Technological Dynamics in Strategic Management: An In-depth Analysis of Implementation, Control, and Evaluation

Technological Dynamics in Strategic Management: An In-depth Analysis of Implementation, Control, and Evaluation

Justice Mutua J.N., Ph.D.^1*, Irene Akeyo  Amenya²

^1,2School of Business and Economics, Daystar University

*Corresponding Author

DOI: https://dx.doi.org/10.47772/IJRISS.2024.801182

Received: 11 January 2024; Accepted: 15 January 2024; Published: 23 February 2024

ABSTRACT

The contemporary business landscape is intricately interwoven with technology, encompassing diverse tools and innovative processes strategically employed to fulfill organizational goals. This comprehensive exploration delves into the multifaceted role of technology in strategy implementation, control, and evaluation within the framework of strategic management. In strategic planning, technology is instrumental in optimizing operational resources across various facets of a company. To effectively harness employee contributions, a strategically managed company must orchestrate the right balance of input in the product development process. The use of information systems emerges as a linchpin for maintaining competitive advantage by enabling companies to respond dynamically to evolving business markets. Whether adapting to changes in a dynamic market or consolidating gains in a stable one, information systems play a vital role in strategic adaptability. The primary focus of this study is a meticulous analysis of the effect of information technology on strategy implementation, control, and evaluation. Adopting a desktop research methodology, this investigation unravels the intricate role of information communication technology infrastructure as a key driver for effective and efficient strategic management processes. However, it underscores the critical need for organizations to carefully select the type of IT infrastructure, as inappropriate choices can introduce confusion and hinder the seamless flow of the strategic management process.

Keywords: Information technology, strategy implementation, strategy control, strategy evaluation, strategic management, information communication technology

INTRODUCTION

Background of the Study

In the contemporary global landscape, the integration of technology into organizational frameworks has become ubiquitous, ranging from small-scale enterprises to multinational corporations. The transformation of the workplace is evident, with information technology (IT) permeating nearly every functional department of organizations. In this digital era, communication channels, both internal and external, predominantly rely on email as the primary mode of interaction (National Academy of Sciences, 1997).

Organizations today are not merely adopting IT; they are strategically embracing it across all functional domains, with the overarching goal of enhancing operational efficiency and overall effectiveness. This phase of integration involves users familiarizing themselves with specific technologies, a process often initiated through word of mouth, demonstrations, or various advertising media (Salvin, 2015).

Dynamics of Technological Trends

The advancement and application of information technology in strategy implementation, control, and evaluation represent an ever-evolving landscape. Several prominent trends are shaping this dynamic environment, each with its unique implications.

Cloud Computing

A focal point of contemporary discourse in information technology is organizational cloud computing. This paradigm involves the utilization of computing services, encompassing both software and hardware, delivered over a network, typically the Internet. Cloud computing offers three broad services: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). The benefits of cloud computing span cost reduction in IT infrastructure, promotion of virtualization, simplified software and hardware maintenance, and addressing pertinent issues such as privacy, compliance, security, and legal considerations (Management Study Guide, 2016).

Mobile Applications

Mobile applications, software designed for smartphones and tablets, represent a burgeoning trend in information technology. Beyond being efficient tools for customer communication, mobile apps have proven to be strategic in acquiring new business and facilitating sales transactions. The success of mobile applications is evident in their widespread availability across various mobile operating systems, such as Apple, Blackberry, and Nokia, contributing to revenue generation shared between distributors and developers (Harvard Business Review, 2017).

User Interfaces

The evolution of user interfaces has undergone a revolutionary shift with the advent of touch screens. This capability has transformed how end users interact with applications, allowing direct interaction without intermediary devices like mice. Touch screen technology finds applications in smartphones, tablets, information kiosks, and other information appliances, redefining user experiences (Management Study Guide, 2017).

Analytics

The realm of analytics has experienced exponential growth, blending statistics, computer programming, and operations research. Within analytics, distinct domains like data analytics, predictive analytics, and social analytics have emerged. Data analytics, a pivotal component in strategy evaluation, involves converting raw data into meaningful information to support decision-making processes. Predictive analytics anticipates future events based on historical and current information, while social media analytics aids companies in understanding and accommodating customer needs (Arslan et al., 2015).

Research Objective and Question

1. This study is fundamentally aimed at assessing the profound influence of technology on strategy implementation, control, and evaluation within organizational contexts. The central research question driving this inquiry is:
2. How does technology influence strategy implementation, evaluation, and control within organizational frameworks?

LITERATURE REVIEW

Dynamic Capability Theory: A Holistic Perspective on IT and Strategy

Dynamic Capability Theory (DCT) offers a valuable framework for understanding the complex interplay between technology and strategy. Developed by Teece et al. (1997), it emphasizes the continuous renewal and reconfiguration of organizational capabilities to adapt to a dynamic environment. In this context, IT plays a crucial role in enabling organizations to: Sense and shape future opportunities: IT tools like market intelligence platforms and predictive analytics can help organizations scan the environment, identify emerging trends, and anticipate future scenarios, informing proactive strategic adjustments. Seize opportunities: IT facilitates rapid development and deployment of new capabilities by enabling collaboration, resource allocation, and project management through platforms like enterprise resource planning systems and agile development tools. Reconfigure existing capabilities: IT allows for adapting existing resources and processes to accommodate changing markets and demands. Cloud computing and flexible software solutions provide agility and scalability, making it easier to adjust IT infrastructure to evolving strategic needs. DCT presents a nuanced view of IT alignment, moving beyond simplistic notions of matching technology to existing strategies (Itami & Numagami, 1992). It offers three distinct levels of alignment: Level 1: Current Technology and Current Strategy: This traditional approach focuses on leveraging existing IT capabilities to optimize the execution of the current strategy. Level 2: Future Technology and Current Strategy: This level considers the potential impact of future technological advancements on the current strategy, prompting proactive adaptation and exploration of new opportunities. Level 3: Future Technology and Future Strategy: This highest level of alignment involves co-evolution of technology and strategy. Organizations actively shape their future technological capabilities to enable novel strategic directions and long-term competitive advantage.

By embracing the DCT perspective, organizations can develop dynamic IT alignment strategies that consider both present and future contexts (Qiang, 2006). This includes: Investing in flexible and adaptable IT infrastructure: Cloud computing, open-source platforms, and modular software solutions can provide the necessary agility for continuous reconfiguration and scaling of IT capabilities. Fostering a culture of innovation and experimentation: Encouraging employee engagement in exploring new technologies and identifying potential applications within the strategic framework is crucial. Developing strong technology foresight capabilities: Continuously monitoring technological trends and actively scanning the environment for emerging disruptive technologies are key to proactively shaping future strategies.

Empirical Literature: Exploring the Interplay of Technology and Strategy

A substantial body of empirical research has explored the multifaceted relationship between technology adoption and various stages of strategic management. While some studies focus on specific contexts, others offer broader theoretical frameworks with valuable insights for this study. Union Renewal and ICT: Cockfield (2005) investigated the impact of information and communication technology (ICT) on union renewal strategies in Australia. Findings suggest that while ICT can offer new forms of participation and activism, successful integration with the overall strategy is crucial for effective implementation.  Collaboration and ICT: Rochart and Short (2008) conducted research on the role of ICT in managing organizational interdependencies. Their work highlights how ICT facilitates problem-solving across departments and strategic business units, contributing to a competitive advantage through enhanced responsiveness to dynamic market forces. Technology Adoption and Competitive Advantage: Bengi (2009) emphasizes the importance of continuous technology adoption for sustained competitiveness. Her study identifies behavioral characteristics of users, technology features, and organizational factors as key determinants of success or failure in implementing technology-based strategies. Additionally, Bengi notes that organizations often underutilize IT in opportunity assessment during strategy formulation.

Technology-Strategy Alignment in Change Management: Bett (2013) conducted a case study at Kenya Petroleum Refineries Limited, examining the alignment between technology and strategy in managing change. The findings indicate a strong link between strategy and successful technology initiatives, but also highlight the inherent challenges associated with managing change at both organizational and divisional levels. Strategic Use of Technology in Crime Prevention: Kambuti (2013) investigated the utilization of technology by the Kenya police in crime detection within Nairobi city. The study revealed limited adoption of modern technologies, hindering its strategic use in crime prevention. It proposes a structural re-engineering of hardware and software infrastructure as a key initiative for enhancing police capacity. ICT and Strategy Formulation in Public Enterprises: Odinga (2014) focused on the role of ICT in strategy formulation at KenGen, a Kenyan energy company. His research demonstrates how IT acts as a key determinant of an organization’s strategic direction and efficiency. Technology and Innovation in Low-Cost Housing: Okumu (2014) studied the case of Elsek and Elsek Kenya Limited, a company utilizing modern building technologies to address the housing shortage in developing countries. The findings suggest that adopting such technologies can play a significant role in alleviating housing challenges.

Theoretical Considerations

Existing literature identifies various theoretical frameworks for understanding the relationship between technology and strategy. One key framework suggests that firms can pursue cost leadership, differentiation, or market segmentation strategies, with technological advancements serving as potential tools for achieving any of these competitive objectives. Examples like Amazon and Alibaba exploring AI-powered systems for strategic decision-making highlight the evolving use of technology in shaping and executing business strategies.

Acknowledging Potential Challenges

While the majority of empirical evidence points towards a positive relationship between technology and strategy, Dewett and Jones (2001) caution about potential factors leading to failure, including human behavior, organizational structure, and technology features. This study underscores the importance of acknowledging and mitigating these challenges for successful technology-driven strategies.

The case of the Nairobi County Government (NCG) implementing an e-payment system for parking fees provides a relevant local example. While the initiative aimed to increase revenue collection and curb corruption, initial reports indicate a decline in revenue after its implementation. This instance highlights the critical need for thorough planning, user involvement, and proper training to ensure successful technology adoption within the context of strategic execution.

Technological Concerns in Strategy Management

While information systems offer significant benefits for strategy implementation, evaluation, and control, integrating technology also presents critical concerns. This section explores these concerns across the key stages of the strategic management process.

Strategy Implementation

Communication and Goal Management: Information systems can facilitate clear communication of strategic goals and metrics from formulation to execution, connecting individual tasks to broader objectives (Wakefield, 2006). Tools like dashboards and collaborative platforms can aid in assigning tasks, monitoring progress, and triggering alerts for areas requiring attention. Challenges of Implementation: Despite such benefits, bridging the gap between strategy formulation and execution remains a persistent challenge. Factors like user engagement, resistance to change, and limitations of the chosen technology can hinder successful implementation.

Strategy Control

Information-Driven Monitoring and Correction: Effective strategic control relies on accurate and timely information (Schaap, 2006). Information systems can provide managers with real-time data on performance indicators, enabling them to track progress, identify deviations from planned objectives, and implement corrective actions. Overreliance on Technology: While technology plays a crucial role, complete dependence on automated control systems can create vulnerabilities. Overlooking human judgement and neglecting organizational context can lead to suboptimal decision-making and unintended consequences.

Strategy Evaluation

Comprehensive Performance Analysis: Information systems can be valuable tools for evaluating strategic performance by providing data-driven insights into various aspects like financial metrics, market share, and operational efficiency (Schaap, 2006). Tools like balanced scorecards and risk management systems can offer valuable insights for strategic adjustments. Dynamic Environment and Emerging Technologies: However, it is crucial to recognize the limitations of traditional evaluation methods. Rapidly evolving environments and the emergence of disruptive technologies necessitate continuous review and adaptation of evaluation frameworks and metrics.

Critique of Technological Utilization in Strategy Management

Cost-Benefit Analysis and Vulnerability: While technology can create value and drive competitive advantage, it is critical to consider its costs alongside benefits (Wakefield, 2006). Implementation requires strong internal controls to mitigate security risks and avoid potential vulnerabilities. Overuse and Double-Edged Sword: Overreliance on technology can have unintended consequences. Automation can lead to job displacement, rigid processes can stifle innovation, and excessive data dependence can undermine decision-making autonomy.

Common Pitfalls in Technological Integration for Strategy Management

User Involvement and Alignment: Failure to identify and involve stakeholders at all levels of the organization (operations, management, policy) can lead to misaligned technological solutions and user resistance. Matching Capability to Needs: Choosing the right hardware and software for an organization’s specific needs is crucial. Over-investing in unnecessary features or underestimating requirements can lead to wasted resources and ineffective systems. Hidden Costs and Ongoing Maintenance: Beyond initial acquisition costs, consider the ongoing expenses associated with maintenance, data management, training, and potential upgrades. Pilot Testing and Risk Assessment: Thorough pilot testing of new systems is essential to identify and address potential issues before full-scale implementation. This helps mitigate risks and ensure operational readiness. Right Team for the Job: Assigning responsibility for technology implementation to a team with the necessary skills and expertise, including “Strategy IT analysts,” is crucial for success. Continuous Learning and Technology Transfer: Providing ongoing training and support for both existing and new personnel is essential for successful technology adoption and sustainable knowledge transfer within the organization.

RESEARCH METHODOLOGY

This study employed a rigorous qualitative research approach, specifically adopting the documentary analysis method to delve into the multifaceted realm of technological concerns in strategy implementation, control, and evaluation. The documentary analysis method provided a robust framework for the systematic examination and positive evaluation of a diverse array of professional documents, fostering a nuanced understanding of technological intricacies. The outcomes of this analysis not only served as insightful judgments but also swiftly translated into remedial measures, encapsulated within managerial conclusions for practical implications.

Documentary analysis, as an encompassing methodology, draws upon a wide spectrum of sources, as elucidated by May (2003). This inclusive approach involves the scrutiny of diverse documents, including newspapers, books, magazines, journals, websites, and government minutes. These sources are carefully curated, preserved, and subjected to meticulous analysis by social researchers, as emphasized by Bryman (2004). The relevance of each document, however, hinges on its adequacy and appropriateness concerning the specific phenomena being investigated.

Given the nature and scope of the research topic, the methodology strategically prioritized the analysis of journals, websites, articles, and textbooks. This emphasis was predicated on the centrality of media-related sources in providing comprehensive insights into the technological dimensions integral to the broader facets of this study. Through a judicious selection of documents, the research methodology aimed to extract nuanced and pertinent information, ensuring a robust foundation for the subsequent analysis and interpretation of technological concerns in strategic management.

CONCLUSION

This study explored the multifaceted relationship between information communication technology (ICT) infrastructure and various phases of strategic management. The findings highlight the significant potential of ICT in driving effectiveness and efficiency across strategy implementation, control, and evaluation. However, the benefits of ICT are not guaranteed. The choice of technology, its alignment with organizational needs, and the ability to integrate human expertise with technical capabilities all play crucial roles in determining successful outcomes.

RECOMMENDATIONS

Recommendations for Practice

Strategic Alignment of ICT Investment: Organizations should move beyond viewing ICT simply as a cost or tool, and instead, strategically align their IT infrastructure with their overall business goals and strategic objectives. This requires careful consideration of factors like industry trends, organizational context, and user needs to ensure the chosen technology supports and enhances successful strategy execution. Building Human-Technology Synergy: Effective utilization of ICT in strategy management goes beyond mere automation. Organizations should prioritize fostering a culture of collaboration where human expertise guides technology application and technology insights inform human decision-making. Ongoing investment in employee training and development is crucial to ensure human skills complement and leverage the capabilities of technology. Continuous Monitoring and Adaptation: The dynamic nature of today’s environment necessitates a shift towards agile strategic management practices. Organizations should embed continuous monitoring of both internal and external factors into their processes. This allows for real-time data-driven adjustments and ensures strategies remain responsive to emerging trends and disruptions.

Recommendations for Further Research

Investigating the Impact of ICT on Strategic Decision-Making: While this research emphasized the potential of ICT in support of strategy, further research is needed to delve deeper into how ICT specifically influences the cognitive processes and decision-making behaviors of individuals and teams within organizations during strategic planning and execution. Developing Frameworks for Evaluating Human-Technology Collaboration: Robust frameworks and metrics are needed to evaluate the effectiveness of human-technology collaboration in various stages of strategic management. Such frameworks could provide valuable insights for organizations seeking to optimize their approach to integrating human expertise and technological capabilities. Exploring the Ethical Implications of AI-driven Strategy: As AI algorithms play an increasingly prominent role in strategic decision-making, research is imperative to explore the ethical and societal implications of AI-driven strategy. This includes examining issues of bias, transparency, accountability, and potential unintended consequences of relying on AI for strategic guidance.

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