2. Literature survey
2.7. Conclusion from the review of the literature
Chapter 2: Literature survey
execution. It is the intent of the study to note some of the key factors, which were found from practice, that have made a significant impact on effective strategy execution.
The second research question seeks to understand which factors are key to effective strategy execution through the use of project portfolios. A series of salient factors were identified from the literature and these span strategic management, the role of management and the importance of capabilities within the organisation. It is thus important to note to what extent are these prevalent during the data gathering process.
Chapter 2: Literature survey
Ghapanchi et al. (2012), Patanakul (2015)). In addition, the effectiveness of project portfolios is critical since it depicts how scarce organisational resources need to be allocated and managed to realise strategic objectives (Laslo, 2010).
2.7.2. Effective strategy execution
Strategy execution is about the realisation of intentions, the fulfilment of the company’s mission and the achievement of its vision (MacLennan, 2011). Strategy execution is a complex task due to the different factors that play a role during the execution process and the lack of a guiding framework (Hrebiniak (2005), Al-Ghamdi (1998), (Speculand, 2014), Getz et al (2009), MacLennan (2011) and Getz et al (2012)). The most effective way to successful business strategy is through alignment and follow up (Khadem, 2008). Ramakrishnan (2012) says that enterprises are incorporated to performance and the decisive test of performance is the value created in relation to a promise made to the stakeholders.
2.7.3. Value creation
Benefits realisation management is an important approach to ensure that corporate initiatives deliver what they promise: it provides focus, demonstrates value for money, reduces the risk of failure and maximises benefits achieved (Esteves, 2009). It is clear from the research work as noted during the review of the literature that strategy execution still needs improvement to ensure that the expectations from the strategic formulation and planning phases are realised. Furthermore, the surveyed literature indicates that effective strategy execution is still in its infancy thus the aspect of benefits realisation as well as value creation, management and realisation may be jeopardised.
Shareholder value measured through financial and non-financial measures should be the ultimate goal of strategy execution as it provides a framework for the evaluation of strategic plans and management’s performance (Copeland and Meenan (1994), Rappaport (1983) and Copeland et al, 1994). However, the measures for value creation are not clear, they need to be determined (Rappaport (1983), Copeland et al (1994), Biddle, Bowen and Wallance (1998), Worthington and West (2001), Palliam (2006) and de Wet (2005)). Furthermore, since value mean different things to different people, the value created by the enterprise needs to be articilated in a manner that demonstrates benefits to different stakeholders.
2.7.4. Approach and framework for effective strategy execution to realise value The importance of strategy execution to realise value gives rise to the need for a guiding framework to improve the chance of success (Hrebiniak (2005), Al-Ghamdi (1998), (Speculand, 2014), Getz et al (2009), MacLennan (2011) and Getz et al
Chapter 2: Literature survey
(2012)). The challenges faced by organisations in executing strategy are lamented by a number of authors. A number of strategy implementation frameworks have been developed and some such as the balanced scorecard model are widely applied by industry. However, the level of integration of the different models to develop a comprehensive model that could be applied during strategy execution is still to be developed. Frameworks for effective strategy execution have been proposed and refined to improve their effectiveness (Hambrick and Cannella (1989), Hrebinaik and Joyce (1984), Stonich (1982), Waterman et al (1980), Vascocellos e Sa (1990) and De Feo and Janssen (2001)). Proposals have been made of integrated frameworks since effective strategy execution is not a linear process (Okumus (2003), Kaplan (2005), Kazmi (2008) and Lukac and Frazier (2012)).
The results of the review of the literature presents areas which the study needs to consider in order to evaluate the extent to which these observations are valid in practice. Literature also present areas which the study could learn more about in order to contribute to the current body of knowledge. Furthermore, literature present areas which are not well understood and requires testing and validation.
2.8. Developments in the research of strategy execution through PPM
It was observed during the review of the literature that a number of significant contributions were made by researchers in the area of strategy execution, effective strategy execution, strategy execution through project portfolios and the achievement of business success through execution of strategy using project portfolio management.
The review of the literature indicated that between 2001 and 2015 there were a number of studies that sought to go beyond the understanding of the components that enable effective strategy execution and strategy execution through project portfolios. It was noted by the author that these studies focused more on integrated frameworks since strategy execution is a complex process. Furthermore, researchers shared their empirical observation on factors that are critical to effectively executing the corporate strategy. These factors highlight the complexity which business leaders face in overseeing strategic management throughout the organisation while providing guidance to the strategic, tactical and operation levels of an organisation.
The observations, denoted in Table 2.1 were made during the review of the literature, indicating the pertinent contribution that was made by the different researchers in the field of strategy execution:
Table 2:1: Pertinent contribution towards the field of strategy execution Researcher Focus area Pertinent contribution Artto, K. (2001, 2004) Strategy execution
through projects
Artto has researched and contributed in the management of project oriented
Chapter 2: Literature survey
Researcher Focus area Pertinent contribution
organisations as well as strategic management through multiple projects.
Okumus, F. (2003) Strategy execution Okumus proposed a framework to implement strategies in organisations taking into consideration content, context, processes and outcomes as well as explains the potential role and importance of each factor in the process.
Hrebiniak, L. G.
(2005, 2006, 2008)
Strategy execution Hrebiniak has researched and contributed towards the area of effective strategy execution. He has researched strategy implementation, the importance of leading effective strategy execution and change, obstacles to effective strategy implementation and making strategy work.
Kazmi, A. (2008) Strategy execution Kazmi conducted research work to expand on earlier frameworks of the popular McKinsey’s 7-S model by Waterman, Peters and Philips (1980) and the work done by Okumus (2003) and starts by clarifying the different components that make up the framework proposed by Okumus (2003). He proposed a model of strategy implementation that attempts to capture the major themes in strategy execution and the activities that make up each theme.
Meskendahl, S.
(2010)
Strategy execution through PPM
Meskendahl proposed a conceptual on the relationship between strategic orientation, project portfolio management and business success.
Lukac and Frazier (2012)
Strategy execution Lukac and Frazier advocate the need to link strategy to value. They promote the need to develop strategic plans that provide competitive advantage and how shareholder value will be created.
They indicate that there is a need for research to provide guidance on how shareholder value will be achieved
Chapter 2: Literature survey
Researcher Focus area Pertinent contribution
since there is no simple framework for connecting strategy and value. They proposed a model on how to link strategic maps to shareholder value.
It was the aim of the researcher to build on this seminal work done by different researchers and expand on the work done by Meskendahl (2010) and test the conceptual model proposed from the study. Furthermore, this study also incorporates exploring the link between strategy and value as proposed by Lukac & Frazier (2012).
The review of the literature demonstrated a number of gaps (see section 2.9) which by validating the proposed conceptual model the research may present insight on better mechanisms of executing corporate strategies.
The following progression which is depicted in Figure 2.10 was noted during the review of the literature which demonstrates the evolution of strategy execution in the quest to improve its effectiveness and the realisation of business value:
Figure 2:10: The evolution of strategy execution
It is thus noted that the progression in the field of strategic management is towards improving the effectiveness of the process in order to improve the extent to which organisations achieve their strategic objectives thus creating value for stakeholders.
Furthermore, this progression demonstrates the quest for effective strategy execution to create value, which this study seeks to contribute and add to. It is anticipated that the tested conceptual model will equip business leaders with insight that will enable them to better execute the corporate strategy and thus improve the level at which they achieve their strategic and commercial objectives.