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“Teams and groups are essential to strategy formulation and implementation”. Please discuss with reference to the literature.
Strategic Management brings together the goals of the business in unison with the environment it competes in. Formulation and implementation of these goals using the company’s resources is key to the strategic Management concept. An essential part of a company’s resources is its teams and groups. Management can steer teams and groups in a meaningful way to achieve the goals of the business.
Cane suggests that a group of people that don’t know they are a team cannot be one.
“It is certainly true to say that any group of people who do not know they are a team cannot be one. To become a team, a group of individuals needs to have a strong purpose and to work towards that purpose rather than individually. They need also to believe they will achieve more by co-operation than working individually”.
Although groups and teams appear to be similar entities there are distinct differences as pointed out by Meredith Belbin in “Beyond the Team”.
The differences that can be found relate to size, selection, leadership, perception, style and spirit.
Some differences of note include the fact that teams are limited by size whilst groups can be bigger another notable, selection of team members is crucial compared to a group’s which is immaterial.
Belbin created nine team roles that all have their strengths and weaknesses
- Plant:Creative but can ignore important details
- Resource Investigator:Extrovert but can be overly optimistic
- Co-ordinator:Delegates well but can be seen as manipulative
- Shaper:Dynamic but can provoke others
- Monitor-evaluator: See all options but can be overly critical
- Team worker:Co-operative but can be indecisive
- Implementer:Reliable but sometimes inflexible
- Completer:Delivers on time but can be reluctant to delegate
- Specialist:Dedication but only to a certain area
From a strategy perspective these roles all have their place within the team and their interaction together serves the organisation as a whole. Managers must be careful to utilise team members in their roles taking note on how they complement each other.
Direction must be led by managers who believe in situational leadership and remember the statement below from Ken Blanchard’s bestseller “Leadership and the one minute manager”.
“There is nothing so unequal as the equal treatment of unequal’s”
(Blanchard, 1985) P.33
As individuals in organisations we are prone to the social loafing effect made famous by Ringelmann. This effect means people exert less than 50% effort within their team in contrast to the effort they would exert in individual tasks. The effect is directly related to links between effort and reward.
The opposite of social loafing is social facilitation when working with others can have a positive effect on output. The key reason for its success depends on what level individual contributions are evaluated. In general people don’t want to show weakness in front of others. Companies that seek successful strategic management should seek to enjoy social facilitation by evaluating individual performance within teams.
Groups within organisations can be split into two types formal and informal. Both are important for Strategic Management, the formal group which operates at multiple levels within the organisation is relatively permanent. The informal group which can be important for networking and work satisfaction is more informal.
(Mullins, 2013) P.305
‘Riches’ suggests that teams should create norms of behaviour and stick to them in order to achieve good team performance. Team members get used to these norms and they mostly have a positive impact but can be negative also. They teach people to behave in a certain way within the team often depending on the behaviour of the manager.
An example of a negative team norm would be the code of silence relating to drug use during the US Postal Teams Tour de France victories. Lance Armstrong and his colleagues had entered into this norm together to protect themselves from sanctions. Eventually the truth came out but it took a long time before the scandal actually unfolded.
Information available from their website (cbsnews.com, 2012)
To develop teams for strategic management organisations can incorporate Professor Bruce
Tuckman’s stages model:
- Forming:Getting to know each other
- Storming:Disagreements expressed and challenges offered
- Norming:Focus begins on making team decisions
- Performing:Cohesiveness is created, Performance of outlined goals occurs
- Adjourning:Group is dissolved due to goal being met
Hrebiniak describes the importance of coordinating teams and groups in his book “Making Strategy Work”
“The work of diverse and separate organizational units must be coordinated to achieve desired results and a unity or consistency of effort. Structure shows the different parts of an organisation and their separate capabilities. Integration or coordination of these parts or units and their capabilities is absolutely vital to the execution of a coherent, focused strategy”
In addition he describes how execution of strategy suffers if performance measures aren’t used.
“Execution suffers heavily if performance measures aren’t used as the basis of managerial responsibility and accountability. Measurability and accountability are vital aspects paving the path to execution success”
Accountability for Performance against Objectives
(Hrebiniak, 2005) P.141 & P.190
According to ACAS the importance of forming teams and groups for strategic management can be attributed to the following reasons:
- Improves productivity
- Improves quality and encourages innovation
- Takes advantage of opportunities provided by technological advances
- Improves employee motivation and commitment
(Mullins, 2013) P.325
‘Adams’ confirms how important teamwork is to organisations
“The point is that teamwork is not an option for a successful organisation; it is a necessity. Teamwork can lead to achievement, creativity and energy levels that someone alone or perhaps with just one person could hardly imagine.
(Mullins, 2013) P.326
Ashmos and Nathan make the following point
“The use of teams has expanded dramatically in response to competitive challenges. In fact one of the most common skills required by new work practices is the ability to work as a team”
(Grant, 2010) P.188
A fundamental problem of organizations is reconciling specialization with co-ordination and
Cooperation. Employees are usually grouped by Tasks, Products, Geography and Process. These groups then need to be controlled. Oliver Williamson calls this ‘The Principle of Hierarchal Decomposition’
(Grant, 2010) P.190
Additionally factors that can affect organizations are:
Economies of Scale: Group specialized teams together to exploit maximum economies of scale
Economies of Utilization: Group together similar activities results in fuller utilization of employees
Learning: Create multifunctional work groups to form architectural knowledge
Standardization of control systems: Similar tasks should be grouped together from a performance measurement standpoint
The below website outlines five disciplines relevant to the strategy direction of teams in organisations. The article states that organizations rarely have an issue with developing a strategy, it’s the execution that is the problem.
Information available from their website (fastmeetings.com.au, 2014)
Commissioning: Being clear about the purpose and ends
It’s important for teams and group to have full sight of the end goal throughout the process. They should understand why they are trying to achieve this goal and the benefits it will bring. Understanding the process and end state motivates team members making their work more interesting.
Clarifying: Being clear about strategies, priorities and measurable objects
Teams need to ensure the goals they set for themselves are SMART (specific, measurable, achievable, relevant and time-bound) Complete reviews of goals should be set at regular intervals to ensure plans move forward. Occasionally team members may need coaching assistance to achieve the goals that are set.
Co-creating: Working together to innovate, make decisions and solve problems
Companies that encourage innovative tasks among team members will provide ideas for the future. Brainstorm labs and creative settings should be encouraged at all costs to secure the organisation in future years. This is vital especially in the technology sector where companies such as Apple, Dell, Samsung and Nokia fight for limited market share. Innovation and patents can often be the lifeblood of this fast moving sector.
Connecting: Engaging with stakeholder groups, staff, boards and customers
Teams should align themselves together for the good of the organisation. This involves meeting together at regular intervals to discuss strategy objectives. An open mind is required by all groups in devising and implementing strategy.
Team Learning: Developing each other and the collective whole through action, learning and unlearning
Groups work together to learn and apply new items that will make the organisation successful. Items that hinder or are negative to the organisation should be unlearned at this point.
This article also addresses why organizations use teams
Information available from their website (managementstudyguide.com, 2014)
Teams get things done faster than individuals alone: The output of teams working together is better than that of individuals. Together teams can specialize and utilize economies of scale.
Work does not fall behind within a team: Work can be managed by other team members during holidays and illness. This ensures full cover and attention to all clients consistently.
Teams promote healthy competition within the organization: Employees will strive to meet and exceed the work rate of their colleagues. This increases output within the team and creates experienced new leaders for the organisation.
Bonding of employees is better within teams: Employees feel motivated to perform when they work with others. This team building is important for culture and staff retention.
New skills are developed within teams: A diverse team can share knowledge and improve each other’s skills by introducing their experiences from their previous organizations. In addition team members may have developed valuable skills in third level education they may wish to share.
A certain type of group called a Quality circle can help the organisation improve its output and overall standards. On completion of their work the group will make recommendations to management to improve their processes. The group may also have the authority to implement the recommendations.
This type of proactive involvement by groups is a great example of how strategy formulation and implementation is assisted by specialised groupings.
Strong working groups are not always a positive for organisations as their culture can be hard to change once developed. In addition the norms of certain groups may cross the boundaries of what the organisation expects.
To get the most out of teams and groups in relation their strategy needs they must have effective leadership in place. Management styles can differ and treatment of others is vital in order to develop success. Some basic management philosophies include:
- Recognition and trust
- Involvement and availability
- Consideration, respect and trust
- Fair and equitable treatment
(Mullins, 2013) P.478
Managers who lead teams with effective strategic management in mind should take note of the 3-D model of managerial behaviour devised by Reddin. This model involves a combination of task orientation and relationship orientation. The interaction between these determines the behaviour of the manager towards his/her team. There are 4 effective styles and 4 less effective styles.
- Bureaucrat (Effective)
- Benevolent autocrat (Effective)
- Developer (Effective)
- Executive (Effective)
- Deserter (Less effective)
- Autocrat (Less effective)
- Missionary (Less effective)
- Compromiser (Less effective)
Hayes and Hyde (1998) created six steps that organisations should use when approaching external change. Teams and groups have full involvement in each of the steps. Senior management needs to apply strategic management using these steps and be cognisant that their teams and groups will be affected during the process.
- Recognise the need for change
- Start the change process
- Plan and prepare to implement
- Implement change
Without teams and groups in organisations it would be impossible to implement strategy successfully. As individuals we do not have the capabilities or the time to be good at everything. Our dedication is not as strong when we are on our own. Physcologically we need others to stimulate our competitiveness. We strive for the social facilitation effect even if we don’t actually realise we are doing it. Organisations that mentor and grow teams successfully reap the benefits down the line. By steering the teams via senior and middle management good leadership will implement strategy successfully.
The changing face of technology and input of new disrupters ensures organisations need to work hard to formulate and implement ahead of their competitors. Large companies that failed to adapt to change and suffered because of it could have utilised their teams a little better. Could Kodak have foreseen and implemented digital camera technology quicker? Why did Nokia fall from the market leader position for mobile phones? Of course adapting our people is a challenge for all people managers and depends on the individuals Locus of Control. Changes of strategy can be difficult for people within teams if they have an external locus of control. Management needs to be wary of this when making strategy decisions and they should guide their teams through the process. Communication needs to be clear and motivation/support high. In addition any training needs should be addressed to ensure a smooth transition.
Management & Organisational Behaviour, 10th edition, L. Mullins (with G. Christy), Pearson, 2013
Robert M. Grant, 2010. Contemporary Strategy Analysis: Text Only. 7th Edition. Wiley.
Ken Blanchard, 1985. Leadership and the One Minute Manager: Increasing Effectiveness Through Situational Leadership. 1 Edition. William Morrow.
Lawrence G. Hrebiniak, 2005. Making Strategy Work: Leading Effective Execution and Change. Edition. Pearson Prentice Hall.
USADA report slams Lance Armstrong - CBS News. 2014. USADA report slams Lance Armstrong - CBS News. [ONLINE] Available at: http://www.cbsnews.com/news/usada-report-slams-lance-armstrong/. [Accessed 19 July 2014].
5 Disciplines of Successful Strategy Implementation - Fast Meetings | Effective Meetings to Improve Productivity. 2014. 5 Disciplines of Successful Strategy Implementation - Fast Meetings | Effective Meetings to Improve Productivity. [ONLINE] Available at: http://www.fastmeetings.com.au/5-disciplines-of-successful-strategy-implementation/. [Accessed 21 July 2014].
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Strategy Implementation Module – (Bachelor Financial Services, 2014)