Strategic Management and Decision-Making Process - Essay Example

Strategic Management When firms seek to introduce a new measure into their business operations they plan by setting strategic platforms that provide the scope they hope to attain using such measures. Scholars and other great thinkers refer to strategy as the scope and direction taken by an organization for a long time (Enz, 2010:42). Its aim is to achieve advantage by configuring the organization’s resources within constantly changing surroundings in order to fulfil shareholders’ expectations and meet the demands of the market (Puffer, 2004:55). Strategy, otherwise known as the course of action that consists of specifications of the resources needed to attain a specific advantage is very essential for a business development (Hanna and Middleton, 2008:18). This paper will seek to describe strategic management by critically analyzing strategic and non-strategic decisions and the difference between business level, functional, and corporate level strategy with reference to the Four Seasons Hotels and Resorts International. It will also evaluate the role of risk and uncertainty in strategic decision-making, critically assess the need for change, and develop strategies for managing change. Strategic decisions Strong decisions making procedures are truly significant in every organization. Specific methods of making decisions play a major role in realizing an organization’s executive goals. Ways in which managers make decisions influence the kind of results the organization is likely to obtain and resources to be committed (Williams, Hall, and Champion, 2011:60). Benefits such as higher amounts of profits and rapid implementation of decisions make part of the strategic management of an organization (Sutherland, 2008:80) Strategic decision-making ensures that employees with key discipline in decision-making and those who have experience take part in the process making choices for the organizational well-being (Ford, Sturman, and Heaton, 2012:57). Strategic decisions making takes note that, the decisions made by an organization are implemented rapidly. Rapid implementation of the set objectives facilitates rapid organizational growth as employees and managers act accordingly and with speed on goals laid upon by the management (Sturman, Corgel, and Verma, 2011:45). Strategically, decision-making process should put into consideration a number of disciplines, which enable faster discussions, involvement, and response. Management with strategy encompasses skills, expertise, and experience (Barrow, Brown, and Clarke, 2003:63). As such, organizations that choose to employ strategic management realize large benefits since the process of making decisions follows a robust fact base coupled with transparent criteria (Enz, 2010:59). It also follows the idea that, people involved in decision-making should take part in its implementation process (Fennell, 2002:58). Fact-findings show that such a platform is essential and as it cuts cost for strategy implementation. Strategic decisions are those that which cost an organization a reasonable amount and time (Hanna and Middleton, 2008:51). An organization can refer to its decisions as strategic when they indicate that the resources committed are considerable and the speed at which the implementation takes place is rapid. With reference to the Four Seasons Hotels and Resorts International, decisions made are strategic and the resources committed are apt. The Four Seasons Hotels and Resorts International has a valid system of judging decisions made and does not consider try and error approaches. Particularly, this organization starts making strategic decisions by first identifying what problem the firm intends to solve (Puffer, 2004:81). Frankly, business econometrics and analysts assert that it is greatly important to understand, in full, an issue in addition to its implications before going ahead and making a decision. This shows that, for the Four Seasons Hotels and Resorts International to introduce its services and presence in the Chinese market, it must identify any problems that might hinder its decision (Hudson, 2008:64). Objectively, looking at the scope of going to China and considering every aspect of it could prove substantial for the Four Seasons Hotels and Resorts International and any other organizations wishing to venture into a different market either locally or internationally (Enz, 2010:71). Significantly, strategic decision making and strategic management intertwine. For an organization to make strategic decisions, it must have a strategized management. A thorough outlook into all aspects and issues surrounding and/or affecting a market is imperative for any firm wishing to shift its services to a different market (Williams, Hall, and Champion, 2011:76). Other markets apart from those that an organization operates are full of stringent and secretive aspects, which can negatively influence a business if it does consider them before venturing into such a market. Strategic decision-making involves the facet of employee engagement especially if the employee has the relevant skills and expertise or experience (Sturman, Corgel, and Verma, 2011:58). Decisions made by the Four Seasons Hotels and Resorts International depict a series of innovation and creation among its key decision makers. Knowingly, making the right choice intuitively hard and sometimes it can lead to either success o failure (Barrow, Brown, and Clarke, 2003:93). Non-strategic decisions Agreeably, not all decisions made by an organization are strategic. Some of them may not meet the specific standards of a strategic decision. Non-strategic decisions are non-resourceful (Hanna and Middleton, 2008:73). They do not have resourceful strategies hence their physical, human, and financial as well as intellectual or intangible resources are insufficient. Inadequate human and financial resources leads the decisions made to have a deficiency (Hsu and Powers, 2002:84). Thus, they function ineffectively causing an organization to face difficulties in its implementation process of decisions. Non-strategic decisions associate with inadequate, insufficient, and unavailable resources for implementing decisions. According to the Four Seasons Hotels and Resorts International, assessment of its culture concludes that the organization has a strategized process of making decisions (Patterson, 2007:76). The differences between strategic decisions and non-strategic decisions are many and complex. In strategic decisions, managers or owners of a business make decisions, which provide high flexibility. Decisions made by a manager of a simple organizational structure have little task specialization (Enz, 2010:85). As a result, products manufactured or offered by such an organization enter the market rapidly and with much ease. Additionally, decisions made in such organizations are strategic as they have few rules hence little formalization. This factor results to no or few coordination problems, which in turn facilitate the operations of such a business (Puffer, 2004:101). Non-strategic decisions tend to occur in organizations with functional structures where the decision making process must undergo several channels. It must also get the approval of the organization’s president, accounting department, legal affairs, human resource management, finance department, marketing segment, and production sector (Burke, 2010:75). Indeed, such a channel must be rigid and time consuming which makes it hard for decisions to take place as expected (Sturman, Corgel, and Verma, 2011:66). Further, the differences shared between and among functional, business level, and corporate level strategy is that the channels involved and resources committed are not the same. In functional level, decisions made and resources committed have to get the approval of not just one department, but also the others that hold crucial part in that organization’s decisions making process (Williams, Hall, and Champion, 2011:80). Additionally, in functional level of strategic decision-making, decision makers have to understand that control of operations is central hence, there are functional coordination problems (Krawinkel, 2008:79). In business level, decision’s strategy undergoes probably the owner of the business or the manager and/or some employees who happen to have the relevant experience and skills (Hanna and Middleton, 2008:87). In this level, decisions are strategic as they involve fewer processes and the activities involved are not that rigid. On the far end, corporate level of decisions making is somehow lengthy than business level and functional level. At this point, strategy decisions must undergo a long channel of decisions making with the engagement and involvement of not only the managing departments, but also some employees (Hudson, 2008:111). In corporate level, strategy decision making has to involve the management of the organization, stakeholders, and employees with the skills needed, and sometimes the target market. They have t carry out a research before implementing any decisions that has an impact on the target market (Enz, 2010:94). In contrast, functional level, business, level and corporate level strategy are dissimilar in a way that, scope of the direction taken by a business level is not of the same length and does not consume the same amount of resources as the functional and corporate level strategy (Ford, Sturman, and Heaton, 2012:89). The process of configuring resources within these levels is different and takes place in different changing environments and the market covered is not of the same size. The role risks in strategic decision-making In making strategic decisions, organizations have to make the reasons as to why they exist understandable to everyone. Organizations do so by coming up with a mission statement (Pasmore, Shani, and Woodman, 2010:36). Further, organizations have to let it be known to every employee, stakeholder, and anyone else involved of the kind of an organization that they would like to be (Williams, Hall, and Champion, 2011:92). There must also be some goals and objectives which the organization intends to fulfill. Specifically, it must also set the activities that it intends to take part in and for that, there must be indicators and measures for showing the success or progress of these activities (Gual, 2002:86). With that respect, it means that an organization must wait for outcomes and for those outcomes to be the way they want them to be, they must take charge and great responsibility as well as caution in making and implementing the decisions needed (Sturman, Corgel, and Verma, 2011:83). However, it is generally very vital to understand that risks play a very crucial role in the process of making strategic decisions. Risks forces managers and experienced employees involved in making key decisions to think comprehensively. Risks encourage decision making which results to setting of formal targets that enable control in an organization (Hanna and Middleton, 2008:95). Presence of risks in an organization emphasizes and enforces organizational coordination and coherence, which are very essential for ensuring continued peace, and corporation among employees and all the other agents associated with that organization. Apart from that, knowing that risks are sometimes not that much rewarding to an organization is crucial. Sometimes, they do not necessarily deliver the expected advantage (Puffer, 2004:122). In addition, risks may lead to over formalization, which may in turn reduce the taken initiative. Risks discount the implication of internal politics. Ideally, when managers in an organization foresee the possibility of risks in a particular decision, they tend to politicize the decisions made. This indicates that risks sometimes discount the connotation of internal politics especially when decision strategy is the case (Curseu and Vermeulen, 2008:54). The role of uncertainty Frequently, managers make decisions but they are not always sure of what they are planning to execute. This aspect of not being sure plays a major role in strategic decisions making process in an organization. Uncertainty brings about a whole lot of care and consideration in those involved in decisions making (Enz, 2010:116). As a result, it becomes very to have decisions without proved meaning or implication. In large sized firms, uncertainty plays a role of diversifying services, increasing innovation, and reducing bureaucracy, which results to stabilized environment and expertise (Schwenker and Spremann, 2009:83). This happens because the process of making any decisions is strategic and involves not only precision, but also a diversified structure (Hsu and Powers, 2002:124). Without a doubt, uncertainty is an important segment of strategic decisions making. It is congruent as it helps facilitate the implementation of the chosen approach. Furthermore, since uncertainty involves the feature of waging upon the necessary and beneficial components of a strategic decision, it acts as renewals reflect of a decision in every step of the implementation process. In this spectrum, uncertainty plays the role of creativity and learning since decisions makers have to propose many approaches before they choose to settle on one (Williams, Hall, and Champion, 2011:107). It also embarks on introducing more initiatives, which supports the façade of support and trust among the involved decision makers. Uncertainty is pragmatic in an organizational strategic decision making process because it leads to repression of bureaucracy which also controls the adversarial relationship between the decision and decisions makers (Patterson, 2007:109). In simple terms, uncertainty acts as tools for risk aversion in strategic decisions making process. Upon evaluating the Four Seasons Hotels and Resorts International, it is agreeable to put across that uncertainty emphasizes on adaption to the existing environment thus strengthen strategic management of that organization (Sturman, Corgel, and Verma, 2011:104). The role of trade offs in strategic decision-making Inevitably, every strategic decision involves a trade off. Knowing and understanding what an organization cannot purse is valuable since it articulates what it should do. Nevertheless, knowing which trade offs are valuable and acceptable to the organization brings the strategic decision making process come to a strategic position. In strategic decision-making, trade offs enables decision makers to balance between the short term and long term decisions (Enz, 2010:133) Determining what the organization should do to benefit in the long term is far much better than working on short-term gains. Moreover, trade offs help decisions makers input the important strategies in view of attaining the required results. Where decision-making involves trade offs, decisions makers are able to list the advantages and disadvantages that may come along with the chose approach or strategy and find it necessary to seek for other people’s perspective on that approach (Curseu and Vermeulen, 2008:68). The need for change At Four Seasons Hotels and Resorts International, there is a need for change and ways of managing that change mainly because; the hospitality industry is prone to environmental changes. Frequently, the hospitality sector undergoes a bit or major transformations due to changes in climate, economic indicators, and other factors (Williams, Hall, and Champion, 2011:115). These advent changes calls for frequent need to change with time and the existing environmental transformations. For instance, in 2009, the Four Seasons Hotels and Resorts International had to adjust its operations with reference to the hard economic times, which exposed the hospitality industry market to severe economic challenges (Miller, 2009:102). Evaluations show that the Four Seasons Hotels and Resorts International experienced some hard times in its outlets in the United States as the economy continued to feel the pressure from diminishing economies (Forgang, 2004:141). During this year, there was also the problem of reduced business travel and leisure activities worldwide. The SWOT analysis of the Four Seasons Hotels and Resorts International shows that this organization has asset advantage and its service is effective. At the Four Seasons Hotels and Resorts International, innovation is the key to its success while loyalty to their customers happens to be the pivotal point of their existence (Hanna and Middleton, 2008:107). With outlets in the United States, Middle East, Africa, and Pacific Asia as well as in Europe, the Four Seasons Hotels and Resorts International has a strong brand equity and supply chain. Therefore, it is acceptable that change is always needful (Puffer, 2004:134). Definitely, the strengths of this firm indicate that it has bearable market share leadership and a huge brand image, which makes it broad enough to have a string management team capable of introducing change and probably managing it (Patterson, 2007:132). According to a report released by Ernst and Young LLP highlights that, as the hospitality industry particularly hotel sector continues to grow, the possibility of engaging or taking part in the corporate Social Responsibility is seeable (Ramanathan, 2009:165). The research findings show that, sustainability will be a defining issue in the hotel sector by 2015 and beyond. While change remains to be a core factor in the Four Seasons Hotels and Resorts International, need to understand that these changes may have systematic, structural, and technological implications is important (Enz, 2010:152). To have these changes induced into an organizations system of making decisions, it must undergo changes in of the process of making decisions, modification of the decisions made, addition, and/or deletion of some decisions (Narayanan and Nanda, 2004:76). The Four Seasons Hotels and Resorts International needs change in areas where production of resources is not sufficient. Importantly, this hotel faces the threat of bad communication negatively. Its economies of scale are also amiss. These issues tend to impact this well-being of this organization (Williams, Hall, and Champion, 2011:120). Consequently, introducing change can prove effective since change can bring about strategic management practices, as there will be no more bad communication between and among its workers (Adair, 2010:86). At times, change can result to advantageous process of making decisions. If, for example, an organization keep son employing the same old facts, processes, and resources when making the key decisions regarding an organization, it is not easy to realize more than what such decisions achieve for that firm (Ford, Sturman, and Heaton, 2012:110). Nevertheless, fact-findings opine that, injecting new systems and process of making decisions can have strategic impacts on the management aspect of that organization. It also becomes easy and uncomplicated to meet the set goals and objectives since the processes applied in making decisions are new (Griffin and Moorehead, 2012:124). Change is imperative and can increase the amount of benefits that an organization gets at the end of every fiscal year. This is why there are changes in the decision making process of almost every organization allover sudden (Narayanan and Nanda, 2004:76). Using different measures or strategies to make decisions in an organization paves way for decision makers to exercise their experience and expertise in taming uncertainties and risks that may result from implementing a change. At the Four Seasons Hotels and Resorts International, competition and cheaper technology is posing some serious challenges on the development of this organization (Adair, 2010:100). The hospitality industry is flooding with large chains of hotels and resorts all offering almost the same products and services thus making the market be competitive. In order to maintain a balanced growth, the Four Seasons Hotels and Resorts International tends to implement changes in its decisions making process that makes the firm continue to survive and even make profits despite fluctuations in the world economy (Hanna and Middleton, 2008:142). Strategies for managing change For the Four Seasons Hotels and Resorts International and any other organization to maintain any new changes introduced in its system, it must formulate strategies for maintaining such change. One strategy, which is capable of maintaining change, is rapid coping and integration (Williams, Hall, and Champion, 2011:130). Integration plays a very special role in maintaining change as it facilitates employees and other members’ ability to accept change and blend in it. A change is like a new aspect of being. It comes along with new and different measures that are unfamiliar with almost every employee (Enz, 2010:160). As a result, they tend to take time to understand or cope with the situation. With that regard, it is always very essential to ensure that once an organization undergoes any changes in its operations or decisions making process, there are ways to necessitate employee to change integration (Rothwell and Sullivan, 2005:154). Conclusion In conclusion, the Four Seasons Hotels and Resorts International strategy is straightforward and declares the things that every individual associated with this firm should seek to uphold at all times. The Chinese market is full of potential although there are some issues such as cultural beliefs and language barrier that may hinder the entrance of this chain of hotels (Sturman, Corgel, and Verma, 2011:131). However, that should never be an issue to deter it from joining the Chinese market since there are more than enough ways to introduce change, cope with, and integrate. 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