2. Literature survey
2.9. Gaps and deficiencies identified during the review of the literature
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.
Chapter 2: Literature survey
Effective strategy execution through project portfolios
Kazmi (2008) indicates that “project management is of utmost importance in strategy implementation, a fact that has been neglected in most of existing frameworks”. According to Young and Grant (2015) “the contribution on the link between strategy execution and project management is smaller than expected and more research is required to explore how projects can contribute more to strategy”. According to Meskendahl (2010) “there are few studies that are exploring single aspects of the linkage between strategy, project portfolio management and business success thus there is a need for testing and the further development of the conceptual model, in which the propositions are tested by quantitative empirical study”. Young et al. (2012) report that “the way projects are selected and managed limit the capability to realise strategic goals thus recommended future research to develop programme management, portfolio management and project governance to increase the likelihood that strategy will be implemented”. Martinsuo and Killen (2014) found that “project portfolio management presents a complex set of challenges to decision makers in that multiple projects must be configured and managed in a way to enhance the long-term strategic value of the portfolio while considering multiple criteria and interdependencies”. They also pointed out that the literature on project portfolio management has paid scant attention to value management concepts.
“It is tragic that when leaders are asked to implement the strategy, they do not know what to do, even though successful strategy implementation provides a competitive advantage” (Speculand, 2014).
“Shortcomings in that little emphasis was given to strategy implementation, poor co-ordination of implementation activities and that there was a lack of thorough analysis and in-depth consideration of what needs to be managed” (Al-Ghamdi, 1998). According to Getz and Lee (2011) “management do not realise that managing strategy execution requires well-orchestrated management processes and need to thoughtfully manage the way the strategy is implemented”.
Aubry et al. (2012) found that “the concept of organisational project management is uneasy to identify with precision, which then challenges the concept’s own existence. Furthermore, they highlight a difficult problem of alignment or fit between the components themselves, such as governance mechanisms, portfolios, programmes and projects”.
Kock and Gemünden (2016) reports that they are not “aware of empirical studies that evaluate the effectiveness of strategy execution through project portfolios”. They proceed to state that “there is little understanding of how the use of project portfolios in strategy execution differ between organisations”.
Chapter 2: Literature survey
Performance management and value creation
Flitman (1996) highlights that “management have struggled to develop focused reports that directly summarises the strategic progress of an organisation”. He also indicates that “other problems encountered include the derivation of measures for all areas of strategic progress and the provision of timely, quality information at a cost the organisation can live with”.
Srivastava & Sushil (2015) say “there are limited studies showing how performance measurement systems ensure effective strategy execution”. “The lack of strategic performance factors and their role in effective strategy execution, which turns out to be a barrier to the successful execution of strategy identified” by Srivastava & Sushil (2015). “Poorly implemented performance management frameworks leading to increasingly difficulty in addressing a problem involving the inability of senior management to be proactive on strategic activities thus causing activities at the operational level to no be carried out effectively” (Chau, 2008).
According to Serra & Kunc (2015) organisations fail in implementing strategies even though they employ project, programme and portfolio management techniques since there is no empirical evidence of the effectiveness of BRM, however their study shows BRM practices being positive predictors to project success on the creation of strategic value for the business.
A guiding framework for strategy execution
According to Lukac & Frazier (2012) “there is a significant body of knowledge covering how to identify value once it has been created but there is less guidance on how shareholder value will be achieved and there is no simple framework for connecting the two”. Ballow, Burgman & Molnar (2004) highlight that “executives are often left with inadequate insight into how various investment choices link to the creation of shareholder value”. They indicate that
“management needs an approach that is able to handle this complexity and make the final connection from asset use to shareholder value creation”. They say that “ultimately a more scientific approach to value creation can provide executives with the insight they need to proactively manage all components of their valuation and the assets of the high performance enterprise”.
According to Carroll (1982) “there is no appreciation of the importance of environmental factors that enhance relative performance because of the lack of a conceptual framework that permits sources of comparative advantage in a business to be identified and exploited”. “The lack of a model, blueprint or template that could be used to shape execution decisions or actions” as found by Hrebiniak (2005).
“The inadequacy of existing business strategy models to cope with the limited level of integration across the strategy management process” as identified by
Chapter 2: Literature survey
Ghezzi (2013). “An integrated approach is required to act strategically and increase the chances of success” (Dandira, 2012).
“The adequacy of existing business strategy models to cope with discontinuity should be subject to further research in order to resume and potentially redesign traditional strategic planning and strategy analysis” (Ghezzi, 2013). Getz, Jones
& Loewe (2009) state that “most strategies don’t deliver the results that are promised because they lack a critical link, which they call migration management, between long-term strategy and the actions needed to achieve it”.
A number of gaps were identified from the review of the literature that warrants research work on the improvement of strategy execution to create business value. In addition, there was a need for the development of an integrated framework that would guide how organisations should effectively execute the corporate strategy through project portfolios in the quest to realise value. Furthermore, there was a need to gain insight on behavioural factors that contribute to effective execution of strategy thus enhancing the outcome of strategy execution.