Business Strategy - Assignment Example

? Business Strategy Business Strategy Please answer the following questions: a) Explain the mechanistic and organic organization perspectives in relation to strategy and structure. (5 marks) Different organizations adopt various structures and strategies depending on the aims and goals that they seek to achieve in the end. A company may adopt either a mechanistic or an organic approach while executing its business or any other role that it plays in the society. A mechanistic approach is characterized by high levels of bureaucracy and complex strategies of executing duties, which are carried out in a more formal way. On the other hand, an organic organization has lower degree of bureaucracy, is relatively centralized and show limited level of formality while executing its strategies (Herman, 1991, pp306). b) Alfred D. Chandler’s reading is a business classic. Explain why structure follows strategy. Does firm structure continually evolve? If yes, how does this take place? Give an example to illustrate. (7 marks) Any organization that ventures in any business must come up with strategies to achieve the best fit in the ever-competitive environment. In this case, the company has to decide on which strategy to adopt among other issues. It is indispensable to appreciate the fact that a company has to strategize on which structure to adopt. In this case, strategy comes before structure. Most organizations evolve in order to acclimatize themselves to changes in the business environment. Furthermore, growing competition often forces a company to re-strategize and come up with better ideas to help it to operate profitably. This is the basis of evolution. In fact, a company may have to diversify its operations and provide new product that it were not producing initially (Herman, 1991, pp309). Furthermore, a company may come up with new departments to help it in tackling the numerous issues related to success. This is the basis of structural evolution in an organization. For example, Google Inc. has experienced an evolving organizational structure. Initially, it did not have representatives in other regions of its operations. However, it has had to introduce branches in such places in order to take care of its interests. Branches like Google South America, Google SE Asia, and Google East Africa among others exemplify this. c) Bartlett and Ghoshal (1995) argue the benefits of transnational organizations. What is a transnational organization? Provide an example of a transnational organization, justifying your selection. (5 marks) A transnational organization as used by Bartlett and Ghoshal (1995) is a phrase used to illustrate an organization that carries out its activities in a global perspective and does not rely in any way with the differences that may exist in countries that it operates. Such an organization in most instances seeks to achieve the balance of providing globally efficient services, responsive to all its customers irrespective of their nationalities, and carries out worldwide development. Microsoft Inc. exemplifies this. The corporation is American-based, but it is obviously clear that it seeks to provide goods and services serving the global market (Segal-Horn & Faulkner 1999, pp 116). d) What do critical views and current findings tell us about the link between strategy and structure? (3 marks) The current findings and views postulate a clear perspective that strategy and structure are intertwined facets in which one cannot operate in the absence of then other. It is essential to note that, strategies formulated by any organization are drawn from the status of the existing business environment. This will then be used to come up with the best structure that counters the weakness and takes advantage of the strengths at its disposal. The development of such a competitive advantage positions the company at a situation where it can capitalize its strategic options, which are often determined by the environment. a) Briefly explain the planning perspective and the incrementalism perspective. (5 marks) The incrementalism perspective is an approach employed in project planning such that working is achieved by adding to the project using small, often unplanned, incremental changes instead of a few, wide-ranging and large strides. It is a concept employed in project management where the work is done by building a bit by bit, and constantly adding to it as the project advances. The planning perspective involves prior involvement in the project by establishing the definitive road map to be followed in order to optimize the commercialization of the outcome of the results intended. It is more of an integrated multidisciplinary approach, which involves initial preparation including seeking talent and experience before incorporating to work the business strategy or project (De Wit & Meyer, 2010 pp.128). b) Chakravarthy and Lorange supporting the planning perspective and Quinn supporting the incrementalism perspective each make an important contribution to our understanding of strategy formation. Explain their contribution to our understanding of strategy formation? (7 marks) Charkravanthy and Lorange support the planning perspective while Quinn supports the incrementalism approach. All of them make significant contributions to one's understanding of strategy formulation. Charkravanthy and Lorange supported the planning perspective and explained that the planning perspective was only essential if managers were able to free their minds and think strategically. In support of the planning perspective, they dissected it into three levels, the corporate planning, business planning and functional planning. All these levels included individual planning perspectives such that prior planning was done at different levels. They included initial planning of the corporate goals and objectives, prior formulation of divisional business objectives within the defined area of activity and prior formulation of feasible programs to implement the business strategies (De Wit & Meyer, 2010 pp.131). On the other hand, Quinn supported incrementalism because he thought it was impossible to plan everything that along the way, there were meant to some changes to any business strategy. In this case, incremental planning was the best approach to strategy formulation because it provided room for additional bits in the cause of strategy formulation. The levels of planning at different managerial levels were allowed to make or add small changes instead of waiting to add one massive change to the strategy or project (De Wit & Meyer, 2010 pp.133). c) Reflect on the application of strategy formulation in a context with which you are familiar – it can be your business experience or an example from the business press. Was the emphasis on the planning perspective or the incrementalism perspective? What aspect or aspects of the strategy formulation activity were successful? What failed? Why? On reflection what have you learned? (8 marks)" In the application of strategy formulation, I chose a business experience for the business was to develop a strategy that focused on core competence. In this case, the strategy focused on developing ways to remain competitive in the market and deal with the threat of competition from other companies. Such a strategy is challenging because in a free market, all businesses focus on constantly devising ways to stay above the opponent. The emphasis of the strategy was on the planning perspective the manager though it was the best approach to use (Segal-Horn & Faulkner 1999, pp 116). He believed in the planning perspective and organized it according to the three levels, corporate, business and functional. In the process of strategy formulation, two aspects of strategy formulation were successful. The corporate and competitive strategies were successful because they had been planned from within the organization and emphasized to delivery. However, the functional strategy failed because along the way, there were changes that needed to be incorporated in the initial strategy. Since every business was coming up with ways to beat the other, the initial plan was prone to changes, which were not incorporated in the initial strategy. From this, I learnt that it is necessary to incorporate both the planning and incremenatlism approach in strategy formulation because of the dynamics during the implementation of the business strategy that may need few changes (De Wit & Meyer, 2010 pp.138). Bibliography De Wit, B. & Meyer, R. (2010). Strategy: Process, Content, Context, an International Perspective. Cengage Learning EMEA, pp128-150 Herman, L. B. (1991). Strategy Formation Processes in Health Care Organizations: A Context- Specific Examination of Context-Free Strategy Issues Journal of Management June 1, 17: 305-344 Segal-Horn, S & Faulkner, D. (1999). The Dynamics of International Strategy. Cengage Learning EMEA, pp112-120 Read More