of the plans.

4.5.5 Proposition 5

Simple yet effective communication is the lubricant that aids strategy implementation.

The literature revealed that effective communication aids quicker understanding of what needs to

be done, why it needs to done and how it will be done. A more informed workforce about the

company‟s strategy supports its implementation much quicker than a less informed workforce.

There has to be continuous communication of the progress made in implementation to keep the

energy levels and the focus high. The company‟s communication channels should encourage a

two way flow of information.

4.5.6 Proposition 6

Reward and recognition systems need to be aligned and support the strategy.

The literature showed that it is important to anchor the implementation activities in the company‟s

financial infrastructure. The reward and recognition processes should encourage implementation

and reward employees for meeting or exceeding strategic targets.

34

4.5.7 Proposition 7

Middle managers have a far greater role to in contributing to strategy formulation than just

implementation.

The literature review showed that middle managers have been overlooked, or their ability to

contribute to strategy formulation has been minimised by senior leaders who tend to see strategy

formulation as the preserve of a few senior managers. Middle managers have good insights into

consumers, customers and competitors. This is gained from their daily interactions with these key

stakeholders. They can be used as good sounding boards during strategy development. The

middle managers will also support the strategy far more quickly and take more ownership.

4.5.8 Proposition 8

Typical middle managers do not understand the company’s strategy.

The literature showed that most middle managers do not have a good grasp of the company‟s

strategy. It cites sights lack of earlier involvement as one of the contributing factors. Most are not

included in the earlier discussions about strategy and are only seen as implementers.

35

CHAPTER FIVE

THE RESULTS

5.1 PARTICIPATION

Participants were chosen on the basis of those who fitted the Frohman and Johnson (1992)

definition of middle managers. They were all involved in strategy implementation and had been

involved in the recent change process that SAB embarked on. All 21 participants who were

approached agreed to take part in the research and this was facilitated by the fact that SAB

supported the research. The middle managers held various positions and all had employees

reporting to them. There were three females and 17 males in the sample. Their teams ranged in

size from three to 10, they had been in their current roles ranging from two years to 10 years and

their tenure at SAB ranged from three years to 21 years. All the managers had some form of

tertiary qualification, with one being a chartered accountant (see Appendix 2 for the list of

participants). All their responses were collated and analysed. The results will be presented in text

and table format similar to ones used by Alback (2004) and Klassen (1997).

5.2 SENIOR EXECUTIVE’S VIEW

The following questions were put to the general manager in order establish a base to compare with

responses from middle managers:

What is SAB‟s strategy?

In your view what is the role of middle mangers in the implementation process of strategy?

How do you measure their performance?

What competencies do they need to have to be able to translate the strategy into reality?

The following were his responses:

SAB‟s strategy at a higher level is really about driving the virtuous cycle.

We have to deliver superior value to our customers and consumers and ensure that SAB

works for the benefit of society.

We have developed five key strategic thrusts to achieve this, namely: Stabilise the

Foundation; Engage the Competitor; Ensure Brands Resonate with consumers; Shape

Superiror Routes to Market; and Restoring Societal Leadership.

They play a critical role in implementation.

36

Specifically my expectation is that the middle managers guide their teams to provide market

driven differentiated service that builds sustainable competitiveness within clearly defined

segments.

They should lead their teams to achieve growth in volume sales, growth in market share and

increased customer service.

They need to achieve the above by planning for effectiveness, resourcing for effectiveness,

executing plans and measuring performance.

Amongst others they need to be analytical, be good communicators, be resilient, be action

orientated and definitely be a good team player and believe in themselves.

Table 5.1: General Manager’s response on strategy

Response Frequency

1. At a higher level it is really about driving the virtuous cycle and winning with customers and consumers.

1

2. 5 Key thrusts to ensure we win sustainably. 1

3. The middle managers play a critical role. They turn big ideas into action plans.

1

4. Execution, execution and execution. 1

5. They guide their teams to implementing our strategy well. They direct the foot soldiers on the ground giving all necessary support.

1

6. They should achieve growth in volumes, market share and customer service.

1

7. They should plan, resource, execute their plans and measure their performance.

1

8. They need to be good in communication, analysis, resilience, execution, team player and self belief.

1

5.3 UNDERSTANDING OF STRATEGY BY MIDDLE MANAGERS

The participants were asked to define what they understood by strategy. The following were the

main responses.

It is the path that will be followed in order to achieve a company‟s objectives (13

respondents).

It is a plan that a manager comes up with (two respondents).

It is the How we will get there (one respondent).

It is a detailed plan showing what resources are going to be used to achieve objectives ( 12

respondents).

It is a way of achieving results (seven respondents)

It is a game plan (11 respondents)

37

Table 5.2: General understanding of what strategy is by middle managers

Response Frequency

1. it is a path that will be followed to in order to achieve results.

13

2. It is a plan. 12

3. it is how we will get there. 1

4. It is a way of achieving results. 7

5. It is a game plan. 11

5.4 SAB STRATEGIC INTENTS

The respondents were asked to explain the SAB strategy including the strategic intents. This

question was asked to check whether the middle managers understood the company‟s strategy.

The most common responses are listed below.

At a higher level, the author would say it is really about driving the virtuous cycle (18

respondents)

Stabilise the foundation (16 respondents)

Superior route to market (14 respondents)

Ensure brands resonate (15 respondents)

Societal leadership (14 respondents)

Engaging the competitor (16 respondents)

Table 5.3: SAB’s strategy

Responses Frequency

1. Driving the virtuous cycle 18

2. Stabilise the Foundation 16

3. Superior Route to Market 14

4. Ensure Brands Resonate 15

5. Engage the Competitor 16

6. Societal Leadership 14

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5.5 ROLE OF MIDDLE MANAGERS

The participants were asked to state whether they felt that they had a role to play in strategy

implementation. If the answer was YES, they were then asked what they understood to be their

main role in strategy implementation at SAB. The following answers were dominant.

Yes, we have a big role to play in implementation (20 respondents).

Facilitate the implementation. The author inspire, engage and manage performance (9

respondents).

Motivate the team to carry out their duties (13 respondents).

Give direction to the team in terms of simplifying strategy in simple blocks (7 respondents).

The middle managers is at the forefront of driving execution of our goals (13 respondents).

The author must ensure that the team always comes under budget and there are no cost

overruns (10 respondents).

Market share and profitable volume growth (14 respondents).

Increase company‟s competitiveness and beat the competitor (10 respondents).

Lead the team to achieve its strategic objectives (14 respondents).

The middle managers is responsible for deriving the Quarterly Business Plan for the team

and see to its that it is implemented and within budget (12 respondents).

Table 5.4: Role of middle managers

Responses Frequency

1. I facilitate the execution of the plan. 9

2. Motivate the team to carry out its duties and meet deadlines. 13

3. Give direction to the team by simplifying the strategy to small chucks.

7

4. I am at the fore front of driving execution. 13

5. Achieve market share growth and profitable volume growth. 14

6. Increase the company‟s competitiveness and beat the competitor at the game.

10

7. Lead the team to achieve strategic objectives. 14

8. Develop Quarterly Sales Plans and adhere to the budget. 12

39

5.6 PROGRESS MADE BY SAB WITH ITS STRATEGY

The respondents were asked to state their views on the progress that the company had made in

implementing its new strategy. The following responses were recorded.

I am excited about the good progress that has been made in the last three years (12

respondents).

The strategy is working well and we should stick to it (14 respondents).

We need to review the strategy to take advantage of the slack in our competitors (2

respondents).

The competition is beginning to feel the heat (six respondents).

We are beginning to claim back lost market share (eight respondents)

We are silencing all the critics and showing that we are a great South African success story

(seven respondents)

Table 5.5: Views on progress made by SAB’s strategy

Responses Frequency

1. I am excited with the good progress that has been made in the last three years.

12

2. Strategy is about choices and I feel that we made a good choice and should stick to it. It is working well.

14

3. We need to review the strategy to take advantage of the disorganised state of our competitor.

2

4. The competition is beginning to feel the heat. 6

5. We are clearly winning as we are beginning to win back lost market share.

3

6. We are silencing all the critics and showing that we are a great South African success story.

7

5.7 BARRIERS TO IMPLEMENTATION

The participants were then asked to list what they considered to be challenges that they face/have

faced in implementing their strategy. They were also asked to state how they overcame these

challenges. The following responses were the most frequently cited:

Sometimes the budget that we are given is not sufficient to achieve the ambitious targets that

we must achieve (13 respondents).

Decisions seem to take longer to be made by senior management and by the time they are

made the opportunity is lost (10 respondents).

40

When this change came, I did not believe that we were doing the right thing and as a result

my team took advantage of that fact (three respondents).

We are a highly competitive company and this was at times detrimental to the company as

we focused too much on the internal politics instead of external competitor (13 respondents).

At times I felt that the goal posts kept changing and that de-motivated me (eight

respondents).

I had new team members who took long to become competent in their jobs thereby affecting

my ability to be effective (12 respondents).

I get frustrated when people only think about their departments and do not see how their

actions impact on the rest of us (14 respondents).

Sometimes you are asked the same thing by different people and it creates confusion (10

respondents).

There are unrealistic targets and expectations (12 respondents).

Being a target-driven organisatio, at times the targets drive the wrong behaviour as

individuals look to gain in the short term (12 respondents).

People that do not see the big picture (nine respondents).

The incentives are given to some employees only and not others and this has tended to

demoralise other employees as they feel that they contribute to the same goal. (14

respondents).

It is difficult for the team to embrace the new strategy with speed and start seeing it as the

new way of life (15 respondents ).

My manager is always there to help (14 respondents).

The resilience course that I attended equipped me with skills to handle any challenge (14

respondents).

I relied on more experienced team members (12 respondents).

I believe that I can do anything that I put my mind to (five respondents).

I relied a great deal on the weekly brainstorming sessions to come up with solutions (11

respondents).

41

Table 5.6: Barriers to strategy implementation at SAB

Responses Frequency

Barriers

1. Insufficient budgets

13

2. Bureaucracy 10

3. Line managers not buying into the strategy from the beginning of the implementation process

3

4. The competitive culture of the organisation is destructive as there is too much internal focus

13

5. The „goal posts „ keep changing throughout the year

8

6. The high rate of staff turnover at the lower levels of the company affects the consistency in the execution.

12

7. Silo mentality. 14

8. Too many project managers managing the same outputs and all making similar requests wastes execution time as line managers respond to their requests.

10

9. Whilst stretch targets are welcome, at times they are unrealistic and demotivate the employees.

12

10. The unrealistic targets result in employees engaging in unethical behaviour in trying to achieve them.

12

11. Lack of understanding of the big picture. 9

12. The incentive programme favours only some employees and not all employees.

14

13. There is resistance to change and embrace new strategy as a new way of life.

15

14. How they overcame the challenges:

My manager always helped me when I was unsure.

14

15. The resilience course equipped me to deal with setbacks. 14

16. I relied on the more experienced colleagues to help me. 12

17. I have a strong belief that nothing is impossible. 5

18. During the roll out process they gave us Q&A s to assist in dealing with the implementation.

7

19. Our weekly social systems are helpful in brainstorming any issues that might be bothering me.

15

5.8 Factors that have aided the implementation process

The respondents were asked to cite the factors that have assisted them in the implementation

process. The following were the most common responses.

I used my strengths, my intimate local knowledge of this market to make it as hostile an

environment as possible for the opposition (six respondents).

42

The commitment and resilience of the team helped me to be able to deal with the change

better, I was more positive (eight respondents).

The MD‟s live broadcast address propelled me into excellence (three respondents) .

There was good support from my line manager (12 respondents).

We work and win in teams (six respondents).

Our social systems every Tuesday helps everyone to focus on the most important things (13

respondents).

My team had a good understanding of the key drivers to achieve our objectives (one

respondent).

Our tracking systems are very effective (10 respondents)

The game plan was clearly communicated and I felt confident about what I had to do (8

respondents)

We celebrated the milestones and were kept updated on progress against our strategy (7

respondents)

I am very excited by my incentives and never miss it (12 respondents)

Table 5.7: Factors that have aided strategy implementation

Responses Frequency

1. My knowledge of the market dynamics helped me a great deal.

6

2. Commitment and resilience of team. 8

3. Involvement of senior management. 3

4. Good support from my line manager. 12

5. We have a strong bond as a team and nothing is impossible.

6

6. Our Tuesday meetings help to create common ground on the focus area for the week for the entire business unit.

13

7. My team had a good understanding of the key drivers and managed them well.

1

8. The game plan was clearly communicated and each individual took ownership.

8

9. The celebration of milestones keeps the team motivated even during difficult times.

7

10. I am driven by my incentives. 12

43

5.9 COMPETENCES

The respondents were asked to share what they thought to be their core competences and how

these had helped them implement effectively. The common responses are quoted below.

Capabilities:

I have developed very good analytical skills to keep track of developments in the market (14

respondents).

Profit pool analysis to see which segments are most profitable (10 respondents).

I have developed the ability to see things in different ways (eight respondents).

Effective territory management (12 respondents).

I have developed commercial competence for effective profit story engagement with

customers (nine respondents).

I have a better understanding of myself (four respondents).

I am able to maintain confidence and objectivity under pressure ( 15 respondents).

There is an integrated management process for effective people development and

management (18 respondents).

Improved leadership skills improved my communication (20 respondents).

Coaching for performance improved team performance (eight respondents).

How they have helped:

My technical competence has helped me in quicker decision-making and bias for action (14

respondents).

I am able to anticipate the market trends and get first mover advantage (six respondents).

I can analyse the market and formulate an appropriate plan (eight respondents).

I now use my budget more effectively and achieve better returns (14 respondents).

My coaching of my team has improved their effectiveness (15 respondents).

I feel more confident as a leader and feedback from my team has been very positive (10

respondents).

44

Table 5.8: Core capabilities for middle managers and how these assisted implementation

Responses Frequency

1. Analytical skills 14

2. Profit pool analysis 10

3. Cognitive skills 8

4. Effective territory management 12

5. Commercial competence 9

6. Emotional resilience 15

7. IMP 18

8. Leadership skills 20

9. Improved self awareness 4

10. Coaching for performance 8

11. They have helped me make quicker decisions 14

12. Market analysis and anticipating trends and competitor moves 6

13. More effective budgeting 14

14. Improved results through coaching for performance 15

15. I have become a confident leader 10

5.10 DEVELOPMENT OF CORE CAPABILITIES

Respondents were asked how they developed those competencies and their responses are set out

below.

I attended the Training Academy in Midrand for two to three weeks (16 respondents).

There was a formal competence acquisition process (20 respondents).

I had on the job training (12 respondents).

My mentorship programme has assisted me in building my competence (seven

respondents).

We have a twinning relationship with two other depots and do regular benchmark visits to

share experiences (five respondents)

I have attended workshops (13 respondents)

I have had ongoing coaching (nine respondents)

45

Table 5.9: Core capabilities and how they were developed

Responses Frequency

1. SAB Training Academy in Midrand. 16

2. Formal competence acquisition process – CAP. 20

3. We receive continuous on the job training. 12

4. Formal and informal mentorship programmes. 7

5. Benchmarking visits and shared experiences 5

6. Workshops 13

7. Ongoing coaching 9

5.11 STRATEGY AND STRUCTURE AT SAB

The participants were asked whether they saw a link between effective implementation and the

structure of the organisation. They were also asked the questions set out below.

Please comment on the structure of SAB and how it affects your effectiveness in

implementation?

What could be done with the structure to enhance implementation effectiveness?

Does structure follow strategy or is the reverse is true?

The following were the most common responses.

Yes, there is a strong link (17 respondents).

No, I do not see a clear link between the two (three respondents).

The structure of a company is there to support whatever strategy is being implemented (14

respondents).

Our structure is built around five regions with a strong control from central office (eight

respondents).

SAB has standardised most critical processes and this has resulted in better alignment whilst

saving costs and minimising duplication (13 respondents).

I believe our structure allows for easier co-coordination and initiatives can be implemented

simultaneously achieving greater impact in the market (12 respondents).

Our wide footprint gives us a competitive advantage (11 respondents).

46

Our goal setting process has a cascading effect ensuring alignment from the corporate level

down to the business unit level (15 respondents).

Our structure allows for easier benchmarking of performance allowing us to share best

practices far more quickly. This speed is very important in this competitive market (12

respondents).

Our support services like Trade Marketing, Finance, Sales Development and Operations

Services are standardised across the five regions ensuring everyone receives sufficient

support (five respondents).

We have a centralised scorecard and ranking system that is used to measure performance

across the various teams (11 respondents).

Our structure allows for transparency with regards to targets and the budgets to achieve

them ( 14 respondents).

The teams are split by the geography and the type of market we service. This allows for

specialisation (five respondents).

Our social systems have been aligned to facilitate more effective team meetings and review

of previous week‟s performance (16 respondents).

Our integrated management process (IMP) calendar ensures uniformity and consistency with

performance appraisals and calibration (15 respondents).

Limitations of SAB’s structure

I feel that too much centralisation has killed initiative amongst employees (10 respondents).

The regions are not necessarily the same and at times the measurements are irrelevant to us

(13 respondents).

We need to guard against a deliberate attempt by our competitors to poach exceptional

talent from SAB (eight respondents).

Whilst our structure is designed to drive execution, the unintended consequence is that it

breeds middle managers who are just doers with very little thinking being applied (12

respondents).

The budgets are too lean to support our strategy (four respondents).

Too much decision-making has been centralised and this means decisions take far longer

(six respondents).

I think certainly that we should decide what needs to be done and then see if our structure is

supportive of those objectives (nine respondents).

I think structure comes before the strategy because you need the people first and then you

can decide what to do (four respondents).

47

Table 5.10: Strategy and structure at SAB and its perceived limitations

Responses Frequency

1. YES, there is a strong link between implementation effectiveness and the structure of the organisation.

17

2. NO, I do not see a clear link. 3

3. The structure supports what ever strategy is in place. 14

4. Our structure is built around five regions. 8

5. Our structure promotes a competitive work ethic and team work whilst it encourages individual accountability. Standardised processes save time and reduce costs

13

6. It facilitates easier co-ordination and simultaneous implementation of initiatives.

12

7. Our geographic footprint gives us a competitive advantage. 11

8. Our goal setting process has a cascading effect that ensures alignment.

15

9. It allows easier benchmarking of performance, facilitating sharing of best practices speedily.

12

10. Regional support services ensure consistency in execution. 5

11. Our centralised balanced scorecard and ranking drive internal competition.

11

12. Our structure promotes transparent budgetary process. 14

13. Geographic focus allows for deeper understanding of market dynamics.

5

14. Our social systems facilitate more effective team meetings and review of previous week‟s performance simultaneously.

16

15. Our integrated management practices ( IMP) calendar ensures uniformity and consistency with performance appraisals and calibration.

15

Limitations of structure

16. Whilst it is geared to support alignment the structure has an unintended consequence of breeding managers who are just good doers and not thinkers.

13

17. There is increasing demand for competent employees in the industry and SAB is becoming the immediate source for it. We need to strengthen our retention plans.

8

18. Painting all regions with same brush can be counter-productive. 13

19. Too much decision-making has been centralised. 6

20. Budgets are too lean to support the strategy adequately. 4

21. We should decide what needs to be done and then see what people we need to carry that out.

9

22. Structure comes before strategy because you need people first. 4

48

5.12 OTHER ISSUES RELATED TO SAB’S STRATEGY IMPLEMENTATION

The respondents were asked for input on any other structural issues that they saw as being

important for SAB. The most common responses appear below.

We can only be swift and nimble people if we also have the right skills and competences in

place (12 respondents).

Fast to action, as well as fast in action. This means that 80 per cent accurate information is

enough: do not wait for perfection otherwise you will miss the opportunity (13 respondents).

Everyone must understand the priorities, their roles, and what they have to do (14

respondents).

Remember we are a beer company and fun is not illegal (two respondents).

We need more entrepreneurs who will think outside the box and be able to see opportunities

(8 respondent).

We need to enhance inter-team and inter-departmental communication ( 7 respondents).

Table 5.11: Other strategy implementation related issues

Responses Frequency

1. Ensure that employees are „fit for purpose‟. That is, right people with the right skills for the right job.

12

2. Speed to execution will create differentiation. 13

3. Role clarity and priorities. 14

4. Do not forget to have fun. 2

5. We need more entrepreneurial individuals. 8

6. Enhance communication between departments and teams. 7

5.13 COMMUNICATION EFFECTIVENESS

The participants were asked how important effective communication was for effective strategy

implementation at SAB. The following were the most common answers.

Communication is very important for effective implementation (18 respondents).

The employees need to understand why there is a need for change otherwise they tend to

see it as just another exercise (seven respondents).

The language needs to be simple yet effective otherwise it is seen as “theirs” and there will

be no buy in (12 respondents).

I am reminded of the toilet cleaner as NASA who when asked what he was doing, answered

that he was “getting a man to the moon”. This shows the importance of total buy in from the

shop floor. This employee totally bought into the strategy and believed it (one respondent).

49

Complicated words and business school language tend to intimidate the average employee

(eight respondents).

The messaging has to be consistent and authentic from the CEO down to a junior manager

and it will resonate with the employees (14 respondents).

Any strategy that can not be communicated well is bound to fail ( 10 respondents)

Communication encourages a two way process where my employees can give me immediate

feedback about challenges they face and this allows me to course correct (12 respondents).

Communication should be co-ordinated otherwise we might have people delivering

conflicting messages (seven respondents).

The frequency of communication is crucial to keep sufficient energy and focus but also to

guard against overloading the employees (15 respondents).

Communication must be relevant and accessible (five respondent).

The form of communication and message must be tailor-made for the audience in order to be

effective otherwise you create clutter (six respondents).

Table 5.12: Communication

Responses Frequency

1. Communication is very important. 18

2. When employees understand why there is a need for change then they will buy in.

7

3. The language needs to be simple yet effective. 12

4. Effective communication drives employee buy in. 3

5. Ensure consistency in messaging. 14

6. Immediate feedback allows for course correction. 12

7. Avoid clutter by tailor making message and channel of communication.

6

8. Frequency of communication is crucial to maintain momentum and focus.

15

5.14 COMMUNICATION CHANNELS

The respondents were asked what communication channels they had at SAB and which ones they

found to be most effective. These were the most common responses.

Monthly meetings with my line manager (17 respondents).

The weekly team meetings help me to stay abreast of developments in my team (17

respondents).

The District manager‟s quarterly address (10 respondents).

50

The General Manager‟s quarterly briefs (nine respondents).

Our MD addresses us via satellite once every quarter (17 respondents).

Every year we attend our marketing, sales and distribution conference where the strategy is

communicated (16 respondents).

Emails (14 respondents).

Goal setting sessions (18 respondents).

Leaders internal magazine (13 respondents).

Table 5.13: Communication channels at SAB

Responses Frequency

1. Monthly meetings with my line manager. 17

2. Weekly team meetings. 14

3. District manager‟s monthly briefing. 10

4. General Manager‟s quarterly briefing. 9

5. Managing director‟s quarterly satellite TV broadcast. 17

6. Marketing, sales & distribution conference. 16

7. E-mails. 14

8. Goal setting sessions. 18

9. Leaders‟ internal magazine. 13

5.15 SAB REWARD AND RECOGNITION EFFECTIVENESS

The respondents were asked if a reward and recognition policy was important for effective

implementation of strategy. They were also asked to comment on its impact, and whether the

reward and recognition policy at SAB was aligned to the five key thrusts and was effective in

supporting its implementation. These were their responses.

Reward and recognition is very important (18 respondents).

It is not that important (two respondents).

People like to be acknowledged for their contribution (13 respondents).

It motivates employees to go the extra mile (nine respondents).

It promotes excellence in execution (12 respondents).

It drives teams to go the extra mile (13 respondents).

People are driven by money and this gives them extra cash over and above their normal pay

(eight respondents).

51

Effectiveness of reward and recognition

The sales incentives specifically seem to be very effective as we can see the good results

that the teams are achieving (11 respondents).

There was generally good alignment to support the five strategic thrusts (13 respondents).

There is room to redefine some of the criteria used for the quarterly awards (four

respondents).

We should bring back the fun, they have cut the budgets too much (five respondents).

Table 5.14: Reward, recognition and performance

Responses Frequency

Importance

1. It is very important. 18

2. Not really important. 2

Its Impact

3. It promotes excellence in execution. 12

4. I think it drives employees to go the extra mile. 13

5. People like to be acknowledged for their outstanding work. 13

6. People are driven by money and this gives them extra cash. 8

Alignment and effectiveness

7. It is effective as seen by the good results being achieved. 11

8. Generally good alignment to support the five Strategic Thrusts. 13

9. There is room to redefine some of the criteria used for the Quarterly awards.

4

10. Bring back the fun; they have cut the budgets a lot. 5

5.16 REWARD AND RECOGNITION AND PERFORMANCE

The respondents were asked how their success is measured at SAB. They were also asked what

had been the effects of not aligning the reward and recognition process to the company‟s strategy.

Measurement of performance

Achieving my volume targets (14 respondents).

Achieving my budget targets (12 respondents).

Increased market share position (10 respondents).

Balanced scorecard (14 respondents).

Improved customer service and the perceived gap between my service and the service that

my competitor renders (seven respondents).

52

Corporate social investment targets met (five respondents).

Signed off as competent (13 respondents).

Effects of not aligning

It did not create the right excitement and energy behind the key focus areas, that is, results in

sub optimal execution (eight respondents).

It promoted a silo mentality (seven responses).

Misdirected resources (10 respondents).

Table 5.15: How performance is measured at SAB

Responses Frequency

Measurement

1. Volume targets met. 14

2. Budgets met. 12

3. Market share maintained. 10

4. Improved customer service index. 7

5. Balanced scorecard. 14

6. Corporate social Investments. 5

7. Signed off as competent. 13

Effects of not aligning

8. It did not create the right excitement and energy behind the key focus areas, that is, sub-optimal execution.

8

9. Promoted silo mentality. 7

10. Misdirected resources. 10

5.17 Involvement in strategy formulation

The participants were asked to what extent they had been involved in strategy formulation at SAB

and the following were their responses.

To a very limited extent (14 respondents).

l have never been involved (three respondents).

We do not do the thinking but just execute other people‟s decisions or ideas (nine

respondents)

Never (1 respondent).

I have been involved in strategy workshops which probably fed into some strategy (six

respondents).

53

Table 5.16: Involvement of middle managers in strategy formulation

Response Frequency

1. To a very limited extent. 14

2. Never been involved at all. 3

3. We just do the execution. 9

4. I have attended some kind of strategy workshop in the past.

6

5.18 ADDITIONAL ROLE FOR MIDDLE MANAGERS

The respondents were asked whether they thought they had a role to play in strategy formulation.

They were further asked if YES, what their role could be in strategy formulation. The following were

their responses.

I think we definitely have a role to play (20 respondents).

I can be used as a sounding board because of my experience and insights about the market

place (13 respondents ).

I have a good understanding of the needs of the customer and consumer (four respondents).

I think I can contribute a great deal on the How part of the strategy (20 respondents).

Table 5.17: Additional role for middle managers

Responses Frequency

1. I do have a role to play. 20

2. I can be used as a sounding board and utilise my knowledge of market experience.

13

3. I have a good understanding of the needs of the customer and consumer.

4

4. I can contribute a lot on the how part of the strategy. 20

54

CHAPTER SIX

INTERPRETATION OF RESULTS

6.1 INTRODUCTION

In this chapter, the results will be interpreted and the propositions tested against the results.

Recommendations to SAB will also be made.

6.2 PROPOSITION ONE

Middle managers have a major role to play in the successful implementation of strategy, they need

first to understand their role very well, and secondly, they must understand what the company’s

strategy is.

Questions one, two and three were asked to test this proposition. They established if the managers

were familiar with the concept of strategy, if they knew SAB‟s strategy and what they understood to

be their role in implementing it.

The respondents demonstrated a good understanding of the concept of a strategy. The majority

understood that a company needed a game plan to be able to chart its way forward.

They believed that it was a path that was to be followed in order to achieve the company‟s

objectives.

They saw strategy as a way of achieving results.

The managers demonstrated a good grasp of the company‟s overall strategy, with 90 percent

being able to articulate the strategy in full, together with its strategic intentions. Only two

respondents struggled to explain the strategy in full. This contradicts the notion by Kaplan and

Norton (2001) that less than five percent of employees would have a good grasp of the company‟s

strategy.

The responses indicate that they saw their role being to explain effectively the strategy to their

teams. The managers were in agreement that they had a role to play in strategy implementation, a

view shared by Frost (2001) and Roth (1998).

With regards to their role, the majority felt that they play a key role in inspiring their teams to

achieve good results. They did this by engaging their teams and managing any poor performers.

The also saw their role being that of giving direction to the team by simplifying the strategy into

55

simple blocks. According to Peters (1988), they facilitate effective communication between

management and the employees.

They create a feedback loop from the employees to senior management so that the

implementation can be adjusted for new realities on the ground. Alexander (1985) suggested the

importance of a two way communication for effective implementation.

The participants felt that they were at the forefront of execution. They ensured that the small action

items were realised. This view is shared by Bossidy and Charan (2002) who emphasised that

execution was the main differentiator that managers should drive.

They drive the execution based on a quarterly plan that they are responsible for putting together.

This quarterly plan gives a detailed breakdown of action items; who is responsible; budget

allocated; and timelines. This makes it easier for their team to implement.

The results indicate that the managers, who participated in this study, have a very good

understanding of strategy and also an appreciation of their role in effective implementation. They

reported that they had an opportunity of engaging with the strategy during the roll-out workshops.

Only three reported not supporting or being convinced by it immediately. Their confidence is

supported by their general view that the implementation is going very well. They expressed

excitement at what had been achieved by the strategy so far. They were able to link the results to

the actions that they carry out on a daily basis.

The responses of the participants were supported by the views of the senior executive. It is clear

that the strategy has been sufficiently communicated to the middle managers. This contradicts the

view of Kaplan and Norton (1993) view that less than five percent of typical employees understand

their organisation‟s strategy.

Conclusion: The author is inclined to conclude that the results of the research support this

proposition.

6.3 PROPOSITION TWO

Strategy implementation faces many barriers and these need to be understood and overcome if

implementation is to succeed.

Question five was aimed at addressing proposition two and the results were used to test this

proposition. Their results reveal the following.

The budget that was allocated was always not sufficient to support the stretch targets they

needed to achieve.

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Senior management and the programme office took too long to respond to requests from the

coal face and by the time they did the opportunity was gone.

There was excessive internal competition between teams and this had a detrimental effect to

the overall company performance. They attributed this to the fact that for a long time the

company did not face any real external threat and employees thrived on competing with each

other.

High staff turnover at the lower levels of the organisation affected stability and continuity.

Too much emphasis on targets compromised ethical behaviour by employees in a quest to

achieve them.

Incentives were not spread equally.

Initially there was resistance to embrace the new strategy as a new way of life by the team

as they saw it as just an intervention.

The respondents cited the following as having the most impact on effective implementation: team

dynamics, financial support, cultural dynamics, and leadership dynamics.

Staff turnover was reported to be too high for comfort. In some teams, it was as high as 50 per cent

in a year period. This posed a challenge of continuously training new team members and slowed

down momentum.

The respondents also reported that there were insufficient funds to support the new strategy. This

was as a result of taking money from non-market facing activities in order to fund market facing

activities. In trying to reduce costs, the company cut back on its no of employees, but

underestimated the number of people that would be required to achieve the new growth targets.

The inadequate budgets also meant that the incentive system was only focused on sales and

operations people, as these were seen to be more market facing than other back-office

departments, like finance and human. This frustrated other employees.

The respondents reported that SAB‟s high performance culture at times elicited the wrong

behaviour from its employees, as they tried to achieve the stretch targets. The high performance

culture also promotes too much competition between teams internally instead of focusing on the

enemy outside, as everyone wants to be the best.

Decision making seemed to have been compromised by centralising too much power in the middle,

leaving the region managers feeling powerless. This tended to create frustration and lead to

missed opportunities.

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To overcome the barriers, it was apparent that the managers relied a great deal on the support

from senior management to minimise their uncertainty (Brashers, 2001). The guidance helped

them to deal with their challenges more effectively and to remain committed (Huy, 2002).

The majority of respondents also commented that the resilience training they had attended earlier

on in the year had made them more resourceful. One commented, “l had to dig deeper within

myself to find the energy and the focus to overcome my challenges. I think I bounce back very well

now”.

The weekly social system where the teams meet to review the week‟s performance and brainstorm

any challenges for the weeks ahead, also assisted the middle managers to find solutions quicker.

Conclusion: Their responses confirm that there will always be challenges in the implementation

process of a strategy and what is important, is that these are understood and a way is found to

deal with them. The author concludes that the research supports this proposition.

6.3 PROPOSITION THREE

Building a core set of capabilities helps the company in implementing its strategy more effectively.

Questions seven and eight were associated with proposition three. For that reason, the results of

these questions were used to test this proposition.

The respondents‟ answers relating to the importance of building a core set of capabilities were

summarised in Chapter 4, Table 9. All respondents were able to identify at least five specific

competences they developed in their current roles at SAB (Hirsh & Strebler, 1994). These can be

classified into hard and soft skills. The hard skills developed are detailed below.

ability to analyse data and situations and come up with action plans;

profit pool analysis, which is the ability to identify key segments of their business that

contributed the most and also those that had the most potential to deliver better profits. They

then can come up with action plans to implement;

commercial competence, which assisted them in designing solutions that were mutually

beneficial to SAB and its customers; and

effective territory management, which helped them to optimise their people resources.

The soft skills developed were identified as.

emotional resilience;

improved self awareness which helped them enhance their interpersonal relationships;

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coaching for performance; and

leadership skills with the emphasis on inspiration, performance management, change

management and thought leadership.

It was interesting to note that when asked if these skills had helped them become better at what

they do, an overwhelming 16 of the respondents said yes. The remaining four were not sure if their

effectiveness was the result of their competencies or other factors.

Sixteen respondents pointed out that they developed these competences whilst working at SAB.

They attended formal training programmes at their Training Academy for periods ranging between

two weeks and three weeks. All twenty respondents reported that they had also followed a formal

development programmed and had been signed off as competent for their roles. This seems to

support the observation by Winterton and Winterton (1997) that many organisations increase the

capacity of their managers by implementing management development programmes.

The following benefits of acquiring these skills were noted by the respondents.

14 respondents indicated that they had improved their ability to analyse and bias for action.

This made them feel more confident and effective in making decisions, for instance, better

budgetary decisions and commercial engagements with customers, resulting in positive

outcomes.

All 20 respondents indicated that the soft skills developed had improved their leadership

effectiveness. Knowing themselves better due to the Insights course had improved their

relationships with their teams, which led to improved performance. The coaching for

performance built confidence in their teams and they executed more effectively.

Conclusion: The results of this study strongly support this proposition.

6.4 PROPOSITION FOUR


strategy.

Questions nine and ten refer to this proposition. Therefore, the results of these questions were

used to test this proposition.

Seventeen respondents felt strongly that there was a link between the structure of the organisation

and its ability to implement its strategy. The other three respondents were not fully convinced of the

59

link. There is a general appreciation by the middle managers of how this affects them on a day-to -

day basis and when probed for specifics, they could highlight specific examples

Thirteen respondents recognised the benefits of standardised processes which, they say, saved

time and avoided “reinventing the wheel”. They also felt that the structure drove better alignment

and saved costs.

It was felt that the use of a balanced scorecard has promoted transparency in the organisation.

The targets are known to all employees and so are the related budgets to achieve them.

Sixteen respondents felt that the social systems, which were re-aligned a year ago, have resulted

in more effective and action-orientated meetings where the previous week‟s performance is

reviewed across the organisation at the same time. They believe this has enhanced the strong

performance culture that exists.

Uniformity and consistency in the performance appraisal and calibration process has been

achieved by the adoption of an integrated management process by all employees in the

organisation. This view was expressed by 15 respondents. This, according to one respondent, also

contributed to a healthy industrial relations climate.

Whilst the majority of middle managers identified with the positive impact that structure has had on

them, they also raised some critical concerns about the structure that could diminish their ability to

implement effectively.

Thirteen respondents felt that, due to the high performance culture of the organisation which

needed results almost immediately, as middle managers, they ended just being doers without

much thinking and reflection. They believed that this limits their ability to develop their thinking

capabilities. This would be contrary to views held by Senge (1998), that companies should be

learning organisations if their employees are to develop their intelligence.

Conclusion: The results overwhelmingly highlight the link between strategy implementation and the

structure of the organisation as cited by Dostal et al. (2005). This research supports the

proposition.

6.5 PROPOSITION FIVE

Simple yet effective communication is the lubricant that aids strategy implementation.

Questions 11 and 12 are related to this proposition. Therefore, the results of these questions were

used to test this proposition.

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Eighteen managers believed that communication is important for effective implementation of

strategy. They said that communication facilitates understanding of why the change is

necessary and how it will be done (Kitchen & Daly. 2002 ).

Twelve respondents highlighted the importance of a two way communication process

(Alexander, 1995) in improving the implementation process. They noted that a two way

process allowed the employees to provide immediate feedback about their lack of

understanding, anticipated problems and other related issues. This allowed the manager to

take corrective steps immediately.

Fourteen respondents noted that the consistency and authenticity of the message was

equally important. Consistency aids quicker understanding and minimises the level of anxiety

and uncertainty.

The importance of simple messaging was highlighted by 12 respondents. They indicated that

the use of jargon only creates more anxiety in employees. This viewpoint is shared by Allio

(2005) when he notes that imprecise language obfuscates implementation by confusing the

rest of the team.

It was evident that SAB employs a variety of communication channels. The following were listed as

the most effective:

goal setting listed by 18 respondents;

MD‟s Satellite broadcast – mentioned by 17 respondents;

weekly team meetings – 17 people; and

one-on-one sessions between line manager and employee – 17 respondents.

Conclusion: The study revealed a strong link between communication and effective implementation

of strategy. The author concludes that the proposition is fully supported.

6.6 PROPOSITION SIX

Reward and recognition systems need to align to the strategy in order to support effective

implementation.

Questions thirteen and fourteen were aligned to this proposition. Therefore, the results of these two

questions were used to test this proposition.

The respondents were emphatic in asserting that the reward and recognition policy was important

to effective implementation with 18 respondents having answered yes. The other two respondents

did not feel that it was important. When pressed for an explanation, they offered the view that the

normal remuneration was good enough to motivate employees to excel.

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There was general consensus that an employee who had made an extraordinary contribution to

their team or region, would like to be acknowledged. Eight respondents saw money as being a

considerable motivator for employees to excel.

Whilst the SAB policy with regards to recognition and reward is seen as having been effective and

supportive of the five key strategic thrusts by 11 respondents, four others felt that there was room

for improvement. There needed to be a review of some of the criteria that were not fully supportive

of the current strategy.

The process was seen to motivate employees to excel and also strengthened teams as they

focused on the same goals. They also commented that in the past saying that different

departments used to have their own targets to achieve, which were at times not aligned at all to the

strategy, resulting in sub-optimal or mediocre performance.

Conclusion: The field study seems to support this proposition.

6.7 PROPOSITION SEVEN

Middle managers have a far greater role in contributing to strategy formulation than just

implementation.

Questions fifteen and sixteen were aligned to this proposition. Therefore, the results of these two

questions were used to test this proposition.

All 20 respondents indicated that they definitely had a role to play in the strategy formulation

process.

Thirteen respondents said that they had a great deal of knowledge and experience which

could be used as a sounding board during the formulation process.

Four felt that they had a good understanding of their customers‟ needs.

All 20 respondents felt that they could contribute effectively on the „How‟ part of the strategy.

When asked about their involvement, 14 responded that they had been involved in the

formulation process to a very limited extent. This involvement would have been limited to

answering some questions from head office.

Nine respondents felt that they only executed without much thinking.

It is interesting to note that, whilst all the respondents initially expressed interest in the formulation

process, when asked further what role they thought they could play, they were not very

communicative. They all saw to role of sounding board as what could be their contribution. This

seems to support the notion by some researchers that strategy formulation is seen as a grand and

62

very important thing to do in organisations, but also one which requires certain specific skills to be

able to perform. Whilst the author recognises that middle managers can aid implementation, as

noted by Floyd and Wooldridge (1994), the results reveal the managers as wanting to be part of

the process, but not being convinced about what value they would add to the process.

Conclusion: The field research does not support this proposition.

6.8 PROPOSITION EIGHT

Typical middle managers do not understand the company’s strategy.

Questions one related to this proposition.

Eighteen managers displayed a good understanding of the company‟s strategy and were able not

only to mention them, but to explain in detail whet were the strategic intents of each thrust. Their

explanations were in line with the responses of the senior executive from questions one and two.

They explained that the strategy roll-out workshops were very effective in explaining the strategy.

Most commented that the concept of fitting everything on one page and the language used

simplified it. What also aided the understanding was that every internal communication mentioned

the strategy.

Conclusion: The research has shown that the middle managers have a good understanding of the

company‟s strategy. It does not support this proposition.

6.10 RECOMMENDATIONS FOR SAB

Responses to questions nine, ten, eleven and twelve were used to develop recommendation for

SAB management to consider for future change processes.

Middle managers have the potential to be even more effective in driving effective

implementation of strategy. Ensure that they are engaged earlier on with the new strategy, as

their buy in and commitment are essential.

Line managers need to give support to their employees.

Senior management‟s support for and involvement with the implementation process

motivates the team and show the importance of the strategy.

Middle managers need to be empowered to make quick decisions.

Senior management must ensure that internal competition does not result in destructive

behaviour.

63

They should ensure that the measurement systems focus on outcomes in the market as

opposed to winning inside the company.

Ensure relevance and accessibility of information. Communication should be clear and

streamlined, making sure that a communication protocol is implemented.

Strengthen the social systems to ensure regular focused reviews of progress made against

the strategy and gaps identified.

The value of follow-up workshops was highlighted by many respondents. This helps to clarify

the strategy further.

Any incentive programmes being designed should ensure that they promote focus on priority

areas and rewards the correct behaviour.

The issue of insufficient budgets was highlighted. Management should ensure improved

allocation of financial resources, taking into account the existence of competitors.

The value of training was also highlighted and management needs to review existing training

programmes to ensure that the skills being developed are not general but rather specific

competences.

Streamline the coaching programmes for quality and avoid situations where line managers

seem to be chasing numbers and not the quality of the sessions held. Effective coaching will

certainly aid effectiveness.

Senior management should continuously review the structure of the organisation to support

its strategy.

Management should link the goal setting process to the strategy.

Continue with the integrated management process to drive excellence.

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CHAPTER SEVEN

CONCLUSION

7.1 1INTRODUCTION

This chapter sums up the main findings of the current study and considers whether the research

objectives were reached. It also discusses the implications for management based on the results

and suggests future research topics.

7.2 SUMMARY OF FINDINGS

The research objective was to establish factors that affect strategy implementation in an

organisation. In particular, the objective was to understand the role of the middle manager in the

implementation process. Eight research propositions were posited.

Middle managers have a major role to play in successful implementation of strategy and they

need firstly to understand their role very well and secondly to understand what strategy is

being pursued.

Strategy implementation faces many barriers and these need to be understood and

overcome if implementation is to succeed.

Building a core set of capabilities helps the company in implementing its strategy.


strategy.

Simple yet effective communication is the fluid that aids strategy implementation.

Reward and recognition systems need to be aligned to the strategy in order to support

implementation.

Middle managers have a far greater role in contributing to strategy formulation than just

implementation.

Typical middle managers do not understand the company‟s strategy.

The findings of the research support the first six propositions, but contradict the last two. The

research objective of establishing factors that affect the effective implementation of strategy and

the role of middle managers was achieved.

The research found that middle managers at SAB are at the forefront in executing the company‟s

strategy. Contrary to findings in the literature review that said that generally middle managers do

not have a good grasp of their company‟s strategies, they demonstrated a good grasp of the

65

strategic issues and also what their role as implementers entailed. Whilst all the respondents

expressed interest in becoming involved in the strategy formulation process, they could not

articulate what their input would be. It would appear that the middle managers are yearning for

more engagement in strategic issues rather than participation in the formulation process.

The research found the following factors amongst those that slowed down implementation.

There was too much internal competition which tended to be destructive at most times. They

admitted to taking the eye off the competitor, whilst focusing on beating another team or

department.

There was a lack of opportunities to develop strategic thinking capabilities.

Whilst the respondents acknowledged recent improvement, staff turnover still remained a

major concern. This resulted in loss of corporate memory and affected momentum.

Too much time was spent on explaining why targets were not met rather than on trying to

achieve them.

The budget was not always sufficient to support the execution initiatives.

The following factors were found to be some of the factors that assisted the implementation

process:

effective communication channels, especially the roll-out workshops;

simple messaging and consistency thereof;

depth of experience in the team allowing employees to learn from the colleagues;

good senior management support;

rich skills base;

a highly competitive culture and belief that they can win; and

good incentive programme, even though they felt it needed reviewing and alignment with the

outcomes of the strategy.

7.3 MANAGERIAL IMPLICATIONS

Senior management should consider using middle managers more often in strategic

discussions. They can also be utilised initially as part of work streams in order to start

developing the ability to grasp “big picture” issues. Most of them felt that they could be

utilised as sounding boards for implementation plans. Their earlier involvement would also

benefit the company, as the middle managers would buy into the strategy and take

ownership much earlier.

66

Senior management needs to be mindful of the destructive nature of internal competition.

This needs to be managed very closely, otherwise it will result in sub-optimal execution as

teams are reluctant to share best practices. They need to make concrete plans to reorient the

employees to be externally focused. One way of dealing with this challenge is by making sure

that the unit of measure for performance is the team and not individuals. Incentives could

also be given to teams that have innovated and shared the most ideas with the rest of the

organisation.

The study has highlighted a gap in the communication process in terms of giving clearer

action plans for employees to understand specifically what they need to do.

There is a general feeling amongst middle managers that, by the nature of the organisational

structure, their roles do not allow them to use their initiatives, but only implement what has

been thought through by others. This limits their ability to develop strategic thinking

capabilities which would allow them to take their performance to a much higher level.

There are some middle managers with vast experience who could be utilised to mentor

younger middle managers. This would improve the company‟s overall ability to implement

strategy more effectively.

The research also highlighted the need to have specific interventions to retain critical staff. If

not prioritised, loss of experienced staff will impact on the ability of SAB to continue executing

its strategy well. In the long term, this will compromise its competitive position.

Whilst a balanced scorecard is critical to measuring and monitoring progress against the

strategic imperatives, the research did highlight the frustration of middle managers with the

amount of time spent explaining the measures instead of focusing on the outputs.

The planning process should be streamlined and business plans should be signed off at least

one month before the start of a new fiscal year.

There should be increased transparency regarding income statements of each business unit

showing all material investment. This would ensure middle managers could see the direct

impact of their actions.

Communication clutter results from the amount e-mails coming from different sources and all

requesting the same responses. Management should consider creating a clear protocol and

accountabilities of communication to avoid the clutter.

Companies need to move from a transactional/prescriptive approach to an interdependent

partnership with customers. This means that they must listen and then act. This should start

with board level engagement with selected customer groups across key channels on bi-

annual basis. Customers should shape the company‟s strategy and execution and not a

reactive approach to what competitors are doing.

67

7.4 RECOMMENDATIONS FOR FUTURE RESEARCH

This research has raised various questions which merit further investigation and these are

presented below.

Middle managers felt they could add more value to the process of strategy formulation. They

were, however, not forthcoming concerning what that role would entail. Further research

could aim to establish what value specifically middle managers could add to the formulation

process.

The leadership aspect has not been addressed sufficiently by the existing literature.

Research could focus on what leadership competences are essential for middle managers to

be able to translate strategy into action.

It was clear from the research that the culture of the company was highly competitive with a

great deal of internal competition and this drove the company to achieve good results. There

is room to study how this internal competitiveness affects interpersonal relationships and

what would be the long-term impact on the ability of the company to continue winning.

A larger sample would be useful in validating the findings. Perhaps one could look at middle

management in SAB as a whole. It could also look at variables, like gender and age, to see if

the effects would be the same.

A systemic approach to developing middle management competences to enable them to

implement strategy more effectively should be adopted.

The research focused on the five key strategic thrusts and could have included other change

events that respondents had experienced recently. This would have given much broader

insights into change management and the role of middle managers.

68

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APPENDIX 1

LETTER TO THE SELECTED PARTICIPANTS

REQUEST FOR INTERVIEW 15 August 2009

Dear Sir / Madam

As part of my MBA programme at Stellenbosch Business School in Cape Town, South Africa, I am

required as a student to complete a research report. I am conducting a research on the factors

affecting strategy implementation and the contribution of middle managers to its implementation.

The research is based on South African Breweries.

The research is based on in-depth interviews with middle managers who are responsible for

implementing strategy. I would appreciate an opportunity to discuss the issues related to the study

with you. The discussion will take approximately two hours of your time. Your views and

contributions will remain anonymous. Your name will not be linked to any statements or comments

made.

The research will be carried out by me Thobani Dlodlo as an MBA student under the supervision of

Professor Laettitia van Dyk who is a lecturer in Leadership and Strategy at the University of

Stellenbosch Business School, Cape Town, South Africa

I will be contacting you shortly to arrange an appointment.

Yours sincerely

Thobani Dlodlo Supervisor: Professor Laetitia van Dyk

E-mail: [email protected]

Cell phone: 082 9217662

mailto:[email protected]

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APPENDIX 2

LIST OF PARTICIPANTS

Na

me

Po

sit

ion

Siz

e o

f

Team

Ye

ars

in

Ro

le

Ten

ure

at

SA

B

Tert

iary

Qu

alifi

cati

on

Pro

fess

ion

al

Bo

dy

Ian Mountain General Manager 10 15 23 Yes Hons

Zo Mzilikazi Sales Managers 7 3 7 Yes -

Clinton Dreher Sales Manager 7 5 10 Yes -

Nicus Venter Sales Manager 6 3 6 Yes -

Glad Ramaboe Sales Manager 6 3 6 No -

Thulani Zwane Sales Manager 5 4 7 Yes -

Joy Segoe Sales Manager 8 3 9 No -

Esau Komane Sales Manager 7 5 18 No -

Kabelo Lephaka Depot Manager 4 2 3 Yes Hons

Murray De Jager Snr Depot Manager 6 10 21 Yes -

KG Leeuw Depot Manager 6 2 5 Yes -

Ntoko Ntombela Depot Manager 5 3 6 Yes -

Wilhelm Lategan Depot Manager 7 3 5 Yes -

Sue Carter Warehouse Manager 8 10 20 Yes -

Reitumetse Kau Warehouse Manager 3 2 3 Yes Hons

Hlogi Matlala Warehouse Manager 3 2 3 Yes -

Shannon Samjee Credit Manager 1 5 2 3 Yes -

Bonga Xotong Team Leader 1 4 2 5 Yes -

Lucky Intimane Team Leader 2 5 2 4 Yes -

Jolande Booyens Finance Manager 5 2 4 Yes CA

Tshego Morosele Human Resources 7 2 3 Yes Hons

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APPENDIX 3

INTERVIEW SCHEDULE FOR GENERAL MANAGER

1. What is SAB‟s strategy?

2. What is the role of middle managers?

3. What competences do you think they need to possess in order to be able to translate SAB‟s

strategy into action?

4. How is their performance measured?

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APPENDIX 4

INTERVIEW SCHEDULE FOR MIDDLE MANAGERS

1. Please define what you understand by strategy.

2. Please explain SAB„s strategy including the strategic intents.

3. Do you feel that you have a role to play in strategy implementation?

If the answer is YES, what do you understood to be your main role in strategy implementation at SAB?

4. What is your view on the progress that SAB has made in implementing its new strategy?

5. What five major challenges do you / have you faced in implementing your strategy?

How did you overcome these challenges?

6. What factors assisted you during implementation?

7. What do you consider to be your core competences?

How these have helped you in your implementation process?

8. How did you develop these competences?

9. Do you see a link between structure and effective implementation of strategy in an organisation?

How does the organisational structure at SAB affect your effectiveness?

What can be done with the structure to improve your effectiveness?

Does structure follow strategy or is the reverse true?

10. Are there any other structural related comment?

11. How important is effective communication for effective strategy implementation at SAB?

12. What communication channels do you use at SAB?

Which ones would you consider to be most effective?

13. What do you see as the link between a Reward and Recognition policy and effective implementation?

What has been the impact of Reward and Recognition at SAB?

How was its alignment to the key strategic thrusts?

14. How is your success measured at SAB?

What has been the impact of not aligning the reward and recognition process to the company‟s strategy?

15. To what extent have you been involved in strategy formulation at SAB?

16. Do you think that you have a role to play in the formulation process?

If Yes, what role would that be? Please be specific

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APPENDIX 5

INTERVIEW PROTOCOL

5.1 Details of respondent

Name of respondent:

Position:

Number of employees reporting to you:

Number of years at SAB:

Number of years as a line manager:

Date:

Time:

Duration of interview: 5.2 Opening statement to respondent

Thank you for agreeing to contribute to this research. Your contribution will remain anonymous.

Your name will not be linked to any statements or comments made.

I am researching on factors affecting strategy implementation and the contribution of middle

managers to its implementation. The study aims to address propositions set out below.

Proposition 1 - Middle managers have a major role to play in successful implementation of

strategy and they need firstly to understand their role very well a secondly understand what the

strategy is.

Proposition 2 - Strategy implementation faces many barriers and these need to be understood

and overcome if implementation is to succeed.

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Proposition 3 - Building a core set of capabilities helps the company in implementing its strategy.

Proposition 4 - There is a strong link between the structure of the organisation and its ability to

implement strategy.

Proposition 5 - Simple yet effective communication is the lubricant that aids strategy

understanding and implementation

Proposition 6 - Reward and recognition systems need to be aligned and support the strategy.

Proposition 7 - Middle Managers have a far greater role in contributing to strategy formulation

than just implementation.

Proposition 8 - Middle Managers have limited understanding of the company‟s strategy.

Please feel free to ask me to clarify any questions that are not clear

5.3 Interview using semi structured interview schedule (see Appendix 3)

5.4 Closing statement to respondent

Thank you very much for your time and for contributing to my research. The insights received from

you have been invaluable. As soon as the results of the research emerge, I will send you a copy

for your perusal.

Thank you