Strategic Management in Contemporary Organizations - Case Study Example

Strategic management in contemporary organizations Name: Instructor: Institution: Course: Date: Strategic management Introduction Strategic management has become a more important model in today’s society since the environment is changing fast. Companies and organizations set strategies to help them grow and earn profit. They also wish the strategies should be implemented in the manner in which they were intended to be. It is not all the individuals or employees that are put in the same category under a specific approach. The strategy that the companies have is that they want to maximize their profits through an incline to grow. However, the need of growth is not the same for all companies and therefore it is not all companies that have the same observation about the definition of growth and the strategies through which they will reach this growth. These variations of views and opinions have made different companies to express different strategies of management that will suit their individual needs. The formulation of strategy is established to be completed in many different ways that are both developing and deliberate. The theory of strategic management also defines these strategies that are working as recommendations for the people in the company that are frequently designed by the top leaders in the business and they are in future adopted by the employees (Liberman‐Yaconi, Hooper and Hutchings 2010). The strategy of visionary management is a long-term objective that affects short term objectives. It is the personal perception of an individual to portray how the visionary will be used. This is because, people have diverse cognitive structures and therefore they are likely to understand the vision differently. In this content therefore, a broader way of looking at strategies will help to be a guide for different interpretations of individual perceptions. The Whittington’s Strategy Model is crucial in determining the areas of strategic management that are considered critical to the strategic success of contemporary organizations. The model consists of four approaches to management that include the classical approach, evolutionary approach, processual approach and the systemic approach. The classical approach involves planning how to make effectively good use of the resources available so as to achieve the long-term desired objectives and goals. It is on the basis of long-term planning that the classical individuals and managers can attain their profit positioned objectives of the strategy. In this approach, an individual has the logic that top managers take charge of the process of formulation and control of strategies and the operational managers take the initiative of implementing these strategies. Since the company is consistently applying the method of maximizing their returns on investment, the assumption of these profit-maximizing of the classical approach is that the CEO, who is the one that formulates the strategy, should also be the one to control its operations. The classical approach highlights that the managers should adapt to the policy of profit-maximization through balanced planning. The formulation and control of strategic plans are done by the top-management but finally brought down in the hierarchical structure of the company. CASE STUDY 1-the evolving strategy Facebook has adopted the Evolutionary approach. This approach believes that the environment should be left to select the best strategy and not the managers. It is not a matter of whether managers realistically plan long-term strategies of profit-maximizing if the markets they are competing in only guarantees survival for the organizations that manage to achieve those strategies. The adaptation to the environment by the organisations is not possible to ignore because there is no way a strategy can survive in one way or the other unless it is reflecting threats and opportunities of the environment in which the company is in (Hill, Jones and Schilling 2014). Therefore, it would be true to say that a strategy can be portrayed only by environmental requirements, irrespective of the resources of the CEO that the strategies of the Classists are being based on. The evolutionists believe that the success of a company does not depend on the managers it has but it depends on the environment that it is acting in. since evolution is a cost benefit analysis of nature, the strategy that the managers plan does not matter since the market determines the best performers. The approach therefore determines that companies survive for long if they are unique and can have better performance than their competitors. Facebook has adopted the strategy of differentiation as the key to success according to evolutionary approach. Its reason for the differentiation is because it would not be rational for Zuckerberg and the entire management to try to outdo the market through investing heavily in only one central plan. This is why the have diversified from making face book to be only a site for communication but also working with companies in developing a marketing strategy that is personalized through the use of Facebook Pages. Facebook has shifted its initial strategy of being user-focused and has taken another strategy that is to capitalize on the network that it has created and the data that it has captured. This is according to the approach that it is more efficient to invest in different small projects to see the one that will succeed and those that will fail. Once the company establishes this, it is able to capitalize on the projects that are succeeding and divests in the ones that are failing (Hill, Jones and Schilling 2014). CASE STUDY 2-corporate governance and sustainability Queensland and Northern Territory Aerial Services (QANTAS) being the oldest Australian airline in the English speaking world has been able to apply corporate governance and sustainability. Its outcomes of the strategy are more than just the issue of profit-maximization. People in the organization can convey their own intentions and cognitive biases to the organization and try to hold them so as to decide on the set of objectives that they all agree on. The act of going out to the market and hunting every opportunity that arises emphasizes on interior improvement rather than exterior and this has to do with building on the core competence of the company. It is about using the appreciated resources that are non-imitable in the best way to be able to outperform their competitors. The most valued resource that the company owns is knowledge since it is hard to trade on the market and to manage it. Since Knowledge is gained through learning and experience, it is important to make it personal so that the competitors will find it hard to imitate. This will be with the help of strategic plans that will guide the management to act on it regardless of whether it is right or wrong. It is through an achievement that the strategies are revealed. The decision-makers of the company are individuals who are interlaced in systems of social background. The social networks that interlink this individual affect the means and ends of the actions taken. They advocate that it depends on the economic and social systems that the organizations are entrenched in that also distinguished by them. They also proposes that the strategic goals of the management and the way they react depend on the social systems they are in. However, it fails to define things like what cultural rules in the local society are, who the strategists are and if the firm is supposed to have a strategy according to its rules if it is part of the culture and society (Hodgkinson & Healey 2011). CASE STUDY 3-Value creating goals The value creating goals of Fortescue Metals Group Limited revolve around customer satisfaction. It is very crucial to manage the interests of the customers in an organization. The customers are the key to the success of a business. Pressure on the customers should be primary and other things should be secondary. Therefore, the cognition of external pressures are not very significant than the internal processes that have the connection over profit maximization. The relationship of the coworkers should also be highly valued in the company. A cooperative agreement should also be reached between all the stakeholders who are involved. The agreement should involve the management and all stakeholders concerning the relationships in the organization. The arrangements of these agreements should be made on the full spectrum of the employee’s chain. The agreement should specify the relationship bеtwееn partners in connection to the work of the organizations, the management of the outlined project, and the rights and obligations of the partners and shareholders (Freeman 2010). An agreement that is consortium should be signed before starting the project. This consortium gives a firm resemblance to the be agreement created. However, there are no legal bases on such agreements since they are not more than a memorandum of understanding between the organizations. CASE STUDY 4-industry analysis The Australian supermarket industry is one of the most competitive industry in Australia. The companies have had a rapid growth in the industry due to increased demand for this market by the customers. They have been the almost exclusive in selling house products that are private-label. They also sell at discounted prices due to the massive shift of the industry. They have been able to identify ways in which many individuals understand actions powerfully and shape their future actions and the questions they might ask about those actions. Due to this, the companies are able to tailor make products to suit the customer's requirements. This is referred to asking about the process of knowing. (Whittington 2011). The hypothesis is based on assuming that the reality is present, out of control an not touchable. They claim that things are over-simplistic and this can cause misunderstanding and hence the complexity is not a bad thing. The choice of the approach to be taken should also be considered critical. The choices include Deductive or Inductive approach. It applies the theory that already exists that gives facts from predictions and explanations of the statements. The approach is not risky than the inductive one since it always applies the general rule. CASE STUDY 5-The nature and sources of competitive advantage Previous research that was done showed the significance of the policymaker where the need to examine the strategist mind affect the strategies. Therefore, the issue of cognition which is described as opinions or thoughts that are in relation to each other arises. These concepts when put together demonstrate the cognitive structure of an individual. If the decision makers are the ones who are taking part in strategizing, implementing and formulating the strategies, then there are many strategies within the organization for individual decision-making. A cognitive structure as understanding the reality involves the clarity but non complexity in the mind of an individual. The clarity in the mind is relevant only when it is placed in the background and connected to experiences of the past. The process of creating understanding and meaning can be conscious or subconscious. However, the conscious portion of it stresses that the complexity should be changed for intelligibility in such a way that the process will create biasness. In this manner, the individual creates a cognitive structure that involves creating an arrangement of understanding of the individual’s reality where the structure works as an instrument for understanding new information (Liberman-Yaconi and Hooper 2010). The strategic management helps to establish a structure with other Individuals. The structure consists of similarities and differences that describe a sharing of understanding where individuals familiarize with the perceptions of other individuals. The similarities of agreement on ideas show the extent in which the cognitive structure of an individual is shared within a group of people. The aspect of sharing understanding of thoughts in a group of people is not good because it hinders the aspect of learning. Different individuals contained in a group can also generate a structure of understanding that can restrains them from getting more information. Differences in how different individuals perceive can assist them in creating their own cognitive structures. When this happens, many individuals can create an understanding that is joined with other individuals. From this strategic understanding, one can therefore conclude that all individuals have strategic experiences that are different from each other (Liberman‐Yaconi, Hooper and Hutchings 2010). CASE STUDY 6-Business level strategy Strategic management in a business level strategy should include legal and economic issues. For the legal issues, the organization needs to submit to the health and safety standards and the lines of operation of the public health programs that amount for worldwide sanitation and public health guidance and regulation. The Company should also be a subject to truth-in-advertising, child labor laws and customs, and other laws that comprise of consumer defense regulations those that regulate the retailers in general and that promote the sale of goods and services and the operations of the warehouse facilities and retail stores. This regulatory environment that has the surrounding of the information privacy and security is very challenging with the recurrent positioning of always fluctuating rules and requirements in the business units. The economic issues involve expanding the capability in devoted direct-to-customer centers to balance the store fulfillment. The organizations can achieve this by continually bringing the facilities customer implements that are based on new technology. The valuing of the protection of employee, customer and the company data should be emphasized. The customers need to have expectations that the organizations will adequately protect their personal information, interests and other security breaches. The results of operation in the company and sales should depend on the ability to predict and respond to the changes in consumer inclinations and fashion trends in a timely manner. The organizations should develop new business ideas that will help them to adjust continuously the situation of the industry in precise main brands and product groups in the effort to satisfy the customers (Freeman 2010). Conclusion Strategic management is one of the most important instruments that are used in steering the network and building a consensus. It provides promotion of integration throughout the establishment of cohesion. When a vision statement is created by the organizations which are directly involved in making course of action, they use the consensus that helps them to avoid deviating from the goals and objectives that are set by the strategic management. References Freeman R E 2010 Strategic management: A stakeholder approach. Cambridge University Press. Hill C Jones G & Schilling, M. 2014. Strategic Management: Theory: An Integrated Approach. Cengage Learning. Hitt M Ireland R D & Hoskisson, R 2012. Strategic management cases: competitiveness and globalization. Cengage Learning. Hodgkinson G P & Healey M P 2011 Psychological foundations of dynamic capabilities: reflexion and reflection in strategic management.Strategic Management Journal, 32(13), 1500-1516. Whittington R 2014 Corporate strategies in recession and recovery: Social structure and strategic choice. Routledge. Vaara E & Whittington, R 2012 Strategy-as-practice: taking social practices seriously. The Academy of Management Annals, 6(1), 285-336. Achtenhagen L Melin L & Naldi, L 2013 Dynamics of business models–strategizing, critical capabilities and activities for sustained value creation.Long range planning, 46(6) 427-442. Liberman‐Yaconi, L Hooper T & Hutchings K 2010 Toward a model of understanding strategic decision‐making in micro‐firms: exploring the Australian information technology sector. Journal of Small Business Management 48(1) 70-95. Hung S C & Whittington R 2011 Agency in national innovation systems: Institutional entrepreneurship and the professionalization of Taiwanese IT.Research Policy 40(4) 526-538. Read More