DHL Global Company - Prescriptive Approach in Strategic Development and Strategy Implementation - Case Study Example

Prescriptive or Emergent Approach in Strategic Development and Strategy Implementation Introduction Modern organizations are faced with emerging new challenges and competition in the markets. They are finding it hard or unsettling to survive in current market environments owing to shifts in technological, political, social, environmental and economical dynamics and elements. Thereby, organizations are adopting new methods and programs to help improve their performance and satisfy the needs of their markets. Among such ventures is strategic management. Strategic management can be described as a continuous cycle of identifying, planning, analyzing, implementing, and managing operations and work process of an organization, in order to increase its competitive edge and promote quality performance (Finlay, 2000, p. 535). Strategy management encompasses strategy analysis, strategy development and strategy implementation. Through strategy management, organizations are able to identify their strengths and exhaustively capitalize on them, analyze their weaknesses thereby working on eliminating them or improvising ways in which the weaknesses can be changed into an advantage (Heath, 2010, p. 289). Moreover, through strategic management, organizations are able to discover and assess possible risks and threats to them, and therefore device mechanisms and avenues within which the risks to the organizations can be neutralized, transferred to third parties or budgeted for (Capon, 2008, p. 311). In addition, organizations are able to make out possible gaps and opportunities in the market, and create products and services that are economically and financially viable to take advantage of the opportunities and propel the organization ahead. After implementation, strategy management allows a chance to deliberate and reassess the effectiveness and efficiency of the implemented programs, thus deciding on whether to continue using it or replace it with new programs (Sekhar, 2009, p. 23). This is done in order to satisfy changing market needs, integrate new technological products and tools, fend and block off new competitors, strive to excel in new business environments and be able to effectively counter emerging political, social, cultural, economical, financial and legal challenges. Through strategic management, strategic development, strategic implementation and strategic evaluation are conceived. This report therefore, critically discusses the concept of prescriptive and emergent approaches to strategic development and strategy implementation and usage and implementation of prescriptive and emergent approaches to strategic development and strategy implementation in DHL Global Company. DHL Global Company DHL Global Company, an international market brand in express and in the field of logistics, was established in 1969 by Robert Lynn, Larry Hillblom and Adrian Dalsey in San Francisco in the United States. The company initially focused on doing door-to-door express delivery service of mail and documents to and from San Francisco, Honolulu, California and Hawaii. Through the years, the company has grown immensely and countered shifts in the markets by quickly adapting to market changes in order to satisfy changing consumer needs, expectations, attitudes and behaviors. Currently, DHL Global registers annual revenue amounting to not less than 45 billion euros, with a global system connection in not less than 200 regions universally. It has developed to include among other services; express, rail, air, road and water transport (LLC & Books, 2010, p. 13). More over, it offers logistic solutions and global dispatch services. It boosts of offering more than 290,000 employment opportunities for populations around the world, who are tasked with responsibility to ensure the needs and expectations of the customers are met with ease and on time (Wagner & Bode, 2009, p. 187). Its success is ploughed back to the community through social, educational, environmental and adversity management. To ensure on time delivery, quality delivery of products and services and to meet the needs of their clients, DHL Company has integrated and implemented separate specialized segments namely express, mail, supply chain and global forwarding, freight (LLC & Books, 2010, p. 26). Strategy Development and Strategy Implementation Strategy development begins with the management of an organization understanding where they are at, and where they want to go. This is done in co-relation with the organization’s goals and objectives (Sekhar, 2009, p. 25). In this stage, an organization may opt for either corporate strategy, which depicts which avenue of business to invest in, or, business strategy, which depicts which mechanism, shall be used to achieve the set goals and objectives (Finlay, 2000, p. 368). This entails detailed, deliberate and strategic planning, analysis of the internal and external environment of the market and the organization, setting specific, measurable, time bound, achievable and realistic objectives and goals, setting aside resources to fund strategy implementation and examination (Hill & Jones, 2009, p. 467). After strategy development, strategy implementation is done. This entails allotment of adequate workforce, finance, time, and technological resources, creating a sequence of control and delegating tasks and processes to various specialized personnel, training the work force, aligning work process and operations with the organization’s goals and objectives, preparing citations, and making sure programs meant for implementation conform with existing legal requirements (Capon, 2008, p. 267). A combination of the variables of strategic development and strategic implementation in strategic management can either lead to success of an organization, where an organization develops the right strategy and implements it well, an organization develops a poor strategy but implements it well, an organization creates a good strategy but executes it inadequately and failure which is realized when an organization formulates poor strategies that are weakly applied (Reinartz et al., 2004, p. 15). To effectively implement the right strategy, it is imperative for the organization to recognize specific, measurable, achievable, and realistic and time bound goals (Campbell, et al., 2002, p. 292). This is thereby followed by establishing appropriate and definite working strategies and initiating proper lines of communication of guidelines, which shall used to direct the implementation, control and evaluation process. For successful and effective strategic development and strategic implementation, each stakeholder in an organization has a role to play in being accountable to ensure the process is successful. It is imperative that an organization focus on one strategy at a time to avoid being overwhelmed by various ongoing strategic processes and setting guidelines and communicating to stakeholders on what need to be done, why, when and how it will be achieved (Hill & Jones, 2009, p.135). It is important to anticipate possible future threats to the strategies developed and implemented in order to set up a back up plan or plan for them (Finlay, 2000, p. 680). Since strategic management process is an ongoing continuous cycle, there is need to put in place control and monitoring measures to assess the success or failure of strategies, thereby, planning for the way forward. Prescriptive Approach Prescriptive approach refers to the perception that formulating management strategies can be facilitated by premeditated planning, rationally assessing and appraising the market drivers and economical limitations in order to create lucid strategic bearing. Consequently, organizations are able to have a foolproof performance programs. This is facilitated by the top-level organizational structures. Prescriptive approach, development of strategies primarily precedes strategy implementation process (Campbell, et al., 2002, p. 296). In this approach, organizations adopt a top down technique rather than adopting a collaborative of down top approach. The theory in prescriptive approach is that the practice of strategic management in organizations is a greatly formalized preparation process where objectives and goals are identified and stated, and strategies are developed and established in order to accomplish them (Heath, 2010, p. 163). The main benefits of using prescriptive approach is in setting lucid goals that help give the organization a direction on which to follow, goals set by the organization can easily be converted into objectives against which productivity and performance can be assessed and examined (Alkhafaji, 2003, p. 317). Moreover, prescriptive approach allows for assigning of resources to definite organization’s goals and thus allows easy evaluation and measurement of effectiveness, feasibility, viability and efficiency of strategic programs and infrastructures used. The approach is attributed to being valid, balanced, and it is possible for the management to monitor and control work processes and operations of the organizations (Sekhar, 2009, p. 30). Nevertheless, the approach has encountered disapproval from various sectors. Many have pointed out that strategies are easier planned than implemented, and the inability to be flexible and swiftly adapt in a not so stable modern market environments is at the least suicidal for organizations and utmost fruitless (Campbell, et al., 2002, p. 292). Prescriptive approach which advocate for deliberate planning without factoring in unplanned for changes that may occur in the future, creates a situation where creativity and innovation is suppressed. It has been argued that unyielding follow up of set up plans by the management, leads to fail to notice or ignore business prospects. Emergent Approach The emergent approach suggests that organizations should always be on the look out for emerging opportunities in invest and develop in. this is because, there is always potential multiplicity and assortment of programs and opportunities that when seized by organizations, it increases their market niche and establishes sustainable competition. Contrary to the perspective held by prescriptive approach of using top down techniques, emergent approach suggests and opts for developing strategies from within and without the organization, as all stakeholders brave themselves for change, which is inevitable upon strategic implementation (Campbell, et al., 2002, p. 293). In emergent approach, strategic implementation process primarily precedes strategic development. Although there are efforts to encourage creativity and generation of new concepts and ideologies, these new concepts and ideologies are bound to encounter problems arising from power for conventionality to familiar management strategies (Capon, 2008, p. 410). The theory in this approach is that strategies surface and build up gradually over time without necessarily adhering to unyielding plans. Managers in this approach are given an opportunity to be innovative and creative. The benefits associated with emergent approach are that organizations using it are able to improve tremendously, enhance their adaptability and flexibility levels especially during tumultuous market environments. Thus, the organization is able to counter and neutralize possible risks and threats, work on its weaknesses, capitalize on its strengths and take advantage of opportunities in the market (Campbell, et al., 2002, p. 295). Emergent approach allows for a mutual communication with stakeholders, hence a fertile ground for creativity and innovation. Just like the prescriptive approach, emergent approach has its own limitations. Since there is no lucid goals, which are deliberately set, the organization may deviate from the original frame and line of goals and go of course, meaning the results anticipated will not occur, and may at worst, produce unanticipated costly outcomes (Alkhafaji, 2003, p. 320). When using the emergent approach, organization are hard pressed and unable to accurately assess and measure their performance over time since goals and objectives are not as much well identified and set. What approach does DHL Company make use of? In order to maneuver tumultuous market environments coupled with limited resources, increased consumer awareness and increased competition to offer the best logistic solutions in the logistic industry, DHL Company have had no choice but to immerse themselves into strategic management. The company has had to re-evaluate, analyze and identify which strategic management practices and programs do work, and which that does not promotes performance and does away with. Strategic management has offered DHL Company a chance to diversify its products and services, target varied consumer segmentation, improve the quality of products and services they offer, venture into new geographical locations and enhance their delivery capacities and on-time deliveries. Strategic management has help propel this multi billion dollar organization to new and greater heights. This has been possible with accurate planning, and factoring in possible challenges that are deemed eminent in the future. Moreover, strategic formulation, strategic implementation and strategic evaluation has help this company assess and understand what their strengths are, identify in which areas they are weak on and improve on them, capitalize and invest in emerging opportunities in the market and last but not least, identify possible threats and risks, thereby, strategically blocking them, transferring the risks or budgeting for threats. Although DHL Company has recently been keen to shift into emergent approach, it traditionally has been using prescriptive approach in controlling operations and monitoring performance. Initially, the prescriptive approach worked wonders for the company owing to the fact that the organization was a first mover in the logistics and transport industry. Therefore, they had the upper hand in controlling the market forces and taking advantage of the market competitive forces. For the longest time, the firm enjoyed exclusivity in the industry. They reputed themselves as market leaders by initiating the concept of customer-oriented, decentralized systems of operations and planning ahead of time. The exclusivity did not last for long since new market entries like UPS, TNT and FedEx came in thus destabilizing the market. With increased competition and with not so stable market environments, the prescriptive approach used by DHL Company would cost them much. This is because its competitors used centralized work systems and preferred short-term strategy management, which worked for them. This is because, the competitors were in a position to stretch their costs across its set-ups, and while its central points accessed higher rates of financial resources. This long term strategic planning for DHL was deficient since the firm was prone to unforeseen risks and shifts in the market. The company using prescriptive approach would identify the problem and set up specific objectives. They would then weigh the fundamental features of the process at the time, and gather significant information, assess the information gathered and establish the relationship between the cause of the problem and the effects that arise from it, and hence, decide what the connection between the two variables are, and verify that all elements are factored in by establishing the main cause of the established problem (LLC & Books, 2010, p. 89). The company would then plan whether to progress on present operations and programs or initiate new ones. Monitoring and establishing control systems of the process then followed which ensured that the management remained on course, and problems were priory anticipated and rectified before they materialized (Marshall, 2007, p.35). Lately, the company has seen the need for encouraging its managers across its networks to generate innovative ideas to sustain the company at its peak. This has been facilitated by not only preparing detailed, accurate and timely reports for its internal and external publics, but also the company has invested in the state of the art specialized supply chains (Benko & Anderson, 2010, p.187). The supply chains are tasked with on time and efficient delivery of products and services to customers, which in turn promote the company’s sustainable competitive edge, and utilizing specialized personnel to map, source, create, amass, organize and distribute industry specific solutions to customers (LLC & Books, 2010, p. 50). The technique of inter-operating between prescriptive and emergent approaches has born fruits for the company. The company is more flexible to the shifts in the markets and has been able to identify what their strengths are and capitalize on them. They are working day and night to uncover what the competitor are doing, and improving on their strategies or entirely coming up with new innovative ideas that are meant to block new entrants into the market, retain their loyal clients, strengthen their quality of brand, promotes their brand name and attract potential markets. This has seen the company register increased global market shares even in traditionally inhospitable regions. Through adoption of emergent approach in strategizing, DHL Company has been able to identify potential opportunities in the market and invested in them. Moreover, they are able to not only recognize and anticipate risks, but also plan for them. They are able to develop customized solutions to meet the specific needs and expectations of their diverse customer database, which consists of clients from the motor industry, engineering, information and technology, health care, production, life sciences, and consumer products and services (LLC & Books, 2010, p. 102). Moreover, the company provides an array of choice for customer on which supply chain to use. This includes contract logistics, express, ocean, air, and freight. The company does not only plan for the now but also for a sustainable future. This is realized through establishment of solutions and innovations division and research and development division charged with the role of creating sustainable, sellable, and innovative and customized logistic solutions which are founded on interactive partnering in knowledge management, use of modern technology and resource allocation for strategic implementation (Ungson & Wong, 2008, p. 239). This has seen it develop tracking devices, which ensures that customer goods on transit are safe and secure. The company has not been left behind in shouldering their corporate social responsibility. This has been evident in their quest to collaborate with the United Nations, in aid provision, eradication of poverty and in disaster management ventures. It has sponsored educational programs, which allow and promotes education for all. Moreover, it is the pioneer as an international logistic firm to adhere to minimizing the emission of green house gases. Through use of emergent approach, DHL Company has initiated strategy process integration that routinely appraises and reexamines its operations and work process in order to ensure their customers are satisfied and their expectations are met (Marshall, 2007, p. 31). In aligning itself against threats in the market environs, and to capitalize on making market forces work for its advantage, the company has embarked on developing strategic management practices that are geared towards making the company to incur minimum costs and generate maximum profits, investing in product differentiation and customized solutions and developing strategies that are customer-based. DHL Company has understood that for strategic management processes to be effective, it is important as an organization to establish what need to change and what does not need to change, for the organization to accommodate development, implementation and evaluation of set strategies (Ungson & Wong, 2008, p. 239). Moreover, the company understands the need to evaluate its informal and informal organizational formation and ensure that the strategies that are considered for implementation, co-relates and interlocks well with existing organizational culture. It has been fundamental for DHL Company to choose relevant approaches when applying chosen strategies, and ensuring that it does not only develop the best strategies, but it also put in efforts and resources to ensure the developed strategies are executed properly (Benko & Anderson, 2010, p. 139). Conclusion Strategic management is a must have for organizations in modern organizations owing to the unstable market environments which are coupled with stiff competition from emerging innovative companies, and shifts in political, social, technological, legal, economical and environmental dynamics. Strategic management entails strategic development, strategic implementation and strategic evaluation. During the process of strategic management, organizations may opt to initiate the process with strategic development followed by strategic implementation. This is what is referred to as a prescriptive approach. On the other hand, emergent approach is whereby an organization initiates the process by strategic implementation preceding strategic development. This report has critically discussed the two approaches in strategic development and strategic implementation and what DHL Company, a market leader in logistics, uses. DHL Company has established its self as brand leader in offering customized logistic solutions by giving their diverse customer base an array of choice of supply chains namely contract logistics, express, ocean, air, and freight. References Alkhafaji, A.F. 2003. Strategic management: formulation, implementation, and control in a dynamic environment. London: Routledge. Benko, C., & Anderson, M. 2010. The Corporate Lattice: Achieving High Performance in the Changing World of Work. Harvard: Harvard Business Press. Capon, C. 2008. Understanding Strategic Management .New York City: Financial Times. Campbell, D., Stonehouse, G., & Houston, B. 2002. Business Strategy. 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