It has become evident in the modern society that most of the successful companies put a generous amount of effort into developing their strategies. Strategic management helps an entity to clearly identify its goals and objectives and achieve them quickly and efficiently. However, it is still argued that the strategy is not an essential component of organizational management, and it is not necessary to invest in strategic development. This essay critically analyses the question of whether it is essential to have strategy as a management component, gives the definition of a strategy in a managerial context and briefly outlines possible problems of modern strategic development.
What is a strategy?
It is essential to comprehend the core meaning
…show more content…
In his opinion, strategies are vital management components because without strategy, an organization is simply a ‘collection of individuals, each going his or her own way’ (Mintzberg 1987b). Therefore, strategy is used as a team-building tool, making various parts of an organization work together towards the common goal. Managers, who use a strategic approach in leading the workforce, tend to be more successful in bringing the team together, as their dynamic leadership and strategic vision galvanizes others into concerted action (Jackall 1988). Strategic management not only helps to achieve organizational goals, but also raises work efficiency and, therefore, increases the overall productivity of the company. Moreover, Mintzberg (1987b) claims that strategy helps to differentiate an organization from competitors and make its objectives clear to external stakeholders. Thus, it becomes a mediating force that connects external and internal parts of the organizational …show more content…
2014). With increasing competitiveness of modern business environment, it is crucial for a company to develop a strong strategy with clear objectives in order to beat its competitors. Well-developed strategies may help an organization identify areas of business that require significant investments, and inefficient parts of an entity that need further development (Grant et al. 2014). An organization with low commitment to strategic management may be unable to quickly adapt to the changing business environment and, therefore, companies that implement strategies in their workforce have a competitive advantage over them. For instance, the CSR practices that were outlined above can become a part of organizational strategy and increase the legitimacy of company’s actions, attract investment and raise profitability. It is also important to understand the strategies of competitors whilst developing your own. When a company analyses the strategies of competing businesses, it can manage its own strategies and put itself in the reactive position with the ability to control and influence the business environment (Robert 1990). When an entity understands its competitor’s strategy, it can adopt successful elements of it and adjust its own organizational strategy, making it more effective. Overall, companies that use strategic management tools tend to be stronger competitors on the business arena and gain
In Cynthia Montgomery’s the book “The Strategist”, she explains that becoming a strategist is an essential component of a leader, and this book provides a strategic framework where it is easy to understand. Throughout the book, she emphasizes that a good strategy starts with a strategic leadership, a compelling purpose, and a system of value creation, and she believes that a leader and a strategist in inseparable. I agree with this because a leader guides the company to find its purpose and mission, and this is what a strategist is good at as well. Therefore, a leader should be a strategist who apply strategic management in its corporations or organizations. Throughout the book, Montgomery illustrates many real life examples regarding to the importance of strategy plays in the success of a business, such as Masco’s failure in its expansion through furniture manufacturing. She also emphasizes that a strategist or a leader must understand the purpose of a company exist in order to success. Then, she analyzes practical models such as five forces to help the reader understand how these model connect to strategy as a whole. Her “Strategy Wheel” framework is a viable tool that could help the business leader in developing their strategies. Through many business cases that Montgomery explains such as Masco, Ikea, Walmart and Gucci, these cases are an excellent
As we look at strategy teams they are composed of strategy managers, analysts and directors, (Paroutis, Heracleous, & Angwin, 2013). Each discipline within the team is vital to a successful outcome. Strategy teams vary in size, they can be as few as 10 or as many as 50 in one team, (Paroutis, et al., 2013). The director oversees the operation, insuring progress is being made and strategies are being developed. The strategy team analysts conduct surveys, develop strategy reports based on findings and provide support to the team, (Paroutis, et al., 2013). The strategy mangers are the people who interact with stakeholders and implement the strategies, (Paroutis, et al., 2013). This is a high pace position that requires excellent social skills and versatility in function, (Paroutis, et al., 2013). This can be a very demanding position that requires extensive
Dess, G. G., Lumpkin, G. T., Eisner, A. B., & McNamara, G. (2012). Strategic Management: Text & Cases (6th Ed.). New York, NY: McGraw-Hill.
According to Johnson et al (2013) and John (1997), strategy can be defined as a general scope or long-term direction of a firm. Johnson et al (2013) state that strategy has three levels which refer to corporate, business and operational levels. In Lynch’s view (2006), there are two elements in corporate strategy that are corporate-level and business-level. This essay will focus on both corporate and business-level strategy. To conclude Lynch (2006) and Johnson et al (2013)’s points, corporate-level strategy can be identified as a purpose or overall scope of an organization. Business-level strategy is related provide the best value for products or services to compete in the specific markets. For example, innovation or response to competitors are usually the tactics of business-level strategy (Johnson et al.,
The scope of this essay is to address coherently with examples a number of key areas of strategy; strategy and its importance, challenges in relation to development and implementation of strategies, and a discussion of the relevance of strategy in the modern
Strategic management is the ongoing process of ensuring a competitively superior fit between the organization and its ever-changing environment (Kreitner, G13). Strategic management serves as the competitive edge for the entire management process. It effectively blends strategic planning, implementation, and control. Organizations that are guided by a coherent strategic framework tend to execute even the smallest details of their mission in a coordinated fashion. The strategic management process includes the formulation of a strategy/strategic plans, implementation of the strategy, and strategic control. A clear statement of the organizational mission serves as the focal point for the entire planning process. People inside and outside the organization are given a general idea of why the organization exists and where it is headed. Working from the mission statement, management formulates the organization's strategy, a general explanation of how the organization's mission is to be accomplished. Then general intentions are translated into more concrete and measurable plans, policies, and budget allocations. Implementation is the most important part of the strategy. Strategic plans must be filtered down to lower levels to be success. Strategic plans can go astray, but a formal control system helps keep strategic plans on track. In the strategic management process general managers who adopt a strategic management perspective appreciate that strategic plans require updating and fine-tuning as conditions change. Given today's competitive pressures, management cannot afford to let strategic plans sit as is. A strategic orientation encourages farsightedness. Sun Microsystems Inc. is one company that developed a strategy to become the competitive leader and become the most reliable in the net business. I will explain how Sun's strategy integrates their marketing, management, technology, and service functions into one effective strategy. First I'll discuss who Sun is and what encouraged them to develop their strategy.
Thompson, A. A., Strickland, A. J., & Gamble, J. E. (2008). Crafting & executing strategy: The quest for competitive advantage (16th ed.). New York: McGraw-Hill Irwin.
Throughout the global economic environment the desire to out-perform the competition is always present. In every situation, the companies who do better are the ones with superior strategy (Rothaermel, 2013). Strategic management is therefore important in every company, no matter what industry or market they operate in; and as stated by M. Carpenter and G. Sanders, 2013, is described as "The process by which a firm manages the formulation and implementation of its strategy". Strategic management is a constant topic under discussion with different schools of theorists with different beliefs and attitudes which is described as "A tense array of disagreement" (Rees, 2012).
A marketer doesn’t just have a plan. Marketers now open up to a wider strategic plan and it’s based on steps that balance out what the market is offering consumers. These marketers must analyze their production with these steps, then make a portfolio of the growth and even their down falls therefore this keeps these marketers to continuously innovate and create even a greater amount of value for their customers. Marketing management functions are discussed along with the marketing mix and strategy.
Thompson, A.A., Strickland, A.J., & Gamble, J. E. (2010). Crafting and executing strategy: The quest for competitive advantage: Concepts and cases: 2009 custom edition (17th ed.). New York: McGraw-Hill-Irwin
Strategic planning has a focus on stabilizing the current environment, and it also support the organization's business plans and goals. Strategic planning helps to implement new projects, new technology, consolidation of data centers, data warehouses, exponential data growth, cost of ownership, and resources available in an organization to assess the future requirements. Strategic planning analyzes the business plan, potential blockage or other issues in the current architecture, processes and their implementation in new initiatives, and processes. Strategic planning helps to formulate the ideas about the key factors that are affecting the present and future development of the organization and the opportunities offered by the environment and the competence of the organization.
Strategy formulation is the process of establishing the firm's mission, goals, and choosing among alternative strategies or plans; it involves and implies that preparing the best approach to respond to the circumstances of a firm's environment, whether or not its conditions are known in advance; being strategic and tactical, then, means being clear about the management's aims; being aware of the company's resources, and incorporating both into being consciously responsive to a dynamic environment (SM, 2010). As nearly all businesses have limited resources, top leaders and management must determine which alternative plans or strategies will do well to the organization most; strategic management requires attention to the big picture and the motivation to adapt to circumstances, and consists of the following aspects:
According to Wheelen & Hunger, strategic management “is that set of managerial decisions and actions that determines the long-run performance of a corporation. It includes environmental scanning (both external and internal), strategy formulation (strategic or long-range planning), strategy implementation, and evaluation and control” (2004, p2). All eleven good to great companies are benefit from strategic management and gain long term strategic advantage then lead to outperforming compared companies.
Strategic management is the “identification of one or more sustainable competitive advantages a firm has in the markets it serves (or intends to serve), and allocation of resources to exploit them” (Business Dictionary, 2016). In order for industries and organizations to thrive, they must have strategies in place and strategic management processes to stay competitive, profitable, attractive to stakeholders, and to sustain advantages that set them apart from other competitors (Barney & Hesterly, 2015). The strategic management process involves a set of procedures that lead to choosing a strategy that will eventually lead to competitive advantage (Barney & Hesterly, 2015). The six steps of the strategic management process involves defining
Strategic management has shown to enhance the company’s profits and market shares. Companies need to utilize strategic management in order to improve that their performance and organizations are set. Some of the benefits of strategic management are it brings new opportunities and development, the manager is more involved in their job role, the quality of the company is enhanced, implementing models that will bring the company growth and profits, it helps the manager to be organized in order for them to be successful, it brings certainty to the company, and provides management with a guide to what the company is needing to accomplish with their goals for the future. According to Nmadu (2007) he stated “strategic management has become more important to managers in recent years and defining the mission of their organization in specific terms have made it easier for managers to give their organization a sense of purpose” (Dauda, Akingbade, and Akinlabi, 2010, p.100). Strategic management can also have its disadvantages. A few disadvantages are time and effort that is put into the company, and discussing what is important for the company’s long-term goals. Another disadvantage is managers stay on the planning stage but forget to implement and take control of the plan. If strategic management is not enforced than this can cause effects on the companies market shares, and profitability. Enforcing a strategic plan will play a major role in the companies