STRATEGIC MANAGEMENT
Introduction
Strategic management refers to the utilization of organization resources to achieve its goals, mission, and objectives. It entails a comprehensive reflection on the organization’s procedures and processes and the external environment of an organization that influence its functioning (Alam, 2018, 67). The strategic management helps the organization leading in making decisions and actions. Strategic management is the process of formulating the organization objectives, analyzing the competitive nature of the business, analysis of internal organization resources, assessment of the company strategies to ensure that they are incorporated in the daily operations of the company (Gupta, 2016,34). Strategic management could also be defined as all the procedures that entail the strategic thinking and planning of an organization. It involves identifying the achievable organization’s objectives and enhances the ability of the organization to meet the aims and objectives identified. The paper aims to give a comprehensive insight into strategic management.
Definition of Emergent and Prescriptive Strategy
The prescriptive strategy in where the three core area of management have a sequential relationship, it entails analyzing the process before it is executed thus the procedure is prescribed before its implementation ( Johnson, 2017, 62). The emergent strategy is whereby three core aspects of strategic management are interlinked, and their analysis is done before the implementation. However, these management strategies are formulated on an experimental process of trail and errors; hence the management needs to distinguish between the observed and implementation stages.
Critique of emergent and prescriptive strategy
In prescriptive strategy, the organization mission, objectives, and core values are clearly stated and the visions comprehensively defined before the commencement of the implementation of the process. The top management plans formulate and deliberate on the strategy based on the organization visions and priorities. The approach incorporates a top-down approach which is regarded as authoritative. It uses a linear model that entails strategy analysis, formulation than implementation (Carayannis, 2018, 98). The prescriptive approach is considered a rational, orderly and system that fosters a stable business environment. The process is based on tree principles of management that include formulation, planning and strategic position in a competitive environment.
The prescriptive approach is useful in organization management because it has many advantages. It has a long term strategic thinking of the company organization. Since the approach factors all the organization’s objectives in attaining its mission, core values and mission hence increasing managers’ motivation since they could measure their decisions and actions towards the company’s long term performance (Jablonski, 2017, 49). The approach is useful since it discourages short-term practice since the organization targets are based on a long term basis.
It is advantageous due to its coordinating effect since it becomes easier to coordinate employees, the organization’s strategic business n units and the leadership. Coordination becomes more manageable since the company objective, core value, mission, and visions are formulated in the organization’s strategic management. It enables the organization to achieve effective communication since the makes strategic decisions that are in line with the company objectives thus achieving consensus ( Peppard, 2018, 64). Also, the approach fosters learning from each other since it entails sharing and harmonizing ideas from the leadership department in an organization to formulate strategic management. It is evident from the approach that strategic planning entails leaning (Sarsby, 2016, 35). It enhances suitable organization since the analysis enables the organization to be organized in its functions to stay ahead in a competitive environment.
The approach also has got various demerits since it discourages creativity in an organization due to its top-bottom process. Creativity and initiatives emerging from the lower management are usually packaged depending on the needs of the top management hence demoralization of the workforce ( Jensen, 2020, 35). Also, the approach can lead to paralysis due to strategic analysis since the organization spends more resource in analyzing it external and internal environment thus missing the opportunities that arise. Strategic paralysis could, in the long run, affect the operations of the organization. The approach may lack the sufficient information required for strategic analysis since most information about competitors is confidential (Kiron, 2019, 136). Also, the method could experience the danger of strategic shift since the top-bottom approach in most cases; the information does flow at a slow pace. The bottom-up affects the company since it could not benefit from the junior staff information.
Emergent Strategic Planning
The emergent approach is where strategies come up in the process of managers making decisions in the running of an organization leading to a particular pattern. It is evident that the top management does not make the organization’s management strategy but as a result of the actions, decisions and events that happen at the lower level of management (Kunc, 2018, 59). The strategic effective since it enables flexibility to changes in the business environment. Under this management, the objectives are based on a short term basis that allows the organization to adapt to the changing climate. It is based on the learning school of approach since the strategies are developed due to the risk changes done by the lower levels managers (Wang, 2018, 142). The flexibility to rapid changes in the business environment would be useful to enable a business stay ahead in a competitive market.
The approach has many advantageous if adopted in an organization since it has the least resistance to changes. The fewer resistance occurs because the strategies and modifications are carried at the same time hence encountering less resistance since it does not require implementing radical changes. It is useful since it presents the ability for the exploit opportunities. Its flexibility to changing environment makes it easier to exploit the opportunities (Lindell, 2016, 114). The approach has higher chances of strategic success since the experimentation and learning are done during then emergence of management strategies. It becomes a source of competitive advantage among peers since the development and implementation of the process are carried at the same time (Ross, 2018, 75). It also effective in an organization since it motivates employees and promotes innovation in the work place.
The emergent approach has its shortcomings due to the possibility of short-term focus because managers focus on the short term performance due to the lack of a formal strategic plan. It would place the organization at a disadvantageous competitive state since it concentrates on the today survival and not planning for the future. The approach has high risks of strategic drift since the organization culture determines it since it develops exponentially (Parnell, 2020, 26). It may achieve lower success since it does not have formal planning hence becomes hectic to monitor organizational performance.
How Organizations Use Internal and External Environment
SWOT Analysis
A SWOT analysis framework is used to evaluate how an organization uses its internal and external environment in strategic management. It gives a comprehensive assessment of the business environment to assess its current position and future positioning. The SWOT framework is established to provide realistic, data-based, and information-driven on the organization’s strengths, weaknesses, opportunities, strengths, opportunities, and threats (Mayabi, 2019, 83). The analysis should be used as a blueprint to guide the organization’s strategic management as opposed to prescription. It is a strategic tool that helps in the formulation, development and implementation of management strategies. The analysis leads to the rising of new perspectives and ideas in an organization which are based on data and facts (Speth, 2015, 31). The SWOT analysis analyzes the organization environment effectively when different groups offer their ideas and view.
The analysis is an effective process of evaluating the organization performance, competition from peers in the industry, the potential for growth of the business and the risks in management that may hinder the success of the organization. The analysis of the external and internal environment of the organization, the framework could identify aspects where the firm needs to improve hence help in the development of strategic plans (Pathak, 2020, 59). Analysis of external and internal environment allows the business to incorporate strategies that could enhance the success and drive it away from management plans that could be less successful.
The analysis could help identify the company strengths, which are areas where the company excel and devise on how to use it to their competitive advantage. The study of the organization would help in the identification of forces that make the business not to achieve its optimum performance (Porter, 2017, 70). Would highlight aspects of the company that the organizations need to improve to remain competitive in the market. The weaknesses could be in the external or internal environment.
The SWOT analysis identifies opportunities in the internal and external environment that could help the organization to stay ahead in a competitive market. The framework also identifies threats in the organization strategic management (Maheshwari, 2020, 47). The model identifies the force in the organization that has the potential to harm the strategic direction of the organization and develop strategies to mitigate them.
The Five Forces
The analysis method developed by Michael Porter helps to give a comprehensive assessment of the organization’s external environment. It is established regarding the industry environment aspect (Romano, 2017, 39). According to the framework, an organization would always encounter five different in its business environment that impacts on its competitive nature.
The five forces that could help to establish how an organization utilizes its resources include; threats on new entrants in the industry, the bargaining power of suppliers, bargaining powers of buyers, threats from substitute products in the market and rivalry among competing peers in the industry (Wunder, 2016, 142). The model helps to determine whether the strategic management, whether the business is attractive or it can achieve above-average returns. Organizations should be informed of all the forces before making any decision or actions to enhance effective strategic management.
Conclusion
Strategic management in an organization enhances the effective utilization of the resources to achieve its objectives, mission, and vision. The strategic direction could be in the form of emergent or prescriptive approach in formulation, development, and implementation. A SWOT analysis is a useful tool that helps to assess how organizations use their internal and external resources strategic management. The strategic direction of an organization influences its competitive position in the industry. The emergent and prescriptive strategic approaches are essential in the development and implementation of long term and short term strategic management. An organization should incorporate strategic management that could effectively achieve its mission, visions, and objectives.
Reference List
Alam, J., 2018. Developing Strategic Management and Leadership Skills. 5th ed. Oxford: GRIN Verlag.
C.B., G., 2016. Strategic Management (Text and Cases). 7th ed. Berlin: S. Chand Publishing.
Carayannis, E., 2018. strategic management for technological learning. 2nd ed. new york CRC Press.
Gerry Johnson, K. S., 2017. Fundamentals of Strategy. 4th ed. London: Pearson, UK.
Jablonski, A., 2017. Business Models: Strategies, Impacts and Challenges. 3rd ed. Oxford: Nova Science Publishers.
Joe Peppard, J. W., 2018. The Strategic Management of Information Systems: Building a Digital Strategy. 4th ed. Cambridge: John Wiley & Sons.
Joshua D. Jensen, S. L. D., 2020. Manage with Flair (Vol. 1): Strategic Management. 3rd ed. London: J. Jensen Group.
Kiron, M., 2019. Company Background and SWOT Analysis of Forever 21. 2ND ed. HAVARD: GRIN Verlag.
Kunc, M., 2018. Strategic Analytics: Integrating Management Science and Strategy. 2nd ed. Havard: John Wiley & Sons.
Lindell, J. T., 2016. The controller as Business Manager. 2nd ed. Berlin: John Wiley & Sons.
Mayabi, B., 2019. Primark. Core Competencies, Pestle Analysis, SWOT-Analysis. 6th ed. London: GRIN Verlag.
Parnell, J., 2020. Strategic Management: Theory and Practice, Sixth Edition (Paperback-B/W). 2nd ed. London: Academic Media Solutions.
Pathak, D. R. K., 2020. Strategic Management (for MBA). 3rd ed. Oxford: Shanti Publication.
Porter, M. E., 2017. Competitive Strategy: Techniques for Analyzing Industries and Competitors. 5th ed. new york: CreateSpace Independent Publishing Platform.
- Maheshwari, S. A., 2020. Strategic Management: A publication of SBPD Publishing House (Sanjay Sahitya Bhawan). 3rd ed. Washington dc: SBPD Publishing House.
Romano, L., 2017. Project Portfolio Management Strategies for Effective Organizational Operations. 3rd ed. Salford: IGI Global.
Ross, L., 2018. Strategic Management. Are Strategic Planners Still Essential?. 5th ed. London: GRIN Verlag.
Sorsby, A., 2016. SWOT Analysis. 7th ed. Oxford: Lulu.com.
Speth, C., 2015. The SWOT Analysis: Develop Strengths to Decrease the Weaknesses of Your Business. 2nd ed. new york: 50Minutes.com.
Wang, V. C., 2018. strategic leadership. 4th ed. Berlin: IAP.
Wunder, T., 2016. Essentials of Strategic M
anagement: Effective Formulation and Execution of Strategy. 2nd ed. london: Schäffer-Poeschel Verlag.