Part 4 Unit 10 Strategy Preparation, Resource Planning and Structures

1. Part 4 Unit 10 Strategy Preparation, Resource Planning and Structures

2. Reading

3. Part 4: Strategic Implementation • The final stage of tourism corporate strategy is strategic implementation. By the end of part 4 it should be possible to construct a plan to operationalise a strategy for a tourism organisation, systematically monitor that strategy and create a comprehensive strategy document. • Strategic implementation follows logically from the previous three stages where an appropriate strategy has been selected from a number of options after a comprehensive situational analysis of the tourism organisation. • Chapter 10 discusses the detail of implementation in terms of financial, physical and human resources. • Chapter 11 examines the management of change and reviews methods of control and evaluation of strategy. • Chapter 12 concludes the book. At its centre is a guide on how to write and present a strategy document and this is followed by a look at turnaround and crisis strategies

5. After studying this chapter and related materials you should be able to understand: Resource planning Formulation of a coordinating plan Design of an organisational structure Issues in organisational design and critically evaluate, explain and apply the above concepts. Learning Outcomes

6. In 2005 the Games of the XXXth Olympiad for 2012 were officially awarded to London. In terms of funding the London 2012 Organising Committee has budgeted about £2bn for the staging of the Games. It receives most its funding from the International Olympics Committee and by its own revenue generation through sponsorship, ticket sales and merchandising. On the other hand the budget needed by the Olympic Delivery Authority to provide the infrastructure is around £9.5bn the sources of this are as follows: Central Government £5,975 million National Lottery £2,175 million Greater London Authority £925 million London Development Agency £250 million Case Study 10: The London Olympics 2012

7. Building the 2012 Olympic Stadium

8. Introduction Executive Summary summary of main points of report recommendations (proposed strategy) Mission Nature of Business defining the business of the organisation identifying key strategic business units Missions and Goals statement of mission of organisation objectives set Strategic Planning Framework: 1

9. Strategic Analysis Analysis of capability Evaluation of product portfolio Resource Audit (availability/effectiveness/efficiency) Analysis of external Environment CPEST factors Trends in competitive environment Trends in political environment Trends economic environment Trends sociocultural environment Trends technological Environment SWOT summary and analysis Strategic Choice An outline of alternative strategies, directions and methods An evaluation of the alternative strategies under review The proposed strategy, direction and method Strategic Planning Framework: 2

10. Strategic Implementation Planning Resource Implications of strategy Network analysis for strategy Review of organisational structure Monitoring Setting and measuring objectives and key tasks Evaluation of strategy (assumptions testing and monitoring financial or other targets) Strategic Planning Framework: 3

11. The evaluation stage of the strategy process involved analysis of the feasibility of an option in terms of finance and availability of resources. At the implementation stage, resource planning is concerned with identification of resources resource fit, and formulation of a co-ordinating plan Resource Planning

12. Physical resources A change in strategic direction will generally require adjustments in physical resources at the level of plant and machinery or consumables. A tourism organisation may have a dedicated purchasing department to co-ordinate the buying of physical resources. Important considerations in physical resources planning include: Specification - This may involve a careful audit of the uses to which physical resources are to be put. The result will be a list of required specifications. Fitness for purpose - This will examine the match between the specifications offered and the specifications required Cost - Prices between suppliers need to be compared, taking into account running and maintenance costs. Terms - Is it more appropriate to lease or buy capital goods? Identification of resources

13. Human resources Strategic implementation will have consequences for human resources, and manpower planning will need to address: manpower numbers skills recruitment and selection, and, training and development grading and remuneration Identification of resources

14. Information and technology resources Information and technology competence may be obtained by In-house development Purchase from external providers for internal use Contracting out of services Alliances Acquisition of organisations that possess the desired technology Identification of resources

15. There are two potential problems of resource fit. First, the technical issue of how new resources will fit with existing ones? This is a particular problem for areas such as computer resources, where new software may just not technically operate on old systems, or the computer systems of two merging organisations may be incompatible. The second problem of resource fit concerns fit between resources and organisational skills. Resource fit

16. A co-ordinating plan is a key to strategic implementation. It comprises the following elements project logistics, (planning) project objectives (operations) Management by Objectives (MBO) can be an important contributor to strategic implementation. First MBO helps to clarify the strategy - what does the strategy mean in terms of measurable performance targets? Second, MBO, assists implementation since this now becomes attributable to personnel who have been assigned specific tasks. Formulation of a coordinating plan

17. An organisational structure is the framework which describes how an organisation's activities are arranged. It shows how its personnel are grouped together and the purposes of the groupings (e.g. marketing, human resource management). It shows lines of communications between groupings, organisational hierarchy and control. Mintzberg (1979) defines an organisation's structure as "...the ways in which its labour is divided into distinct tasks and then its co-ordination achieved amongst those tasks." Design of Organisational Structure

18. The main types of organisational structure include: simple functional multidivisional matrix structure holding company experimental / organic Structural Types

19. Mintzberg (1979) identified six basic elements common to all organisational structures. These are: the operating core - the employees who produce the goods or provide the services. the strategic apex - the management of the organisation. the middle line - as organisations grow, middle-managers are needed. the techno-structure - analysts such as accountants and statisticians who perform a monitoring role the support staff - who provide internal services such as catering, cleaning and legal services. its ideology - which describes the overarching values, beliefs and aims of the organisation. Structural Elements

20. Functional Structure

21. Multidivisional Structure

22. Matrix Structure

23. Key issues in organisational design include: nature of structural groupings tall vs. flat structures bureaucratic vs. flexible centralisation vs. decentralisation co-ordination of structural elements Issues in Organisational Design

24. Resource planning: Identification of resources, ensuring resource fit, and formulation of a co-ordinating plan Co-ordinating plan: A plan covering project logistics (planning) and project objectives (operations) Logistics: The organisation and management of the flow of goods, information, human and other resources in order to achieve a particular goal. Organisational structure: The framework which describes how an organisation's activities are arranged. Simple structure: Absence of formal structure. Functional Structure: Groupings arranged according to functional areas. Divisional structure: Groupings arranged according to an organisation’s products or services or geographical areas. Matrix structure: Groups workers by both function and product. Holding company: An umbrella-type structure for the ownership and co-ordination of a number of clearly separated business units. Organic structure: A flexible and fluid network of people and communications. Review of Key Terms

25. Discuss the suitability of using an experimental or organic type of organisational structure for a tourism organisation with which you are familiar. Does structure follow strategy or strategy follow structure? Discuss with reference to a named tourism organisation. Identify and explain Mintzberg's six structural elements by reference to a tourism organisation you are familiar with. Prepare a project plan which demonstrates the logistics of a named tourism strategy. Identify the type of organisational structure which exists for a named tourism organisation. Is this structure appropriate for the future? Discussion Questions

26. Part 4 Unit 10 Strategy Preparation, Resource Planning and Structures The End