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The importance of organisational strategy
Organizational strategy case study
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INTRODUCTION:
Today, companies operate in a dynamic, ever-changing world. To remain competitive, they need to move away from the traditional notions of strategy formation and rethink the way they approach the formal work of strategising and organising.
Strategy is an elusive term and is defined in various ways by a number of authors. Broadly, strategy is referred to how the goals, objectives and mission of the organisation will be achieved (Jonas 2000). In relation to this, strategising is the processes through which a company meets these goals (Jarzabkowski and Fenton 2006). Organising refers to the formation and implementation of the ‘structural practices and co-ordination processes by internal stakeholders to enact the organization’s identity, culture and interests’ (Jarzabkowski and Fenton 2006).
Whittington (2003) distinguishes between the formal and informal work of strategising and organising. He states that the formal work includes meetings, conferences and the like, which can be traced and measured. It uses the tools and techniques that are taught to people through out their educational life. Informal work is the work that is emergent from the situation and cannot be evaluated through any of these management tools.
There is only a negligible amount of research done on the formal work of strategising and organising. This research also tends to focus only on the top management. To provide a base for further research, the following essay explores the top management as well as other organisational members who are responsible for the formal work of strategising and organising. It also looks at how members can reach these positions in the firm.
WHO DOES THE FORMAL WORK OF STRATEGISING AND ORGANISING:
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Ralph Nader, Mark Green and Joel Seligman, in an excerpt from Taming the Giant Corporation (1976, found in Honest Work by Ciulla, Martin and Solomon), take the current role of the company board of directors and suggest changes that should be made to make the board to be efficient. They claim the current makeup of the board does not necessarily do justice to the company because “in nearly every large American business…there exists a management autocracy” (Nader, Green and Seligman, 1976, p.570). The main resolution they present is to make the board more democratic with the betterment of the company as its first priority. Currently the board no longer oversees operations, or elects top company executives and they are no longer involved in the business operations to the extent they should be. Nadar, Green and Seligman argue that that all of these things need to be changed. For a corporation so large to be successful there must be separation of powers just as there is in any current government system ( p.571). They claim this is the only and best way to success (Nader, Green and Seligman, 1976, p.570-571).
The corporation’s business is carried out by its management, under the direction of the Board of Directors. The Board, and each committee of the Board, has complete access to management. Also, the Board and committee member’s has access to independent advisors as each considers necessary or appropriate. Mallor, Barnes, Bowers, & Langvardt (2010) state that the Board of Directors also, issues shares, Adopts articles of merger or sha...
“The financial crisis and various corporate scandals have caused widespread concern over the way corporations are governed and their responsibilities to stakeholders.” Regulators and academics have emphasised the importance of board diversity in improving the strategic and monitoring role of the board, and preventing further business failures. The discussion has recently concentrated on the poor representation of female members at board level, which seems to be a common problem in most countries, including the United Kingdom. It has been suggested that women can provide boards with “unique qualities and resources that can improve board dynamics, strategic decision-making and firm performance.
A formal strategy must be followed in order to accomplish company goals. Managers are required to be experienced, educated, flexible, and informative in their capacity to undertake meaningful ventures. The success of companies depend on current, and creditable information which allows for a formidabl...
Arthur, A., Thompson, Margaret, A., Peteraf, John, E. Gamble, A., J., Strickland III. (2014). Crafting & Executing Strategy: The Quest for Competitive Advantage 19e: Concepts & Cases. C6-C25.
• Strategic management is fluid and complex. Change creates original combinations of conditions requiring shapeless non-repetitive responses.
Numerous definitions of strategy exist, in most circumstances strategy can loosely be explained as an overall plan of deployment of resources to ascertain a favourable position within a market (Zablah, Bellenger and Johnston 2004; Grant 1994, p 14). Further, imbedded in many successful organisations are strategies, the importance of which is to remain relevant in the market, and successful in the various attributes of business; profiteering, employee motivation, maintaining sustainable core competencies, effectiveness in operation, or efficiency in the conduction of operations. Therefore challenges involved in the formulation and implementation of a strategy can revolve around the overall external market, as well as internal
Planning aims to reduce uncertainty. It does this by forcing managers to look ahead, anticipate change, consider the impact of change and develop appropriate responses. (Robbins 2012) Through attempted monitoring of conditions in a changing environment, one is able to respond quicker to new information and new circumstances, thereby becoming more flexible. In addition, having the environment under constant observation enables managers to analyse how the organisation will differentiate itself from its competitors, therefore facilitating more chan...
There are different types of strategic planning that are currently in use, since this is a widely debated area of management. However, it is concluded that there are two main schools of thought, the prescriptive approach or the emergent approach (Lynch, 2012). As defined by Lynch, (2012) prescriptive strategic planning is the term given to a strategy whereby the objective of the strategy is defined in advance and the main elements are designed and develop...
To a certain extent, the tenure of service also has impact on the effectiveness of non-executive directors. Feldman (1992) is of the view that a board that services a business well today may not be qualified to lead it five years from now as markets and products evolve. Therefore, the appointments of non-executive directors should be for a specific term and new members should be appointed as and when needed. One suggestion is that by serving for more than ten years, the board member tends to become too close to senior management to provide objective oversight (Ahwireng-Obeng, Mariano and Viedge, 2005). However, this could provide the in-depth knowledge and institutional memory that a new board member has to work hard to acquire (Fleming, 1998 cited in Ahwireng-Obeng, Mariano and Viedge, 2005).
Organizations that only have top management as the board members are more susceptible to accounting malpractices. Members of the board should preferably own shares in the company to ensure diligence when it comes to the interests of the company. Apart from the Board of Governors, there should also be an audit committee in place to oversee the financial dealings of the bank. Members of the board and the audit committee should have basic financial knowledge. Some of the members should also be experts in finances so that they can detect any anomaly that may take place in terms of financial reporting. An overhaul of the regulatory framework is required to empower authorities to intervene immediately, and make improvements. New technology is required. Manual antiquated processes should be eliminated because this causes greater human error and poor
Nottingham Trent University. (2013). Lecture 1 - An Introduction to Corporate Governance. Available: https://now.ntu.ac.uk/d2l/le/content/248250/viewContent/1053845/View. Last accessed 16th Dec 2013.
Bateman, T.S., & Snell, S.A. (2011).Management: Leading and collaborating in a competitive world (9thed). New York, NY: McGraw-Hill Irwin.
Middle managers oversee the first-line management teams and seek methods to organize human and additional sources to reach goals for the organization. The middle manager will have marketing or production knowledge and they assist their supervisors to attain a more efficient way to use their operating budget and to lower manufacturing cost. If organizational goals are not being met, middle managers will make proposals to top managers on how to obtain the goals (Jones & George, 2011).
According to Carol Padgett (2012, 1), “companies are important part of our daily lives…in today’s economy, we are bound together through a myriad of relationships with companies”. The board of directors remain the highest echelon of management in any company. It is the “group of executive and non-executive directors which forms corporate strategy and is responsible for monitoring performance on the behalf of shareholders” (Padgett, 2012:1). Boards are clearly critical to the operation of companies and they are endowed with substantial power in the statute (Companies Act, 2014). The board is responsible for directing and steering the company. The board accomplishes this by business planning and risk management through proper corporate governance.