The Notion of Strategy - Essay Example

? Future Management Table of Contents Table of Contents 2 Introduction 3 Critical Evaluation of Management Response 6 Appropriate Management System 11 Conclusion 12 Reference List 14 Introduction A business is an entity comprised of all the activities aimed at generating profit by providing the necessary goods and services to the customers. A business is often dubbed as an economic pulse of the nation that strives to increase the standard of living in a society. A business is also responsible for the distribution of products and services to the customers or members belonging to the society (Harigopal, 2006). The sole intention of a business is to satisfy the needs of the customers and generate profit for itself. However, one can question the apparent theoretical simplicity of the process. The answer is obvious ‘no’ in terms of simplicity because the simple process of providing goods and services to the customers for generating revenue passes through various complex stages to achieve the goals and fulfil its objectives. There are several business risks, but simultaneously, there are opportunities as well. Hence, to mitigate the risks and capitalize on the opportunities, a company need to have predefined strategies or plans (Gibson and Barsade, 2003). The notion of strategy has been borrowed from the military and adapted for the use in business. In business, as in the military activities, a strategy bridges the gap between objectives of the company and tactics. Hence, it can be stated that tactics and strategy together, closes the gap between the objectives of the firm and the means of achieving it. However, the question which arises in this context is: why does a business require a strategy to operate in the market place? There are several reasons, but one of them is the changing dynamics of the marketplace. The changes in market place occur due to shifts in the external business environment such as, consumer trends, political landscape, new government regulation or a technological change. According to eminent scholars and practitioners, the business environment is always dynamic in nature and undergoes radical shifts with time (Iivari, 2005). With the great global redistribution of social and economic power, it is expected to continue over the next few decades. Moreover, due to the changes in other business factors such as, the environmental factors, political factors, economical factors, legal factors, social factors and technological factors, companies are compelled to bring changes into their system of operation in order to comply with the external environment (Janicijevic, 2012). Despite several attempts to manage the business environment by devising strategies, the attempts have been futile and it also practically seems impossible for a company to manage the business environment (Jones, 2004). This is because a certain amount of change in one of the factors leads to a drastic amount of change in other factors, due to high interconnectivity. Figure 1 (Source: Newagepublishers, 2010) According to eminent scholars such as Schawalby (2005), companies will face a hard time in the future because of the involved uncertainties. The author had also mentioned that due to the increasing intensity of competition within the industries, a company is bound to face complexities. However, the level of complexities faced by the companies will depend upon their ability to adjust themselves in the changing marketplace. An organization has to deal with changes on a daily basis as people usually do with their lives. Change is therefore regarded as inherent in the contemporary organizations and its management is not only critical, but also at the crux of organizational development (OD). A business always has two sets of objectives namely, short term objective and long term objective. The short term objectives generally deal with the achievement of short term goals. When it comes to the formulation and achievement of long term goals, the dependence on the external environment is more. As a result of that, the future looks unstable and uncertain. This report seeks to investigate about the extent to which a rational-technical management response is appropriate to the 21st century. The changes in the government policies sometime act as a major driver for organizational change. Apart from that, one of the major causes that lead to radical changes in the business environment is the development of technology. The advancement in technology is forcing companies to adopt new systems of business operation. For example, a few years back, companies such as, Samsung and Apple, used to market their products either through physical distribution or through company owned stores, but with technological advancement, these companies nowadays markets their products through the online stores as well. The changing needs of consumers are also a key factor that leads to the unpredicted future business scenario. Reports have suggested that due to the multifaceted characteristics of the business environment, envisaging the future is a difficult task. In addition, the business environment is also characterized by complexity, dynamism and reaching impact. Figure 2 – Characteristics of Business Environment (Source: Newagepublishers, 2010) Although, it is literally impossible to envision the future state of the business environment, but as per the trend and history, it is obvious that the current scenario will not be similar after a few years due to the shifts in patterns and nature. Therefore, on the basis of the analysis, it can be stated that the future is unstable due to high business turbulence. Therefore, companies need to frame in strategies for mitigating the risks of future and simultaneously, can capitalize on the opportunities of the market. In the next section of the study, a critical evaluation of the possible management response to the future of business environment will be drafted. In order to accomplish the same, the study will seek assistance from scholarly journals, articles, books as well as newspapers. Critical Evaluation of Management Response The above section has pinpointed to the fact that in future, the business scenario will continue to be as it is, that is, unpredictable and uncertain. Hence, in such situation, it will be wise of the companies to devise techniques that suits and fits with the situation. However, before recommending or determining the best course of action for a company, it is important to evaluate the possible future scenario through the analysis of the characteristics of the business environment. The characteristics of the business environment are discussed below: Environment is Complex: - A business environment usually consists of several factors and event conditions. These factors and events bring an entirely new set of power that directly interacts with the each other. As a result of that, it becomes difficult for the functional managers to grasp the complexity and rigidity (O'Neill, 2010). Environment is Dynamic: - The internal environment as well as the external environment of the organization continuously changes. Some of the changes are natural, whereas some are intentional. This is because of the fact that internal change becomes essential when an external factor changes. Both micro and macro environment has profound impacts on the business. Moreover, due to the flexible nature of the environment, companies are facing additional complexities to formulate the business strategies (Ragsdell, 2000). Environment is Multi–faceted: - The strategic observers have the ability to scrutinize and detect the changes in an environment with time. Ironically, the changes always do not bring difficulties for the company. At times, it also brings various opportunities for the firm. Hence, this fact makes it evident that a company needs to maintain a balance between the defensive and offensive activities in order to address both the aspects. Environment has a far reaching impact: - Several studies have also proved that environment encompasses far reaching impact. The impact on the environment acts as one of the factors to study the possible changes in the environment. Despite the determination of the impacts, the strategists fail to take appropriate stance at the right time and the right place. Moreover, as per the views of the industry experts and scholars, the growth, survival and development of the organization along with its profitability, greatly depends upon the macro and micro environmental factors (Suran, 2002). Therefore, from the above analysis, it is evident that devising a strategy for the future is a difficult task due to the unpredictable nature of business. However, some points can be considered by the company by which risk can be mitigated and also, which can be beneficial for the firms. The possible tactics are detailed below: - Continuous Research and Development Activities: - The research and developmental activities are a group of activities that takes place within the business. The activities which are dubbed as the research and development activities differ from one company to the other, but similar models are mostly followed. In one of the models, the primary function is to develop and modify one of the existing products or service. On the other hand, the second model refers to the discovery and creation of new knowledge and innovation for the sole purpose of enabling and uncovering innovative and valuable products, services and processes. Under both the models, the research and development activities share significant amount of differences (Schein, 2010). Therefore, a company which undertakes either of research and development activities would get tremendous benefits out of it. The demands and taste of consumers' changes over a period of time and they always look for the products which are innovative and trendy. As a result of which it is obvious that continuous research and development work is necessary to sustain and manage the future business environment. To support this statement, eminent scholars have advocated that R&D acts as a core activity of the modern day business and major decisions are made on the basis of its outcome. Moreover, it is also a way to mitigate future risks and gain an edge over the competitors (Taylor and Cooper, 2007). Regular Customer Survey: - As mentioned several times in the report, the needs and wants of the consumers are changing at a rapid pace and to sustain in the market place, a company needs to track the changes which takes place in the market. Moreover, several scholars have stated that consumer survey is a means of achieving customer satisfaction. Some of the additional benefits of customer survey, apart from identifying a trend of their taste and demand shifting patterns, are achievement of customer loyalty, fostering of effective communication and determination of the strategies to cope up with their expectations. However, when it comes to envisage the future, regular customer survey is one of the critical processes. This gives a company the opportunity to identify the trend and thus, to build up a strategy on that basis. Identification of the needs of the Stakeholder: - Each of the stakeholder groups must get equal importance from the company. This is principally because of the fact that biasness with a particular group can lead to adverse consequences. Therefore, it is an important task of the company to identify the needs of the consumers. Although, identification of these needs will not directly assist the company to determine the future business scenario, it will lead to a definite state where the company can identify the requirements. Furthermore, involving stakeholders in the change management process will certainly help the company to manage the process smoothly. Therefore, companies are strongly recommended to manage and identify the need of stakeholders in order to manage and ensure a better future (Haveman, Russo and Meyer, 2001). Complying with the social responsibility in order to meet the environmental requirements of future: - Numerous business houses and entrepreneurs deem corporate social responsibility as ‘something nice’ or ‘good for image’ sort of activity and do not associate with the earnings and growth of the company. However, studies have shown that a socially responsible image of the company in the minds of the consumers simultaneously, provides the company with a good reputation. In the context of envisioning the future and managing the future business environment, social responsibility of a company will be important. Consumers nowadays are more aware of environmental preservation and as a result of that, they prefer companies which are socially responsible and perform certain activities for the betterment of the society and environment. It is expected that this awareness will rise further in the future and may develop a situation where consumers may even adjudge CSR activities as a criteria for purchase decision (Worksystemscanada, 2009). The government of different countries has imposed rules and regulations pertaining to the activities of the CSR. Hence, it is strongly recommended to the companies that they should focus more on the development of CSR activities in the future and also, notify the same to the stakeholders. Legal Knowledge: - With the increasing turbulence in the business environment and rising deceptive activities in an organization, governments of the different countries are imposing rules to bring transparency in organizational operations. Such kind of activities will increase in the days to come and hence, it is obvious that knowledge over the legal aspects of the business process will offer companies with an added advantage. Technological Up gradation: - With the rapid development of technology, companies around the world are switching to automated activities. Technology has always played a key role in the business world and is expected to play the same kind of role over the next decades. This is because technology is the only factor through which a company can develop new products or services, bring innovation into the system and can explore new ways of service delivery. Over the years, business houses have been dependent on technology to such an extent that without technology, all the operations will come to a grinding halt. As a result of this, the use of technology in business operations will continue to increase. Therefore, companies lagging behind in this aspect will surely fail to cope up with the environmental requirements, thereby experiencing high customer switching and loss of revenue. It is strongly recommended to the companies that they must continue their developmental activities pertaining to technology (Conner, 2011). The aforementioned areas are the areas of concern which must be given prime importance in order to manage the future of business environment efficiently. Appropriate Management System On the basis of the analysis, it is evident that there is no common or predefined management system with which a company can manage the future. However, there are tactics or strategies by which a company can mitigate the future risks or can pave its way towards ensuring a smoother business flow. The most appropriate management style for the company towards ensuring proper management of the business environment in the future is the implementation or pursuing the strategies mentioned above. For example, a company is strongly recommended to undertake a regular customer survey in order to identify a trend and develop strategies accordingly. Furthermore, investment in the research and development process will also help the company to mitigate several risks of the future and will also assist the company to move at par with the trend. Management is another aspect which needs strict attention. The level and type of management play a critical role in the management of future endeavours. There are usually two management styles being pursued by the managers, which are either rational management or non-rational management style. The concept of the rational decision model was actually proposed by Simmons. This approach encompasses multiple steps. Generally, the process begins with setting a goal and on the basis of decision criteria, formulates a set of alternative course of action and finally, makes a decision. Hence, the approach is more realistic and the strategy depends upon the problem (Boundles, 2013). On the contrary, the non rational perspective of decision making is greatly dependent upon pre-assumptions. For example, in the context of future endeavours, a number of factors need to be assumed, but in reality, the assumptions may not hold true. Hence, it is strongly recommended that companies must use rational management system and take assistance in technology in order to achieve greater control and efficiency. Figure 3 – Rational Decision Making Flowchart (Source: Boundles, 2013) Conclusion The study was meant for the analysis of the future business scenario and to do so, a comparative analysis of the present and future state has been done. The analysis of the study has clearly made it evident that it is impossible to predict the future state of the business environment due to the rapid changes in the business environment. The study has also made it evident that the future is absolutely uncertain, but on the basis of the trends, a picture can be easily drawn or rather the future can be predicted to a certain extent. It is also true that the scenario of the business will not remain constant and will obviously undergo certain changes over a period of time. As a result of that, it is vital for the company to devise a strategy that will help it to adjust to the changing business environment. The strategies recommended to the firm are continuous research and development activities, regular customer survey, identification of the needs of the stakeholder, complying with the social responsibility in order to meet the environmental requirements of the future, legal knowledge and technological up gradation. With the application of the aforementioned strategies, the risks of future can be mitigated to a great extent. At the same time, this will also ensure that the company has enough openings to capitalize on the opportunities provided by the market. Now, regarding the question: to what extent is a rational-technical management response appropriate to the 21st century? It can be said that to a large extent, rational-technical management response is appropriate for the business house. Although, exact prediction of the future and its management is not possible with rational technical management, yet it is one of the best methods by which a company can maintain greater efficiency in the future. Reference List Boundles, 2013. Rational decision making model. [online] Available at: [Accessed 22 November 2013]. Conner, D., 2011. What Role Does Culture Play During Change? [online] Available at: [Accessed 22 November 2013]. Gibson, D. E. and Barsade, S. G., 2003. Managing Organizational Culture Change: The Case of Long-Term Care. Journal of Social Work in Long-Term Care, 2 (1/2), pp. 11-34. Harigopal, K., 2006. Management of Organizational Change: Leveraging Transformation. 2nd ed. California: SAGE. Haveman, H. A., Russo, M. V. and Meyer, A. D. 2001. Organizational environments in flux: the impact for regulatory punctuations on organizational domains, CEO succession, and performance. Organization Science, 12, 253-273. Iivari, N., 2005. The Role of Organizational Culture in Organizational Change - Identifying a Realistic Position for Prospective IS Research. ECIS 2005 Proceedings. Paper 46. Janicijevic, N., 2012. The influence of organizational culture on organizational preferences towards the choice of organizational change strategy. Economic Annals, LVII (193), pp. 25-51. Jones, G. R., 2004. Organization Theory, Design, and Change. New York: Addison-Wesley Publishing Company. Newagepublishers, 2010. Business Environment. [pdf] n.p. Available at: [Accessed 22 November 2013]. O'Neill, M. J., 2010. Measuring Workplace Performance. 2nd ed. Florida: CRC Press. Ragsdell, G., 2000. Engineering a paradigm shift? A holistic approach to organisational change management. Journal of Organizational Change Management, 13 (2), pp. 104-120. 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