Factors Affecting Poor Strategy Implementation

https://doi.org/10.22146/gamaijb.5702

Muh. Darmin Ahmad Pella(1*), Ujang Sumarwan(2), Arief Daryanto(3), . Kirbrandoko(4),

(1) Graduate Program of Management and Business, Bogor Agricultural University
(2) Graduate Program of Management and Business, Bogor Agricultural University
(3) Graduate Program of Management and Business, Bogor Agricultural University
(4) Graduate Program of Management and Business, Bogor Agricultural University
(*) Corresponding Author

Abstract


Research on strategy implementation has been developed for three decades, yet only a few studies focus on factors affecting poor strategy implementation. This research evaluates the influence of strategy implementation problems on strategy implementation success and firm performance. This survey was conducted in 60 Indonesian companies and the data were statistically analysed using Structural Equation Modeling Partial Least Square (SEM PLS). The results show significant influence of strategy implementation problems on the degree of successful strategy implementation and perceived firm performance. The seven major obstacles that have impact on poor strategy implementation are: problems related to corporate scorecard, key performance indicators, information technology, competence, performance appraisal, strategy management office, and financial support.                  

Full Text:

PDF


References

Aaltonen, P., and H. Ikavalko. 2002. Implementing strategies successfully. Integrated Manufacturing Systems 13 (6): 415-18.

Alexander, L. 1985. Successfully implementing strategic decision. Long Range Planning 18: 91-97.

Alexander, L. D. 1991. Strategy implementation: nature of the problem. In Hussey D. (Ed.), International Review of Strategic Management 2 :73-96. New York: John Wiley and Sons.

Al-Ghamdi, S. 1998. Obstacles to successful implementation of strategic decisions: The British experience. European Business Review 98: 322-327.

Al-Ghamdi, S. 2005. Communicating a Strategy to Employees: An Empirical Study on Saudi Manufacturing Company. King Fahd University of Petroleum and Minerals

Beer, M., R. A. Eisentat, and B. Spector. 1990. Why change programs don’t produce change. Harvard Business Review (Nov-Dec): 158-166.

Beer, M., and R. A. Eisenstat. 2000. The silent killers of strategy implementation and learning. Sloan Management Review 41 (4): 29-40.

Boasson, V. W. 2001. Location, Strategy and Firm Performance: Evidence from the Pharmaceutical Industry. Bufallo: State University of New York. ABI/INFORM Global. Publication No. AAT 3021877.

Bolton, B. J. 2006. Corporate governance and firm performance. ProQuest Dissertations and Theses. Boulder: University of Colorado.

Bossidy, L., and R. Charan. 2002. Execution The Discipline of Getting Things Done. New York: Crown Business

Bourgeois, L. J., and D. R. Brodwin. 1984 Strategic implementation: Five approaches to an elusive phenomenon. Strategic Management Journal 5 (3): 241-264.

Bower, J. L., and C. G. Gilbert. 2007. How Managers’ Everyday Decisions Create—or Destroy—Your Company’s Strategy. Boston: Harvard Business School Publishing Corporation

Brauer, M., and S. L. Schmidt. 2006. Exploring strategy implementation consistency over time: The moderating effects of industry velocity and firm performance. Journal of Management dan Governance 10: 205-226.

Brown, J. E. 2000. A Study of the Relationship between CEO. CFO. and COO Short-Term Compensation and Firm Performance. California: California School of Professional Psychology. ABI/INFORM Global.Publication No. AAT 9964374.

Chong, H. 2003. A Causal Model of Linkages Among Strategy. Struktur. and Performance Using Directed Acyclic Graphs: A Manufacturing Subset of The Fortune 500 Industrials 1990 – 1998. Texas: A and M University

Curkovic, S., S. Vickery, and C. Droge. 2000. Quality-related action programs: Their impact on quality performance and firm performance. Decision Sciences 31 (4): 885.

Ghozali, I. 2008. Structural Equation Modelling: Metode Alternatif Dengan Partial Least Square. Semarang: Badan Penerbit Universitas Diponegoro, UNDIP.

Hacker, M. E., T. Kotnour, and L. A. Mallak. 2001. Formalizing deployment processes in the US government. International Journal of Public Sector Management 14 (3): 221-240.

Harrington, R. J., and K. W. Kendall. 2006. Strategy implementation success: The moderating effects of size and environmental complexity and the mediating effects of involvement. Journal of Hospitality Tourism Research 30: 207.

Jusoh, R., and J. A. Parnell. 2008. Competitive strategy and performance measurement in the Malaysian context: An exploratory study.Management Decision 46 (1): 5-31.

Kalali, N. S., M. R. Akhavan, A. A. Pourezzat, and D. K. Dastjerdi. 2011. Why does strategic plans implementation fail? A study in the health service sector of Iran. African Journal of Business Management 523: 9831-9837.

Kaplan, R. S., and D. P. Norton. 2001. The Strategy Focused Organization – How Balanced Scorecard Companies Thrive in The New Business Environment. Boston: Harvard Business School Press.

Kaplan, R. S., and D. P. Norton. 2005. Creating the office of strategy management. Working Paper (unpublished). Balanced Scorecard Collaborative. www.hbs.edu.

Kaplan, R. S., and D. P. Norton. 2008. Execution Premium: Linking Strategy to Operations for Competitive Advantage. Boston: Harvard Business School Press.

Kazmi, A. 2008. A proposed framework for strategy implementation in the Indian context. Management Decision 46 (10): 1564-1581.

Lingle, J., and W. Schiemann. 1994. Is data scatter subverting your strategy. Management Review 83 (5): 53-6.

Low, J, and T. Siesfield. 1998. Measures that matter: Non-financial performance.Strategy and Leadership 26 (2): 24-38.

Miller, A., and G. Dess. 1997. Strategic Management (International ed.). New York: McGraw-Hill.

Mintzberg, H., B. Ahlstrand, and J. Lampel. 1998. Strategy Safari. New Jersey: Prentice-Hall.

Neilson, G. L., K. L. Martin, and E. Powers. 2008. The secrets to successful strategy execution. Harvard Business Review 86 (6): 60-70.

Noble, C. H. 1999. The eclectic roots of strategy implementation research. Journal of Business Research 45. 119-134.

Nohria, N., W. Joyce, and B. Roberson. 2003. What really works. Harvard Business Review 81 (7): 42-52.

Okumus, F. 2003. A framework to implement strategies in organizations. Management Decision 41 (9): 871-82.

Olson, E. M., and S. F. Slater. 2002. The balanced scorecard, competitive strategy, and performance. Business Horizon (May-June): 11-16.

Pella, D. A. 2010. Tujuh Langkah Transformasi Manajemen Kinerja Korporasi: Rahasia Peningkatan Kinerja Bisnis. Jakarta:Republika

Peljhan, D. 2006. The role of management control system in strategy implementation: The case of Slovenian company. Paper presented in Research Seminar at the University of Ljubljana.

Peters, T., and R. H. Waterman. 1980. In Search Of Excellence: Lessons from America’s Best-Run Companies. UK:Bloomsbury

Peters, R. C. 2007. Corporate Social Responsibility and Strategic Performance. Realizing A Competitive Advantage Through corporate Social Reputation and A Stakeholder Network Approach. Florida Atlantic University. Proquest Dissertation and Theses

Ramaseshan, B. 1998. Internal success factors for marketing strategy implementation. Conference Proceedings (9 ABI/INFORM Global): 68. American Marketing Association.

Rampersad, H. K. 2003. Total Performance Scorecard, Redefine Management to Achieve Performance with Integrity. Burlington: Butterworth-Heinemann

Roth, K., D. M. Schweiger, and A. J. Morrison. 1991. Global strategy implementation at the business unit level: Operational capabilities and administrative mechanism. Journal of International Business Studies 22 (3): 369.

Saunders, M., R. Mann, and R. Smith. 2007. Benchmarking strategy deployment practices. Benchmarking 145: 609-623.

Saunders, M., R. Mann, and R. Smith R. 2008. Implementing strategic initiatives: A framework of leading practices. International Journal of Operations dan Production Management 28 (11): 1095-1123.

Schmelzer, C. D., and M. D. Olsen. 1994. A data based strategy implementation framework for companies in the restaurant industry. International Journal of Hospitality Management 13 (4): 347-359.

Schneier, C. E., D. G. Shaw, and R. W. Beatty. 1991. Performance measurement and management: A tool for strategy execution. Human Resource Management 30 (3) (1986-1998): 279.

Shah, A. M. 2005 The foundations of successful strategy implementation: Overcoming the obstacles. Global Business Review 6: 293.

Simons, R. 2000. Performance Measurement dan Control Systems for Implementing Strategy. New Jersey: Prentice Hall Inc

Skivington, E. J., L. R. Daft. 1991. A study of organizational framework and process modalities for the implementation of business level strategic decisions. Journal of Management Studies 28 (1): 45-68.

Sull, D. N. 2005. Why Good Companies Go Bad and How Great Managers Remake Them. Boston: Harvard Business School Press

Syrett, M. 2007. Successful strategy execution. How to keep your business goals on Ttarget. The Economist.

Tan, Y. T. 2004. Barriers to Strategy Implementation, Study of Air New Zealand. Auckland University of Technology

Tessema, M., and J. Soeters. 2006. Challenges and prospects of HRM in developing countries: Testing the HRM-performance link in Eritrean civil service. International Journal of Human Resource Management 171: 86-105.

Teng, M. 2002. Corporate Turnaround: Nursing A Sick Company Back to Health. Singapore: Prentice Hall

Yamin, S., and H. Kurniawan. 2011. Generasi Baru Mengolah Data Penelitian dengan Partial Least Square Path Modeling, Aplikasi dengan Software XLSTAT, SmartPLS dan Visual PLS. Jakarta: Salemba Infotek.



DOI: https://doi.org/10.22146/gamaijb.5702

Article Metrics

Abstract views : 997 | views : 50

Refbacks

  • There are currently no refbacks.




Copyright (c)



 

 

 

 

Gadjah Mada International Journal of Business indexed in: 

 

 

 

 https://doaj.org/static/doaj/images/logo_cropped.jpg

 

 Indonesian Publication Index (IPI)

 WorldCat

 

 Harvard Library

 The University of Manchester

 University of Oxford

 Google Scholar

 

 

 

 

 

Copyright of  Gadjah Mada International Journal of Business  (ISSN 1411-1128 (Print) and ISSN 2338-7238 (Online))


Creative Commons License
 Gadjah Mada International Journal of Business  is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License

site
stats View My Stats