The Relevance of Managing Theory and Strategy - Research Paper Example

Introduction Managing strategy has had increasingly marked relevance in the last four decades. There has been diverse literature which have provided direction and perspective on the topic.   “…as Richard Whittington said almost 10 years ago, the average book on strategic planning [management] is pretty cheap. So, how come, if the secrets of strategic management are so cheaply and easily available, many organizations fail to develop successful strategies? Is there something wrong with the literature – or maybe even the concept itself?” (Clegg et al. 2005, p. 410).   Whittington (2000) has made a relevant and valid statement in saying such. However, majority of these literature on strategy are not bold enough to provide clear directions and formulae on how to craft and deploy strategy with certain success. It is true and it is well documented as what Richard Whittington had pointed out that over the past decade or two that hundreds even thousands of literatures, articles and books on strategic management have been published and yet there are still companies or organizations who fail miserably despite having access to tons of information on different corporate or business strategies be it through books or via the internet. The question raised by Whittington, and a very good question if I might add, is - could there be something wrong with these literatures or worse, the concept itself? To find out we first have to define what a strategy is and what the concept of strategic thinking or planning is all about. On Strategy Strategy pertains to the way and the span that an enterprise encompasses, over a substantially long period of time. Such strategy is expected to yield competitive advantage for the enterprise, through an alignment of its resources. It also prudently considers the external factors in the environment, to be able to respond to the demands of consumers, and address what they anticipate in a product or service (Johnson & Scholes, 2000). In other words, strategy is about determining what direction the business is headed for or what the overall long term goal is, it also entails which market an enterprise should play in, and to learn the basics of whatever venture or market a particular business decides to compete in (Johnson & Scholes, 2000). It also involves knowing your competitor, knowing the advantages one has over its competitor and also having the man power meaning one has to know if he or she has employed the right people or staff in order for the business to be competitive in a given market. Allocation of resources is also of significant importance if a business is to survive or be successful in today’s highly competitive market. And more importantly the set goals should be in line with the expectations of the top executives of the company (Ansoff 1957). Of course there is no one over all strategy for any existing business because businesses have different structural levels and each level is totally independent of the other, you have your Corporate, Business Unit level, and the Operations Unit level (Ansoff 1957). Each level of course has different needs and therefore requires a different approach in meeting its assigned goal but is still of course very much in line with the company’s long term goal or vision. The challenge therefore for any business or corporation for that matter is how properly manage these different components to function as one towards achieving the company’s overall goal or purpose. This of course involves making strategic decisions and choices in terms of employing the right people, proper allocation of available resources and understanding the company executive’s expectations and laying the ground rules in order to meet those expectations (Porter 1977 in Quick MBA 2007). After having analyzed the different options and having formulated, studied and selected a strategy, the task then is to properly implement the said strategy. A solid properly implemented business strategy is often the key for a successful business. But there are, of course, different types of strategic business modules. These are well designed to cope with the demands of a rapidly changing world of business and trade. The question one might ask then is which module to use? Will it work? One such module was put forth by Igor Ansoff in 1957. He designed his module to be used as a tool accord assistance to organizations in terms of decision making. These have to do with their strategy in terms of their market and product as well. He indicates that business growth depends on whether a company or a business decides to market novel or current products in a new or existing market (Ansoff 1957). His module gives emphasis on five important strategic business alaternatives, namely entering a new market; developing a novel product; developing business; expanding one's scope; and integration. Ansoff’s module basically stresses on selling existing products into an existing market this involves maintaining or even increasing the overall share of current offerings by a combination of different tactics such as employing competitive pricing schemes, advertising, combined with an aggressive promotional campaign designed to restructure an existing market to make it unattractive for competitors which will eventually drive them out and therefore achieving a steady growth and almost total dominance of that said market. He also encourages businesses to focus on products and market areas that it knows well as it will probably have relevant data on other players and this in the long run will also prove to be cost efficient as this will no longer require the said business to invest much in market research (Ansoff 1957). Market development is also given emphasis in this module encouraging companies to sell or introduce an already existing product into a new market. This is a common practice in the pharmaceutical industry where in an existing drug is being repositioned for other indications other than the one it was originally designed for. For example: Flagyl (Metronidazole) is a drug originally designed for gastrointestinal infections such as amoebiasis is now being repositioned as an adjunct therapy for bacterial vaginosis (Henry 1996). This of course is backed up by research and proven medical trials. This concept opens up a novel market stratum for an already existing and proven product which is more cost effective as opposed to creating a new product for that specific indication which of course will require years of expensive research, product testing, accreditation, certification and product advertising. Introduction of new products in new market areas is also given importance although caution is required as this is an intrinsically risky move because the company will be venturing into an area which it has minimal or nil information or experience with. For a business to succeed in this venture it must have a well-defined idea about what it anticipates to yield from the strategy and it must have a candid evaluation of the risks involved (Ansoff 1957). Having done a thorough examination of Ansoff’s module, and mind you, his is just one of many strategic business modules in existence and is currently being used by dozens of corporations worldwide, I find nothing wrong with his concept. I find his concept to be well written, well designed and more importantly a clinically proven effective marketing tool. But the question still is why dozens if not hundreds of corporations fail in their endeavors? If there is nothing wrong with the concept, could the problem therefore lie with the application? I tend to agree with the latter, it has been a time tested and proven fact that the key for any business, institution, or even a country for that matter to succeed is the proper application effective management schemes. How often have we heard of the term “mismanagement”? Since the beginning of recorded history how many nations, corporations, business, banks, investments have we seen go up in smoke because of mismanagement? Rome during her golden age was the most economically and militarily powerful nation the world has ever seen, at the time no other nation in the world enjoyed an era of economic stability and prosperity. But sadly greed, corruption and self interest by her leaders eventually led to her eventual demise (Ansoff 1957). The Barings bank at the time of her operation was the oldest bank in England and at one time financed the Napoleonic wars went bankrupt at the hands of a single individual Nick Leeson who at one point became the general manager of its Singapore branch. The 233 year old bank which was also the personal bank of non other than the Queen of England her self went bankrupt in 1995 and was sold for believe it or not a mere 1 pound (Leeson, 1996). Where am I going with this you might ask? The fact of the matter is that no business, organization, institution or country for that matter, irregardless of whatever strategic business concept or tool it employs, no matter how good a concept it is will not survive with out proper application of management principles or concepts. Proper and effective management means taking responsibility, whether we accept it or not often times how the boss behaves has a profound effect on how his or her subordinate performs and thus affecting the entire working environment. And this is not limited to the business setting only, this also includes government, school, family or basically any structured institution (De Bono 2006). This is a well known fact that is acknowledged by most people. But few bosses if any at all acknowledge the fact that inferior performance is partly or in most occasions entirely their fault. W. Edwards Deming (Heller 2006) stated that 85% of all failure is attributed to failed management. People in the working class work within what is known as the boss class system (De Bono 2006). Meaning the “I’m-the-boss-and-I’m-in-charge-you-do-as-you’re-told-system”. This could not be more evident than in today’s work setting. How many times have we tried to voice our concerns or at least point out certain aspects about the task at that does not necessarily agree with what our bosses are thinking but you know you are right and more importantly he knows you are right. Notice how those concerns usually fall on deaf ears. Call it pride or arrogance but this type of system not only limits but hinders a person’s ability to perform well in a highly competitive business arena. People tend to think that when one has attained a certain status especially in the business setting that admitting to ones short comings be it in the top managerial or supervisory level is a sign of weakness or incompetence. We all agree that nobody’s perfect so what’s with the attitude? Attitude and Character are also crucial components in determining the outcome of any endeavor. In order to achieve anything, one must have a clear sense of direction, a purpose, an aim or a common goal (Heller 2006). One must also have a strong sense of commitment in adhering to the company’s vision of success, and not let his or her own self interest dictate the flow of things. It is only logical of course for any institution to set up targets as a gauge or an instrument to measure progress and eventual success, to find out how different individuals will seek to achieve excellent results and what rewards will flow from success, plus what fate will accompany any failure (Heller 2006). Rewards or incentives of course will play a major role in the eventual success or failure of ones’ goal. A good incentive program is a powerful tool to boost individual performance, but it is by no means the one and the only tool for the job (De Bono, 2006). Although it is true people work their butts off to make a living or to make ends meet so to speak, but sometimes giving out big fat bonuses is not enough it is often times too much. Ever heard of the old cliché “less is more”? As silly as this may sound, sometimes corporations have the wrong concept of recognition they often fail to recognize that the little things in life are more gratifying and satisfying than awards or bonuses (De Bono 2006). A simple pat on the back or a simple acknowledgement like telling ones subordinate to “keep up the good work” or a simple “how are you today” can go a long way. The smallest of gestures when delivered with great sincerity is just as powerful or if not a much more effective tool in motivating people to strive for excellence in any competitive arena. Having a safe, fun working environment that is founded on mutual respect and professionalism is often times the key ingredient for a company to succeed. Sadly it is often times the most neglected (Heller 2006). In business or in life in general difference between gainers and losers often does not lie in one’s intrinsic competencies or the effort of one person, though they are key components for success. But more importantly it lies in the prudent drafting of goals and indicators which allow tracking of progress towards the vision of being the best in any given specific field or industry (Heller, 2006). Utilising different strategic business modules can in fact help in achieving the ultimate goal of success that is what they have been designed for in the first place (De Bono 2006). Though they are effective tools they should be approached with great caution and leaders who try to utilise them should have an open minded approach and they must have a clear definition of what can or cannot be applied in a particular scenario (Heller 2006). They should be able to think outside of the box so to speak. Conclusion Such complex strategic theories, encompassing goals may be effectual; however, they need to translated into bite-size components which are clear, specific, well defined, tasks that lend themselves to measurement, before any body can realize the lofty goal of being the best. But what does “best” mean? Based on what metrics? Though it has been agreed upon that, while the end results are of the utmost importance as these are tantamount to the final score when the final buzzer sounds their attainment relies on two other considerations: satisfaction of the customer and that of the employees (De Bono 2006). In business as in sports, individuals make the score but it is always the team that wins the game and although the score when that whistle is blown is more important - at that moment. Still other games, other times, other financial cycles and other business turns lie ahead (Heller 2006). Effective management does not just focus on the winning game in hand but rather it should look beyond to shed light to the next play, and to make sure, to the most optimal extent of collective human effort, to try and win repeatedly, over the long haul. References Ansoff, I 1957, Ansoff matrix. [Online] Available from [20 July 20 2009] Clegg, S, Kornberger, M, & Pitsis, T 2005, Managing and organisations: An introduction to theory and practice, Sage, London. De Bono, E 2006, Edward de Bono’s thinking course, Pearson Education Limited, UK. Heller, R 1999, Effective leadership, Dorling Kindersley Publishers Ltd, UK. Henry, JB 1996, Clinical diagnosis and management by laboratory methods, 19th, ed. Philadelphia, W.B. Saunders. Johnsons, G & Scholes, K 1998, Exploring corporate strategy, Pearson Education Limited, UK. Leeson, NW & Whitley E 1996, Rogue trader: How I brought down Barings Bank and shook the financial world. Boston, Little, Brown. QuickMBA, 2007, Strategic management, [Online] Available from www.quickmba.com [19 July 2007] Whittington, R 2000, What is Strategy and Does It Matter? Thomson, London. Read More