Strategic Management Report

This report analyzes a strategic failure at ABC Telecommunications in Kuwait, examining the organizational structure, internal and external factors, and the impact of poor implementation on the company's performance. It proposes restructuring recommendations to improve communication, collaboration, and overall strategic effectiveness.

Strategic Management

Table of Contents
ASSESSMENT TASK 2.................................................................................................................3
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................3
1.1 Organisation Background......................................................................................................3
1.2 Business Case of ABC's Implementation Strategy................................................................4
LITERATURE REVIEW................................................................................................................7
ANAYSIS/REDESIGN...................................................................................................................8
3.1 Analysis and Restructure.......................................................................................................9
3.2 Monitoring ..........................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13
APPENDICES...............................................................................................................................16

ASSESSMENT TASK 2
EXECUTIVE SUMMARY
This business report summarises strategic management and its components as the major
key for defining the criteria that must be evaluated for any business organization before as well
as during the process of executing strategies for achieving its performance goals, roles and
responsibilities. This report has been divided into four phases viz. Introduction, literature review,
analysis/redesign and conclusion. It aims to discover the cause, contributions and impacts made
by strategic business unit's operations at a lower level in relation to its external environment
leading to the strategic failure or success of the organisation as a whole. Additionally, this report
also discusses how redesigning of structural dimensions of strategy department by maintaining
its core competencies in innovation, market research and cost-effectiveness help in achieving
strategic effectiveness.
For developing a complete understanding of the topic, ABC Telecommunication of
Kuwait has been selected to critically evaluate and analyse the business units and their strength,
weaknesses, opportunities and threats over the external environmental factors. It demonstrates
how effectively functional tasks such as product development, adaption to new technologies
have been carried out in ABC for reorganizing their mission and vision as well as goals and
objectives in response to growing competition in the telecommunication industry.
INTRODUCTION
In the phase 1 of assessment task 2, a proposal regarding the final project report has been
created which gives a brief background regarding ABC Telecommunications and its incidental
strategic failure of business unit regarding an implementation of an action plan.
1.1 Organisation Background
The chosen organisation for this project is ABC, a Kuwait-based telecommunication
company that is engaged in providing cellular mobile telecom and data services to mainly
individuals and business. I'm working as a Strategy development Consultant in ABC, performing
a number of highly crucial roles within the organisation. Some of the responsibilities delegated
to me include research, strategy planning and implementing new programs or products as well as
protocols into the organisation. Telecommunication sector of Kuwait has been rapidly adapting
to innovations and technological changes related to digitisation. ABC is one of the organisations
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that has been aggressive in its pricing strategies grabbing market share from Ooredoo and Zain
since its launch in 2009. The organizational structure of ABC includes Chief Executive Officer
with Finance, Human Resources, IT, Strategy and Internal Audit Functions. Generally, the
organisation in which the strategic manager works will have their effects over several number of
duties, mainly on overlooking the entire development process of new products and programs
within an organisation, from the initial planning phase to implement or production (Chang,
2016).
However, being the Strategy development Consultant for ABC calls for an immaculate
responsibility to ensure that there is proper coordination and collaboration among different
business units involved in strategy development as well as its implementation. A strategic failure
of a business includes poor implementation of a strategy that was planned to perfection or poor
implementation of a strategy that was not up-to-mark in the first place. After the discussion with
the board of directors and stakeholders in general meeting, the organisation develops a strategy
of targeting or capturing the large market across the different nations. This project will discuss
the former strategic failure in the context of ABC.
1.2 Business Case of ABC's Implementation Strategy
Identification of Problems:
Chiefly concerned with innovation and development of the products for competing with
other firms as well as for the survival of the business in the long-run, ABC has been experiencing
a moderate subscriber growth. One of the reasons for this trend can be associated to the high
penetration rate in Kuwait as well as identical product offerings in the sector. As a result, the
organization's research and development has a crucial task to create points of differences in its
product offerings apart from pricing (Amankwah-Amoah, 2016). ABC aims to provide better
customer experience by offering differentiated quality of services to its customers. Hence it is
important for it to not only create a strategy that complies with the alterations coming into effect
regarding a protocol or law as well as be agile enough to adapt to new requirements. This
requires involvements between Strategy, IT and Research & Development Departments of the
company.
As the strategic failures in organisations mainly occur due to poor implementation of a
strategy, this may relate to not having the right people involved in implementation of a plan that
was created remarkably (Daft, 2015). This can be evidenced with the following excerpt of
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Minutes of that meeting mentioned in the Appendices section of this report. In the context of
ABC, the main issue has been related to the timely and effective implementation of proposed
strategy which has been not achieved by the business for some time now. One of the key
incidents that can be evidenced for it is the case of inter-connection services that developed by
ABC to enhance its subscriber growth and face-off competition. Its inadequate implementation
led to a conflict between the marketing, R&D as well as IT Departments. Consequently, the
company was unable to meet its predetermined date of launching the project throughout its
operating locations. Thus, the customer feedback were relatively negative especially in the
remote areas and bad reviews were given regarding the organisation. This affected badly the
sales and the profitability as well as the current market price of the share.
Thus, a strategic failure in the organisational design of ABC occurred leading to a fall in
brand loyalty towards its products as well as value of goodwill. As a result, ABC has been
unable to pay dividends to its shareholders, affecting its credibility in the process and has
experienced delay in repayment of debts from the financial institutions, no matter how minimal.
Underlying Factors responsible for the problems identified:
This particular strategy concerned itself with innovating a plan that would focus on
providing price as well as interconnection services for both personal and business division
customers of ABC by shifting its Signalling Protocol focus from SS7 to SIP as well as
adaptability to live infrastructure. An SS7 protocol refers to Signalling system 7 that are used to
set-up global public switched telephone calls including Short Message Service (SMS), prepaid
billing mechanisms and other mass services. On the other hand, SIP is an Internet Engineering
Task Force (IETF)-defined protocol that is commonly used to control communication sessions
over Internet Protocol (IP). It can be used to develop, change and cease two-party or multi-party
sessions conducted over voice and video calls. This strategy of management of ABC is prepared
in order to make interconnections as well as pricing strategies more effective to relate to the slow
growth in subscriber rates for ABC.
The strategy of management of organisation was absolutely great but the technology
adapted by the organisation or research and development for implementing such changes was
relatively not so advanced. However, the strategy to implement these changes tends to fail due to
shortfall in ascertaining alternatives that are easy to implement and does not require slow
networking among its users. Since the Research and IT Departments were not able to implement
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these changes across its customer base in a given period of time due to budgetary constraints, the
customers, both individuals and business, experienced slow internet thus leading to fall in the
sales of ABC products in the current year. Another contributing factor that results in poor
implementation of a strategy such as in the case of ABC is that of an absence in collaboration
among units. This is an outcome of the mismanagement among various departments. The main
cause of the problem experienced in ABC is that the R&D Department has been unable to clearly
inform the other departments regarding the critical areas and risks involved in the successful
launch of the project. Also, presence of multiple reporting has resulted in the ambiguity among
employees regarding their roles, responsibilities and level of contribution in the proposed
strategic project.
Structural Dimensions of ABC:
The Organisational Structure of ABC as evidenced in the Appendices Section of this
Report is that of Matrix Structure with different reporting relationships among the functional
departments. Looking at the company's overall structure, the complexity of business includes
vertical information sharing at level 4 whereas the horizontal information sharing among
functional departments is at level 5. Also, a separate Strategy Department has been dedicated to
achieve successful development and execution of strategic projects. On the other hand, the three
critical business units responsible for the failed implementation of ABC's plans are Marketing,
Research & Development as well as IT Department. Due to the Matrix Structure of the
organization, the employees tend to have a dual reporting structure where they are responsible in
reporting to their functional as well as product managers.
However, when there is a case of strategy implementation some of the functional
departments are entitled with more accountability in comparison to others. They are responsible
to manage not only the horizontal flow of the information but also for the vertical information
sharing practices. This tends to decline employee performance resulting in goals and deadlines
not met by them. Since Dual reporting is a situation which, if not tackled carefully, can lead to
confusion, it is important for ABC to provide clear goals both functional as well as
organisational in a detailed yet straightforward manner. In addition to this, departments working
at cross-purpose have also resulted in an absence of collaboration among R&D, Technology and
Marketing Departments which can only be resolved if the horizontal linkage among the three is
improved or made adequate.
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LITERATURE REVIEW
In the phase 2 of assessment task 2, an in-depth review of available literary works of
scholars has been executed in order to understand the concept of strategic management, failure
and analyse the theoretical as well as methodological contributions in the context of ABC
Telecom, Kuwait.
Every organization involves certain functional departments that coordinate and strive to
achieve set goals and objectives, long term and short, of the business. As explained by David
and David (2013), an organisational structure depicts the hierarchical levels within the business
entity based on the number of functions it employs as well as information flow occurring within
it. On the other hand, Furrer (2016), defines an organizational structure design as a blueprint of
the type of business structure adopted by the organisation that is in line with its work
environment and increases efficiency. A company may have a functional, line, line and staff,
market, geographic or matrix structure employed within it. The organisational design helps in
specifying roles and responsibilities clearly for a given individual across all levels of the
business. In addition to this, design also helps in departmentalizing similar jobs together, creates
a span of control and a chain of command for employees working at the operational level of the
business.
In the present scenario, there is a need to continually innovate, plan and implement
strategies that enhance business performance as well as create new opportunities and markets for
an organisation. Thus, it is important for the functional departments to effectively allocate its
resources, both financial and human, that produce such futuristic results efficiently by saving
time and money for the organisation. Hence, any kind of discrepancies arising due to
overlooking of aforementioned factors, the organisation may face a situation of strategic failure.
According to Goffee and Scase (2015), the concept of Strategic failure relates to the inability to
meet the needs and requirements that are essential to the succession of any business strategy or
plan. Usually Strategic Failure in an organization occurs when the internal systems are unclear
about the objectives of the organisation, budgetary constraints or weak coordination among inter-
departmental functions.
As far as planning strategy is concerned, if these are not implemented in a proper manner,
strategic failures may arise. Planning and executing a strategy in an efficient and effectual
manner signifies the ability of an organisation to reasonably acquire economies of scale at a
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faster pace in comparison to its competition. Designing a strategy usually includes determination
of short-term and long-term goals that a business aims to achieve by bringing in this change as
well as the budget alignment required to implement the strategy. Kandemir and Acur (2012)
observe that in an industry, strategic failures tend to occur due to the inaccurate assessment of
critical risk issues as well as inability of businesses to comprehend evolving needs and
preferences of their stakeholders. Kownatzki and et.al. (2013) state that these risks mainly
include failure to ascertain fair price based on value of service offered, unable to connect
industry growth with socio-economic gains, poor engagement with external environment and
failure to maintain robust relations with the shareholders.
If an entity is able to successfully plan its plan of action by affirming proper allocation of
its resources in given functions, coordinate and control inter-departmental operations that go into
execution of strategy, then it can achieve what it aimed for and achieve competitive advantage in
the market. Proper coordination among departments and budgeting ensure that any contingency
occurring in the future is avoided. These factors can be attributed as the internal factors leading
to strategic failures in the organization. Morrison and et.al. (2019) explain that apart from
internal factors, external factors play an important role in cause of strategic failures among
business organisations. Such elements include compliance with laws or amendments made
thereof, poor communication or collaboration.
Overall it can be said that strategy planning, organizational design as well as assessment
and control of internal and external factors play an important role in deciding an organisation's
strategic effectiveness. If any of these variables are not properly evaluated a business may suffer
huge losses and strategic failures in its internal environment.
ANAYSIS/REDESIGN
In the phase 3 of this assessment task, a detailed analysis of the affected business unit in
ABC has been realized as well as recommendations to the restructuring of this department have
been made thereof.
In the context of telecommunication sector of Kuwait, this industry is highly agile and
adaptable to digitalisation as well as in accepting new changes brought in by government. As
ABC is the youngest telecommunication service provider in Kuwait, it has grown rapidly since
its launch possessing the most innovation solutions to its customers thus enhancing their user
experience. It caters to both individual as well as the business decision of the economy providing
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internet services as well as business solutions to these parties respectively. As per the given case
scenario, the business units under scrutiny include the research, strategy and IT departments of
ABC. These units are highly inter-dependent on each other as they carry out the functions of idea
generation, innovation, planning, forecasting, coordinating, implementing and controlling of
future strategic actions for the company. For the purpose of implementation of action plans, the
strategic business units play an important role as they are responsible in carrying out the cost-
benefit analysis of current sources of funds so as to estimate the expected expenditure and
revenue of the project.
3.1 Analysis and Restructure
In relation to ABC Kuwait, a SWOT Analysis has been carried out below in the
appendices section for the structural dimensions of ABC's Strategy Department and its
favourableness to external environment. A strategy department mainly functions in the
development, implementation, coordination and evaluation of a company's plan of action that
satisfy individual as well as overall organizational goals or objectives (Park and Shaw, 2013).
SWOT Analysis is an evaluating tool employed by an organisation to understand its strength,
weakness, opportunities or threats resulting in strategic failures or success of an entity . An
investigation proof regarding this has been attached in the Appendices section of this business
report.
As per this analysis, the structural dimensions of strategic business unit of ABC possesses
strong innovation capabilities that enable ABC to adopt aggressive pricing strategy. However,
the subscriber base of ABC has been increasing at a low rate as compared to its counterparts in
the industry. Strength for any business unit or organization as a whole pertains to the core
competencies that the business currently possesses in superiority to its industrial counterparts
(Popkova and Gandin, 2015).
The evaluation of business unit's strengths show that this department's internal structure
possesses strong innovating capabilities based on their technical know-how, skill-set of
employees as well as research development technologies used to formulate new products or
plans for ABC's customers. Apart from this, the department controls lower-level costs by
regularly reviewing budgeted plans for each department and inter-departmental operations so
that its cost-effectiveness can be maintained across all levels of management. By using high-end
research technologies such as Artificial Intelligence and Market Research, ABC has created
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customer data collection as one of the strongest points of its strategic business unit. This is
accomplished by creating 'ABC Application' that stores the personal information of customers
along with their preferred plans that help in spotting trends and creating new schemes for ABC's
audiences.
Weakness for any business unit or organization as a whole pertains to the core
competencies that the business currently possesses in inferiority to its industrial counterparts
(Rothaermel, 2013). As far as its weaknesses are concerned, the employees struggle resolving
disputes among them and the department as a whole has been struggling to schedule processes
that clearly communicate roles and responsibilities of different teams regarding IT, Marketing
and R&D units. This was clearly visible when the company decided to implement inter-
connection services between Zain and itself and faced challenges in shifting its signalling
protocol thus experiencing slow networking connections among the two parties. Hence, in order
to enhance collaboration and communication among these problem units, a proposed restructure
has been provided with a view to segregate and group them properly. The restructure proposes a
much enhanced and detailed outline of each department that will help in segregating
responsibilities internally as well as connect the functional departments much more efficiently,
thus, resulting in enhanced collaboration, communication and clarity among employees
regarding their job roles.
3.2 Monitoring
Continual monitoring of ABC's strategic department through SWOT has led to the
creation of opportunities and threats that it may face externally. Opportunities and Threats are
the external components of SWOT technique. A Business unit or organization-related
opportunities indicate the situations that a business can exploit to its advantage. On the other
hand, threats indicate what situations can arise along the journey of an organisation or unit that
can decrease the competitive advantage, both current and potential, for it as compared to
prevailing industrial competition (Rummler and Brache, 2012).
Looking at the current strengths of ABC Telecommunications, organization's
opportunities include economies of scale, competitive advancements and revenue generation. A
business unit is only strong as long as its supportive functions are able to perform and execute a
plan effectively. Since the strategy department of ABC has been able to harness its innovation
capabilities, maintaining such practice in future can result in industrial leadership of firm. These
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innovation capabilities also include proper usage of data collection and cost-benefit analysis by
the department. Since the technical know-how of employees is immense, the company can
further this advantage to create cost-leadership and attain economies of scale along with
maximum revenue generation through bottom-line expansion (Siren, Kohtamäki, and Kuckertz,
2012). Conversely, the department has experienced difficulties in scheduling, coordinating
among employees, dispute resolution and communication of roles and responsibilities among
inter-departmental functionaries. Overlooking such issues may create problems such collapse of
business process system as a whole, ambiguity, lack of motivation consequentially leading to
high attrition rate among the staff of the department.
Hence, it is recommended that the strategic manager of ABC must strive to reduce its
weaknesses by implementing proper communication processes that not only define the unit
employees' roles and responsibilities but also give a clear picture to other units that are involved
in development, implementation, controlling and evaluation of action plans. Proper
communication methodologies, formal as well as informal, would help in reducing ambiguity,
create motivation and sense of achievement among employees (Ucbasaran and et.al., 2013).
Also, compliance with amending protocols and laws regularly would help in increasing
collaboration and prevent obsolescence or collapse of structural dimensions of department and
organisation as a whole.
The department can restructure its internal process by monitoring its waiting time and
problem tasks that create the most difficulty in implementing strategy. Since ABC faced
problems in implementation of inter-connection services with Zain, ABC can include seminars
or workshops that help in creating an environment where departmental as well as inter-
departmental issues among employees can be resolved. This will not only help in motivating
employees but also create a sense of belonging and contribution among them. In addition to this,
a complete redesign of its controlling process and communication systems among related
business units must be done by assigning contact points for each related department that would
have a detailed knowledge about information required for execution of each strategy. This will
ensure that no external business unit such as Marketing, IT or Finance Department faces any
delay while addressing issues and reporting them to the strategy department. Thus, resulting in
effective inter-departmental harmony across organisation.
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CONCLUSION
From the above business report it can be concluded that strategic management is
immensely important for guiding an organisation so that it can achieve business growth and
survival in a highly competitive environment. Application of business process systems to achieve
strategic effectiveness is important by creating an organisational design which is line with
organization's vision, mission and beliefs. This report focused on a critical evaluation of ABC
Telecommunications through application of academic concepts in a practical situation by
analysing the importance of organizational structures, effectiveness and failures along with its
consequences. Through this research and discussions made further, it was inferred that the
philosophy of Strategic failures mainly occur when there is an inadequate effort of executing
plans. Its symptoms usually include inadequacy to collaborate, communicate, control or
coordinate functionaries of business units internally as well as across different levels of
management. A SWOT analysis of ABC's strategy department helped in understanding the
problems the unit faced while implementing strategies and how they could be resolved to
increase revenue and generate economies of scale for ABC.
This report also recognises the importance of restructuring of organizational designs
wherein new communication systems are recommended to be introduced along with point of
contacts that act as a medium between strategy department and other functional departments of
ABC. In the end, it is seen how the organisational design failures meddle with the departmental
contributions towards implementation of strategies.
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REFERENCES
Books and Journal
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Gives a detailed account of progressive thinking prevalent in organizations in present scenario.
Innovative ideas with proven classic theories and effective business practices are presented in a
competitive and compelling manner.
2. David, F. R. and David, F. R., 2013. Strategic management: Concepts and cases: A
competitive advantage approach. Pearson.
Today's Economy proves to be a highly competitive environment in which organisations tend to
struggle for achieving competitive advantage in a sustainable manner. This book captures the
complexity of current business environment and helps in tackling situations by providing
unrivaled clarity to students through skill-development exercises.
3. Furrer, O., 2016. Corporate level strategy: Theory and applications. Routledge.
Challenges faced by diverse organisations are pinpointed in this book by author Olivier Furrer.
Also, he helps in providing a detailed account for forming corporate strategy to consider the
impact of business units, resources and job roles of firm in establishing and sustaining corporate
advantage.
4. Goffee, R. and Scase, R., 2015. Corporate Realities (Routledge Revivals): The Dynamics
of Large and Small Organisations. Routledge.
Concept of Corporate Realities gives a straightforward review of management and its related
issues in diverse organisations. It explores features of small as well as large businesses by
demonstrating their successful transition from former to latter.
5. Jones, G. R., 2013. Organizational theory, design, and change. Upper Saddle River, NJ:
Pearson.
This books provides students with current contemporary treatment of issues by managers to
increase overall organisational effectiveness. It showcases the organisational change as its
centrepiece giving a detailed account of organisational theory and design.
6. Kandemir, D. and Acur, N., 2012. Examining proactive strategic decision‐making
flexibility in new product development. Journal of Product Innovation
Management. 29(4). pp.608-622.
This article carefully evaluates the proactive strategies that ensure strategic flexibility as a
prerequisite factor for a firm's success by reviewing the work of previous literary scholars and
researchers. Through application of strategic decision making a firm is able to achieve new
product development.
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7. Kownatzki, M. and et.al., 2013. Corporate control and the speed of strategic business unit
decision making. Academy of Management Journal. 56(5). pp.1295-1324.
This article explains how decision speed is important for the firm performance in small, medium
as well as large organisations. It also depicts the control mechanisms that are set by corporate
headquarters to influence speed in Strategic Business Units as well as across all organisational
levels.
8. Morrison, G. R. and et.al., 2019. Designing effective instruction. Wiley.
This book provides an account of practical skills that can be adopted by instructional designers to
effectively face off challengess and help design organisational process in an ideal manner.
9. Park, T. Y. and Shaw, J. D., 2013. Turnover rates and organizational performance: A
meta-analysis. Journal of applied psychology. 98(2). p.268.
This Article talks about the turnover rates prevalent in the organizations and aims to ascertain a
relationship between organisational performance and turnover rates by conducting a meta-
analysis.
10. Popkova, E. G. and Gandin, E. V., 2015. Strategic effectiveness evaluation as integral
part of the modern enterprise management. Asian social science. 11(20). p.16.
This article aims to create conditions for the workers that are ideal for enable strategic planning
and effective management opportunities in the organisation. It also aims to suggest new solutions
that allow interaction among various strategic resources of the firm.
11. Rothaermel, F. T., 2013. Strategic management: concepts. New York, NY: McGraw-Hill
Irwin.
This book applies a combination of quality and user-friendliness with rigour and relevance. It
also aims to provide a detailed understanding of strategic management through results of
empirical studies and breakthroughs made prior in this field.
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white space on the organization chart. John Wiley & Sons.
Improving performance is the centrepiece of this book which is achieved by bridging the gap
between the organisational strategies and individuals. It also reflects on the key organisational
needs to suffice the challenges faced by firms today.
13. Siren, C. A., Kohtamäki, M. and Kuckertz, A., 2012. Exploration and exploitation
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exploitation trap. Strategic Entrepreneurship Journal. 6(1). pp.18-41.
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This article foucses on the role of strategic learning as a moderator between exploration and
exploitation. It also reflects upon the related processes in a detailed manner.
14. Ucbasaran, D. and et.al., 2013. Life after business failure: The process and consequences
of business failure for entrepreneurs. Journal of Management. 39(1). pp.163-202.
This research article takes into account uncertainty and failure. It also examines financial, social
and psychological costs of failure by highlighting key factors that influence it.
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APPENDICES
SWOT Analysis of Viva's strategy department and its structural dimensions in relation to
external environment:
Strength Weaknesses
 Innovation Capabilities.
 Cost-effectiveness.
 Data collection.
 Internal Dispute Resolution.
 Scheduling issues.
 Inter-departmental Communication.
Opportunities Threats
 Competitive Advantage.
 Economies of Scale.
 Revenue Generation.
 Collapse of business process systems.
 High attrition rate.
 Ambiguity.
Organizational Structure of ABC:
Current Unit's Chart:
Marketing Department Unit Structure:
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IT Unit Structure in ABC:
R&D Unit Structure in ABC:
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Proposed Unit's Chart:
Marketing Unit Structure:
IT Unit Structure:
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R&D Unit Structure:
19