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

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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

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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.

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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.

CONTENTS
DECLARATION ACKNOWLEDGEMENTS ABSTRACT LIST OF TABLES LIST OF FIGURES CHAPTER ONE INTRODUCTION 1.1 1.2 1.3 1.4 1.5 1.5.1 1.5.2 1.5.3 1.5.4 1.6 1.7 INTRODUCTION THE RESEARCH PROBLEM THE OBJECTIVES OF THE RESEARCH RESEARCH METHODOLOGY DEFINITION OF CONCEPTS AND TERMS Middle Management Uncertainty Implementation Competitiveness LIMITATIONS OF THE RESEARCH SUBSEQUENT CHAPTERS OF THE REPORT ii iii iv ix x 1 1 1 2 2 2 2 3 3 3 3 3 5 5 5 6 7 9 11 13 13 14 15

CHAPTER TWO REVIEW OF RELEVANT LITERATURE 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 MIDDLE MANAGERS UNCERTAINTY BUILDING A DEFINITION OF STRATEGY STRATEGIC PLANNING NINE SCHOOLS OF THOUGHT STRATEGY AS A COMPETITIVE POSITION STRATEGY AS A SYSTEMIC PROCESS STRATEGY AS A LEARNING PROCESS RESOURCES AS STRATEGY BLUE OCEAN AND RED OCEAN STRATEGIES

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2.11 2.12 2.13 2.14

FACTORS AFFECTING IMPLEMENTATION STRATEGY IMPLEMENTATION AND MIDDLE MANAGERS MCKINSEY 7S MODEL CONCLUSION

15 20 22 23 24 24 24 27 27 27 27 28 28 28 30 30 30 31 32 32 32 32 33 33 33 33 34 34 35 35 35 36

CHAPTER THREE CASE BACKGROUND 3.1 3.2 3.3 INTRODUCTION SOUTH AFRICAN BREWERIES STRATEGIC THRUSTS AND INTENTS

Table 3.1: SABs strategic thrusts and intents 3.4 3.4.1 3.4.2 3.4.3 3.5 THE VISION, MISSION AND VALUES OF SAB Vision Mission Values THE SUCCESS OF SABS STRATEGY

CHAPTER FOUR RESEARCH METHODOLOGY 4.1 4.2 4.3 4.4 4.5 4.5.1 4.5.2 4.5.3 4.5.4 4.5.5 4.5.6 4.5.7 4.5.8 INTRODUCTION SITUATIONS FAVOURING QUALITATIVE INTERVIEWS INTERVIEWS AND INTERVIEW SAMPLE METHOD OF ANALYSIS SUMMARY OF RESEARCH PROPOSITIONS Proposition 1 Proposition 2 Proposition 3 Proposition 4 Proposition 5 Proposition 6 Proposition 7 Proposition 8

CHAPTER FIVE THE RESULTS 5.1 5.2 5.3 PARTICIPATION SENIOR EXECUTIVES VIEW UNDERSTANDING OF STRATEGY BY MIDDLE MANAGERS

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5.4 5.5 5.6 5.7 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.18

SAB STRATEGIC INTENTS ROLE OF MIDDLE MANAGERS PROGRESS MADE BY SAB WITH ITS STRATEGY BARRIERS TO IMPLEMENTATION COMPETENCES DEVELOPMENT OF CORE CAPABILITIES STRATEGY AND STRUCTURE AT SAB OTHER ISSUES RELATED TO SABS STRATEGY IMPLEMENTATION COMMUNICATION EFFECTIVENESS COMMUNICATION CHANNELS SAB REWARD AND RECOGNITION EFFECTIVENESS REWARD AND RECOGNITION AND PERFORMANCE ADDITIONAL ROLE FOR MIDDLE MANAGERS

37 38 39 39 43 44 45 48 48 49 50 51 53 54 54 54 55 57 58 59 60 61 62 62 64 64 64 65 67

CHAPTER SIX INTERPRETATION OF RESULTS 6.1 6.2 6.3 6.3 6.4 6.5 6.6 6.7 6.8 6.10 INTRODUCTION PROPOSITION ONE PROPOSITION TWO PROPOSITION THREE PROPOSITION FOUR PROPOSITION FIVE PROPOSITION SIX PROPOSITION SEVEN PROPOSITION EIGHT RECOMMENDATIONS FOR SAB

CHAPTER SEVEN CONCLUSION 7.1 7.2 7.3 7.4 1INTRODUCTION SUMMARY OF FINDINGS MANAGERIAL IMPLICATIONS RECOMMENDATIONS FOR FUTURE RESEARCH

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REFERENCES APPENDIX 1 LETTER TO THE SELECTED PARTICIPANTS APPENDIX 2 LIST OF PARTICIPANTS APPENDIX 3 INTERVIEW SCHEDULE FOR GENERAL MANAGER APPENDIX 4 INTERVIEW SCHEDULE FOR MIDDLE MANAGERS APPENDIX 5 INTERVIEW PROTOCOL

68 73 74 75 76 77

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LIST OF TABLES
Table 2.1: Nine schools of thought on strategy by Mintzberg Table 3.1: SAB's key strategic thrusts and intents Table 3.2: Progress in terms of the Five Key Strategic Thrusts Table 5.1: General Manager's response on strategy Table 5.2: General understanding of what strategy is by middle managers Table 5.3: SABs strategy Table 5.4: Role of middle managers Table 5.5: Views on progress made by SABs strategy Table 5.6: Barriers to strategy implementation at SAB Table 5.7: Factors that have aided strategy implementation Table 5.8: Core capabilities for middle managers and how these assisted implementation Table 5.9: Core capabilities and how they were developed Table 5.10: Strategy and structure at SAB and its perceived limitations Table 5.11: Other strategy implementation related issues Table 5.12: Communication Table 5.13: Communication channels at SAB Table 5.14: Reward, recognition and performance Table 5.15: How performance is measured at SAB Table 5.16: Involvement of middle managers in strategy formulation Table 5.17: Additional role for middle managers 10 27 28 36 37 37 38 39 41 42 44 45 47 48 49 50 51 52 53 53

LIST OF FIGURES

Figure 2.1: The main components of the Strategic Planning Process Figure 2.2: Porters Five Forces Framework Figure 2.3: Strategy as a systemic process Figure 2.4: Ansoffs Matrix Figure 2.5: Strategy Implementation Figure 2.6: Implementation Plan Figure 2.7: The importance of middle managers during change in an organisation Figure 2.8: McKinsey 7S model Figure 3.1: SABs business model Figure 3.2: SABs Business Strategy

8 11 13 14 16 19 21 22 25 26

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 others 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 (WaiKwong, 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.

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 Johnsons (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).

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 ones 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.

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.

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

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 companys strategy is managements action plan for running the business and conducting its operations. They s ee 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 companys strengths and weaknesses with the environmental opportunities and threats. According to Hough et al. (2008), a companys strategy consists of the competitive moves and business approaches that managers are employing to grow the business, attract and please

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.

Business Vision Mission & Goals & Values SWOT Strategic Choice
Functional Level Strategy Business Level Strategy Feedback Global Strategy Corporate Level Strategy

External Analysis

Internal Analysis

STRATEGYY IMPLEMENTATION

Designing organisational structure Structure

Matching Strategy Structure & Controls

Designing Control Systems

Managing Strategic change Figure 2.1: The main components of the Strategic Planning Process Source: Hill and Jones (2001)
Change

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

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. 2.5 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. 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.

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Table 2.1: Nine schools of thought on strategy by Mintzberg

Entrepreneurial Environmental

Dimension

Cognitive

Planning

Position

learning

Political

Andrews,
Key Author(s)

Ansoff, 1965

Porter, 1980

Schumpeter 1934

Simon 1976

Lindblom 1959 Quinn, 1980

Allison 1971 Perrow 1970

Normann, 1977

Cultural

Design

Hannan and Freeman 1977

1965

None
Base Discipline

Systems Theory cybernetics

Economics

None

Psychology

Psychology

Political Science

Anthropology

Biology

SWOT Model & Fit

Vocabulary

Formalising programming & budgeting

Analysing generic ttrategy

Vision leadership innovation

Bounded rationality, mental model reframe

Incremental

Power Coalition Dominant

Ideology Values

Reaction Selection Retention

emerging

President
Central Actor

Planner

Analysts

Leaders

Brain

Everybody who learns

Everybody

Collectively

Stake holder

Director

with power

Opportunity Environment

Stable & controlled

Analyse in economic variables

Manoeuvrable

Cognition

Demanding

Intractable

Incidental

Dominant

& Threats

Malleable

Explicit perspective
Strategy

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 ones position in the industry relative to ones competitors.

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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 companys position strategically in the market place.

Substitute Products

Power of Suppliers

Rivalry amongst existing companies

Power of Buyers

Potential New Entrants

Figure 2.2: Porters 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.

12 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 companys 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 firms position. This may be seen as moving from a niche position to wider market control. The second is maintaining and holding a firms 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 companys 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 prod ucts 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.

3.

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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:

Quality of monitoring and feedback about viability

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

Quantity and Quality of Options and Choices

Ease of translation into executable business plans

Robustness and sustainability of the strategy

Clarity about the strategic architecture

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

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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 managements 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: Ansoffs Matrix Source: Ansoff (1987)

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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 todays 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

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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.

Evaluate/understand current position and potential futures Develop options and choices

Strategy planning and implementation

Develop a robust strategy architecture

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 companys current position is a good point to start a strategic conversation because it shows the companys 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.

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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 companys 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 ones view was on strategy. He questioned whether strategy formulation came first before implementation or vice versa. In his view, ones 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 managers 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 organisations 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

Media What methods Timing When will the

are

adequate

for

communication need to be placed? Message What needs to be communicated?

communicating?

Milestones How and

when

are

results

measured? Participants Who will be involved in the

Work Plan What time

communication process?

and

effort

is

required?

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 individuals different characteristics. Human resources are emerging as the key success factor in strategy implementation. This means that fit between the intended

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 enou gh 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

Implementing Total Quality Management

Enabling change in culture

Development / Sustainability of teams

The Middle Manager

People Management

Problems resistance

of

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.

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.

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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 SABs 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. Heinekens investment in a new brewery signalled its longterm 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 bimodal 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.

Our business model - Driving the virtuous cycle

Leverage scale for efficiencies

Grow to expand scale

Fund marketfacing investments & capabilities

Figure 3.1: SABs 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 our way and the SAB business strategy

Winning with scale & skills

1. Stabilise the foundation

2. Engage the competitor

Winning with 5toDrive

3. Ensure key brands resonate

4. Shape superior routes to market

Winning sustainably

5. Restore societal leadership

Figure 3.2: SABs 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 SABs 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: SABs strategic thrusts and intents Strategic Thrust 1. Stabilise Foundation Intent 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. Ensuring the competitive game is played based on our strengths and the competitors weakness 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 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

2. Engage The Competitor

3. Ensure Key Brands Resonate

4. Shape Superior Routes To Market

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 SABS 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 The out of stocks situation has been eliminated with about 95% of customers now receiving their correct orders and on time. 1. Stabilise the Foundation 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. SAB losses have slowed in recent months. 2. Engage the competitor 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.

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3. Ensure Key Brands Resonate

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. Shape Superior Routes to Market

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. 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)

5. Restore Societal leadership

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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 authors 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.

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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 SABs 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.

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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 companys 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 companys 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 companys financial infrastructure. The reward and recognition processes should encourage implementation and reward employees for meeting or exceeding strategic targets.

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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 companys strategy. The literature showed that most middle managers do not have a good grasp of the companys 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.

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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 EXECUTIVES VIEW

The following questions were put to the general manager in order establish a base to compare with responses from middle managers: What is SABs 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: SABs 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.

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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 Managers response on strategy Response 1. At a higher level it is really about driving the virtuous cycle and winning with customers and consumers. 2. 5 Key thrusts to ensure we win sustainably. 3. The middle managers play a critical role. They turn big ideas into action plans. 4. Execution, execution and execution. 5. They guide their teams to implementing our strategy well. They direct the foot soldiers on the ground giving all necessary support. 6. They should achieve growth in volumes, market share and customer service. 7. They should plan, resource, execute their plans and measure their performance. 8. They need to be good in communication, analysis, resilience, execution, team player and self belief. 5.3 UNDERSTANDING OF STRATEGY BY MIDDLE MANAGERS Frequency 1 1 1 1 1

1 1 1

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 companys 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)

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

Response 1. it is a path that will be followed to in order to achieve results. 2. It is a plan. 3. it is how we will get there. 4. It is a way of achieving results. 5. It is a game plan.

Frequency 13 12 1 7 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 companys 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: SABs strategy Responses 1. 2. 3. 4. 5. 6. Driving the virtuous cycle Stabilise the Foundation Superior Route to Market Ensure Brands Resonate Engage the Competitor Societal Leadership Frequency 18 16 14 15 16 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 companys 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 1. I facilitate the execution of the plan. 2. Motivate the team to carry out its duties and meet deadlines. 3. Give direction to the team by simplifying the strategy to small chucks. 4. I am at the fore front of driving execution. 5. Achieve market share growth and profitable volume growth. 6. Increase the companys competitiveness and beat the competitor at the game. 7. Lead the team to achieve strategic objectives. 8. Develop Quarterly Sales Plans and adhere to the budget. Frequency 9 13 7 13 14 10 14 12

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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 SABs strategy Responses 1. I am excited with the good progress that has been made in the last three years. 2. Strategy is about choices and I feel that we made a good choice and should stick to it. It is working well. 3. We need to review the strategy to take advantage of the disorganised state of our competitor. 4. The competition is beginning to feel the heat. 5. We are clearly winning as we are beginning to win back lost market share. 6. We are silencing all the critics and showing that we are a great South African success story. Frequency 12 14 2 6 3 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).

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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).

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Table 5.6: Barriers to strategy implementation at SAB Responses Barriers 1. Insufficient budgets 10 3 13 8 12 14 10 2. Bureaucracy 3. Line managers not buying into the strategy from the beginning of the implementation process 4. The competitive culture of the organisation is destructive as there is too much internal focus 5. The goal posts keep changing throughout the year 6. The high rate of staff turnover at the lower levels of the company affects the consistency in the execution. 7. Silo mentality. 8. Too many project managers managing the same outputs and all making similar requests wastes execution time as line managers respond to their requests. 9. Whilst stretch targets are welcome, at times they are unrealistic and demotivate the employees. 10. The unrealistic targets result in employees engaging in unethical behaviour in trying to achieve them. 11. Lack of understanding of the big picture. 12. The incentive programme favours only some employees and not all employees. 13. There is resistance to change and embrace new strategy as a new way of life. 14. How they overcame the challenges: My manager always helped me when I was unsure. 15. The resilience course equipped me to deal with setbacks. 16. I relied on the more experienced colleagues to help me. 17. I have a strong belief that nothing is impossible. 18. During the roll out process they gave us Q&A s to assist in dealing with the implementation. 19. Our weekly social systems are helpful in brainstorming any issues that might be bothering me. 14 12 5 7 15 Frequency 13

12 12 9 14 15 14

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).

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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 MDs 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 1. My knowledge of the market dynamics helped me a great deal. 2. Commitment and resilience of team. 3. Involvement of senior management. 4. Good support from my line manager. 5. We have a strong bond as a team and nothing is impossible. 6. Our Tuesday meetings help to create common ground on the focus area for the week for the entire business unit. 7. My team had a good understanding of the key drivers and managed them well. 8. The game plan was clearly communicated and each individual took ownership. 9. The celebration of milestones keeps the team motivated even during difficult times. 10. I am driven by my incentives. Frequency 6 8 3 12 6 13

1 8 7 12

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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).

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Table 5.8: Core capabilities for middle managers and how these assisted implementation Responses 1. 2. 3. 4. 5. 6. 7. 8. 9. Analytical skills Profit pool analysis Cognitive skills Effective territory management Commercial competence Emotional resilience IMP Leadership skills Improved self awareness Frequency 14 10 8 12 9 15 18 20 4 8 14 6 14 15 10

10. Coaching for performance 11. They have helped me make quicker decisions 12. Market analysis and anticipating trends and competitor moves 13. More effective budgeting 14. Improved results through coaching for performance 15. I have become a confident leader 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)

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Table 5.9: Core capabilities and how they were developed Responses 1. SAB Training Academy in Midrand. 2. Formal competence acquisition process CAP. 3. We receive continuous on the job training. 4. Formal and informal mentorship programmes. 5. Benchmarking visits and shared experiences 6. Workshops 7. Ongoing coaching Frequency 16 20 12 7 5 13 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).

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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 weeks performance (16 respondents). Our integrated management process (IMP) calendar ensures uniformity and consistency with performance appraisals and calibration (15 respondents).

Limitations of SABs 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).

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Table 5.10: Strategy and structure at SAB and its perceived limitations Responses 1. 2. 3. 4. 5. YES, there is a strong link between implementation effectiveness and the structure of the organisation. NO, I do not see a clear link. The structure supports what ever strategy is in place. Our structure is built around five regions. Our structure promotes a competitive work ethic and team work whilst it encourages individual accountability. Standardised processes save time and reduce costs It facilitates easier co-ordination and simultaneous implementation of initiatives. Our geographic footprint gives us a competitive advantage. Our goal setting process has a cascading effect that ensures alignment. It allows easier benchmarking of performance, facilitating sharing of best practices speedily. Frequency 17 3 14 8 13

6. 7. 8. 9.

12 11 15 12 5 11 14 5 16 15

10. Regional support services ensure consistency in execution. 11. Our centralised balanced scorecard and ranking drive internal competition. 12. Our structure promotes transparent budgetary process. 13. Geographic focus allows for deeper understanding of market dynamics. 14. Our social systems facilitate more effective team meetings and review of previous weeks performance simultaneously. 15. Our integrated management practices ( IMP) calendar ensures uniformity and consistency with performance appraisals and calibration. 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. 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. 18. Painting all regions with same brush can be counter-productive. 19. Too much decision-making has been centralised. 20. Budgets are too lean to support the strategy adequately. 21. We should decide what needs to be done and then see what people we need to carry that out. 22. Structure comes before strategy because you need people first.

13

13 6 4 9 4

48 5.12 OTHER ISSUES RELATED TO SABS 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 1. Ensure that employees are fit for purpose. That is, right people with the right skills for the right job. 2. Speed to execution will create differentiation. 3. Role clarity and priorities. 4. Do not forget to have fun. 5. We need more entrepreneurial individuals. 6. Enhance communication between departments and teams. Frequency 12 13 14 2 8 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).

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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 1. Communication is very important. 2. When employees understand why there is a need for change then they will buy in. 3. The language needs to be simple yet effective. 4. Effective communication drives employee buy in. 5. Ensure consistency in messaging. 6. Immediate feedback allows for course correction. 7. Avoid clutter by tailor making message and channel of communication. 8. Frequency of communication is crucial to maintain momentum and focus. Frequency 18 7 12 3 14 12 6 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 managers quarterly address (10 respondents).

50 The General Managers 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 1. Monthly meetings with my line manager. 2. Weekly team meetings. 3. District managers monthly briefing. 4. General Managers quarterly briefing. 5. Managing directors quarterly satellite TV broadcast. 6. Marketing, sales & distribution conference. 7. E-mails. 8. Goal setting sessions. 9. Leaders internal magazine. Frequency 17 14 10 9 17 16 14 18 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).

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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 Importance 1. It is very important. 2. Not really important. Its Impact 3. It promotes excellence in execution. 4. I think it drives employees to go the extra mile. 5. People like to be acknowledged for their outstanding work. 6. People are driven by money and this gives them extra cash. Alignment and effectiveness 7. It is effective as seen by the good results being achieved. 8. Generally good alignment to support the five Strategic Thrusts. 9. There is room to redefine some of the criteria used for the Quarterly awards. 10. Bring back the fun; they have cut the budgets a lot. 11 13 4 5 12 13 13 8 18 2 Frequency

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 companys 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).

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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 Measurement 1. Volume targets met. 2. Budgets met. 3. Market share maintained. 4. Improved customer service index. 5. Balanced scorecard. 6. Corporate social Investments. 7. Signed off as competent. Effects of not aligning 8. It did not create the right excitement and energy behind the key focus areas, that is, sub-optimal execution. 9. Promoted silo mentality. 10. Misdirected resources. 8 7 10 14 12 10 7 14 5 13 Frequency

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 peoples decisions or ideas (nine respondents) Never (1 respondent). I have been involved in strategy workshops which probably fed into some strategy (six respondents).

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Table 5.16: Involvement of middle managers in strategy formulation Response 1. 2. 3. 4. To a very limited extent. Never been involved at all. We just do the execution. I have attended some kind of strategy workshop in the past. Frequency 14 3 9 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 1. I do have a role to play. 2. I can be used as a sounding board and utilise my knowledge of market experience. 3. I have a good understanding of the needs of the customer and consumer. 4. I can contribute a lot on the how part of the strategy. Frequency 20 13 4 20

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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 companys 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 SABs 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 companys objectives. They saw strategy as a way of achieving results.

The managers demonstrated a good grasp of the companys 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 companys 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

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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 organisations 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 SABs 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 weeks 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

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

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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 weeks 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; MDs 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

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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 companys strategy. Questions one related to this proposition. Eighteen managers displayed a good understanding of the companys 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 companys 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 managements 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.

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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. There is a strong link between the structure of the organisation and its ability to implement 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 companys 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 companys strategy. Contrary to findings in the literature review that said that generally middle managers do not have a good grasp of their companys strategies, they demonstrated a good grasp of the

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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.

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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 companys 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 biannual basis. Customers should shape the companys strategy and execution and not a reactive approach to what competitors are doing.

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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.

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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: thobani.dlodlo@za.sabmiller.com

Cell phone: 082 9217662

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APPENDIX 2 LIST OF PARTICIPANTS

Qualification Professional
CA

Position

Years in

at SAB Tertiary

Role Tenure

Size of

Team

Ian Mountain Zo Mzilikazi Clinton Dreher Nicus Venter Glad Ramaboe Thulani Zwane Joy Segoe Esau Komane Kabelo Lephaka Murray De Jager KG Leeuw Ntoko Ntombela Wilhelm Lategan Sue Carter Reitumetse Kau Hlogi Matlala Shannon Samjee Bonga Xotong Lucky Intimane Jolande Booyens Tshego Morosele

Name

General Manager Sales Managers Sales Manager Sales Manager Sales Manager Sales Manager Sales Manager Sales Manager Depot Manager Snr Depot Manager Depot Manager Depot Manager Depot Manager Warehouse Manager Warehouse Manager Warehouse Manager Credit Manager 1 Team Leader 1 Team Leader 2 Finance Manager Human Resources

10 7 7 6 6 5 8 7 4 6 6 5 7 8 3 3 5 4 5 5 7

15 3 5 3 3 4 3 5 2 10 2 3 3 10 2 2 2 2 2 2 2

23 7 10 6 6 7 9 18 3 21 5 6 5 20 3 3 3 5 4 4 3

Yes Yes Yes Yes No Yes No No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

Hons

Hons

Hons

Hons

Body

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APPENDIX 3 INTERVIEW SCHEDULE FOR GENERAL MANAGER

1. What is SABs 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 SABs strategy into action?

4. How is their performance measured?

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APPENDIX 4 INTERVIEW SCHEDULE FOR MIDDLE MANAGERS

1. 2. 3.

Please define what you understand by strategy. Please explain SABs strategy including the strategic intents. 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 companys 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 companys 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