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
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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
Every entrepreneur and business owner have the same dreams to own successful businesses, revolutionize the marketplaces, and develop high quality life for each generation. Leaders are trailblazers in their companies and no one know the internal structure and company current situations like they do; therefore, they have responsibility to think deeper for their companies’ strategies. As Cynthia Montgomery illustrates in the book, The Strategist, “A great strategy is more than an aspiration, more than a dream: It’s a system of value creation, a set of mutually reinforcing parts. Anchored by a compelling purpose, it tells you where a company will play, how it will play, and what it will accomplish.” An appropriate strategy is the most important
Thompson, A., Peteraf, M., Gamble, J., & Strickland III, A. J. (2014). Crafting and executing strategy: The quest for competitive advantage; Concepts and cases. (19th ed.). New York, NY: McGraw-Hill.
Luffman, G., Lea, E., Sanderson, S. and Kenny, B., 1996. Strategic Management: An Analytical Introduction. 3rd Ed. Cambridge: Blackwell Publishers Inc.
Lynch (2005) explained emergent strategy as 'an organization whose final goals are hazy, and organizations achieve the strategy proceeds from developed during the course of its life '. Which also suggests emergent approach used at organization to face the quick change market environment, using for short term. Nevertheless emergent strategy also need original theory and formulated built on, and then change with results as an unexpected way. Mintzberg in this field is a key scholar. And he describes emergent strategy as 'a pattern in a stream of decisions ' and furthers this description state "strategy forms, as well as is formulated" which suggests that strategy is a consistency in the firm, but must be play a part in the best interest of the business (Mintzberg 1996). Mintzberg also proposes that it was achievable for strategies created using this concept, and the organization is prepared for any changes or challenges, which focuses on the ability to acknowledge patterns and the ability to act upon emergent factors facing an organization. (Mintzberg, Ahlstrangd and Lampel
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.
Gamble, J. E., Peteraf, M. A., Strickland III, A. J., & Thompson A. A. (2012). Crafting & Executing Strategy: The Quest for Competitive Advantage. New York, NY: McGraw-Hill Irwin.
Strategic management is a method of mounting and implements several competitive actions to improve the success of a company or organization in the present and in the future. These competitive actions must be derived from the customer’s demand in the external environment and in the same manner in the internal capabilities of the company to develop important decisions. The decisions made by the company must be followed by a analysis of the current business situations to ensures the best decision possible.
“Strategy” is an action oriented involves goal directed setting and integrate an organization’s skills and resources with the opportunities and threats in its environment.
The American management scientist Joey Ross says a organization without strategy is like a ship without rudder. All its activities are calf round. Corporate strategy, defined by Michael E. Raynor, is a long-term plan of an company that aimed at creating and capturing its value in a specific product market. Vision and mission are two significant parts of the strategy. In short, the vision can be defined as “How to formulate a corporate strategy” and the mission can be defined as “How to implement that corporate strategy”. According to Tim Hannagan, corporate strategy is concerned with the range of a company’s activities in terms of whether this company focus on one part of the business activity or whether it concentrates on many. For example, Tesco, as a food retailer, it mainly sales food and sometimes clothes as well. However, recently Tesco moves into financial services. Moreover, strategy is concerned as a “bridge” or a tool. It matches the resources and the company’s capabilities to itself and finds out the possible opportunities to achieve the business goal. Therefore, Tim Hannagan regards corporate strategy as a strategic planning, “which is concerned with establishing a competitive advantage, sustainable over time, not simply by tactical manoeuvring but by taking an overall long-term perspective which directly influence line management”. Corporate strategy is based the current situation of the company and influence the company’s future. This essay will critically analyse the advantages of developing an effective corporate strategy in 2014 in terms of enterprise resource management, market share and manufacturing capacity. Competitive advantage also takes a significant part in this...
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
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).
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.
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
Strategic management is the process where organization managers reach the goals and aspirations of the organization on behalf of its owners. This is done through formulation and implementation of ways and methods to fulfill the organizational goals and objectives (Brian, 2011). This is done with in-depth consideration of both the internal and external environments that the organization operates in, in order to allow the organization make the right decisions. Strategic management is an important element that firms must put together through strategic thinking as well as strategic planning (Nag, R., Hambrick & Chen, 2007).