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Abstract
The strategy is a plan that describes the course of action in the future. Strategies are adopted by organizations to help them determine their course of action in the future. The strategy needs to be flexible enough to reflect environmental factors and changes. Organizations have two environments; the external and internal environment. The external environment cannot be predicted by the management, but it can be evaluated. The internal environment can be influenced by the organization. Organizations come up with strategies through their executives and teams of their executives.
These executives from the strategic thinking of the organization also integrate innovation in their strategy process. Challenges in the business environment keep changing and, therefore, the strategy has to be innovative to encompass the change. Leaders need to communicate with each other and with their subordinates to produce a good strategy for the organization. Doha Bank Qatar involves its departments together with external agencies and customer firms to incorporate innovation and focus on change to achieve success in its operations. The bank employs a comprehensive strategic approach that undertakes the strategy development process in its entirety before final implementation. The strategy is led by the business manager, but total participation is acquired through the involvement of the marketing, information technology, and sales departments.
Introduction
All organizations in the world exist to fulfill certain objectives. These objectives, however, are challenging to attain because of many environmental factors that cannot be predicted accurately on time. Thus, organizations determine their direction, as well as their scope for purposes of achieving advantage within the changing environment well in advance. This is done by configuring the resources and competencies such that the stakeholders expectations can be fulfilled. In essence, it is this kind of arrangement and planning that comprises the aspect of strategy and strategic thinking (Johnson, Whittington & Scholes 2011, p. 9). It is an important concept because, without a strategy, there will be no chances of achieving the objectives. Strategic leadership, on the other hand, must have the ability to translate the strategy to operational requisites. It should involve achieving a perfect alignment of the organization and strategy (Boak, 2010, p. 34). In particular, this paper extensively covers the topical issue of strategic thinking and leadership, mainly expounding on the main theories concerning strategy formulation. It also covers strategy development, implementation, and analyzes the relationship that exists between strategy and innovation. The paper analyzes the strategy process adopted at Doha Bank, Qatar in the formulation of its new products and services.
Development and Strategy Implementation: Theories
Different scholars and researchers have offered their definitions of the term strategy. Nadler (2004, p. 30) looks at strategy from four varying perspectives, which also form his definition of the concept. Firstly, he identifies strategic thinking as collecting, analyzing, and discussing the firms environment, as well as the competition it faces and the business design alternatives that are open to it. Secondly, he identifies strategy as a decision-making process that requires several core directional decisions. These decisions are critical choices about the business portfolio and its design, whose purpose is to provide a platform for allocating the limited resources and activities in the future. The third aspect of the strategy is strategic planning that involves the plan and budget for the organization. Finally, the strategy involves strategic execution, which focuses on implementing, examining results, and undertaking necessary corrective action.
Hamel and Prahalad (2005) define strategy as an organizational leadership position that determines the criterion to be followed in charting organizational progress. The strategy elongates the organizations thought duration instead of simply focusing on the immediate future of the firm. The plan establishes a target, which requires personal effort as well as commitment from the employees. The management and staff play a critical role in implementing strategy and, thus, they must have its greater understanding.
Developing organizational strategy takes into consideration various approaches, with the main emphasis being on the emotional and intellectual engagement of employees. This targets developing new skills to enhance organizational competitiveness. The strategy focuses on innovation and establishing competitive advantage layers over time for sustaining the exploration of areas that the competitors could be having little considerations over. In turn, this could help in lowering costs through better working methods adopted by the employees.
On the other hand, Thompson et al. (2010, p. 33) point out that an organization needs to pursue relentlessly its ambitious strategic objective, as well as utilize the full force of resources it owns for it to achieve its strategic objective. To help expound on the point, Welch (2001) illustrates how General Electric set out its organizational objective targeting the first or second position in each market that the company served. Part of the strategy involved revolutionizing the company to achieve greater strengths but still maintain perfect leanness and agility.
A critical aspect of the strategy process is influencing others to look into the process and buy it all together. Others must be able to visualize the intended new look of the organization once the vision is achieved. As Covey (1994, p. 97) asserts, sharing of the strategy should look at the end before beginning to work backward to the organizations current position. This involves describing the strategy and then determining the requirements in achieving it.
Development and Implementation
Strategy formulation should often focus on a clear, simple, and succinct statement that can be internalized easily. Simple statements with clear information support the conformation of behavior with business performance, making it easy for strategy implementation (Collis & Rukstad, 2008, p. 82). Three critical aspects require greater consideration during strategy development. These aspects include objective, scope, as well as advantage (Collis & Rukstad, 2008, p. 82).
Objective refers to the target that the organization plans to achieve in the end. Often, this is explained in the vision and mission statements of the organization. Advantage, on the other hand, comprises of two critical aspects that include customer value proposition statement and the set of unique activities that uniquely enable the firm to offer the said customer value proposition. This target to achieve a simple description within the strategy statement that offers a keen characterization not found in any other firm (Collis & Rukstad, 2008, p. 88).
A good strategy statement, thus, should involve the following vital steps: Firstly, it should evaluate carefully the industry landscape, where the most important aspect should be to understand the customers clearly. Secondly, it must carry out an extensive analysis of the strategies adopted by the competitors and finally carry out a rigorous assessment of the capabilities and resources available (Collis & Ruckstad, 2008, p. 90).
Mission and value statements help organizations achieve shared understanding. It eventually enables individuals to make independent decisions while avoiding working at cross-purposes (Kanter, 2008, p. 43). The presence of common values together with standards offers a chance to the people to arrive at consistent decisions under the numerous corporate challenges. For companies having disparate locations, the mission and value statements act as the binding factor in following and achieving the corporate strategy.
According to McFarland (2008, p. 69), creating an effective strategy requires uniform formulation and implementation. Individuals at the front line within the organization should execute the strategy. However, the strategy should amplify efforts by all other individuals at the organization by directly involving their contribution during its formulation.
Organizations can either adopt a comprehensive or incremental approach in developing corporate strategy (Rees and Porter, 2006, p. 356). The comprehensive approach involves developing an overall strategy before implementation. The incremental approach involves developing a strategy gradually. There is no particular strategy approach among the two that could be considered as superior to the other. However, Rees and Porter (2006, p. 354) point out to managers the need for more effort in case they adopt the comprehensive approach. Failure to adhere to the advice leads to a narrower range of practical specialists, underestimating the organizational behavior complexities, as well as the eventual adoption of a unitary perspective that ignores organizational conflicts of interest. These factors inform Rees and Porters (2006, p. 359) consideration of recommending the incremental approach rather than the comprehensive approach.
Nadler (2004, p. 25) provides six basic steps important for sustaining strategic thinking. His steps involve agreeing on the issue about the companys vision, envisioning the available opportunity space, assessing the business design of the company as well as its internal capabilities, and determining the future strategic intent of the company. Other steps include developing various business design prototypes and choosing the best business design out of the various samples already developed.
An enterprise must adopt a strategy development process that relates to the type of enterprise. Mono-activity enterprises, for instance, should consider high centralization with little formalization. The top management should supervise the whole process of developing the strategy. The top management will be in charge of the process because of the level of understanding concerning each of the activities, as well as the environment in an enterprise whose activities are homogeneously diversified and with a simple-stable environment. This is opposed to an organization whose activities are heterogeneously diversified operating in a simple but stable environment. In this latter case, the top management will devote a significant part of their time to reveal the potential, as well as synergetic efforts rather than engaging in an in-depth exercise of challenging the individual strategic divisional plan (Sarrazin, 1981, p. 12).
Some companies comprise of activities that are homogeneously diversified and operate in environments considered to be complex and unstable. Such companies emphasize on control-oriented perspective rather than being oriented on planning. In such instances, the top manager is considered as the pilot whose decisions ought to determine the uncertain long-term goals together with the constraints. Equally, the decisions determine the short-term dynamic windows that are significant for the corporations various activities.
Another combination could see an organization made up of activities that are heterogeneously diversified and operating within an environment considered being complex and unstable. In such an instant, the top management will need to have a deeper understanding of the relationship network. The most important role in this instance is to carry out an analysis of the network and maintain viable links (Sarrazin, 1981, p. 12).
Various techniques have been proposed to assist managers to implement strategy appropriately. The balanced scorecard is one such strategy that helps in bridging the gap between the mission and strategy statements of the organization, on the one hand, and the daily operational measures on the other (Chan, 2007, p. 28). The diagram illustrates the working modalities of a balanced scorecard modality.
A new practice in contemporary organizations comprises of a newly formed corporate-led unity, which is considered as the strategy management office. Its main responsibilities involve managing strategy (Kaplan & Norton, 2005, p. 8). In particular, the strategy management office assumes the organizational owners position concerning the balanced scorecard. It facilitates the development and flow of the balanced scorecard throughout the organizations hierarchical levels.
Coordination between the budgets, human resource planning, marketing programs, and investments in IT is important and requires the direct input of the strategy management office to ensure proper alignment with the strategy. The office must also take charge of identifying and transferring the best practices to be adopted within the organization.
Strategic Leadership
According to Boal and Hooijjberg (2000, p. 551), strategic leadership focuses on the leadership of the organization, instead of leadership in the organization. Strategic leaders have specific roles that they need to undertake. These include making strategic decisions, creating and informing the future vision, developing critical competencies and capabilities, developing structures and processes of the organization, and managing multiple constituencies. Selecting and growing leaders is also a task undertaken by strategic leaders. This is done to sustain sound leadership even in the future. Strategic leaders are also mandated with the role of seeing to it that the organizational culture is upheld effectively.
On their part, Hitt and Ireland (2002, p. 3) argue that strategic leadership is an important aspect of the organization since it helps in the building of a companys resources, as well as its capabilities. It emphasizes both the human as well as social capital, all of which are intangible. Another description of strategic leadership comes from Collins and Porras (2002, p. 18). They describe it as an activity whose focus is on building the clock rather than telling the time. In other words, it is an activity that looks at the future and determines ways of making the future to be improved than the current or present time. Both Senge (1990, p. 12) and Collins (2001, p. 64) are unanimous in their definition of strategic leadership. The two scholars term it as an important function of guiding an organization for purposes of building its organizational capabilities.
From the above definitions, it can be deduced that leadership changes in its nature with the advancement of seniority. This is because the organization interacts more with the environment while rising levels of complexity also add more pressure in terms of complexity. For the leader of a small organization, the focus needs to be that of making predictions concerning future challenges that face the organization. On the other hand, strategic leaders of large corporations ought to deal with significant ambiguities, as well as complexities that exist in the environment. This is done by way of establishing priorities through the management of external relationships (Capon, 2008, p. 123).
The main role of a strategic leader in an organization is to build a more effective team. It does not concern the magic powers that an individual CEO holds in as far as his decision making and control is concerned (Pfeffer & Sutton, 2006, p. 113). As Pfeffer and Sutton further point out, strategic leadership involves the building of reliable systems that can be able to work in the same way over and over again for a considerable period. It is not really about individuals and their capabilities. Rather, it is focused on the ability to envision the companys future and determining what will be needed in advance. Strategic leadership is about planning for a future that is not yet seen, but that which can be anticipated (Davila et al. 2006, p. 63).
Constraints affecting a Strategic Leaders Performance
Strategic leaders performances are hindered by several constraints that can be categorized as internal and external. The internal constraints consist of limited resources, a company culture that is strong and conservative, and a bureaucratic approach that is very strong. On the other hand, external constraints comprise of such aspects as product and market factors, general economic conditions, and policies of the government, as well as technological changes, among other factors (Yukl, 2002, p. 181).
Executive Teams
This also forms part of strategic leadership in an organization. Executive teams can particularly be of significant value to large organizations and require the company CEO to formulate the team (Collins, 2001, p. 64). The teams have the potential benefit of sharing the leadership burden while contributing the individual knowledge and skills that are held by each of the teams members. The wide-range nature of a decision made by the team is more likely to offer a true representation of an organizations diverse staff. Teams also improve the communication quality amongst individual executives, while they also promote better understanding and dedication of the executives.
However, as Yukl (2002, p. 182) points out, there is a challenge in relying on an organizations executive team as the strategic leadership. This is because teams often differ greatly and this can have great consequences on their operations. Equally, while some teams will tend to be dominated by the CEO, some may operate in a more participative way.
Executive teams are most important, particularly during certain circumstances. These include when there is a rapid change within the organizations environment and when the business units of an organization require being coordinated owing to their diverse but interdependent nature (Yukl, 2002, p. 196).
Boards of Directors
Company boards of directors often comprise of senior executives, as well as non-executive directors. Their role entails overseeing the CEOs work, as well as that of the management team while ensuring that probity is achieved (The Higgs Report, 2003, p. 23). For the executive board to achieve excellent results in terms of offering strategic thinking and leadership, its chair needs to have a strong relationship that is complementary to that of the CEO and other board members. There also needs to be cultivated a culture that reflects openness and one that supports constructive dialogue. Members must trust each other and maintain mutual respect (Higgs Report, 2003, p. 23).
However, the board of directors often faces four common directorial dilemmas that must be achieved if the boards role as strategic leaders is to be realized. The directional dilemmas include the board being entrepreneurial and having the ability to drive the organizations business forward (The Higgs Report, 2003, p. 24). This must occur while maintaining control of the business. It must have enough knowledge about the organizations working to be accountable but avoid the daily management work. Other directional dilemma involves being sensitive to pressures of short-term issues, as well as remaining resolute on the commercial requirements of the business. This should be done while at the same time acting responsibly towards the employees, the business partners, and the entire society (Garratt, 2003, p. 6).
Strategy, Innovation, and Change: Relationship
Innovation involves adopting a new idea for use in an organization. This aspect of innovation is important when it comes to enabling an organization to achieve a greater competitive advantage. It is widely adopted and visible, as opposed to administrative innovations that are, on the other hand, less advantageous and complex to implement (Damanpour, 1990, 127). Todays markets have stiff competition that forces firms to be innovative to remain competitive in their respective industries (Aghion et al. 2005, p. 701).
Porter (1985, p. 54) identified the need for organizations to adopt innovation as a way of assuring differential products. Differential products offer unique and highly valued attributes to the customers. As the firms seek for differentiation of its products and services, it is compelled to expend a significant portion of its resources on undertaking research activities to determine unique product attributes while promoting brand image at the same time.
Innovation can only be achieved in instances where an organization pursues a strategy of differentiation, either for its products or for services. De Witt and Meyer (1999, p. 198) point out the need for organizations to scan the environment, as well as conduct market research to identify opportunities. In the contemporary market setup, however, firms are searching for ideas to sustain their product differential strategy through the establishment of social networks with customers and suppliers for purposes of developing product ranges that satisfy customer needs.
As Hamel (1998, p. 8) rightly points out, innovation is achieved through involving new voices, bringing together knowledge in varied ways, getting people to involve themselves in inventing the organizations future, as well as introducing new lenses and conducting extensive research. Flexibility is important for organizations to help them achieve and manage the change that is inherent in the organizational environment (Boak, 2010, p. 19). In particular, there are two different configurations; mechanistic and organic. These play a significant role in enabling an organization to achieve change.
Mechanistic Configuration
The mechanistic configuration comprises of technostructure as its main part, while it adopts standardization of work as its central coordinating mechanism. This configuration type prefers the use of limited horizontal decentralization. The structure gives precedence to higher formalization degrees, as well as higher specialization degrees. In terms of the decision-making process, centralization is the main feature, while the management has a narrower span. It spots relatively more levels in its chain of command, beginning with the chief executive officer to the lowest-ranked worker at the organization. There is little need for lateral or horizontal coordination, with machine bureaucracy as well as a larger support staff base being commonly integrated within the mechanistic configuration. This type of organizational configuration offers a typically stable environment, with the main objective being the achievement of internal efficiency (Lunenburg, 2012, p. 4).
Organic Configuration
This configuration type places greater emphasis on the support staff while using mutual adjustments to achieve coordination. Although it maintains decentralization, this is done selectively. Generally, the structure has lower decentralization and formalization systems. The organizations core operations are run by technical specialists, making a smaller technostructure. The complex structure gains support from the support staff base, which is larger in this kind of organization. Organic organizations mainly undertake tasks that are non-routine and thus adopt the use of sophisticated technology. The aim of this kind of approach is for the firm to realize innovation. At the same time, the firm can adapt fast to the ever-changing business world. The organic type of organizations is medium in size and highly adaptable. Their focus should be on the efficient use of resources (Lunenburg, 2012, p. 6).
Selected Strategic Process: Doha Bank Qatar New Product Introduction
The process of formulating new products at Doha Bank Qatar undergoes three critical stages, which include collection, analysis, as well as thoroughly discussing relevant information and details concerning its environment and its competition. As Nadler (2004, p. 26) points out in his theory of strategy, Doha Bank relies on this initial information to ascertain the various design alternatives that it may employ to introduce the new products successfully. The bank has established up to five departments that are engaged in the collection, analysis, and discussion of information. They include the Business and Product Development Department, Marketing Department, Information Technology Department, Sales Unit, and the Marketing Agency.
The strategy process of the bank entails the above-mentioned departments making decisions about core directional choices that are critical about the portfolio together with its design. Doha Bank Qatar has assigned the five departments with the responsibility of drawing up the plan and its respective budget, as well as the execution of the strategy. The execution and implementation focus on result examination and the subsequent execution of corrective action to ensure the whole strategy process takes place as anticipated. The implementation and execution roles as assigned at the bank are particularly in tandem with the definition offered by Nadler (2004, p. 29) concerning strategy and its process.
The strategy process involves the relevant departments determining the actual criterion that the bank is expected to follow as it charts its organizational progress. Targets are established during the process, which acts as a guide to employee participation and operation during its implementation (Hemel and Prahalad, 2005).
Strategy Process Duration
Doha Bank Qatar takes between one and two months to undertake the strategy process and eventually finalize on the new products intended for the introduction. During this period, each of the departments involved in the process carries out extensive work, including the collection of vital information, the processing of the information, and sharing of the information with the other departments to ascertain the effectiveness. These details and information evaluate the organizations readiness to achieve the strategic objective effectively by scrutinizing the resources of the bank to ensure its full utilization. The aspect of resource evaluation, as pointed out by Thompson et al (2010 p. 33), is critical for the success of any strategy process as it provides the firm with the ability to fully utilize the number of resources that it owns.
The five departments engaged in the strategy process mainly target to influence each other such that it may eventually be possible to buy the entire process altogether. The Business & Product Development Department formulates the new product idea and explains how its introduction will strategically enable the bank to achieve a competitive edge and growth over its competitors. As the department sells the idea to the Marketing Department, the latter evaluates its viability to ascertain whether the new idea will be easier to sell to the market and eventually enable the bank to achieve its objectives. The Marketing Department proposes changes to the new product idea that aims at improving the original idea as was formulated by the Business & Product Development Department. The IT department, on the other hand, studies the whole new idea with the view of improving its efficiency such that its implementation may omit any further barriers and increase effectiveness to the organization. For instance, the IT department may suggest programs and software enable the sales unit and the marketing agency to communicate to the marketing department from their remote locations in the field.
During the strategy process duration, the teams involved, which comprise of the five departments, prepare documentation intended for use in controlling and evaluating the progress of the entire strategy. These documents include Product Policy, Project Requirement Document (PRD), Project Initiation Document (PID), as well as the Project Tracking Document (PTD), and Test Document. These documents help in the process by testing the new product or service at every step and checking all the tested work that meets the expectations of the bank.
Other important documents that are developed during the introduction of a new product or service idea include Quality Assurance as well as User Acceptance Test. These latter documents focus on evaluating the acceptability of the new product to the market or consumers through determining their quality.
New product strategies at Doha Bank Qatar are formulated in tandem with the banking business that the institution runs. In particular, the bank comprises of heterogeneously diversified activities that are operated in a complex and stable environment. As Sarrazin (1981, p. 9) notes, such an example of an enterprise requires the top management to have a deeper understanding of how the relationship network operates. The Business Manager at the bank, in particular, is in charge of new product ideas that are formulated at the bank. The business manager, in turn, assigns the Project Manager the role of coordinating the entire strategy formulation process and ensures the work is done as planned.
The project stockholders mainly learn about their responsibilities, as well as distributing tasks expected of them through a brainstorming session that also forms part of the initial strategy process at the bank. The project manager determines each staffs responsibility as well as routine, setting the deadline for achieving such activities as the Project Requirement Document and the Project Initiation Document. The two documents are developed as part of the process of approving authorities finalizing and initiating the strategy process.
This leads to the theoretical development of the product, which paves way for its electronic execution. This is specifically done by the information technology department under defining the projects developers to ensure timely delivery. The IT department has to liaise with the business people after determining a reasonable timeline, as well as the deadline for delivery. The responsibility of the IT department is to ensure that the product development process is finished, from where the test environment can be conducted by the business and product development department. Equally, the quality assurance unit evaluates the progress to make the final testing.
The new product idea then moves to the Marketing Department, which is expected to design a marketing media plan. This plan, however, is only made possible after conducting extensive market research. It determines the way forward for the new product strategy in terms of whether the company needs to undertake Below The Line (BTL) or Above The Line (ATL) marketing activities. The department then finally makes the approvals once it determines that the new product idea meets all the targets of the bank concerning the market. The final stage involves the launching of the product to the public basing on the approval results of the marketing department.
The steps involved in strategy formulation at Doha Bank generally begin by evaluating the industry landscape, where the focus of the bank is in understanding the customers clearly. The involvement of the Marketing Department brings in the idea of evaluating customer response before the launch of the product. It seeks to ensure that the new product meets the expectation of the market, where customers desires and wishes are given priority before any other thing. To achieve this, the marketing department conducts extensive market research that enables it to draw out conclusions that accurately capture the position of the industry. Ruckstad (2008) advises on the need for companies to undertake a careful evaluation of the industry landscape to understand the customers clearly.
Doha Bank Qatar adopts a comprehensive approach in the development of its corporate strategy, where the firm begins by developing its overall strategy before carrying out its implementation. The entire strate
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