What Is Strategy All about - Coursework Example

Strategy Student’s Name Name of Institution The basis of strategy dates back to the emergence of business world. Initially, the term strategy applied merely to the military world. However, with time, all businesses acknowledge their experiences of designing diverse strategies to deal with different problems. Strategy proved to be a notably significant aspect within the civilian business environment subsequent to the onset of the earliest industrial revolution. What is strategy? Theorists have come up with a myriad of definitions of the notion strategy. Among the copious definitions manifest in literature, from the managerial and practical perspective inspiring the idea of strategy, this blend of conceptions best transmit the nature and rationale of strategy. A timely and accurate clarity of strategy is critical in eliminating probable contradictory interpretations of what ought to be though out as strategy, and what ought to be comprehended as strategy. According to Gandellini, Pezzi, and Venanzi (2012) strategy is an assortment of decisions allied to allotment of resources through a medium-long term to a single or numerous market or product combinations. Thomson and Baden-Fuller (2010) defines strategy as a way by which an organization or a business defines the means of realizing a prospect goal. In this milieu, the organization employs both non-human and human resources in their strategy. For example, in the Trojan War, the elite horde did not conquer Troy by engaging in an open pitched combat. However, they utilized both non-human resources (ammunition and arms) and human resources (troops). Ultimately, Thomson and Baden-Fuller (2010) offer an expansive definition of strategy stating that strategy is an outline of significant decisions, executed over time influencing the enduring trend and range of a corporation. Why strategy is important Strategy proves critical because the resources essential in attaining organizational goals are generally limited. Hence, strategy concerns fundamental resource matters, for instance generating funds for a novel factory or settling on which products to allot major funds. An example of this is when Coca Cola settled on launching Pooh Roo juice. Besides, strategy is core to attainment and maintenance of an advantageous position of a business via successive utilization of evolving and existing possibilities. It aids an organization in laying its focus on emerging openings as opposed to entrusting a fixed plan. Ultimately, strategy defines the business scope, that is, where and what is produced. For instance, the key product areas defining BIC’s scope are pens, razors, and lighters. Hence, the company has expanded into core geographical localities producing these items. Approaches to strategy It is complex to understand what strategy is as well as how to develop an effectual strategy prior to attaining a profound understanding of the approaches to strategy. Whittington (2001) develops four broad approaches to strategy explicitly the classical approach, the evolutionary approach, processualist approach, and systematic approach. Classical approach Classical approach embodies the most classical and most prominent approach, which depends on the rational planning techniques. This approach perceives strategy as a coherent process of premeditated calculation and investigation, intended toward maximization of lasting advantage (Whittington, 2001). If efforts are employed toward gathering info and executing apt techniques, both the enterprise and the external world could emerge artificial and predictable, outlined on vigilant plans of top executive. Classicists define excellent planning as that which it required to master both external and internal surroundings. Thus, strategy is critical in the coherent analysis and as well, objective decisions form the disparity amid long-term failure and success. Evolutionary approach Evolutionary approach draws inspiration from the philosophical allegory pertaining to biological evolution. However, it is a surrogate of the subject of market for the rule of the jungle. Evolutionists tend to differ with the classicists on the notion of strategy being a coherent future-oriented development. Evolutionists allege that environment is normally too relentless and too erratic to predict effectively (Whittington, 2001). Hence, the aggressive, competitive, and vibrant nature of the markets imply not merely that enduring survival cannot be premeditated, but also guarantees that barely those businesses endeavoring at profit-maximization will survive. Evolutionists liken businesses to genus of biological evolution (Wootton & Horne, 2010). Competitive processes are on the verge of callously selecting the fittest businesses for survival, with the rest being incapable of transforming themselves swiftly enough to fend off extinction. Therefore, from evolutionary viewpoint, the market as opposed to the managers is responsible for making the significant business choices. Thriving strategies simply materialize as the natural selection process conveys its judgment. Managers have the role of ensuring that they align with the demands of the business setting. Processualist approach Processualist approach puts weight on the oppressive flawed nature of human existence, reasonably accommodating strategy on the imperfect process of both markets and organizations. They concur that enduring planning is massively futile. However, they remain less cynical on the destiny of businesses that fail to optimize their strategies to fit to the environment. Processualits allege that market and organizational processes are never perfect for survival as in the evolutionary theory of for maneuvering as in the classical theory. However, they perceive individuals as harboring diverse interests, being imperfect in understanding, careless in actions, and meandering in attention to be able to come together around and execute a completely premeditated plan. However, people are susceptible to forgetting the plan as circumstances unfold. In reality, strategy surfaces as from a practical process of learning, bodging, and concession as opposed to a logical succession of splendid leaps forward. Whether the evolving strategy is not optimal is not of fundamental concern. The market selection process is in fact rather lax because no person would familiarize with the optimal strategy and no person would be ready to abide by it anyway. Failure to set up and execute an ideal strategic plan will rarely deliver detrimental competitive disadvantage. Systematic approach Systematic approach proves to be relativistic, basing the means and results of strategy as inevitably allied to the authority and cultures of local societal systems within which it occurs. From the systematic viewpoint, while strategy matters, it is not as much as in the case of classicists. Moreover, systematic theorists prove to be less pessimistic as compared to processualists in regard to people’s capability to envisage and execute logical plans, but more optimistic as compared to evolutionists on their capability to describe their strategies in insubordination of market forces. The systematic standpoint recommends that the practices and aims of strategy count on the explicit social system upon which strategy-formulation occurs. Strategists swerve from profit-maximization norms deliberately. Their societal background may endow them with auxiliary interests such as managerial authority, national patriotism, and professional conceit. The quest of these objectives is perfectly logical even though the justification may be disguised. Strategists assert that competitive pressures do not enhance survival of profit-maximizing firms. Markets may be bamboozled or maneuvered making societies adopt alternative criteria for endorsing enterprises rather than relying totally on financial performance. Therefore, systematic approach deems that strategy echoes the given societal systems that embrace strategists’ participation. The fundamental postulations related to the four approaches can be interpreted on the two axes. Evolutionary and classical approaches construe profit maximization to be a natural result of strategy-formulation. Processual and systematic approaches seem more pluralistic because they envisage supplementary probable outcomes just as profit. The blend is diverse with respect to processes. Processualists side with evolutionists in construing strategy as materializing from chance-governed processes as well as from conservatism and confusion. Conversely, even though they differ in respect to results, systematic and classical theorists concur that strategy could be premeditated. Location of strategy Strategy is located at diverse business or organizational levels ranging from the large business milieu to the individuals within the organization. At the corporate level, strategy is allied to the general scope and aim of the business to satiate stakeholder anticipations. This level is crucial given that it faces heavy influence from the investors and operates to steer strategic decision-making. For example, a company by the name Strategy Analytics applies strategy at the corporate level to aid clients in building valid, distinct strategies to succeed in intricate technology markets on a local and global extent. The company delivers precise market info that limited companies can challenge. Equally, it employs advanced responsiveness and proficient analysis to endorse quality data and enhance consumer decision making. At the business unit level, strategy lays its core focus on the way the given business competes lucratively within the market. The chief concerns lay in satiating consumer needs, generating and utilizing novel opportunities, making rational brand choices, and attaining competitive advantage. At the operational level, strategy concentrates on how distinct segments of the business are put in order to convey the corporate strategic direction (Correnti, Sonlin, & Isaac, 2001). Hence, operational strategy deals with issues pertaining to people, procedures, and resources. Models useful in strategic decision Cognitive models prove efficient in understanding the unstructured aspect of strategic decision-making (Vermeulen & Curseu, 2008). These models emphasize that efficient decisions within organizations stress on the implications of cognitive representations on decisional upshots. Concrete, unambiguous, and interpretative cognitive representations prove to be more effectual in grand decisional upshots. Cognitive representations do not merely reduce environmental complexity but also aid decision-makers in enforcing order within uncertain and unstable environments, thus influencing decision-making processes and upshots. Financial models are employed in making decisions pertaining to investment strategy. As Ho and Lee (2003) assert, financial models are vital in understanding the postulations within investment strategies. For example, SK Securities and JP Morgan investment strategies base on financial models that aid them in evaluating trade-off risks as well as proceeds in financial markets (Wierenga, 2008). Moreover, financial models aid in making decisions pertaining to trade. They help determine the affiliations of shares market risks, cross currencies, and movements of interest rates. In summation, strategy is core to attainment of business and organizational goals. Every business ought to execute a premeditated strategy to ensure it runs according to defined plans. However, without a properly defined strategy, businesses and organizations will deviate from their objective. Strategy is not a one-time aspect of the organization. However, it is found at every organizational level. Therefore, it is recommendable that businesses and organizations communicate their strategy to its people. Nevertheless, it is complex to understand what strategy is as well as how to develop an effectual strategy prior to attaining a profound understanding of the approaches to strategy. Thus, various approaches to strategy are available to enhance the comprehension of the notion strategy. References Correnti, S., Sonlin, S.M., & Isaac, D.B. (2001). Applying a DFA model to improve strategic business decisions. Maryland: CAS. Gandellini, Pezzi, and Venanzi (2012). Strategy for action: the logic and context of strategic management. Rome: Springer. Ho, T.S., & Lee, S.B. (2003). The Oxford Guide to Financial Modeling : Applications for Capital Markets, Corporate Finance, Risk Management and Financial Institutions: Applications for Capital Markets, Corporate Finance, Risk Management and Financial Institutions. New York: Oxford University Press. Thomson, N., & Baden-Fuller, C. (2010). Basic strategy in context: European text and cases. West Sussex: John Wiley & Sons. Vermeulen, P.A., & Curseu, P.L. (2008). Entrepreneurial strategic decision-making: a cognitive perspective. Massachusetts: Edward Elgar Publishing. Whittington, R. (2001). What is strategy- and does it matter? Branford: Cengage Learning EMEA. Wierenga, B. (2008). Handbook of marketing decision models. Rotterdam: Springer. Wootton, S., & Horne, T. (2010). Strategic Thinking: A Step-by-step Approach to Strategy and Leadership. Philadelphia: Kogan Page Publishers. Read More