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A Critical Analysis of Strategic Agility in Small and Micro-Enterprises in Trinidad and Tobago: A Case Study of Complete Specialist Agency Limited.
The study of strategic agility in small and micro enterprises in Trinidad and Tobago will take place at Complete Specialist Agency Limited, a small organization in which the researcher has worked since its inception in 2007. This topic was selected as a result of discussions held regarding challenges facing small organization such as being able to adapt and renew business models in a fast-changing and dynamic environment while sustaining competitive advantage.
This chapter will introduce the organization and provide a context within which the study is justified.
1.2 Background of Study
Strategic agility continues to be a growing concern for organizations. In today's turbulent and increasingly global business environment where competition is rampant, businesses must constantly seek new opportunities and adopt innovative strategies in order to survive.
Turbulence is prominent and any attempt to ignore it will be futile. In order to succeed, businesses should embrace the opportunities in turbulent environments and build an agile organization.
To find successful strategies for managing change, researchers have studied large corporations that have been able to reinvent themselves and maintain flexibility that first put them on the growth path but it has so far not been studied in the context of small and micro enterprises.
1.2.1 Importance at National Level
Small and Micro Enterprises (SMEs) in Trinidad and Tobago are potentially in danger of losing or not gaining competitive advantage by a lack of focus on strategic agility. The significance is that this research can help other SMEs focus on their strategic options or decisions.
The economy is not performing and crime continues to be a major issue. Businesses in this industry therefore must now focus on its core competencies based on the fact that turbulence is an underpinning factor. This study will assist small and micro enterprises to adapt quickly to changes in the environment.
1.2.3Importance at an Organizational Level
CSAL is a relatively small company and now that the industry is experiencing relatively strong growth, it is at a place where the company will need to refocus its strategy to compete for customer's attention as they step ahead of both the customer and their competitors in order to be successful, which demands sensitivity and capability for renewal.
This case study will provide academic significance as no academic work at this rigour has been conducted in Trinidad and Tobago and in this context; this can be used as a pilot paper for further development in this area of study.
The researcher will be able to adopt the findings of this paper as a recommendation to the board and management of Complete Specialist Agency to gain competitive advantage through renewal of its strategy.
1.3 Organizational Background
Complete Specialist Agency Limited (CSAL) is a local professional security and property management services company which was established in 2007 to bring the expanding security sector, a type of service in which clients' customer services needs were a high priority.
The Company's vision is to continuously strive to provide to its clients superior, innovative quality services to meet and exceed their ever-changing needs. Its corporate philosophy is rooted in partnering with their clients and providing a preferred environment for their employees through hard work and integrity. Complete Specialist Agency Limited‘s mission is to contribute to providing a safe environment for its customers so that the quality of their life can be enhanced.
The policy of CSAL is to provide efficient, prompt and courteous service through the use of qualified staff and effective work procedures. The small organization comprises of fifteen staff members ranging from management, administrative, marketing, operations and agents.
It has been estimated by various studies and surveys that between 70 percent and 85 percent of all business activity in the Caribbean is conducted by small and micro enterprises that employ less than twenty five persons. Even though their individual levels of activity may be comparatively small, collectively their importance to the general economic activity of the entrepreneurial class cannot be overemphasized.
It is in this regard that survival of SMEs are vital to the development of Trinidad and Tobago and based on the dynamic and fast-changing environment in which we operate strategic agility is critical to sustain survival.
1.4 Research Questions
- Is strategic agility a relevant aspect when discussing small and micro enterprises? and conversely,
- What are those factors of strategic agility in small and micro-enterprises?
- How should Complete Specialist Agency Limited revise its management and operations in order to reach strategic agility?
1.5 Research Objectives
- To critically analyze to what extent strategic agility will assist small and micro-enterprises to respond in turbulent environments.
- To critically examine the business response to mechanisms such as strategic agility in small and micro enterprises in a developing based industry in Trinidad and Tobago.
- To critically explore current literature and best practices in strategic agility in large organizations and relate it to small and micro-enterprises.
- To make recommendations for the adoption of strategic agility in small and micro enterprises in Trinidad and Tobago based on the findings that the research may reveal.
Today, turbulence is playing a leading role in societies and in this context, being agile is not about how an organization should respond to one-off crisis or rebuild after a downturn, it is concerned with an organization's ability to navigate through continual turbulence. This is the justification for this study. The next chapter will examine the existing literature on strategic agility with a view to examining recent developments and theories.
O'Leary (2007 p.78) defines a literature review as a very specific piece of argumentative writing…..that relies on scientific and academic discourse and debate to construct arguments about a current research project.
This review will highlight some of the existing literature of strategic agility namely strategy renewal and resilience, managing change, strategic sensitivity, leadership unity and resource fluidity that will be used to underpin the analysis of strategic agility in small and micro enterprises.
2.1 Strategic Agility
In a turbulent environment where there is globalization, technological changes, emergence of markets and many other factors, the success of an organization regardless of its size is depend on its ability to be strategically agile. Doz & Konsonen, 2008 defines strategic agility as the ability to dynamically revise or reinvent the company and its strategy as the business environment changes. In support of this, Morgan and Page (2008) indicated that this is the key to success in the fast changing environment and it can be defined as the ability to support and at times drive sudden change in order to capitalize on changing market opportunities. However, this same phenomenon is defined by Long (2000) as being able to provide the right products and services at the right place at the right time at the right place for the right customers. Long (2000) goes on to say that strategic agility does not mean not having a strategy, but it rather emphasized strategic thinking and a clear vision instead of strategic planning, as well as a joint concept of strategy development and implementation instead of separating the two.
2.2. Small and Micro Enterprises in Trinidad & Tobago
As mentioned earlier, it has been estimated by various studies and surveys that between 70 percent and 85 percent of all business activity In the Caribbean is conducted by enterprises employing less than twenty five (25) persons. Even though their individual levels of activity may be comparatively small, collectively their importance to the general economic activity of entrepreneurial class cannot be overemphasized.
2.3 The Importance of Strategic Agility to SMEs
This concept is Important for small and micro enterprises as strategic agility is needed most in entrepreneurial companies to maintain its survival as shown in figure 1. Being able to adapt and change processes and strategic decisions based on Industry and the external environment are key factors of success.
2.4 Business Case
The concept strategic agility is somewhat different but not totally at variance with the classical strategy approach. Even though strategy and strategic direction are still critical aspects of an organization, in today's fast changing business environment, the long term strategic planning needs to be replaced by strategic agility (Doz & Kosonen, 2009).
It is Doz and Kosonen, 2008 who identified that as companies grow and become successful, they tend to lose some of their adaptive capability and renewal becomes a difficult and periodic exercise. However, also smaller companies have to pay attention to this, as Long (2000) suggested that agility without a strategy is no better than a strategy without agility. The solution to this dilemma is to be strategically agile.
This phenomenon achieves competitive advantage through the ability to retrieve, interpret and act on battlefield intelligence fast than an adversary. This will derive an increase in profits and lead to cost reductions in the long term as companies will foster to adapt to its environment through emergent strategies.
2.3 Strategic Renewal
Strategic renewal can be broadly defined as the activities a firm undertakes to alter its path dependence. Important parameters of a journey of renewal include: the behavior of managers at each level of the organization in response to each other (top-down or bottom-up); the way they view investing for tomorrow versus milking profits today (exploration versus exploitation); and the way in which they share knowledge with each other across organization boundaries (intra-organization learning).
There have been big corporations that have failed to renew themselves (Hamel & Valikangas, 2003; Hamel 2007),but according to Hamel (2007), lately industries have been left behind on the change curve with their out dated business models. This has been the case as organizations in the past believed that business models should not be changed.
Competitive advantage will not last forever and management must continuously explore innovative strategies to maintain its advantage through reinventing its business models quickly based on the environment.
2.4 Managing Change
For most organization, developing a capacity for agility involves making fundamental changes to the way in which the business is managed. These fundamental changes can be more of less drastic, depending on the organizations.
Change is inevitable and a major factor in any organization. Mullins (2010 pg. 756) states that despite the potential positive outcomes change is often resisted at both the individual and the organizational level. Resistance to change - or the thought of the implications of the change - appears to be a common phenomenon.
In this regard, managing change is vital for any organization to be successful and competitive. New ideas and innovation should not be perceived as threats to the organization and its members.
One of the most important factors in the successful implementation of organizational change is the style of managerial behavior. There are some organizations that prefer a more dictatorial style of leadership while others prefer the participative and consultative approach to introduce change.
Mullins (2010 pg. 762) states that people are the key factor in the successful management of change. If change is to work, it must change the perceptions, attitudes and behavior of people. However, Mullins (2010) cited Lucas who reminds us that a high proportion of change initiatives fail, derailed by the people factor.
2.4 Vectors of Strategic Agility
Mastering the art of organizational agility requires focus on three agility enablers that is rooted in a series of management practices.
2.4.1 Strategic Sensitivity
Research conducted by the Implement Consulting Group states that this is the ability to identify and make sense of emerging opportunities quickly and react faster than competitors.
Lynch (2009 pg. 17) stated that an emergent strategy is one whose final objective is unclear and whose elements are developed during the source of its life, as the strategy proceeds. However this is argued by Mitzberg which was cited in Lynch 2009 who indicated that “the popular view sees the strategist as a planner or as a visionary; someone sitting on a pedestal dictating brilliant strategies for everyone else to implement. While recognizing the importance of thinking ahead and especially of the need for creative vision in this pedantic world, I wish to propose an additional view of strategist - as a patter recognizer, a learner if you will - who manages a process in which strategies (and visions) can emerge as well as deliberately conceived.”
In a chaotic environment, emergent strategies are important in gaining competitive advantage.
2.4.2 Leadership Unity
Leadership is vital in addressing strategic issues at organizations to allow an effective and timely decision making process. There should be high quality internal dialogue to build a common ground and foster development through working together as a team.
Mullins (2010 pg. 373) stated that the changing nature of work involves moving away from an emphasis on getting results by the close control of the workforce and towards an environment of coaching, support and employment. Mullins cited a major report from the Advanced Institute of Management Research which refers to the dual role of leadership. It states that leaders both motivate employees and design effective organizations. There are two broad conceptions of what leaders do - they motivate their followers and they design organizational contexts to enable their followers to function effectively.
Mullins (2007 page 763, 764) cited Drucker who contends that “one cannot manage change. ‘One can only be ahead or it. However in the period of upheavals, such as the one we are living in, change is the norm. To be sure, it is painful and risky, and above all it requires a great deal of very hard work. But unless it is seen as the task of the organization to lead change, the organization will not survive. In a period of rapid structural change, the only ones who survive are the Change Leaders. It is therefore a central 21st century challenge for management that its organization becomes a change leader. A change leader sees opportunity; a change leader looks for change, knows how to find the right changes and knows how to make them effective both outside the organization and inside it.'
2.4.3 Resource Fluidity
Companies should establish more strategic and dynamic resource allocation processes to enable timeliness of actions and assist in the allocation of capital resources in a more flexible way.
An organizational design consisting of modular business processes and IT systems enables greater agility in establishing and scaling up (and down) new business. This offers higher and faster redeployment potential, in the same way as products. In practice, this means that business process modules originally designed for a specific activity, but with flexibility in mind, can be reused in another business configuration with the same activity.
An effective leader should have the ability to drive its workforce and mobilize its people. In this regard, motivation is a critical aspect of this process.
Motivation is the driving force in achieving goals within an organization by stimulating the action of people. Work motivation is referred to as the direction, level of effort and extent of persistence evident in the behavior of an employee. The direction of behaviour refers to which behaviour an employee chooses to perform a task in the organization.
Motivation theories explore the multiple approaches to meeting individuals' needs, including expectancy theory (Vroom, 1964), reinforcement theory (Skinner, 1971), goal theory (Karoly, 1993). It has been shown that predictors of motivation include job satisfaction, perceived equity, and organizational commitment (Schnake, 2007). Today, the well-known theories are the Maslow's needs hierarchy theory, Hertzberg's two factor theory and the McClelland's learned needs theory (Stroh & Northcraft, 2002, page 89).
The Maslow's Needs Hierarchy Theory
Maslow's Needs Hierarchy Theory is considered as the most significant and most popular. Abraham Maslow in his needs hierarchy theory changes the belief about the economic theories of worker motivation during the 1940's (Stroh & Northcraft, 2002, page 64). Maslow's theory uses the five divisions of human wants and needs into the following classifications: the basic physiological needs; the safety needs, the affiliation needs, the esteem needs, and the self-actualization needs (Stroh & Northcraft, 2002, page 64).
The Hertzberg's Two Factor Theory
The Hertzberg two-factor theory was one of the first and most influential motivation theories during the mid-twentieth century. According to Mullins (2010, page 265), Hertzberg conducted a study and the findings showed that there were two (2) different set of factors affecting motivation and work. This led to the two-factor theory of motivation and job satisfaction.
One set of factors are those which if absent, cause dissatisfaction. These factors are the hygiene or maintenance factors. The other set of factors are those that, if present serve to motivate the individual to superior effort and performance. Those are motivators or growth factors. It is the strength of these factors that will affect the feelings of satisfaction or no satisfaction, but not dissatisfactions.
McClelland's Needs Theory
The McClelland's Needs theory was developed by David McClelland who was inspired by Henry Murray refines needs into three motives; the needs for achievement, the need for power and the need for affiliation (Nelson & Quick, 2006, page 156). McClelland also identified that employees acquire and learn their definite needs, equally by inheritance from communal culture as well as from direct practice or incident.
Table 1 - Content Theories of Motivation
It can be said that, motivation is either positively or negatively affected by the experience an employee has within a given work environment and with his or her leaders.
Leaders plan, organize, and execute work processes in complex organizations. The complexity reflects continuous changes in technology, shifts in workforce demographics, the need for faster decision making, and developing the capability to continuously adapt and change. It is within this organizational context that leaders must create a work environment that elicits employee motivation.
Strategic sensitivity, collective commitment and discipline in the working of top teams and a leader who has the courage to lead, building organizational infrastructure, resource allocation processes, people management and modular structures and business process that can be reconfigured fast and provide resource fluidity are all critical factors of strategic agility. However, to conduct the analysis, it will have to be determined whether all these factors influence or can be applied to the organization of study.
The next chapter will look at the research design and methodology that will be used to conduct the study.
RESEARCH DESIGN AND METHODOLOGY
Saunders et al (2009, pg. 3) refers to research methodology as “the theory of how research should be undertaken.” This chapter will outline the research paradigms, methodology and techniques used to achieve the objectives of the study.
3.1 Research Design
This will give the rationale for doing the research philosophy, strategy and approach.
Research can be exploratory, descriptive or explanatory. However, it may have more than one purpose and Robson (2002) states that the purpose of the researcher's enquiry may change over time.
This study will be exploratory in nature as Robson (2002, pg. 59) states that an exploratory study can be used to determine ‘what is happening; to seek new insights, to ask question and to assess phenomena in a new light.'
3.1.0 Research Philosophy
In management research, it is said that theory influences what is researched and consequently the outcome of that research influence theory.
Research philosophy has been classified in to positivistic or phenomenological. Collis and Hussey (2003, pg. 52) states that positivistic approaches are founded on a belief that the study of human behavior should be conducted in the same way as studies conducted in the natural sciences. However, (Patton, 2002, pg. 106) describes the phenomenological approach as the study of how people describe things and experience things through their senses: “The subjective experience incorporates the objective thing and becomes a person's reality, thus the focus on meaning making as the essence of human experience.”
This study is more aligned to a phenomenological approach as businesses are complex and they relate to relationships between people who construct their own social realities in a specific cultural context.
The phenomenological approach adopts ontology and epistemology which legitimate the value of individuals' beliefs, focuses on a socially agreed understanding, and attempts to make sense of participants' motives, intentions and actions in a way which is meaningful to them (Saunders et al, 2009). Thus the focus is on meaning, rather than the measurement of social phenomenon (Collis & Hussey, 2003).
3.1.1 Research Approach
The terms qualitative and quantitative are widely used in business and management research to differentiate both data collection techniques and data analysis procedures. Saunders et al (2009 pg. 151) states that “quantitative is predominantly used as a synonym for any data collection technique such as a questionnaire) or data analysis procedure (such as graphs or statistics) that generates or uses numerical data. In contrast, qualitative is used predominantly as a synonym for any data collection technique (such as an interview) or data analysis procedure that generates or use non-numerical data.”
The research will use qualitative data, obtained from a small number of respondents; the data will be subjective and obtained from the workplace.
3.1.2 Research Strategy
The researcher will adopt a participative enquiry as she works in the organization being studied and in this context this will be the most suitable approach. There will be active involvement in research and emphasis on sharing, agreeing, cooperating and making the research process as open and equal as possible.
Robson (2002, page 178) defines case study as ‘a strategy for doing research which involves an empirical investigation of a particular contemporary phenomenon within its real life context using multiple sources of evidence. Yin (2003) also highlights the importance of a context, adding that, within a case study, the boundaries between the phenomenon being studies and the context within which it is being studied are not clearly evident.
Yin (2003) distinguishes between four case study strategies based upon two discrete dimensions: single case versus multiple case and holistic case versus embedded case.
The research methodology will use a single case study approach to analyze the phenomenon in SMEs using Complete Specialist Agency Limited as a case study. This is especially suited to its small scale, the limitations in terms of time, cost and accessibility (White, 2000), and to exploring and challenging existing theory (Saunders et al, 2009).
18.104.22.168 Data Triangulation
The mixed method design uses both survey (questionnaire) and text (interview) methods in a sequential process, in order to achieve triangulated data, aimed at neutralizing biases Inherent in a single method (Creswell, 2003).
3.2. Data Collection Issues
3.2.1 Data Sources and Collection Methods
The primary sources of data that will be used through observations are:
* Self-administered questionnaires
This will include secondary sources of information, including but not limited to:
* Books and journals on strategy and organizational behavior
* The local sources will include:
i. Central Statistical Office published reports
ii. The Ministry of Labour and Small and Micro Enterprises and their published reports.
iii. Governmental policy and mandates.
As the population under investigation is relatively small, the advice of White (2000) would be followed, and self-completion questionnaires that will be sent to the management team.
3.2.2 Sampling Techniques
3.2.3 Data Analysis Techniques
3.3 Research Ethics
Saunders et al (2009 pg. 183) describes ethics as "the appropriateness of your behaviour In relation to those who become the subject of your work, or are affected by it." Confidentiality will be a critical factor in the course of this paper.
The researcher will seek approval to quote directly from interviews and anonymity will be observed wherever possible during the reporting of findings. Permission will be sorted to use the organization's name and the study will be made available to senior management to make them fully aware of the context.
3.4 Resources and Limitations
The research will be conducted in the workplace of the researcher and access to data should not be an issue. Approval would be sorted from management and a copy of the letter of request is attached as Appendix I. In addition, the resources required will be a recorder, computer, paper and other stationary items. The researcher will bear the cost of these items.
This chapter has outlined the overall phenomenological research philosophy which will define the case study methodology chosen for this research. The research design has been justified and references were made to ethical consideration and the resources required.
The next chapter will give a timeline identifying the activities to be completed to complete this study.
The time table will show a list of activities and the relationship between those activities and time.
4.1 Time Plan
The attached Gantt Chart in Appendix I shows the proposed schedule to completing the dissertation which starts on September 1st 2011 and ends on December 31st 2011.