Corporate Stategy
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First of all, in this paper will take critically discuss the approaches to developing strategy. Strategy is the direction and scope of an organisation over the long term, which achieves advantage for the organisation through its configuration of resources within a changing environment and to fulfil stakeholder expectations (Johnson, G. & Scholes, K.2002, p.10). Defining strategy as intended and conceiving it as deliberate, as has traditionally been done, effectively precludes the notion of strategic learning. Once the intentions have been set, attention is riveted on realizing them, not on adapting them… Adding the concepts of strategy, based on the definition of strategy as realized, open up the process of strategy making up to the notion of learning ( Mintzberg and Waters 1989, p. 17).
Strategic management helps organizations to plan use of resources and improving deployment capabilities within the uncertainty competitive environment. Strategy is formed by two critical forces acting simultaneously, One is deliberate, the other one is emergent. Managers need deliberate strategies to provide the organization with a sense of purposeful direction. Emergent strategy implies learning what works over time. Mintzberg suggested that nobody can claim to own the world �strategy’ and that the term can legitimately be used in several ways, therefore he proposed five Ps of strategy which are: plan; ploy; pattern; position and perspective. There is a key difference between two of Mintzberg’s Ps of strategy: plan and pattern. The difference is to do with the source of the strategy. Mintzberg drew attention to the fact that some strategies are deliberate whereas others are emergent. Deliberate strategy sometimes called planned or prescriptive strategy that is meant to happen. It is preconceived, premeditated and usually monitored and controlled from start to finish. It has a specific objective. Emergent strategy has no specific objective. It does not have a preconceived route to success but is may be just as effective as a deliberate strategy.
Deliberate strategy is the vision towards strategy formation in organizations that emphasizes the benefits of acting intentionally. Plan and think before act. It does not mean that deliberate strategies are completely blind to unexpected developments and events. On the other hand, Emergent strategy is the vision towards strategy formation in organization that emphasizes the benefits of letting the strategy emerge as things gradually becoming apparent. Try before you commit. Strategy is viewed as an ongoing process of constant learning, experimentation and risk-taking. It is an adaptive, incremental and complex learning process in which the ends and means are intertwined and often specified simultaneously. At below, will analyse for the deliberate approach and emergent approach.
The prescriptive, deliberate or planned approach is based on long-term planning which seeks to achieve a fit between organizational strategy and the environment in which it operates. This approach views strategic management as a highly systematized and deterministic process (Andrews, 1987; Ansoff, 1965; Argenti, 1974). The prescriptive paradigm of strategic management has been criticized as being unrealistic, particularly in terms of rapid and turbulent change. Nevertheless, the need to set long-terms objectives and to formulate broad plans and policies in necessary for the survival and progression of any organization. Detailed and inflexible long-term planning is, on the other hand, unnecessary and often counterproductive. Competitive advantage can be gained by being opportunistic and taking advantage of unforeseen opportunities. There are five advantages for deliberate strategy formulation: Direction. Organizations need direction. Without objectives and plans, organizations would be adrift. If organizations did not decide where they wanted to go, any direction and any activity would be fine. People in organizations would not know what they were working towards and therefore would not be able to judge what constitutes effective behaviour (e.g. Ansoff, 1965; Chakracarthy and Lorange, 1991). Commitment. Plans allow organization to mobilize themselves, build capacity and commit to major investment. Plans enable early commitment to a course of action. By setting objectives and drawing up a plan to accomplish these, organizations can invest resources, train people, build up production capacity and take a clear position within their environment. Plans allow organizations to mobilize themselves and to dare to take actions that are difficult to reverse and have a long payback period (e.g. Ghemawat, 1991). Coordination. A well crafted organization-wide strategy allows the organization to act as a whole and make coordinated decisive moves. Optimization. Good plans also facilitate optimal resource allocation. Drawing up a plan disciplines strategizing managers to explicitly consider all available information and consciously evaluate all available options. This allows managers to choose the optimal course of action before committing resources. Moreover, documented plans permit corporate level managers to compare the courses of action proposed by their various business units and to allocate scare resources to the most promising initiatives (e.g. Ansoff and McDonnell, 1990). Programming. Strategic planning enables organization to run like a computer, precise, reliable, without mistakes and efficient.
For example, the creation of a business plan, to create a business plan is prepared by education with clear intention behind it. Applying to the course and taking it, to formulate a written down business plan and marketing plan. This has intention behind it and if this is the how it will be completed this can be seen an intended strategy becoming a realized strategy.
Above mentions, these major advantages of deliberate approach, it can come as no surprise that organizations feel the pressure to engage in deliberate strategizing. Deliberateness is a quality that the strategy formation process cannot do without (Wit and Meyer, 2004).
On the other hand, an alternative to the strategic planning movement is the emergent or learning approach (Lindblom, 1959; Mintzberg and Walters, 1985; Mintzberg et al., 1995). This is based upon the view that the modern dynamic and hypercompetitive business environment will inevitably mean that there will be a gap between planned and realized or actual strategies. A rapidly changing environment means that organizations must incrementally change adapt strategy on the basis of organizational learning. This does not preclude deliberate strategic planning completely but implies that strategic plans must be flexible, guiding the overall direction of the organization, but adapted when