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Business Administration QUESTION #9589
Question 1
The strategic management process includes environmental scanning, strategy formulation, implementation and evaluation. A company successfully formulates an excellent strategy but fails in execution. Research consistently identifies which factor as the most common cause of strategy execution failure?
  • Poor environmental scanning — the strategy was based on inaccurate market intelligence
  • Misalignment between strategy and organizational structure, culture, incentive systems and human capital — the 'hard' strategy was not matched with the 'soft' organizational enablers✔️
  • Insufficient financial resources — the strategy was underfunded relative to competitive requirements
  • CEO failure — execution failure is primarily attributable to leadership style incompatibility with the chosen strategy
Correct Answer Explanation
The strategy-execution gap is well-documented. The most consistent research finding (Kaplan, Norton; Hrebiniak) is that execution fails due to misalignment between the chosen strategy and the organizational infrastructure required to execute it — specifically: structure that doesn't support the strategy, culture that contradicts it, incentives that reward contrary behaviour, and people lacking required capabilities. The '7-S framework' (McKinsey) captures this multi-dimensional alignment requirement.