The Concept of Good and Bad Strategy - Assignment Example

Introduction According to Rumelt, good strategy almost looks modest and easy to understand and does not take a thick deck of Power point slides to explain. Similarly, the good strategy does not pop out of strategic management tool, matrix, chart, triangle or fill – in- the blank scheme. Instead a talented identifies the one or two critical issues in the situation- pivot points that can multiply the effectiveness of effort and then pays more attention on action and resources on them (Rumelt, 2012). Consequently, strategic management has been argued as a continuous process that is meant to evaluate and control businesses and its associates. In fact, through strategic management, businesses are capable of assessing their competitors in the market, setting attainable goals and strategies in order to meet their market demands and stay ahead of all the existing and potential competitors. Of importance to note is that in most occasions, strategic management is dependent of the size of an organization and its overall operations. Thus, scholars such as Rao, et al. (2008) argue that strategic framework ought to address fundamental issues that directly affect the development of an organization. The Concept of Good and Bad strategy Good Strategy Apparently, a good strategy has been described as one concept that is modest and easy to understand. In other words, Rumelt (2012) refers it to the strength that is mostly applied to any opportunities that present themselves in organizations. As such, any strategizing opportunity must comprise of ascertaining crucial issues that are present in the market and the organization in general. Moreover, these crucial points must be keenly focused to come up with results that are action oriented. In this regard, any good business strategy must have a specific action that aims at giving an ultimate solution based on a defined challenge. Of importance to note is that a good strategy is comprised of numerous analyses, and strong development of thoughts and implemented policies that reduce obstacles for the sole purpose of ensuring that the organization moves ahead in terms of maximizing its profit. In light of this, a good strategy is mainly focused on problem solving activity that handles basic issues and not specific ones through the use of intelligent individuals to achieve new and better heights. Contrary to numerous assumptions, a good strategy does not necessary deal with ambitious goals, vision, innovation, leadership or determination (Cunningham & Harney, 2012). Many business leaders have argued that strategy is more of an unrealistic exercise with meaningless slogans that do not have any impact on organizations. Instead, Dawson & Andriopoulos (2014) argue that, a higher number of organizations do not have a good strategy as such, but they tend to compile a list of numerous goals which they wish to achieve. Thus, scholars have ascertained that good strategy is present where there is application of strength as opposed to weaknesses. Bad Strategy Conversely, a bad strategy goes beyond the essence of been the opposite of a good strategy. Basically, a bad strategy mostly emanates from issues pertaining to misconceptions of a specific manner and dysfunctions in leadership. As a matter of fact, scholars have identified four characteristics that demonstrate bad strategy in organizations. The first characteristic is fluff: which are defined as slogans with empty meanings that are used by organizations in place of other important issues. In most cases, these fluff say nothing much of impact to the external world such as potential customers (Stelzner, 2011). The second characteristic is the failure to face challenge. This mostly happens when an organization is not capable of isolating and identifying the main challenge in the organization. For instance, most international organization focus more on revamping their organizations through more advertisement and other externally factors and ignore the internal factors such as poor employee relations, which posse as more challenging as compared to other factors (Dietmeyer, 2004). In addition, a bad strategy is also influenced by the concept of “mistaking goals for strategy”. Apparently, most organizations have continuously dealt with goals with the notion that they are strategies. However, it is worth noting that goal only remain as a list of wishes if concerned parties do not take the necessary actions of pairing them with tangible actions. The fourth characteristic revolves around “bad strategic objectives”. As such, leaders in organizations must be capable of creating, strategic objectives that are high but at the same time attainable. In most cases, bad strategies come from executive who tend to ignore most of the challenges that face their organizations. According to Betz (2011), a bad strategy is much easier to present itself in organizations as compared to good strategy because it does not incorporate critical analysis, logical thinking and focus action that are the main requirement of a good strategy. However, Porter philosophy on strategy emphasize on the concept of being different or unique in handling competition in businesses. Basically, he argues that strategy revolves around a competitive position where a business aims at differentiating itself in the eyes of potential customers by adding value to its product or services as compared to its potential competitors. Thus, Porters strategy incorporates plan and position (Porter, 2008). Another school of strategy is based on Kim argument that businesses should come with ways that are meant to eradicate poverty in the society through the sharing property. The Elements of Good Strategy Having ascertained that a good strategy is more specific and demanding to the concerning persons, there are three elements that are necessarily in making a good strategy: Diagnosis A good strategy must have the element of identifying or explaining the nature of a particular challenge in an organization. Moreover, any good diagnosis should identify the critical elements of a given solution through an individual’s judgment. During diagnosis, it is crucial to understand that all strategic ideas should be written down and thought carefully to produce good judgment and evaluation. Once this has been achieved, then organization experience good strategic plans through the conversion of concepts into actions (Rao, et al., 2008). Similarly, diagnosis offers the opportunity to counter the biases, and shortcomings that might arise in any organization. Of most importance is that, knowledge gained in organization’s challenges and the present strategic options enable easy diagnosis. After diagnosis has been made on the challenges, it is advisable to work deeper on more actions that have come up in the results other than working on the first result to any challenge. Developing robust alternatives is highly likely to bring up new ideas of thinking. It is imperative to consider reactions from important individuals who have an impact in the organization. Through this, the impact of diagnosis in a good strategy will surely be achieved (Mills, 2003). A Guiding Policy In a good strategy, Hitt et al., (2010) articulate that, a guiding policy comes immediately after diagnosis of challenges has been achieved. The main objective of a guiding policy is acting like a sign post in demonstrating the ways in which an organization should proceed. Scholars have ascertained that good strategies make more focus on the advantages of the organization and the best ways to overcome bad strategies. By use of a guiding policy, there are more reasons for organizations to take more actions in attaining their intended objectives (Rumelt, 2012). For instance, Well Fargo uses a guiding policy which dictates that its objective if aimed at fulfilling all the financial demands of its client through cross-selling its services. A set of coherent actions After diagnosis and having a guiding policy, the set of coherent actions is ultimately necessary. Essentially, an action plan is aimed at ensuring an organization needs are catered for in order to succeed. Moreover, action plan enables any organization to have thoughtful allocation of resources. For instance, in marketing organizations individuals could apply their sales and marketing knowledge in order to expand on capacity for the betterment of their products (Siegemund, 2008). Any effective set of coherent actions should have “chain-link logic”. This logic has both strong and weak links which should be incorporated in an organization’s strategic plan. Basically, there should be reinforcement of strongest units while ensuring that the weakest units are improved. The positive aspect about chain –link logic is that organizations in the same field are not capable of replicating their products or services (Henry & Mayle, 2002). The Use of Leverage, Proximate Objectives, Design and Focus in good strategy According to Rumelt (2012), the use of leverage in achieving good strategy revolves around drawing power from the minds of focused individuals to provide a given amount of outcomes that favor the organization. A good strategy has strategists who are aimed at looking forward to some of the behavior aspects meant to turn into organization’s advantage. For instance, a strategy made on real estate investment is mainly based on the anticipation that in future people will demand for real state thus increasing the value of real states. In reference to proximate objectives, a good strategy should create proximate objectives that are feasible. Of importance to note is that proximate objective must be achieved (Brown, 2012). For instance, it is argued that the Former President of U.S Kennedy called for the placement of a man in the moon in the 60s, a situation that was seen as a proximate strategic objective where engineers were expected to design and build rockers and space craft. Similarly, design in a good strategy comprises of three aspects namely; premeditation, the anticipation of behaviors of others and the purposive design of actions that are coordinated. Firstly, premeditation refers to the strategy that is aimed at representing planning that is meant to be carried out before any action. Secondly, anticipation revolves around figuring out how others are presumed to behave in future as one of the strategic planning processes. Thirdly, designing of coordinated action is more of taking caution in use of strategy as compared to making other choices for the organization. It is imperative to note that the level of a challenge in any organization is dependent on a good design type of strategy (Benoit & Lenos, 2011). In light of focus, Rumelt, (2012) argues that there is a combination of policy and positioning that is expected in organizations. Unfortunately, most organizations do not have strong strategies which incorporate focus as a crucial element. Organizations struggling to retain good strategy must focus on specific elements other than pursing multiple goals at once. Moreover, identifying strategy in organization ensures that there is a competitive environment. In general sense, the use of leverage, proximate objectives design and focus combined are supposed to give an organization the best results in determining and distinguishing between what could be argued as a good strategy and a bad strategy (Tidd, 2013). The rationale of Prescriptive and Descriptive models of strategy Apparently, there are two different schools of strategies that have continuously been used by organizations across the world depending on their management teams. On one hand, prescriptive school of strategy revolves around creating a specific strategy formulation that is aimed at analysing both internal and external environments of a particular organization. Basically, the organization’s environment serves as a foundation for creating prescriptive strategy, a process that takes a long period of time before any implementation is carried out. Scholars affiliated to this strategic model argue that the school gives a framework process that is crucial in designing a successful strategy for any organization. Moreover, it tends to give explanation on different approaches, which ought to be adopted by organizations to come up with good strategies. Therefore, prescriptive model ensures that organization take control over their activities for successful strategies (Myers, 1996). On the other hand, descriptive school of strategy revolves around formulating strategy from the past experience such as learning process adjustments, as well as, use of experiments. Most of decisions on descriptive approach are made on positive past experiences while the negative experiences are ignored completely. As a result of this, descriptive approach is argued to be more realistic as compared to prescriptive approach. Nevertheless, Magretta (2012) articulates that this strategic school might at times seem to be unplanned especially on matters of changing reality and the past experience that might not be logical to a particular extent. As such, it is worth noting that both prescriptive and descriptive models of strategy have greatly assisted in differentiating between good and bad strategy and further assisting in making critical decisions on the same (McGrath & Macmillan, 2005). Critical Evaluation of the claimed benefits of Prescriptive model It is apparent that most scholars such as Tomlinson & Murdick (2000) claim that prescriptive model of strategy has more beneficial. Firstly, the approach ensures that organizations have predictive and preemptive strategies that are meant to give fresh opportunities in future. Secondly, it is preferred as the best strategic approach as it ensure that there is a variety of strategic implementations that could only be used by the organization in reference to their plan to avoid using strategies that are not conversant with the current business world. Thirdly, prescriptive model ensures that there is a systematic process that is of a formal top down rational planning process in relation to development and implementation of strategies in any organization (Porter, 2008). Different schools have come up in prescriptive model of strategy. Firstly, the design school articulates the use of strategy must be dependent on the provision of possible fit through the establishment of a situation where the internal issues of the organization are compelled to external facts. Secondly, planning school argues that there must be outlined plans that enable a business to regain its place in the market through the development of an operational plan. Finally, positioning school that is supported by Porter argues that there ought to be an analytical process where an organization is positioned in reference to its industry. Moreover, the school put emphasis on how an organization should improve its competitive position within its designated industry (Hitt et al.,2010). Conclusion It is for undoubted reasons that the concept of a good and bad strategy as argued by Rumelt is built upon the relevance of strategic implementation in most organizations across the world. Nevertheless, it is important to acknowledge other schools of strategy in order to come up with diverse ways of maintaining a competitive advantage and further maximizing on their profit. Moreover, the concept of both prescriptive and descriptive models of strategy should be compared by any business that aims at succeeding within its industry. Of importance to note is that prescriptive model is utilised more than the descriptive model due to ability to handle strategic issues in simpler terms through the use of design, planning and position school as compared to the later. The use of a good strategy demonstrates that an organization is willing to tackle its challenges in the best way possible to achieve maximal profit and retain a competitive advantage. Reference List Benoit, R. &  Lenos, T. (2011). Competitive Strategy: Options and Games. Massachusetts: MIT Press. Betz, F. (2011). Managing Technological Innovation: Competitive Advantage from Change. Hoboken, NJ: John Wiley & Sons. Brown, K. (2012). Managing Change and Innovation in Public Service Organizations. New York, NY: Routledge. Cunningham, J. & Harney, B. (2012).Strategy & strategists. Oxford : Oxford University Press. Dawson, P. & Andriopoulos, C. (2014). Managing Change, Creativity and Innovation. New York, NY: SAGE Publications,. Dietmeyer, B. (2004). 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