The Strategic Context

The strategic context

The effective implementation of an operations strategy is just as important as its formulation and requires at least as much care and skill. To a considerable extent, the operations strategy defines the organisation and marks it out from all rival organisations.

Operations strategy is the manifesto, campaign manual and rules of engagement for an organisation preparing to do battle with its competitors for a stake in the market. The context will be different for every organisation, but the fundamental principle is the same: success depends on good planning, careful timing, disciplined teamwork and a willingness to be flexible in the face of the unexpected.

Operations strategy is also a blueprint for transformation. As well as demanding improvements to meet performance objectives, it requires a reconfiguration of the capabilities of the supply chain to achieve very specific market goals. Ultimately, everything will depend on how well the workers in the organisation understand and carry out their individual and team roles within the larger plan. They need to identify with the overall mission and have a very clear idea of their own function and importance in carrying it through.

Strategy is about winning and any firm's operations strategy is based on order-qualifying and order-winning criteria. Having decided what it takes to win, operations must bring the necessary capabilities into line and up to the required level of performance. This may involve developing new products and services, introducing new processes, applying new technologies, modifying system flows, changing familiar location and capacity arrangements and so on. But at the end of the day, all these things will depend on the ability of the workers concerned to bring about the changes smoothly and effectively. Human resource management is likely to be the key factor in the successful implementation of operations strategy, because if the staff is not convinced, the project will surely fail.

The structure of an organisation can be an important factor in the successful implementation of a new operations strategy. The purpose of organisational structure is to increase operational effectiveness by grouping resources in particular ways and giving them some limited measure of autonomy to carry out their tasks and meet their objectives. Companies can be organised in a wide variety of ways: for example, by traditional functions such as finance, marketing, HR etc; process-oriented functions such as accounting, manufacturing, customer care; or geographical responsibility such as Europe, Middle East, Asia. Large companies are often structured into separate businesses, each with their own functional departments. Businesses can also be divided into strategically-related units. U-form organisations usually have a simple hierarchical structure of management, whereas M-form organisations separate responsibilities under different divisions. Matrix structures organise resources so that they report upwards to a business head, but also laterally to a project leader. 'N-form organisations' structure their resources in groupings that form networks which can operate largely free of top-down government, other than being set fairly general goals to achieve. These groupings relate to each other via networks that can change with time and circumstances. The purpose of this style of organisation is to develop the features of a thinking organism, which can react intelligently to the rapidly changing demands of the modern business environment without having to wait for direct instructions from above.The appropriate structure for implementing operations structure will depend very much on the type and size of business and the particular nature of the strategy. Some strategies require a lot of discipline and follow a strict plan for their implementation. These will be better suited to the U-form of organisation with its top-down hierarchy. Others need the flexibility of matrix or N-form structures, to facilitate learning in the organisation and the involvement of cross-functional teams in some decision-making processes.

The implementation of a new operations strategy is an operation in itself. It is a major project, which needs to be well planned and managed from launch to completion. Your textbook proposes four alternative types of role that could be played by central operations in managing the implementation