Strategy Viewed from a Management Perspective - Essay Example

STRATEGIC PLANNING AND MANAGEMENT School Introduction Strategic Management is the comprehensive collection of organizational activities and processes that are systematically modeled to coordinate and align resources and actions with the goals and objectives of the organization. It is a continuous process that guides an organization in building capabilities that allow it to create value for clients, shareholders and society in the competitive markets.. Strategic management requires extensive planning in any organization since the company’s future relies on prior set goals and objectives. The planning part should be systematic in line with the organizational objectives. According McKienan and Carter, planning enables the company or organization to set priorities focus energies and resources, strengthen operations and ensures employees and stakeholders are working towards a common goal (2000). It helps managers to establish the objectives they want to achieve and the intended outcome from their activities and assess and adjust the organization direction in response to the changing market structure. To achieve all these management needs to come up with a strategic plan that will guide them in management. A strategic plan is a document used to communicate the organizational objectives and goals that focuses on the actions that needed to be taken to realize these goals. Strategic management is guided by that written document. Clark maintains that strategic management transforms the static plan into a structure that provides strategic performance response to decision-making process and enables it to grow and adjust to changes (2004). Execution of the plan is synonymous with management, and it results in a systematic implementation of the plan. A good strategy tends to answer three critical questions that are; where is the organization at the moment? Where does it want to go? And, how will it get there? It should consider the end always. It is not about predicting the future it is about preparing for it with the exact steps the company has to follow in mind in order to gain a competitive advantage. Competitive advantage is what keeps a company ahead of others in the same industry. According to Lowendahl and Revang, a company with a competitive advantage will perform fairly better than the rest in terms of revenue development and customers’ satisfaction (2004). Planning is not guarantee that companies will achieve more competitive advantage over the rest, but it is an essential process that can enhance sustainability of the company in the business. Strategy formulation can result from different interactions depending on the organizations. Some companies generate strategies prior to operations some when the process is ongoing, and formulation does not have a time span and some fail and close up and from these experiences future activities are well planned. Therefore, the strategy can be seen as a design, experience variety or discourse. As a design, the strategy is prepared before any venture commences the approach is rational and objective following laid down plans systematically. Since it is about planning little attention is paid to unpredictable aspects, culture or political activities. Hambrick holds that the design is systematic, and each process or action is thoroughly analyzed and implementation of ideas is in a logical manner (2004). On the experience part managers can devise strategies out of the experience they have had in the past. It follows the culture of the organization keenly that is what has happened the company has done before, and every minor detail regarding an operation is documented. It builds on what has been done before, and so it has predictive nature with expected results before hand. It is the best way to formulate a strategy because one can easily avoid any mistakes that have been done before, and results are guaranteed. Strategy as variety is born out of changes in the environment. It is about companies changing their ways of operation to cope with changes that can be associated with fluctuations in prices, changes in market structures and competition. According to anations of Ketchner, Boyd, and Bergh, Opportunities can present the company with an avenue to expand thus require change of strategy mid operations or threats can make company to reinvent its operations so as to cope that way new strategies are born (2008). Organizations there are encouraged to diversify their initiatives from the bottom or top of the organization. Strategy as discourse arises from personal attributes of managers. The way managers address problems, how they formulate strategic proposals, discuss issues and communicate strategies becomes strategy, the way managers address critical issues influences decisions about those issues. Discourse helps realize personal potentials and interests and those managers who dont care about the success but themselves. To achieve the desired goals of a company apart from the overall strategy of the company each department can come up with a strategic plan that will guide them so as to bring the best out of them. Nag, Hambrick, and Chen identify three organizational strategies; corporate strategy, the operational strategy, and the business strategy of the company (2007). The three have to be distinct as they are responsible for giving directions in different sections of the company. Corporate strategy is the overall scale and guidance of the company and the way business operations run to achieve desired goals and objectives. It is the umbrella under which organization operations run. It gives the general guidelines, and it is multidisciplinary not specific to a particular line of management. Operational strategy on its part focuses on how the resources, personnel, and machinery are going to be employed in production of the products or services. Fairholm says that the corporate strategy focuses mainly on how the company runs through logistic management, procurement and cost analysis (2009). It is, therefore, the essential element for accompany, and it supports the companys corporate strategy. It focuses on internal management of the company. Business strategy focuses on both external and internal relations in the company. It analyzes factors associated with the customers and competitors and the organization. According to McDougal and Oviatt, the business strategy explores how best organization base can be improved, market strategies, customer satisfaction and dealing with competition from like players in the industry (2000). Its primary objective is to achieve better alignment of corporate and operational strategies for the benefit of the company. The business strategy summarizes the best ways to achieve company goals while meeting customer expectations and sustain a competitive advantage in the marketplace. Steps in Strategic Management There are various frameworks and methodologies of strategic planning and management. Although there are no rules regarding the best choice way, there is always a pattern to be followed when strategizing as an organization. These features of the planning process tend to be universal across board. Some of the basic phases include analysis, formulation, execution, and evaluation. Analysis and assessment are essential when one is deciding on the strategy that will guide company operations. As a manager, you have to develop an understanding of the internal and external environment. It is essential to understand the environment you are operating in especially the market structures and your competitors. Know what the people want, and the strengths and weaknesses of your competitors. One should be thorough because these are the issues that will enable your company to stand out. Formulation of your strategy follows after a thorough assessment. Based on findings and recommendations of the evaluation the best strategy is then formulated. Develop a high-level strategy that will enable your company achieves its goals. Furrer, Thomas, and Goussevskial affirm that the strategy should focus on exploiting the weakness of competitors while delivering quality products and service to your clients (2008). Whatever resolutions that are made that are the strategies they should be documented as it will serve as a reference document for your operations. The high-level strategy is then executed by translating the policies formulated into operational plans and actions. Nerur Rasheed and Natarajan explain that the implementation process is essential as it determines what the company is going to achieve, in the long run (2008). But in place checks that will guide the company towards realization of its goals and objectives. According to Mahoney and McGraham, a good strategy should have means of monitoring and evaluating key targets and milestones (2007). The management focuses mainly on this step as it is the level where management is involved. From the set goals, the strategies will be periodically adjusted to fit the present regime. Performance is monitored, proper communication incorporated and other strategic management issues are involved. Attributes of a good strategic plan Debric, Gonzalez, and Furrer hold that a good strategic plan should take into consideration organizational strengths, weaknesses; can be both internal or external, opportunities and threats (2014). These are the four key components of a good strategic management plan. Strengths are the internal positive attributes of the organization that is within managerial control. They include resources, competitive advantage, the positive aspects of the workforce, and aspects that are related to your companys operation that you perform well. A good plan should have these issues on check focusing on them to add value t the organization and offer a competitive advantage to the organization. Weaknesses are the factor within the control of management but yet they detract the organizations ability to maintain a competitive edge. They include issues like limited expertise, lack of resources, limited skills and access to technology, poor location, and substandard services. They are the internal aspects of the organization that inhibits full potential of a company. The management strategy should be one that is focused on addressing these issues so as to meet the company goals. Opportunities present the company with areas to expand and exploit. They give a breakdown of external factors that present avenues for exploitation and expansion. A good strategy should provide a means in which such opportunities can be incorporated into the company operation. The opportunities that can arise according to Knights and Muller include; market growth, lifestyle changes resolving current problems or the chance to offer higher degree value than your competitors (2004). Your plan should cater for such issues as in the event an opportunity presents itself is the management able to exploit that. Threats are external factors beyond your organizational management control that have the potential to place your business in jeopardy. The most common threat to any business is competition. However, risks can include price fluctuations, change in regulation shift in consumer behavior among others. These factors may be out of the control of the management. According to Smith, Heady, Carson and Carson, proper planning and sound SWOT analysis will aid in coming up with a contingency plan to counter any threats (2001). That is why strategic management is about planning and not prediction. Proper planning can easily buffer any threat sand exploit opportunities to the maximum to realize competitive advantage over other players in the industry. Benefits of strategic planning and management Strategic planning and management helps managers to view issues from a broader perspective putting them ahead of their counterpart as they can make informed decisions that do not only rely on finances or marketing to create competitive advantage According to Ramos and Ruiz strategic management facilitates collaboration (2004). Most companies involve middle-level managers in various operation units in the company to formulate a strategic plan. Collaborating with a lot of people who are like minded can help drive the companys agenda forward. The middle-level managers who are involved in the formulation also are the ones who implement so achieving is guaranteed. Having a documented vision, mission and goals helps identify suitable actions to be taken to achieve the goals. Whittington, Jarzabkowski, Mayer, Mounoud, Nahapiet, and Rouleau explain how beneficial strategic management is in identifying competitive advantage by creating awareness to the external environment and increases managers commitment to compete favorably (2003). Conclusion A well-formulated strategic plan if well executed can help managers achieve organizational goals and objectives without any sweat. The future of corporate management calls for proper planning and implementation of due process in the various operational units of an organization to achieve the common goal. It evident that one should not rely on one strategy if they are going to succeed. It is better to involve all the views of formulating strategy. As much as one should have the design one that logically implements operations they should give room for variety as they can witness changes along the way and discourse as managers very essential in running company activities. Managers should bear in mind that clearly spelt strategies enhance success but they are not guarantee to success because if poorly implemented results were not achieved. References Clark, T. (2004). Strategy viewed from a management fashion perspective. European Management Review, 1(1), 105-111. Dabic, M., González-Loureiro, M., & Furrer, O. (2014). Research on the strategy of multinational enterprises: key approaches and new avenues. BRQ Business Research Quarterly, 17(2), 129-148. Fairholm, M. R. (2009). Leadership and organizational strategy. The Innovation Journal: The Public Sector Innovation Journal, 14(1), 3-16. Furrer, O., Thomas, H., & Goussevskaia, A. (2008). The structure and evolution of the strategic management field: A content analysis of 26 years of strategic management research. International Journal of Management Reviews, 10(1), 1-23. Hambrick, D. C. (2004). The disintegration of strategic management: its time to consolidate our gains. 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Taking Strategy Seriously Responsibility and Reform for an Important Social Practice. Journal of Management Inquiry, 12(4), 396-409. Read More