Hustle as Strategy - Essay Example

Critique: Bhide, A. (1986), Hustle as Strategy Any organization, irrespective of its size, structure and area of operation has certain objectives which form the basis of its very existence. Rest of the processes involve ongoing operations which aim to fulfil the desired objectives primarily with endeavours which lead it towards a profitable direction. Strategy is a term which has political, managerial, social as well as economic angles associated with it and is a brainchild of any organization’s founder and those responsible for keeping it afloat in a competitive environment. Strategy involves the efforts of top managers to guide the various parts and functions of a firm so that the whole company moves in a coordinated fashion toward agreed-upon goals (Gilbert, 1993). Strategies in which a company rewrites the rules of an industry from the ground up in a manner that the company gets uniquely positioned to play by the new rules are really decisive contests of the business world and promise to bring their winners the greatest rewards, although they can also entail higher risks (Coyne, 2000). For the establishment and maintenance of a distinctive strategic position in the market Porter (2001), believes that the company needs to follow six fundamental principles. At the outset it must identify its goal with a superior long-term return on investment. Real economic value can be generated only if strategy is established with a firm background of sustainable profitability. Customers should be willing to pay for a product in excess of its cost of production in order for this to happen. Poor strategies result when goals are defined in terms of volume or market share leadership, or they are framed in response to perceived desires of investors. An appropriate strategy delivers a set of benefits to the customers, which are significantly different from those of competitors through its unique character. The company either performs different activities than rivals or performs similar activities in different ways in order to attain a competitive advantage. The company must be prepared for changes in its product features in the process of its operations in order to stabilize its operations from time to time in tune with the customers changing requirements. All operations within a company should be mutually reinforcing and all elements should fit together in a cohesive manner which adds to the competitive advantage. The strategic direction should thus be aimed at an ever continuing improvement in the companys operations. Strategy has also been envisioned to be a journey for the achievement of an organization’s goals through tactical deployment of policies en-route to the destined goals or objectives (Adcroft & Willis, 2008). It can be prescriptive or emergent depending upon the character of the organization and the area of its operations. Internal organizational structure, assets and how the external market forces and changing scenarios affect them contribute to the overall strategic decisions. Bhide (1986) has attempted to espouse the usefulness of hustling as a strategy, or short term measures for challenges as they crop up and handled according to merit instantaneously, especially for small as well as large financial service industries. Bhide believes that as against defined strategic goals which are parts of conglomerates such as manufacturing industries and marketing organizations, financial service industries’ need to have open ended strategic plans which should be subject to modification at short notice in order to stay alive in the competitive and fluid environment of the ever fluctuating local and international financial markets. Bhide’s arguments imply that strategy is more environment’ driven rather than organization driven, though he is careful to cite examples of successful organizations like the American Express which largely had well fore-planned strategies which proved their superiority in the credit sector allowing them to stay and maintain the top position. Bhide suggests that it not necessary that a well planned and executed strategy should be the only factor governing the success of a company as he believes that certain players have done better by just concentrating on the operating details and moving rapidly towards the right direction in face of changed or presented circumstances. Vigour and nimbleness in responding to such changes is the real factor which spells the difference between success and failure (Bhide, 1986). He believes that the right tactics employed at a given point of time and the manner in which they are executed is more important. According to Bhide, predefined strategies have failed to succeed in many large organizational setups in the past such as Coca Cola, Kodak and IBM. All three are world leaders in their respective fields and failed when they tried to overpower respective competitors Pepsi, Polaroid and Apple Computers with big play strategies in one way or the other. Moreover, predefined strategies stand the risk of being copied immediately by the competitors, more so in the present environment where the spread of information technology has left the world transparent and open to scrutiny by appropriately qualified and smart professionals who change allegiance at the drop of a hat in favour of better remuneration. Moreover in financial business ventures, manpower and financial assets are the primary resources to be dealt with unlike manufacturing industries where material goals and sales of actual products are the real targets of strategic planning. Moreover major competitive sustainable advantage is impossible to achieve in the financial services sector as it can be immediately copied by other competing firms, as it happened with the money market mutual funds (Bhide, 1986). Bhide believed that automation and computerization would not be able to affect competitive strategy in the financial sector due to its easy access and adaptability by all competitive entities involved. Establishment of common networks and shared facilities were hypothesized to take away the advantage of information technology as it would be accessible to all and sundry. However, time has proved Bhide wrong as the world has witnessed a revolution in the manner financial transactions take place across the world, which has now become an international business playfield. Banks and financial institutions which honed in to what the IT sector had to offer earlier increased their global presence more rapidly with secure and impregnable networks which allowed them to reap the profits which financial institutions which were slower to react can ever dream of achieving. Bhide’s assumption that execution and opportunism were more important for the ever sophisticated client did hold true but the very modalities have now been associated with the use of automation in all financial transactions which have completely replaced the manner in which business was conducted in the eighties. Institutional customers who need to scrutinize prices and fee before committing to buy can do so now with a few mouse clicks which bring forth the merits and risks involved with a particular investment. Expert opinion and prediction have also been facilitated with increasingly reliable software. Traditional models have collapsed like ninepins in the present worldwide recession and new leaders have emerged from other countries which have surprised the world economists. Client credibility has also become more transparent and a prospective financier has the resources to establish the reliability of investment with assured returns. Bhide’s assumption that financial business is like a game of poker is fast losing ground as strategic investment in the appropriate sectors is now the only option available. Ease of entry, fast action and service intensity are not unique business characteristics limited to new entrepreneurs but a part and parcel of every financial institution in the present environment. Hustling strategies may have seemed appropriate at the juncture this paper was written but they have been obliterated with the brand new economic scenario the world now finds itself in. Only carefully planned and strategically sound investments stand any chance of delivering thoroughly researched and realistic goals. Hustling strategies at best can only be operationalized at the direct human interface where the interlocutors representing the company or the sales team interact with the client, where they can directly observe the emotional and character nuances missed by the inanimate machines brought forth by the developments in information technology. However, that advantage may also disappear as more and more reliable and foolproof software are developed and operationalized. Bhide’s approach as described in his paper is primarily emergent in character, as it suggests that each hand has to be dealt with according to the varying conditions with new strategic tactics. This seems absurd in the present scenario where research and analysis are an omnipresent phenomena yielding rapid guidance for sound investment at every occasion a decision has to be taken. Hustle as a strategy is not always successful. The prime example is the way America has handled its internal security after the emergence of the new wave of terrorism. American presidents in history have always relied on hustle as a strategy during grave threats to the country with solutions that provide quick, spectacular, and inexpensive solutions (Sicherman, 2005). The author believes that this type of short term emergent measures exhibit a hallmark of excessive rhetoric supported by underwhelming force (Sicherman, 2005). This kind of hustle often works brilliantly in recruiting domestic support for a short while but it is always a bluff waiting to be called. When such strategy fails, only then do the responsible people come to grips with the need for a sustained effort (Sicherman, 2005). Appropriate strategic plans can therefore be well planned in advance and executed meticulously to achieve realistic goals assisted by 100% reliable automation for execution. Middleman function, which has been cited by Bhide to be a bottleneck between the separation of transactions done to take speculative position, or trades to accommodate customers, has also disappeared with the availability of modern software which can instantaneously identify the type of investment. Modern strategy therefore can afford to be more deliberate than emergent and has to be more consistent with pluralism rather than profit maximization alone, which though is the primary goal of every organization, cannot be realized by neglecting other aspects. Strategy is definitely organization driven as the character and area of operations of each organization are unique but it has to be aware of the environment at every step as changing scenarios have to be quickly adapted to. The articles strength lies in its timing, as the economic environment at that juncture had brought forth the successes of new entrepreneurs and organizations which employed hustling as their primary mode of operation. They were successful in gaining ground in unexplored territories which the larger financial players missed due to the singularity of their strategic design. However, certain organization did perform well within the regular strategic scenario, as Bhide has admitted by citing the examples of American Express, Merrill Lynch and First Boston (Bhide, 1986). Hustling as a strategy is therefore not recommended in the present environment, though its merits were espoused by the author during the circumstances which existed during the writing of his article, which seemed reasonable at the time. References Adcroft, A. &Willis, R. (2008). "A snapshot of strategy research 2002-2006", Journal of Management History, Vol. 14 (4), Pgs. 313 - 333 Bhide, A. (1986), Hustle as Strategy, Harvard Business Review, Vol. 64 (5), Pgs. 59-65 Coyne, K.P. (2000). Gaining Advantage over Competitors accessed online Nov. 14, 2010 at: http://mkqpreview1.qdweb.net/PDFDownload.aspx?ar=1057 Gilbert, J.T. (1993). "Faster! Newer!" Is Not a Strategy, SAM Advanced Management Journal, Vol. 58 (4), Pgs. 4-8 Porter, M.E. (2001). Strategy and the Internet, Harvard Business Review, Vol. 79 (2), Pgs. 63-78. Sicherman, H. (2005). Cheap Hawks, Cheap Doves, and the Pursuit of Strategy, Orbis, Vol. 49 (4), Pgs. 613-629 Read More