Business Strategies and Decision Making - Essay Example

Strategy Development - Business Strategies and Decision Making A strategy is defined as the long-term route followed by an organisation which usually develops over a given period of time. On the other hand, strategy development is a given plan that puts in place the exact goals and objectives which often can be changed in accordance to situation to be handled owing to the dynamic changes in the business environment. Most competitive organisations develop both short and long-term strategies to ensure they meet or surpass the set targets and/or objectives. Corporations have in every aspect of operations the need to observe the Going-concern Principle of the business thereby taking all necessary measures to develop operations. Several authors have observed a consistent pattern in strategy development and there is no empirical doubt that managers are for it (Higgins, 2013:30). Managers in various organisations, as evident in several publications, agree that it is not easy to hold together all the components of an organisation if a well patterned strategy is not developed. The importance of such a plan can be drawn from the point that core goals, actions and policies are integrated into a strategic plan that drives the success of a business-both large and small. Managers though, observe that developing a strategy alone is not sufficient for a corporation to realise its success, but rather, should be a well-engineered plan that brings together and allocates resources equitably in all operations. Nevertheless, all corporations-large or small- need a form of a patterned strategy put in place so as to experience success as other successful firms. The effect of ignoring such plans may result in haphazard resources spending and consequently leading to wasteful use of the already limited resources. In comparison, large organisations’ strategies are formalised as compared to small-sized ones. However, small sized organisations are of late realising the importance of developing critical strategies that are formal and communicated to staffs. As much as patterned strategy development has been taking centre stage in several organisations, there has a negative counter-development- strategy drift. Business external environment such as competitors, consumers, suppliers among others, is essential to any firm. When a firm fails to respond to such aspects, the condition is termed as a strategy drift. It is not a new phenomenon to find a formally stable business close down as a result of failing to effectively respond in a strategic manner to its external environment (Wild, Wild and Han, 2008:230). So critical is the impact of strategy drift that managers have been employing two approaches to avert the drift. These approaches are Intended Strategy Development and Emergent Strategy Development. The former is translated to mean that strategy which an organisation plans to put into practice. Some authors define it as a situation where the objectives of a given strategy are set in advance and whose main components are developed before the implementation of the strategy. The latter is defined as that strategy which arises as a response to abrupt challenges and opportunities that an organisation had not foreseen. Additionally, some publications define it as a set of activities consistently undertaken over time and have not been put in place in a formal plan and have emerged from outside the formal set plan. Intended strategy development is a plan that is well formulated and incorporated into a strategic plan and can be used effectively in averting strategy drift by taking into consideration the importance of the external environment. Careful analysis and handling of customers, supplies and competitors among other stakeholders and factors can lead to reduced strategy drift. Many managers are commonly using incremental patterns of strategy development as the most advantageous plan for the realisation of their management goals. This is a situation where there is a continuous process of strategic change through minimal adjustment of the strategy that already exists via a given kind of activity to be performed in a subsystem in an organisation. Incremental change mainly occurs through social political and cultural processes or through experimentation and learning-by-doing. However, there are risks of strategic drift which hugely affect the realisation of organisational goals and objectives. Below is a comprehensive discussion on how intended strategy development and emergent strategy development can be used to avoid strategic drift in an organisation but first is the definition of the following concepts; intended strategy, emergent strategy and strategy drift. From the definitions, intended strategy explains the already planned procedure to be applied in solving a given situation that arises in accordance to the set objectives. On the other hand, emergent strategy is that which is employed when a situation arises from outside and whose objectives have not been put in place in advance. Both of them can help a firm to avoid the alarming risks that arise from strategy drift. Strategic drift is defined is a situation in which there is a failure of succeeding strategies to address strategic situations that arise in an organisation thus leading to the gradual decline I performance (Frame, 2003:53). This is mainly caused by several situations in an organisation which includes incremental changes being less than that which occurs from environmental changes, reacting to environmental changes that arise instead of coming up with a proactive way of innovating it, the organisational cultural pattern restricting the organisation’s capability to at the necessary rate among others. Through the employment of intended and emergent strategy development via transformational nature of strategic change, this strategic drift can be overcome. These are explained below. The intended/planned strategies helps in the overcoming of the strategy drift in the following ways; firstly, it usually gives a well structured means of analysing and reasoning about the problems that are strategic but complex (Frame, 2003:53). This enables the management to have an already established procedure of handling a given situation that arises from planned objectives. This helps the organisation to spend little time to attend to the issue at hand and in time before it completely deviates from the track. Secondly, it helps managers to ask themselves questions and challenge wisdom received which they are ignorant about. Managers are able to ask themselves questions about the challenges that look powerful to them that always neglect. This enables them to do an extra work of identifying the necessary planned strategy to cope with such situation. This will make them to think widely and use the necessary wisdom to deal with difficult situations thus avoiding the drift. Also, planned strategies provide helpful means of coordination in an organisation. This enables managers to bring all the necessary resources together and coordinate them properly. This ensures that each resource is utilised accordingly from one person to another or department to another department. Proper coordination of intended strategy enables organisations to be less prone to drift since all the steps are properly merged to each other thus disabling any chances of deviation. More so, it enable the organisation to most effectively communicate the planned strategy within the organisation since the will be a well established structure to transmit information in its operational places (Mingail, 2012:120). Therefore in case of any issues arising in the organisation, the management time will be able to communicate the required solutions to be employed to prevent it from causing any deviations from the normal work thus preventing strategic drift. Furthermore, it helps managers to put more emphasis on important processes in relation to strategy development. This would help them to put the dedication on more important activities that are required to achieve a given objective. This in return will help them to avoid wasting time on unnecessary process thus enabling them to keep on track the work at hand without deviating. This will to avoid the drifting of a given strategy. Additionally, they help develop different kinds of roles within different levels of an organisation. This enables the members at each level realise that they have different kinds of roles to play at a given level and the contribution of each matters. Thus, this will enable manager initiate the programs for dialogues between different levels by clearly enhancing the values contributions made from different individuals at each level. This will enable members to work with loyalty by being keen not fail in the roles assigned hence prevent the drift from occurring (Mingail, 2012:120). They too enable different managerial levels to acknowledge and value different kinds of role. It enables managers to recognise the efforts of individuals at each level. For example, in most cases, middle level manager are considered to be the implementers. Therefore, intended strategy development can help top management to acknowledge the work of such level and motivate them to work toward the achievement of the set goals. This help to prevent the organisation from facing the strategic drift. A flexible environment between senior and junior level staff has to be developed. This ensures a tension free environment where one is not looked upon as an inferior hence harmony at the work place. These environment also enables the instructions issued by the seniors to their juniors are well implemented and these leads to attainment of intended goals. It also ensures that the seniors and juniors are involved in making decisions. This is a substantial approach as it cuts across all the stakeholders and guarantees a thorough postmortem during decision making process preventing future drifting of the strategies (Mingail, 2012:120). The managers involved in the business organisations must be ready to listen to the opinions as well as views during decision making process. They should be willing to accept various criticisms in their decisions by the juniors. This approach is bound to yield good results since the management can identify upcoming problems and quick measures taken to prevent a ‘time bomb’. This is one way of gathering information. It therefore enables the managers to take into account all possible influences while making decisions. It is also an opportunity to obtain some ideas which might benefit the organisation in terms of development. Paying attention to subordinate staff creates a sense of respect in them by which enables a smooth running of the organisation hence preventing the drift. More so, it is a basis for development of solutions since the suggestions given by the juniors (Frame, 2003:53). In the case of managers, the drift in strategy can be overcome by being in a position to define the incoming challenges in the most precise manner. The technique ensures that each challenge is assessed critically to ensure its placement in the most appropriate category and determine the best approach to solve it. New challenges should therefore be dealt with by experts who have a clear understanding of the problem. As a matter of fact, this calls for a competent staff with enough experience that ensures that the organisation is always on a competitive edge (Wild, Wild and Han, 2008:230). The rate of turnover should be reduced for a smooth running of the organisation. Low turn-over rate leads to the stability of the organisation (Higgins, 2013:30). This reduces the emergent strategy development requirements because it comes with various unexpected challenges in terms of staffing which might destabilise economic development. A competent organisation will form a basis for this since the need for on-job trainings will reduce as most of the workers will have be having adequate skills to handles the given tasks leading to a positive impact on economic conditions of the organisation. At the organisation level, there should be a clearly outlined plan of strategies which ensures that there is no misinterpretation while executing the contents. The intended strategy has to be comprehensive and be able to address strategic goals and methods of solving challenges. Involving debates and discussions while addressing emerging issues should be considered. This ensures brainstorming of ideas and is also a fast way of making an effective decision later. The approach enables the problem to be viewed in various dimensions and can also trigger another emerging problem hence the process is interactive in one way or another (Grünig, Kühn and Kühn, 2005). In conclusion, managers are promoting strategy development in organisations and are aware of the recent trends where as a result of some factors; there are cases of strategy drifts. They are using intended and emergent strategy development to avert the trend. References Frame, J. (2003) Managing risk in organisations, San Francisco, Jossey-Bass. Grünig, R., Kühn, R. & Kühn, R. (2005) Process-based strategic planning, Berlin, Springer. Higgins, K. (2013) Financial whirlpools, Kidlington, Oxford, UK, Academic Press. Mingail, H. (2012) The extraordinary power of project relationships, Cork, BookBaby. Wild, J., Wild, K. & Han, J. (2008) International business, Upper Saddle River, N.J., Pearson Prentice Hall. Read More