Abstract
State Owned Enterprises (SOEs) are strategic organizations used by governments across the world to fulfil certain strategic mandates. These organizations contribute to countries’ Gross Domestic Product (GDP) and thus towards their development. How these organizations operate varies globally – those in developing countries often focus on socio-economic imbalances such as inequality, poverty and unemployment.
In the South African context, SOEs have the mandate to enable service delivery and address various socio-economic challenges. Most of them do not operate as private businesses and are affected by macro-environmental factors differently from their private counterparts.
The main objective of this study was to assess how macro-environmental factors (specifically political, legal and environmental factors) affect strategy implementation in organizations. The secondary objective included investigating strategy implementation within the focal organization and determining the effect of the macro-environment on strategy implementation within the focal organization.
The literature review section provides a detailed account of strategic management within organizations, with the emphasis being placed on strategy implementation. Strategic management theories and the ways in which public and private organizations are affected by strategic management are also discussed. Strategy implementation within organizations is examined and macro-environmental factors that have an influence on strategy implementation are discussed.
A total of 15 employees from the focal SOE, a water utility that is based in Johannesburg, were interviewed. The main findings from these interviews were that the participants perceived bureaucracy and red tape as hindrances to strategy implementation and added rigidity to the implementation process. It also highlighted the fact that the political, legal and environmental factors ensure that the organization is compliant with laws and regulations but also have an adverse effect on the organization’s effectiveness in implementing its strategy. The data received from the participants indicated that there is no one factor that is more important than the other
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or that has a greater bearing on the SOE; all the factors have an equal impact on the SOE’s strategy implantation process. The suggested way to overcome these challenges included the minimization of bureaucracy and red tape within the organization, the introduction of less rigid policies and the minimization of political agendas within the SOE’s strategy implementation processes.