The Elements of Strategic Management - Term Paper Example

Uses of Strategy Submitted by: XXXXXXXX Number: XXXXXXXX of XXXXXXXXX XXXXXXXXX XXXXXXX XXXXXXX Date of Submission: XX – XX – 2010 Number of Words: 2068 (Excluding Bibliography) Introduction: Every organization is faced with a number of different decisions that it is required to make to enhance their business. It is a known fact that behind every successful business there is a strong and well planned strategy (Mintzberg, et.al, 2002). Strategy plays a very essential role in every business and is the in some terms the backbone for the businesses. There have been a number of different views and explanations of strategies by different authors. As said by Markides (1999), “There is surprisingly little agreement on what strategy really is”. Strategy has been defined as, “the direction and scope of an organization over the long term, which achieved advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations” (Johnson, Scholes, & Whittington, 2006, p. 9). Strategies exist in various levels within organizations and the uses of strategy are many. This paper aims at identifying and accessing the various uses of strategy. Here firstly, a brief overview of the elements of strategic management will be discussed followed by a detailed explanation of the strategy in different contexts. Elements of Strategic Management: According to Johnson et.al, (2006), there are six major elements that strategic decisions are made out off. It is essential to understand that strategic decisions are normally long term directions of organizations, which include the scope of the organization. Also this includes to a great extent gaining advantage over the competitors and addresses the changes that happen within the business environment (Brauer & Schmidt, 2006). Strategies that are developed, try to develop the resources and try to improve the capabilities of the people within the organization (Johnson, Scholes, & Whittington, 2006). These strategies are also expected to be based on the values and expectations of the stakeholder. The elements of strategic management are interlinked and tend to provide a mode of informing each other. It is important to note that for any strategy, the six elements are divided into three main groups, i.e. the position, choices and the strategy in action. The strategic position tends to cover the three main areas, i.e. the environment, capability and also the expectations and purpose. Here the main focus is on the impact of the strategy on the external environment. The strategic choice on the other hand focuses on the underlying bases of the future strategy. Here strategy is used at several different levels, like business level, corporate level, and also the development, directions and methods (Johnson, Scholes, & Whittington, 2006). The final element is the actual translation of strategy into action. Here there main aim is to identify whether or not the strategies are working in practice. Having gained a brief understanding of the elements of strategy, it is now important to discuss the various uses of strategy. The following section details the various uses of strategy and provides a clear understanding of how strategy can be behaves different in different contexts (Mintzberg, Lampel, Quinn, & Ghoshal, 2002). Uses of Strategy: According to Andrews, “Corporate strategy is the pattern [italics added] of decisions in a company that determines and reveals its objectives, purposes, or goals, produces the principal policies and plans for achieving those goals, and defines the range of business the company is to pursue, the kind of economic and human organization it is or intends to be, and the nature of the economic and non-economic contribution it intends to make to its shareholders, employees, customers, and communities” (Andrews, 1980, p 18-19). According to Henry Mintzberg, strategy can be used by people in a number of different ways of which he has discussed the essential ones to be, a) strategy is a plan of how to get from a here to there, b) it can be considered to be the actions over time, c) it refers to the position, i.e. how products and services can move to particular markets, and d) it is a perspective, i.e. it refers to a vision, mission or direction that the company undertakes (Johnson, Scholes, & Whittington, 2006). He has developed a number of different arguments which imply that strategy is something that would grow over time and normally accommodates reality. Mintzberg has used a realistic approach towards defining strategy. He has supported earlier literature that has been developed by others in relation to strategy (Mintzberg, Lampel, Quinn, & Ghoshal, 2002). One of the authors he has majorly supported is Kenneth Andrews. In short, Mintzberg’s definition of strategy is more realized and is an emergent strategy. According to Porter, Strategy is about being different, he also said, “It means deliberately choosing a different set of activities to deliver a unique mix of value" (Porter, 1996). Strategy is a combination of four major things, i.e. perspective, position, plan and pattern (Mintzberg, et.al, 2002). The strategy normally in simple terms can be described as the as a web of thoughts, insights, and ideas, experiences, and goals. It also includes to a great extent the memories, perceptions, expectations and also provides for specific actions of particular ends. It can also be described as the course that has been imagined for the company (Nickols, 2004). Every strategy has a purpose and the end is always taken into consideration and the outcome is also required to be well decided well before hand (Johnson, Scholes, & Whittington, 2006). Strategy is more like a framework that which provides for the actions that need to be taken and also shaped based on the actions that are taken (Mintzberg, Lampel, Quinn, & Ghoshal, 2002). A clear end result that is required allows for formulating better and clearer strategies and helps reach unto the ends that are being aimed at. Without a clear view of the end results, strategies tend to be less effective and will not serve the purpose for the organisation as a whole (Mintzberg, et.al, 2002). The use of strategy is varied. Different business levels use strategies differently. For instance, strategy in the context of small businesses is very different from that used by a multinational corporation, or also the strategy used by a public sector is very different from that used by a private sector. The use of strategies is clearly affected by four main aspects. These tend to have a major impact on the strategies in most organizations if not all (Porter M. E., 1996). These include the internationalization which can have an impact on the size as well as the competitors of an organization. This also gives rise to the various differences in terms of the different cultures and different approaches. The next important factor that influences the strategies is the information and communication technologies (Brauer & Schmidt, 2006). With the fast changing information and communication technologies, there have been a number of changes in how the managers develop their strategies and the business environment as a whole (Brauer & Schmidt, 2006). Also, the changing purpose of most business as well as the changes in terms of the focus of the businesses, it is evident that these also have a major role to play in the overall changes in the strategy as well. Finally the last aspect that also has a major impact on the overall strategy is the knowledge and learning. Here this has a major impact on the strategies as knowledge and learning now allows for more innovations and also permits a chance for interaction and integration. Also, all these four aspects together form the base of any strategy and together these help in developing a clear and well rounded strategy. There are a number of different thoughts that have been laid down this clearly shows why there is a question of what a strategy really is. There is uncertainty if strategy is a plan, or whether it’s a route to obtain ends, or positions. Based on the various definitions that have been developed over the past, it is clear that the need for a clear plan and a clear set of ideas is very essential for the companies and for the authorities responsible. A comment from Lionel Urwicks classic Harvard Business Review article regarding the span of control is applicable here: “There is nothing which rots morale more quickly and more completely than . . . the feeling that those in authority do not know their own minds” (Urwick, 1956). Without a clear and widespread understanding of the ends, no levels of strategic planning will help the company. According to George Steiner, strategy has become a part of the management literature as a mode to compare and counter the competitor’s actual or possible moves. He also highlights in his works that there is very little people who agree to the meaning of strategy in the real business world (Porter M. E., 1979). George Steiner explains that strategy is an important aspect for every organization, and is a basic directional decision which helps in development of the purpose and mission of the organization. Strategy also answers the question of what organization need to do and help in identifying what end organizations seek. Strategy to a great extent helps in identifying how the missions need to be achieved. Based on the above discussion and after a study of the various definitions of strategy, it is clear that this is a concept that has been borrowed from the military and there is very little that is required for the businesses to adapt too. Strategy can be considered to be a means of attaining the end results. The specifications of the end are more likely to be stated based on the conditions and the circumstances and this however can be known only once the ends are obtained. Strategies are more of a route that is required to be attained rather than what the final aims are, nor for how to obtain the ends (Mintzberg, et.al, 2002). The usefulness of strategy can clearly be identified by the strategy lens, which provides three different ways of looking at issues and identifying ways to resolve them. The use of strategy in simple words is based on these three views. Firstly, as a design, the strategies are developed in a logical process and here the aim is for an analytic and evaluative manner to plan for the direction (Porter M. E., 1996). Here in most cases the top management is responsible to lead the development of strategy within the organizations. Secondly, as an experience, this form allows the strategy to be based on adaption of the past strategies. Also, here these allow the strategy to be developed in a more rational, analytical and responsible manner through bargaining and negotiations. Finally in terms of the strategy as an idea, the lens provides a chance to provide diversity and variety and help in developing ideas where the companies can face the challenges and become stronger and more effective by drawing on the evolutionary and complexity theories. As such, this is an effective method to provide how innovation can take place. Conclusions: It can be said that strategy is an adaptive view and is an evolving view. Based on this study, it is difficult in to provide for a clear definition of strategy. But it can be said very confidently that strategy is a very broad subject hence the definition of it is unambiguous. As Markides, has mentioned, there is very little agreement on what the topic really is and this has been proved from the various suggestions that have been provided by the various authors (Johnson, Scholes, & Whittington, 2006). It is hence clear that strategy is very flexible and can be used for several different reasons. It is important to note here that strategy being an ever evolving subject, can be put to various different uses and can be beneficial in many ways (Andrew, 1980). This study has simply allowed us to gain a clearer view on how it has been difficult to put a clear definition for the subject and how flexible this actually is. Hence with the lack of a clear definition of the term strategy and with the fact that the several different authors have provided different views, it is clear that the uses of strategy also vary to a great extent and cannot be narrowed down completely (Mintzberg, Lampel, Quinn, & Ghoshal, 2002). However the elements of strategy, the strategic lens and also the factors that impact it tend to be the major factors that influence the use of strategy. Bibliography Andrew, K. (1980). The concept of Corporate Strategy. Dow – Jones Irwin. Brauer, M., & Schmidt, S. L. (2006). Exploring Strategy Implementation Consistency Over Time: The Moderating Effects of Industry Velocity and Firm Performance. Journal of Management & Governance , 205. Johnson, G., Scholes, K., & Whittington, R. (2006). Exploring Corporate Strategy. Essex: Prentice Hall. Mintzberg, H., Lampel, J., Quinn, J. B., & Ghoshal, S. (2002). The Strategy Process: Concepts, Contexts and Cases. Financial Times Management: Prentice Hall. Porter, M. E. (1979). How competitive forces shape strategy. Harvard Business Review , 137-145. Porter, M. E. (1996). What is Strategy? Harvard Business Review . Urwick, L. (1956). The Span of Control. Harvard Business Review. Read More