Paper Example on Strategy in Action: Rolls Royce

Paper Type:  Essay
Pages:  7
Wordcount:  1723 Words
Date:  2022-09-28


Most organizations that seem to thrive in business are made so by a working structure. According to Johnson, an organization structure is the established set of relationships and patterns that dictate the business operations (Johnson, 2017). In essence, the structure of an organization dictates its various strategic principles. Strategy management is therefore a fundamental part of any organization's basic skeleton. From strategic management a company is able to determine short term, middle and long term strategies of business operation.

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Consequently, the structure selected by a company such as Rolls Royce plc determines the strategic management moves that the organization plans to make. The functional structure is one that divides a company into functional groups that work together toward common goals. It is mostly effective in specialized organization arrangement because teams are able to produce efficient results from their groups (Johnson, 2017). Another structure to determine strategy is the divisional structure. The divisional structure groups functional groups into geographical regions or products. The divisional structure is advantageous in strategy because it is effective in coordinating functional groups. A final structure used to set company strategic management decisions are the matrix structure. A matrix is an intricate interconnection of related entities. For this reason, the matrix structure incorporates a strategic management tool that aids in enhancing interconnection between both divisional and functional structures. The matrix structure leads to more co-ordinated activities.

Strategic management is essentially the organized use of resources-financial, human and functional processes such as manufacturing, technology and man power to archive company objectives. The process of strategic management therefore starts with the strategy; followed by deployment of resources and then achieving the projected results. The following paper is case study of strategy in action at the Rolls-Royce plc as reviewed by the principles by Johnson The book's chapter on strategy in action outlines about five strategy management principles that will be illustrated on the Rolls-Royce plc case study. The first is the strategy development process in a company; this is shown by the structure the company uses to manage strategy. Second is organizing the company for success. It explores how Rolls-Royce can be managed. The third part is the resources used for strategies employed. It shows the use of finance and business commitment to run the company. In the same way, Johnson explores the issue of managing employed strategies as well as the continual practice of strategic management.

Background of Rolls Royce plcRolls Royce Holdings plc is one of the most lucrative conglomerates dealing with technology and aviation in the world today ( The company was incorporated in the year 2011 as a public limited British multinational company. The company that was established in 1904 is today responsible for manufacturing aviation power systems and other vehicle design products for other companies. According to an article published in Bloomberg, Rolls-Royce plc is the second largest manufacturer of aviation engines in the world (Wall, 2014). The company has also handled several defense contracts over the years. The 1904 company was formed as a result of a merger between F. H. Royce and C.H. Rolls. Rolls had the intention of selling products produced by the Royce Company and the collaboration led to Rolls-Royce limited. The collaboration continued until the first strategic move led to liquidating the company. Rolls-Royce was bought by the government and continued with the name until it was incorporated by the Rolls-Royce Group in the year 2003. Later, Rolls-Royce plc incorporated the company in the year 2011. The company has employed different strategies for management through the more than one hundred and twenty years from its inception.

Literature Review

According to Rolls-Royce annual report for 2017 is described products such as civil and military engines, marine propulsion engines and systems as well as power generation systems (2017). The Rolls-Royce Company also reports revenue of about 16.3 billion pounds as at the year 2017 and holding assets of 30 billion pounds (Rolls-Royce Annual Report, 2017). The figures are given considering the company's various subsidiaries across the world.

Rolls-Royce plc is primarily interested in technological innovation. For this reason, the strategic management tools employed in technology production are important to explore. Manufacturing technology innovation covers three main parts. First it covers the development and application of different strategic technology management principles. Essentially, it covers the integrated framework used for technology management (Johnson, 2017). Secondly, the manufacturing technology sector also explores the operations of the set framework used for technology management. Exploring the framework used is important in discovering the inherent efficiency of the methods employed. Lastly, technology innovation endeavor also considers the integration of technology management tools, their operations in frameworks and integration of technology management tools to enable innovation of better frameworks for the technology industry (Foden & Berends, 2010).

The first consideration for development and application of strategic technology management tools in Rolls-Royce involves identification and monitoring of creative technologies. In this way, the technologies are developed according to the process of through consideration of production activities. In technology development the first step ensures that maturity assessment and benchmarking procedures are conducted (Foden & Berends, 2010). In setting frameworks, the framework sequence selected ensures that the company produces products that follow the framework stages. The stages include selection and approval, capacity development and protecting the produced technology. Finally, integrating the frameworks ensures effective input and output of selected frameworks in the company.

The second thing to consider is dynamic capabilities available and sustained innovation, that is, strategic control and financial commitment at Rolls-Royce plc. Strategic control deals with the precise control of the set frameworks. On the other hand, financial commitments deal with the budgetary considerations of conducting company projects. According to Lazonick and Prencipe, the Rolls-Royce plc's major strategic control principle has been engineering (2005). In essence the company's control is driven by engineering control. The engineering control process has been the major part of technology management innovation in Rolls-Royce. The strategy involves recruiting brilliant engineers to the company and training them to company specifications throughout the years. Essentially, the engineering control strategy has been carried in the company from generation to generation (Lazinick & Prencipe, 2005). On the other hand, financial commitments represent the set of decisions made to drive different selected strategic operations (Lazinick & Prencipe, 2005). Financial commitment therefore allows proper allocation of funds to selected avenues selected for innovation.

The above discussion on strategic control and financial commitment gives an overview of the way Rolls-Royce has to operate between business strategies and operation strategies. Business strategy is the method used by an organization to secure business avenues. Operation strategy, on the other hand, is the use of available resources as efficiently as possible to achieve set business goals (Thompson & Martin, 2005). For a technology company like Rolls-Royce, its business strategy is closely tied to operations strategy. In essence, technology operations determine the business acumen for the organization. The daily operations at Rolls-Royce should be set up in ways that make sense to the business of the company. In this sense, maintaining operations at low prices while using the resources to produce technology that makes business sense is the main interaction between business and operations at Rolls-Royce. For instance, the main business goal at Rolls-Royce according to the 2017 annual report is to be the leading producer of high quality engines that cannot be rivaled by the market (2017). Therefore, once the business strategy has been clearly set, operations are led toward achieving the best engines. The operations include the following: ensuring that engineers selected for projects are as competent as possible, acquiring raw material from suppliers who are credible and cheap; ensuring that the engines are rigorously tested; and lastly to gain a market that appreciates the products the company produces. One operations strategy mentioned by the company is its ability to acquire the best research facilities in order to produce the best products in the market (Rolls-Royce annual Report, 2017).

Rolls-Royce business strategy is for the most part controlled by the operations strategy the business choses to follow. Waters & Waters put it that operations strategy is the main drive that allows a company to interact with customers to give them the understanding of their product as the best in the market (2006). The ability to manage strategic operations comes a company being able to understand their business. Engineering is the main business of the company; therefore, from a top down perspective, Rolls-Royce first acquires some of the best minds in the industry. In this way, the design, compliance and manufacture part of the business is able to build into other aspects such as sales, marketing and distribution.

Application of Strategic Management

The main applications of strategic management seen to be utilized by Rolls-Royce include knowledge management, quality management systems, manufacturing principles and six sigma principles. Knowledge management is the process that a company uses to learn their business requirements as well as learn the use of the knowledge they acquire. In essence, the knowledge management as a part of strategic management involves learning the intricacies of customer requirements. In the case of Rolls-Royce, knowledge can be acquired by investigating the aviation industry needs as well as their previous products. From the acquired knowledge the company is able to determine whether to reuse the technology they have or to create new technology. In the same way, documentation of the knowledge is done and decisions for disposal or development are made. Secondly, using lean manufacturing principles will enable the company to produce engines in short periods of time. The use of lean manufacturing principles will enable the company to use the resources they have on request and efficiently.

Another application of strategic management to Rolls-Royce plc would be by the quality management principles the company adopts. Quality management ensures that the engines and any other products manufactures by the company are in compliance with industry standards as well as showing a high degree of quality. Practice makes perfect. This simply means that any design prototypes should go through all kinds of test to ensure their competence in the market before major production. Organizations use the six sigma approach to minimize costs, defects and significant wastage in production. In essence, the six sigma approach is an improvement on the quality management strategies. It ensures that the company clearly goes through the production process, design process as well as prototype testing to ensure overall production quality.


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