Strategy as Practice and Leadership - Essay Example

Strategy as Practice & Leadership In the contemporary world, business firms cannot achieve success with only competitive strategies in business. The paper tries to implicitly analyze the statement of the famous scholar Mary Parker Follett. She claimed that corporate executives must focus on interrelations between individual’s environment, inheritance and tendencies. Thus, the paper will submit to assured critical aspects and viewpoints by which organizations can infuse cooperative intelligence in business. The analysis of the paper will frame ways by which group principle can be practiced so as to bridge the gap between labor and capital relations. With the essence of such applications, modern associations can strategically develop their business. The context of the paper will also include social and technological pioneering aspects that can be integrated within business firms for future expansions. At the end, the paper will prove that competition must be successfully generated through co-creation and co-evolution, which indirectly support cooperation in the profit-making world. Contents Abstract 2 In the contemporary world, business firms cannot achieve success with only competitive strategies in business. The paper tries to implicitly analyze the statement of the famous scholar Mary Parker Follett. She claimed that corporate executives must focus on interrelations between individual’s environment, inheritance and tendencies. Thus, the paper will submit to assured critical aspects and viewpoints by which organizations can infuse cooperative intelligence in business. The analysis of the paper will frame ways by which group principle can be practiced so as to bridge the gap between labor and capital relations. With the essence of such applications, modern associations can strategically develop their business. The context of the paper will also include social and technological pioneering aspects that can be integrated within business firms for future expansions. At the end, the paper will prove that competition must be successfully generated through co-creation and co-evolution, which indirectly support cooperation in the profit-making world. 2 Introduction 4 Objectives 4 Discussion 5 Complexity Perspective: Thinking About Uncertainty in Strategy? 5 Complex Adaptive Systems 6 Impacts on Leadership 7 The Practice Perspective 9 Conclusion 11 Reference List 13 Appendix 16 Introduction Back in 1920, it was claimed by Mary Parker Follett that managers of an organization should consider individuals along with their inheritance, environment and tendencies (Follet, 2003). In addition to that, she also stated that corporate managers must focus on interrelations between individual’s environment, inheritance and tendencies. This implies that managers of organizations should seek out special conditions, where such interrelations become feasible and prove fruitful for business firms (Hakansson and Waluszewski, 2007). This statement of the author was based on concepts of group principle. The principle advocates that “man has power of creating” and such powers are acquired through special capabilities of an individual whereby they are able to connect with other personalities in the real world. The statement and idea presented by Mary Parker Follett has become popular in the current era (Follet, 2003). This is because; acknowledgement of group principle has significantly increased in the present business scenario. According to this theory, cut-throat competition is no more in fashion as global economy is entering into an era of collective living. Nowadays, large firms are often found to cooperate with each other, instead of competing. Negative market externalities like, economic crisis, can be easily avoided by these firms with cooperation (Stutely, 2002). However, if companies desire to make competition more effective by providing better quality of goods and services, then in that case, competition transforms into cooperation. Hence, managers in the contemporary world need to undertake concerted actions and collective thinking in business for earning higher economic prosperity in business (Follet, 2003). Objectives This essay will refer to certain critical aspects and perspectives by which organizations can instil cooperative intelligence in business. The analysis of the essay will frame ways in which group principle can be applied so as to bridge labour and capital relations. With the essence of such applications, modern organizations can strategically develop and lead their business. The context of the essay will also include social and technological innovative aspects that can be included within business firms for future developments. The essay tries to focus on the field of social innovation within corporate organizations and agents (Stutely, 2002). Discussion Complexity Perspective: Thinking About Uncertainty in Strategy? Since emergence of globalization, all economies in the world have become integrated and level of external uncertainties has also taken a hike. The state of trading affairs of a company not only depends on its internal affairs, but also takes the external environment into consideration (Pinson, 2008). Figure 1 in the Appendix shows that there are four stages of uncertainties in the market. In the contemporary world, clear enough future, alternative future and range of future perspectives do not exist. Business firms are placed in true ambiguity stage of the environment, where they often do not have sufficient clues about outcomes of near future (Abrams, 2003). It can be empirically found that gross domestic income thresholds of modern economies are highly volatile in nature. The economic growth of nations has become unprecedented in developing nations like, Brazil and China; but then again, business world has entered in the age of uncertainty. Issues like, currency crisis, volatile changes in excise and tax rates, market bubbles and irrational exuberances, have greatly aggravated the risks and volatility in business investments. Finally, high volatility in investment market has increased the degree of business ambiguity (Hutchens, 2009). It is the duty of firms to appropriately adapt or shape the true ambiguity about state of external commercial affairs. For instance, existing strategies of firms should be manipulated and altered according to changes in the market (Brown and Gutterman, 2009). The firms should also try to shape the market by means through which they can fit their manipulated strategies in business (Blacwell, 2011). The return verses risk equations of the firms should be further polarized. Scholars have claimed that contemporary organizations should entertain a co-evolving process in business (Elearn, 2013). Structure of an organization should be constructed in such a manner that external pressures would be unable to alter its operations. If organizations operate on the basis of complexity, then they would follow certain special facets in business. These are interdependence and connectivity, co-evolution, bounded instability, fitness landscapes, chaos and complexity, space exploration possibility, emergence, bifurcation, adaptation and self-organizing (Reading, 2002). Therefore, according to the views of Mittleton Kelly, if contemporary organizations operate on the basis of complex principles, then they can co-evolve with the external ambiguous environment and recreate strategies for accelerating growth. Hence, complexity perspective of organizations is based on the statement of Mary Parker Follett, who had claimed that one can comprehend situations of external world only after considering the evolving situations (Jeffes, 2008). It can be critically analyzed that by encouraging the norms of competitive intelligence, business firms in last few years have given excess attention to process and competition (Blattberg, Getz and Thomas, 2001). By doing so, firms have neglected the value of relationships to be built with individuals and hence, have achieved successful competitive intelligence operation. By following the norms of adaptive complexity strategy in business, modern organizations try to operate on the basis of cooperative intelligence (Aaker, 1991). This approach is based on the group principle introduced by Mary Parker Follett. It elaborates ways in which corporate firms can frame future developmental strategies with focus directed at business stakeholders (Kotler, 2008). The implications of growing popularity of complexity strategy in the business world is true because extent of uncertainty present in markets determines methods via which new strategies can emerge and be applied within organizations. For instance, strategic management practices of the hospital industry strictly follow the norms of complexity strategy in business. Due to ambiguous aims, qualitative types of activities, usage of complex technologies and plurality of professionals, such complex strategies are undertaken in this concerned industry (Junior, Pascucci and Murphy, 2012). These hospitals are governed by a unique structure of management, known as the top management triangle; this triangle includes trustees, physicians and administrators. This empirically proves the fact that extensive uncertainties in markets (like, information asymmetry in the market for healthcare) have forced organizations to adopt complex strategic management. Complex Adaptive Systems It should be noted that adaptation is one of the principles of complexity strategy in business. So, organizations that follow adaptive principles in business are actually following complexity strategy. However, all organizations following complexity strategy might not necessarily follow the norms of adaptive principles in their commercial affairs. In organizations that follow norms of complex adaptive systems (CAS), leaders acts as agents who are capable of self-organizing, evolving and moulding business as per changes of the external environment (Casson and Wadeson, 2012). The adaptive organizations conduct their operations on the basis of non-linearity, equilibrium, edge of chaos, self-organizing, emergence and living systems (Peng, 2008). The organizations that follow CAS are less affected by external ambiguities in the business world; this is because these firms operate on grounds of non-linearity, where cause and effect is not closely linked with respect to space and time (Stephen and Toubia, 2010). As these firms operate on the basis of equilibrium, all external effects are nullified by each other; and therefore, net effect remains unchanged. These firms also operate on edge of chaos; under this regime, business decisions are balanced between static and chaotic states. The emerging behaviours of the market are typically unanticipated by these firms. Hence, complex adaptive organizations in the present scenario should consider trust as a critical aspect in business; whereas, risk and creativity should be marked as fundamental and pivotal success aspects of business respectively (Hawkins, 2006). Impacts on Leadership From the above context, it can be claimed that competitive landscape, wherein organizations operates, notably changes overtime. The external environments of business firms have become highly turbulent, unpredictable and experience transformational changes (Andersen, 2000). Globalization has brought about noteworthy change in the state of antagonism and technology with passage of time. Such changes in the external environment require organizational leaders to undertake new and greater responsibilities for (Bigler, 2001). Presently, leaders of organizations aim to frame strategies and perspectives by virtue of which they are able to generate higher competitive advantages for their respective organizations. These perceptive are primarily set on the basis of four aspects, namely creativity, flexibility, knowledge and innovation (Hotho and Dowling, 2010). The leaders are now following de-differentiated policies in business; this allows leaders to encourage greater learning in workplaces and ultimately render organizations more performance oriented in nature. Nonetheless, it should be noted that such policies and strategies of are implemented in the working process of companies through a diversified workforce (University of St, Gallen, 2008). There are various types of leadership; however, it is most likely that entrepreneurial leadership follows the norms of democracy. Under this regime, the leader confirms, informs and shares information with all subordinates. In earlier times, duties of managers and leaders were considerably different. In modern adaptive complex organizations, an organizational manager acts as a strategic leader (Papalexandris and Galanaki, 2009). Figure 2 in the Appendix present various facets in an organization around which duties of organizational leaders revolve. The leaders of complex adaptive organizations are charismatic transformational entrepreneurs. These leaders control and manage the state of commercial affairs on the basis of four “I”s; idealized influence, inspirational motivation, intellectual stimulation and individualized consideration (Tashakkori and Creswell, 2007). In short, it can be critically analyzed and stated that presently, organizations following adaptive complexity strategies try to implement cooperative intelligence; this action can only be executed by charismatic transformational leaders. These leaders have capabilities to effectively incorporate group principle in business for instilling cooperation among relationships shared by resource factors of business like, labour and capital (Svensson, 2005). A good example of a transformational leader in the contemporary era is the owner of a giant social networking company (Facebook), Mark Zuckerberg. He has made the company flourish in terms of brand recognition and revenue with his charismatic leadership powers. Right from the age of 22, Zuckerberg had forecasted opportunities of company’s growth. Moreover, he had strongly encouraged the organization to undertake new risks, which were accompanied with innovation and creativity. Zuckerberg highly motivated employees of the concern and rendered them more productive. It should be noted that Facebook operates and formulates new strategies, which are able to enhance its loyalty towards customers to the greatest limit. Hence, it can be critically stated that Facebook’s business is run on the basis of cooperative intelligence, but not competitive intelligence (Nieuwenhuizen, 2007). Steven Paul Jobs, who is also popularly known as Steve Jobs, was a transformational leader in the business world. He was the co-founder and CEO of the popular multinational company Apple Inc. It is claimed that he owned extraordinary visionary powers. Apple Inc, have gained its majority competencies with the strong innovative powers of Steve Jobs. True transformational leadership skills of Steve Jobs made the workers in Apple more productive and efficient. Hence, the transformational leaders become role models, whose action helps subordinates create special leadership skills in the long run. Steve Jobs, return to Apple Inc, in 1996 signifies the fact that business internationalization of multinational firms is not feasible without the guidance of transformational leaders (Isaacson, 2011). The Practice Perspective Following the norms of group principle, complex adaptive organizations implement strategy as practice perspective (SAP). By following the norms of SAP, leaders would encourage social learning in organization. Figure 3 in the Appendix shows various means by which social learning can be encouraged in organizations. Social learning would help to improve an organization’s intellectual capital (Inoguchi and Marsh, 2007). This is a type of intangible capital that helps to enhance the brand value of an organization. Human, structural and relational capitals are three types of intellectual capital (IC). Thus, by enhancing the degree of IC, companies can improve quality of its workforce, better its process and operations as well as augment the worth of customers and social capital. Social and customer capital deals with methods whereby the company’s relationship with its customers and external business world can be improved (Nadeem, 2012). Nevertheless, it becomes a serious challenge for organizational leaders to achieve higher growth rates for their IC. In order to measure IC, firms need to develop intangible assets monitors. The balance scorecard and Skandia navigator are types of intangible monitors that are used in the modern days (Bazin, 2010). By implementing the norms of strategy perceptive and improving social learning, contemporary leaders can enhance social capital in business. The social capital is goodwill of the firm, which helps to enhance brand value and customer base in the market. It should be noted that social learning can be bettered by enhancing overall knowledge and network relationships in business. Yet, in context of real business world, social capital implementation is still not widely practiced. In addition to that, relationships of firms with business stakeholders are developed for strategic reasons and for not social factors (Kotler and Keller, 2006). It can be critically examined and stated that social learning or innovation has become an indispensable aspect of current business world. This is because, as stated above, social innovation helps transformational leaders of complex organizations to apply group principle appropriately, thereby facilitating them to channelize business proceedings on grounds of cooperative intelligence (Rivera-Vazquez, Ortiz-Fournier and Flores, 2009). Giant multinational companies like, WalMart, Travellers and Wellpoint, are now found to transfer their social responsibilities in business into social innovation. The entrepreneurs of these organizations claim that social innovation effectively generated higher business value as well as leveraged special machineries in business; this can assist them to easily solve upcoming social problems (Kitchen, 1999). These organizations also suggest that social innovation renders businesses sustainable and scalable. In addition, it is also believed that social innovation enables firms to address market failures at certain times. Some organizations that have already adopted social strategies in business are Starbucks, Levi Strauss and Kraft. The coffee beans used by Starbucks are primarily procured from small farmers of developing nations like, Ethiopia, based on fair trading (Nicholls and Opal, 2005). Such initiatives undertaken by the company help to enhance brand worth among all stakeholders in business. Even so, it should be noted that besides social innovation, technological innovation is also an important practice perspective whereby organizations encourage group principle in business. Companies like, Samsung, Apple Inc., Intel and ARM, are firms that invest large amounts for encouraging new technological advances (Shah, et al., 2012). With such improvements, these firms enhance quality of services offered to customers, thereby abiding by the norms of cooperative intelligence. Leaders of firms try to operate on the basis of strategic knowledge. Knowledge is basically a type of intangible resource of an organization. By enhancing knowledge, a company gains business competitiveness. Figure 4 in the Appendix presents knowledge management framework that is adopted in every organization that follows complex adaptive strategies (Canino, 2011). Figure 5 in the Appendix shows various means through which organizations can create explicit or tacit knowledge in business. Nonetheless, there are two generic approaches whereby knowledge management can be incorporated in organizations; these are codification and personalization. When companies face similar types of problems, the approach of codification is used (Zeng, Huang and Dou, 2009). On the other hand, when problems faced by organizations are not similar in nature, personalization should be the apt approach of knowledge management. Hence, by trading off between personalization and codification, contemporary companies operate on grounds of coordination and cooperation, which is determined by generic knowledge management approach selected by its leaders (Weber, 2007). It is true that organizations that follow adaptive complex strategies in business are forced to enhance their knowledge creation process. For instance, a hospital named Erasto Gaertner is a superior service provider of oncologic treatment (Junior, Pascucci and Murphy, 2012). The hospital also provides cancer treatments both in domestic (Brazil) and international markets. It is found that management authorities of the hospital conduct extensive medical research work for upgrading its medical service knowledge, thereby enhancing intellectual capital resource. This is because such research work would help the hospital to invent modern techniques, which will help to enhance customer and social capital. The international strategy applied by most of the business organizations nowadays seek out greater amount of worldwide learning. Worldwide learning of firms is encouraged through innovation sharing (Butje, 2005). The human resources of corporate firms are well-trained and developed because activities like, acquiring and transferring knowledge, are performed by a skilled workforce. However, it should be realized that leadership, learning, culture, communication, technology and infrastructure are various types of factors within organizations, which determine success of knowledge management (Junior, Pascucci and Murphy, 2012). The analysis of the four given concepts pertaining to the statement made by the Mary Parker Follett in the year 1920 suggested that the themes have strong association. The four concepts namely complexity perspective, complex adaptive systems, impacts on leadership and the practice perspective are mutually dependent on each other i.e. pursuing one of the aforementioned themes will lead a manager to apply other concepts as well. For example, a company seeking complexity strategy requires a charismatic leader to fulfil their intended goals. In the similar way, the practise perspective can be achieved by social learning and for social learning a company needs to encourage social innovation. The application of social innovation in a complex organization enables transformational leaders to make pertinent application of the group principle. This in turn allows a company to streamline business functions on the underlying principles of cooperative intelligence. The discussion clearly shows that the four abovementioned concepts have strong interrelations. Conclusion In the current epoch, profit making business organizations conduct commercial activities in highly uncertain marketplaces. The state of economic matters of a business concern in the modern era not only depends on its internal aspects, but also considerably on its external affairs. Following the rule of group principle stated by Mary Parker Follett, firms in this indecisive scenario adopt complex strategic management in business. By following the rules of complexity, organizations strictly implement norms of cooperative intelligence (Finch, 2013). These organizations seek to achieve competencies and growth in business by assigning maximum value to maintenance of stakeholder relationship. These aims of the concerns are accomplished by transformational leaders who ensure attainment of desired goals by enhancing the degree of technological and social innovation in business. Hence, stiff competition is not the optimal strategy for the current business world. 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Weber, L., 2007. Marketing to the social web: How digital customer communities build your business. New Jersey: John Wiley & Sons, Inc. Zeng, F., Huang, L. and Dou, W., 2009. Social Factors in User Perceptions and Responses to Advertising in Online Social Networking Communities. Journal of Interactive Advertising, 10(1), pp. 1-13. Appendix Figure 1: Four Stages of Uncertainty (Source: Lecture Slides) Figure 2: Duties of Business Leaders (Source: Lecture Slides) Figure 3: Social Learning (Source: Lecture Slides) Figure 4: Knowledge Management in Organizations (Source: Lecture Slides) Figure 5: Creation of Knowledge (Source: Lecture Slides) Read More