1.0 EXECUTIVE SUMMARY
The purpose of this paper is to underline the issues Amazon.com is likely to encounter when implementing there recommendations in alignment with future strategy. In so doing, the report will draw attention to the previous studies that have been done when analyzing Amazon.com case. On that premise, this report serves to encapsulate the implementation of the recommendations that was featured during the group’s final report on the ‘evaluation of Amazon’s competitive strategy’ as part of the Amazon.com case study. The recommendations will be highlighted as a plan for new or emerging strategies where appropriate. The analysis will critically evaluate Amazon.com strategic choices based on the previous recommendations and provide new recommendations for Amazon’s future strategies. During the process, the analysis will also incorporate implementation issues and advantages based on structure, systems, culture and people.
2.0 INTRODUCTION
The term ‘strategy’ can be delineated in many ways depending on the contexts, however, according to Chandler (2006) (cited in O’Sullivan and Wright 2009, p.11), strategy is seen as a journey to a particular destination and it involves the provision of the necessary resources and unique activities to arrive there. However, ‘implementing’ the strategy can be a complex set of processes as it determines the outcome whereas the ‘planning’ aspect is usually considered the uncomplicated phase in comparison to the former. Further that, according to Hrebiniak’s (2006) (cited in Mallory et al., 2010, p.5) he suggested that managing the process of strategy implementation is considered more difficult than initially planning the strategyper se; therefore, concepts that cannot be translated into action serve little purpose
Implementation refers to an approach that coverts strategies and plans into actions so as to attain strategic objectives and goals. Implementing strategic plan is as significant, or even more important, than the strategy itself. The critical strategic implementation plans for Amazon is to move a strategic plan from a document that sits on the shelf to functions that compel business growth. However, the many companies that have strategic plans fail to implement them due to the complexity involved in the implementation processes.
3.0 THE ISSUES AMAZON.COM IS LIKELY TO ENCOUNTER WHEN IMPLEMENTING THERE RECOMMENDATIONS IN ALIGNMENT WITH FUTURE STRATEGY
3.1 Organizational Resistance to Change
Various components within an organization are intimately intertwined with an organization’s structure, culture, people and system. Instituting new systems disturbs established patterns of work and power relationships, so there is often substantial opposition to them when they are introduced. The composite relationship linking systems, people, culture, structure, organizational performance, and decision making must be carefully managed. Technology doesn’t involuntarily renovate organizations. There is no delightful wand Amazon.com can wave in order resolve all their issues just because they inaugurated the latest technology.
3.2 Overview of components of an organization (culture, people, systems and structure)
3.2.1 Organizational Culture
Each organization imaginable has basis, incontrovertible, unquestioned assumptions that describe its goals and products. Generally, an organization’s cultural assumptions are taken for granted and are rarely publicly announced or spoken about. As a rule, the organizations culture has proven to be a powerful restraint on making changes within the organization and its basic procedures and common business practices. This is especially evident when considering technological changes that may threaten these commonly held cultural assumptions.
3.2.2 People
The first phase of implementing a plan is to ensure to have the right people are on board. The right people include those stakeholders with necessary competencies and skills that are needed to maintain the plan. In the months following the planning process, enlarge employee skills through training, recruitment, or new hires to include new competencies needed by the strategic plan. People using technology efficiently and effectively, however, can change organizations. Technology can improve communications up and down the organization and from one department to another on the same managerial level. As our dress code policy example shows, communications were much faster and better using technology. (Kotter et al,2008. p.109)The lines of communication are shorter, clearer, and more concise. Technology as an approach for Amazon towards sustaining a competitive advantage will make the organizations more feasible, cheaper, and easier to set up and tear down than before. If you had a small group of people from each functional area of the company collaborating on a new production method, you can bring them together, hammer out the new methodology, and then return them to their regularly assigned units
3.2.3 Structure
Structure of management needs to be set and suitable lines of authority, while clear and open lines of communication with employees need to be established. Plan owners and regular strategy conferences are the two easiest means of putting a structure in place. Meetings to review the development should be scheduled monthly or quarterly, depending on the level of activity and period of the plan.
3.2.4 Systems
Both leaders and technology systems help monitor the progress of the plan and make it quicker to acclimatize to changes. As part of the system, build milestones into the plan that must be achieved within an exact time framework. A scorecard is one tool used by numerous organizations that involves progress tracking and milestones.
3.3 Implementation Strategy Problems for Amazon.Com
Implementing Strategy mostly involves introduction of change to an organization. Leaders may spend quite a substantial amount of time evaluating alternatives and selecting a strategy. Repeatedly, this strategy is then publicized to the organization with the anticipation that organization members will mechanically see why the choice is the best one and will begin direct implementation. Amazon as a business organization should be very careful to ensure that the strategy in keenly implemented. This is because when a strategic change is inadequately introduced, leaders may essentially splurge more time implementing changes resulting from the new strategy than was spent in choosing it. Strategy implementation involves both macro-organizational issues such as technology, systems, decision processes, and structure and micro-organizational issues organization culture and resistance to change.
3.3.1Micro-Organizational Problems of Implementation Strategy
Micro-organizational issues pertain to the behavior of employees within the organization and how employees in the larger organization will view strategy implementation. Implementation can be studied by looking at the effect of organization culture, people, systems, structure and opposition to change has on employee reception and inspiration to implement the new strategy.
According to ( Peters and Waterman, 2004, p 69) attention on the role of culture in strategic management. Organizational culture is more than emotional rhetoric; the culture of an organization develops over a period of time is influenced by the values, actions and, beliefs of individuals at all levels of the organization. Individuals involved in selecting a strategy mostly have entrance to volumes of information and research reports about the need for change in strategies. They also have time to analyze and access this information. What many managers do not to understand is that the information that may make one strategic option an obvious choice is not readily available to the individual employees who will be concerned with daily implementation of the selected strategy. Such employees are frequently contented with the old way of doing things and see no need to change. The result is that management sees the employee as opposing change.
Employees generally do not observe their reaction to transformation as either positive or negative. An employee’s reaction to modification is simply behavior that makes sense from the employee’s perspective. Leaders are required to look ahead of what they see as confrontation and attempt to understand the employee’s framework of orientation and why they may see the change as undesirable(Hillman et al, 2009 p.70).
3.3.2Macro-Organizational Issues of Strategy Implementation
Macro-organizational problem are large-scale, system-wide issues that affect many people within the organization. Researchers argue that there are numerous main interior subsystems of the business that must be synchronized to effectively execute a new business strategy. These systems include technology, reward systems, decision processes, people, culture and structure. However, various systems are interrelated, and varying one may effect to others.
Technology is referred to the knowledge, tools, equipment, and work methods used by an organization in providing its goods and services. Poorly employed technology does not fit the selected strategy and may not be successfully implemented. Amazon need to ensure effective planning to differentiate their product on the basis of eminence must take steps to assure that the technology is in place to create superior quality products or services. This may involve tighter quality control or state-of-the-art equipment. Organizations follow a low-cost strategy may take steps to automate as a means of reducing labor costs. Is such approach it might be challenging for Amazon to use older equipment to lessen the direct expenditure of funds for new equipment.
On the other hand systems such as reward system or incentive plans such as bonuses and other financial incentives, recognition, and other intangible rewards such as feelings of accomplishment may really pose a challenge to the implementation process. However, reward systems can be effective tools for inspiring employees to sustain strategy implementation efforts. Some of which can be employed by Amazon include systems comprise stock options, salary raises, promotions, praise, gratitude, increased job autonomy, and awards based on triumphant strategy implementation. Reward systems can be made available only to managers or increase among workers all through the business. Profit allotment and gain sharing are from time to time used at divisional or departmental stages to more closely associate the rewards to performance (Harris, 2005, p.120).
Queries and troubles will undoubtedly occur as part of implementation. Decisions pertaining to resource provisions, job responsibilities, and precedence are just some of the decisions that cannot be totally planned awaiting implementation commence. Decision processes help the organization make mid-course alteration to keep the implementation on objective.
Organizational structure is the formal pattern of interactions and harmonization established to connect workers to their jobs and jobs to departments. It also includes the connections between employees and departments within the organization. Existing research supports the thought that strategies may be more successful when supported with structure consistent with the new strategic course. For instance, departmentalizations on the foundation of consumers will likely help implement the development and marketing of new goods and services that appeal to a specific customer section and could be predominantly useful in implementing a strategy of discrimination or focus. However, Amazon is likely to experience a challenge since a organizational structure is likely to have high fixed cost and allows for more inefficient utilization of specialists, and might be more inconsistent with their strategy.
4.0 CONCLUSION
Implementing the strategic plan outline in the recommendation will provides a Amazon.com with the necessary direction to pursue a specific strategic direction and set of performance objectives, deliver customer value, and be successful. Nonetheless, this is just a plan; it doesn’t warranty that the preferred performance is attained any more than having a direction assures an organization achieves at the desired goal. Many companies are incorporating the Internet in their business strategies. Because of the Internet, the traditional competitive forces are still at work, but competitive rivalry has become much more intense (Porter 2001). Internet technology is based on universal standards that any company can use, making it easy for rivals to compete on price alone and for new competitors to enter the market.
For many firms that have a plan in place, wasting time and energy on the planning process and then not implementing the plan is very discouraging. Even though the topic of implementation may not be the most exciting thing to talk about, it’s a fundamental business practice that’s critical for any strategy to take hold. The strategic implementation plan will address what and why of activities, but implementation addresses who, where, when, and how. The fact is that both are vital to success. In fact, companies can gain competitive advantage through implementation if done effectively. Often overlooked are the some key components necessary to support implementation: people, resources, structure, systems, and culture. All components must be in place in order to move from creating the plan to activating the plan
5.0 RECOMMENDATIONS
In order to sustain a completive advantage, Amazon need to ensure that there implemented strategies are congruent with the people, structure, systems and culture. With the help of information systems, Amazon can excel over competition and increase the value of a product is. However, this approach is not easy since competitors can rapidly duplicate strategic systems; competitive advantage is not always sustainable. Sustaining a competitive advantage constantly requires altering processes and methods of managing businesses. Leaders simply cannot rest on their laurels with today’s fast growing, and rapidly advancing technology. Technology modifies much faster than organizations can acclimatize. According to(Anthanassiou & Nigh, 2007, p.87) ,as soon as workers and leaders become comfortable with a particular system, it’s almost time to make some more changes.
6.0 REFERENCE
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