Business Strategy in an Organisation - Term Paper Example

 Business Strategy in an Organisation Abstract This paper looks at the business strategy by analysing the key conditions that are necessary for effective functioning of business strategies and goes further to evaluate the effects that HR practices and issues might pose to the successful formulation and implementation of the business strategies. It has borrowed heavily from the constructive arguments posed by other authors who considered business strategies. Table of Contents Abstract 1 Table of Contents 2 1.0Introduction 3 2.0Necessary conditions for determining a business strategy in an organisation 4 3.0The case for including HR issues within a business strategy 9 4.0Conclusion 11 Works Cited 12 1.0 Introduction There are conditions which are very necessary for effective formulation and implementation of business strategies. These must be carefully considered and put in place so as to ensure that the business strategies do not fail the organization (Della-Piana, Low & Lyman 271-290). Human Resources have also been singled out as a major contributor to a successful business strategy. For that reason, it is important for the HR issues to be considered when formulating and implementing the business strategies since their involvement and subsequent continued support is quite important and should never be ignored whatsoever (Lawler 2-89). All businesses, small, medium or large talk about strategy and strategically positioning in the market to gain competitive advantage. Much as this is done, no agreement abounds on what it means. Strategy comes with the intentions of short term and long term planning for businesses which are aimed at achieving certain goals assumed to be important to the organization. The direction and scope of the strategy is meant to achieve the necessary advantages for the business by the configuration of its resources at disposal so as to fulfil the expectations of stakeholders (Della-Piana, Low & Lyman 271-290). There are different levels of strategy which could be corporate level strategy that is the highest level so far. This is concerned with the setting up of long term direction and scope of a given organization. It is about what the business in question should do, how the allocation of resources will be done and how the various units of business will have to relate; business level strategy is normally concerned with the industrial competitiveness of a given business and pointing out the business’s strategic aims and objectives within the market environment. The establishment of the corporate strategy and relationships between the head office and the various business units that a firm has might spell the limitations or flexibility of the business strategies; and finally the functional level strategies which include those individual functions that relate to operations, marketing, finance among others. They support the business strategy and are concerned with the daily activities of a business. 2.0 Necessary conditions for determining a business strategy in an organisation Understanding the business strategy conditions require availability and consideration of certain issues which must be in place in order to consider a business environment and the competitiveness of a given business within the industry. This has been one of the nightmares that Tesco has had to go through in establishing itself in the market. The following conditions should be well looked into by Tesco: The strategic position of the competitors: the firm needs to look at the strategies that are applied by its competitors so as to establish their position and where such competitors are headed for. The business emphasis of such competitors should be known. Their choice of competitive concepts in the market needs to be established such as if they compete on cost, speed, quality, or simply good service. Another aspect to be considered is the kind of market approach i.e. if they are niche or global players. Another important condition is the capability levels of the business organization. Here, they need to know the kind of thing they carry out better than other players, their weaker points and where they organization thinks it does similar to other players (Della-Piana, Low & Lyman 271-290). The business objectives need to be established so that the business is able to know their primary customers and defining their customer base. The conditions regarding what business they do not do and the policy that binds them not to do the businesses. There also needs to be the business partnering and gains from these partnerships. The best strategy in business should be able to seek survival and prosperity in the competitive business environment for quite a long time. The decision and those actions which a business takes in its operations normally have a very direct impact and what the business is capable to do (Della-Piana, Low & Lyman 271-290). The means by which an organization is able to secure resources endowed to it, deploy these resources to the most beneficial functions and utilize them as intended during the business operations is a great determinant for success and achievement of objectives that had been set. The various objectives for operations performance include cost, which is based upon the ability of the firm to produce at a lower cost; quality that lies in the capacity of the firm to produce in relation to the available specifications without encountering errors; speed at which things are done in relation to the demands set by the customer and thus being able to give short lead times in ordering and receipt of goods; dependability which entails the ability for a firm to deliver the required products and services in relation to those promises made to the clients; and flexibility that lies in the ability of the firm to change operations relating to production volume, time taken for production, change of mix of the products or the services produced and innovate and introduce new products and new services if need be (Della-Piana, Low & Lyman 271-290). The availability of finances to support the business is another condition for effective business strategy. The internal financial strength of a business needs to be known. The amount of revenue that their business competitors generate is of importance and the drivers that ensure they get such revenue. The allocation of resources to the business functions need to be known and the speed at which the business could grow. The capital market strength is also another important condition to be established. The status of constraint of resources held by the business competitors need to be known and how strong their financial backing is in place. They need to compare this perception with the consistency of their internal analyses and see why they are not matching. The performance of the company in the financial markets is also of paramount importance. Reasons for such a performance need not be ignored. The opportunities and constraints that are presented by the financial markets and why these opportunities exist is a major factor to be considered (Della-Piana, Low & Lyman 271-290). Another important aspect is the top management of Tesco. This company is however credited for having one of the best management team in place which is able to make effective decisions. Tesco needs to find out if the management has been able to keep the company ahead of the competitors in the market. You realize Tesco faces stiff competition from Wal-Mart and Carrefour who are its major competitors in the retail store business. The reason for keeping the company at the forefront of competition and why it has not managed to do so should also be set in place. The key players of the company are supposed to be seen to be keen on moving Tesco forward as far as the market is concerned (Della-Piana, Low & Lyman 271-290). Conditions such as centralization of operations of the company or decentralization of these functions are other conditions that are necessary for effective business strategy implementation. Tesco needs to know if the corporate parent is acting as the holding company or if such a firm is in a position to act as the active manager of its business affairs so as to avoid conflict of interest. The leanness of the firm and how it is able to do things as required beyond expectations is of paramount importance. This condition of a company being lean might spell success or doom for a business strategy since without practicing lean approaches to business, a firm gets into risks of huge costs of operation, unproductivity and losses. The level of staffing is another important condition for implementing a business strategy. The company needs to know if it is well staffed or understaffed. Overstaffing means higher costs of operation to Tesco while understaffing may make the firm incapable of carrying out its functions fully hence losing business to competitors (Della-Piana, Low & Lyman 271-290). Management of the satisfaction levels of employees is another necessary aspect of business strategy. Both human and organizational objectives’ achievement is important while doing business and how this affects the business should be the question to address. The emphasis of skills during the recruitment process should be taken seriously. This is because skilled employees are known to yield high levels of productivity based on their performance ratings. One other very necessary condition is the results-orientation of the organizational culture. If the culture of Tesco is based on achieving results for the firm through proper handling of quality and customers, then the possibilities of having a successful business strategy are higher. Bureaucratic practices also need to be done away with in order to remove barriers to efficiency and effectiveness in carrying out business strategies. The culture of flexibility of the organization needs to be well established. The clarification of strategy is another important condition. This is because if the business strategy is well communicated to the leadership team, it is able to make them know what kind of business activities they can carry out, the direction that the business is taking and the criteria for carrying out future strategic decisions regarding the business. It is difficult for the teams to get focused, relate well with others, and effectively organize their efforts so as to get competitive advantage required in the market, if these business strategies are not well communicated to them. Hence communication and clarification on such issues is very important. The viability and robustness of the business’s market and finance is necessary in helping Tesco team of leadership test the business strategy and its ideas against those of the future world so as to establish if or not these business strategies can be realized, achieved and even sustained in the long term. By doing this, the management team is able to foresee the future creations of competitive advantage and the key measures to be put in place so as to be able to monitor such changes in the conditions for doing business (Della-Piana, Low & Lyman 271-290). Conditions regarding the business processes at Tesco are of paramount necessity when it comes to business strategy. The flow within Tesco is very important and this entails the product design, manufacturing or products and delivering these finished products to the customers. There needs to be done a good process analysis so as to see what could be done and improved. The design of the organization and its resourcing is another important element in establishing the business strategy. This should be concerned with the evaluation of the issues that align Tesco to the business environment. The other strategies at different levels are also looked into. Establishing the relevant skills that are to be input in the process of implementing the business strategy is also of great necessity. The organization structure needs to be in place and functioning effectively since structures that are not aligned to the business strategy are known to cause conflicts of interest and render the achievement of the goals very impossible. The management team should therefore come up with measures that are able to align the systems within the business so as to achieve the improvement on the effectiveness or efficiency of the set strategy (Della-Piana, Low & Lyman 271-290). Businesses such as Tesco are normally concerned with prosperity and productivity into long term periods. It is of importance to the firm to come up with a business strategy that will effectively address its requirements and put it forward in the market environment by guaranteeing competitive advantages. The conditions that allow a better business strategy to be made and implemented are not things to ignore and if neglected, they could lead to huge negative consequences which the business might not be able to pull itself out of them. 3.0 The case for including HR issues within a business strategy The Human Resources department is able to establish the necessary policies, rules and the relevant systems which are geared towards the creation of internal equity within an organization. The approach given by HR to the management issues is able to achieve functional orientation where the basics of functions are put in place. Cohesion of employees to work towards an important common goal is also another importance of the human resources section of a business. The HR also has the capacity to handle government regulations that affect the work environment and labour relations for proper functioning of the firm. It is therefore important that the HR issues be incorporated within the business strategy so that fragmentation is avoided. Besides, a good implementation of a business strategy calls upon the formulators to consider an all-inclusive system biased approach where the organization is looked at as a whole (Lawler 2-89). It is normally hard to bring up formal considerations for the HR as factors for the planning process of the business. It is however important that they take an active role in the formulation process of business strategies since they play an important role in their realization. For instance, the provision of personnel with high levels of skills and knowledge that could be of great importance towards achievement of business strategic goals can be done by the HR. if the HR fails to put necessary personnel in place through a strategic guideline during the recruitment process, then the firm will fail in trying to implement its strategies since business strategies cannot work without people and the human element cannot be avoided (Lawler 2-89). HR contributions could range from the building of capabilities related to performance management by developing reliable and strong management and leadership teams. The HR is able to link the various competencies of these personnel to the job requirements and help develop their careers for effective and successful planning of the business strategies. While implementing the business strategy, there needs to be an enhancement of the changes in the organizational capacity and building of the necessary human resources networks within and without the organization so that the business can strategically position its human capital into the realization of its strategic business goals (Lawler 2-89). During the initial stages of the business planning process for business strategies, the HR could input effective suggestions which might be considered in the process. HR issues cannot also be avoided during the business strategy implementation because the line managers within an organization are meant to own HR as is outlined in their roles. HR is always part and parcel of the integral membership of the management teams. In this regard, the HR cultural aspects of the firm end up evolving in order to fit within the business strategy (Lawler 2-89). The flexibility required around the work environment is effectively implemented by the HR and their programs, projects and relevant outsourcing aspects cannot be ignored within any business strategy. The capacity of HR to leverage the necessary competencies and manage those linkages related to learning, while building redesigns that work within the established capabilities of a firm like Tesco is of great importance and cannot be ignored (Lawler 2-89). HR gives self-service that ensures transactional work within the firm is carried out without a hitch. The necessary knowledge that is needed in the continued implementation and redesign of the business strategy is maintained by the HR. The focus that is required whenever organizational changes do occur relies heavily on the HR. In cases where the HR choose to change the management team through recruitments and firing, the business strategy might be affected negatively or positively depending on how effective and prudent the HR carries out such an activity. It thus goes without say that the HR is fully tied to the business strategies that a firm such as Tesco undertakes (Della-Piana, Low & Lyman 271-290). 4.0 Conclusion Business strategies are important concepts if well applied within a business environment and could spell success or doom for a business if they are not handled well. There are some conditions that should exist for a successful implementation of business level strategy within an organization. Business strategies are very important to any organization because they could spell success or failure for the business. An organization that could establish the necessary key conditions related to business strategy is in a better position to compete effectively in the market and beat its competitors. Such conditions have been looked into and applied by various firms like Tesco to their business strategies’ formulation and implementation (Della-Piana, Low & Lyman 271-290). The human resources department plays a major role in the planning process of the business strategies and subsequent implementation since HR is seated at the core of success of a business strategy. This is because implementation needs collective approach and good will of the human capital towards such a direction and scope taken by the formulation of a business strategy. Good business management requires an all-inclusive approach to strategy formulation and implementation and therefore, HR issues and other departments’ issues should be included in the system. Works Cited Della-Piana V, Low M &Lyman K, the Business Strategy Audit, Axminster: Cambridge Strategy Publications. (2005): 271-290 Lawler Edward, Linking Business Strategy and Human Resources Management, Centre for Effective Organizations, Marshall School of Business, University of Southern California, (2001): 2-89 Read More