Alternative approaches to strategic management

Alternative approaches to strategic management

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Executive summary

Strategic management can be defined as the sequences involved by a business in the planning, analysing, and monitoring of all aspects of management. These sequences of activities are tied to the business objectives and therefore determines the success or failure of the organisation (Hubbard, Rice, and Galvin, 2014). Therefore, this makes strategic management an essential element of a business. The various issues that may affect business performance, such approaches are used to deal with them. This results in the reduction of risks in business operations since the management is having a proper understanding of the changes in the environment concerning the different business aspects—lack of an appropriate strategic approach results in poor business focus and consequently poor performance.

Introduction

Different approaches have been approved, such as the stakeholder approach, sustainable approach, and dynamic capabilities. Other strategies include industrial-organisational and sociological approaches. The business chose the most appropriate model, following the characteristics of the internal and external environment (Hubbard, Rice, and Galvin, 2014). There is a process involved with the formulation of each of the alternative approaches. Sustainability can be explained as the effective use of company resources to minimise waste and cost while attaining its set objectives. This approach has been successfully used to increase the productivity of the various organisations that adopt it. The stakeholder strategy considers the ideas and interests of other stakeholders in the attainment of its objectives in alignment with its plans.

The strength of strategic management is measured by the ability to beats its other competing businesses. Whether small, large, service, manufacturing, domestic, private, or global business, the results of its actions align with the strategy. This ranges with the different types of companies where some experience high variations in their general performance. The markets become even more competitive as the business environment becomes stiffer with increasing strategies. It is therefore fundamental to research and study strategic management and its alternative approaches to understand the relationship it has with the success of a business. This is the utmost role of the management of any organisation

1. Sustainable approach

This concept has acquired worldwide recognition over the years, as businesses strive to protect the capital and natural resources in the long run. An enterprise adopts this sustainable practice in an attempt to meet the increasing needs of the business activities and stakeholders for the current and the future of the company (Pettigrew, Thomas, and Whittington, 2001). First, companies needed to ensure that they have set sustainable policies and objectives for their employees to encourage excellent performance throughout the departments. The management is responsible for setting targets and developing sound objectives that are tailored to promote sustainability (Radomska, 2015). The policies formulated should provide the stakeholders with the company mission and the strategies put in place in the planning process. Involving the board of directors at this point is necessary to ensure proper development and implementation of sustainable policies. The sustainable developments approach is often difficulties to tie down in analytical terms.

This is because the approach is tied and is concerned with faceted development problems. Any generally recognised definition of the method takes account of the tremendous variety of the objectively of development, yet it must be analytically straightforward in nature. However, there exist different viewpoints for any interdisciplinary approaches that make it possible to pick up some ideas that originates from the various sorts of the scientific field associated with the same. It is as such possible that this approach as whole could be expanded in the different directions by taking the key findings from the different field of enquiry into accounts. With the increasing element of globalisation, the key challenges that most industries do face and communities as well is the ones of striking a balance between with resource scarcity and environmental concerns. It is believed that it is the role of any organisation that plays a crucial part in the sustainability of the future.

From a higher efficiency, low emission and renewables production of energy, total water waste and solution to the ecofriendly development of the environments. The innovative solutions support industries and work to improve the quality of life for society while at the same time managing the impact of the situation. The sustainable approach, therefore, is critical in the development of means of operation that ensure that the outcome is safer on the environmental perspective. The procedure is considered the best globally, especially in the protection of the community interest.

The majority of the companies in the U.K are using sustainable reports to measure the economic results of and the environmental effects of their activities. It has become a genuine interest for investors and stakeholders to demand this information that accounts for the reporting approach of the company’s social-economic performance. Sustainability reports are an innovation to the traditional accounting reports that do not indicate this aspect. As any organisation operates, the principal aim is to align its operations with the global best activities o practices and to get global recognition. The sustainability agenda is often focused on the key issues that most materials of any organisation operations and the stakeholders are based on.

A sustainability report is created through the collecting of information from people living near the company and the global company and its stakeholders. This report contains information about the health and safety conditions of the company & environment, information on the advocacy community, and the ratings of the company (Radomska, 2015). This report has a range of positive outcomes from both the internal and external business environment. Domestic benefits include creating a considerable amount of capital for financial investment, the maintenance of operating licenses, increased transparency to investors, stakeholders, and the public. With increased transparency, there is a continuous improvement as the company gains a good reputation amongst its competitors.

Limitations

Many companies are struggling to manage their capital base due to the scarcity of available resources and an increased level of poverty. The majority of these challenges are environmental related that hinders opportunities and inhibits economic growth. Business sustainability can be defined as the process through which the organisation develops strategies that meet the needs of the enterprise and its stakeholders while building a robust human resource capital. The best method of managing the capital base is by remaining sustainable.

2. Stakeholder approach

Due to the increasing pressure to increase business effectiveness, many businesses have resulted in the use of sophisticated management systems with stakeholder approaches. This approach relies on the assumption that the stakeholders are groups without which the organisation may fail to function appropriately (Grant, 2016). These people include employees, clients, suppliers, environmental and political action members of the public, and the local communities. A perfect example of an organisation using this approach is the APFM (Associated Program on Flood Management). This company brings together a diverse range of entrepreneurs to share information, values, and support in reaching a common goal of flood management. The history of this approach first emerged during the 1980s through a publication by R. Edward Freeman’s Strategic Management- A new Stakeholder Approach in 1984.

This was as a result of building on the work of other authors such as Emshoff (1978) and Mitroff (1982).  The idea behind this approach was to enhance response to the concerns of the top managers and stakeholders of an organisation during turbulence and environmental changes.  The stakeholder approach focuses on the role of the various organisation stakeholder in the management of an organisation. For most organisations today that use this method approach, the multiple stakeholders are always identified, and their specific role of abilities to facilitate the organisation management system is incorporated. The stakeholder approach of management is not a single decision-making approach; the finals approach for any decision within an organisation is affected or determined by the various elements of the decision-making process. The multiple individuals considered do have the role to play. The final choices arrived after a consideration of the numerous factors.  All these factors are often used on coming up with a consolidated kind of management strategy that affects all the stakeholders in the various ways but sums to the same thing which is based on the quality of management.

Stakeholders approach is an approach that helps the management of an organisation have a 360-degree view of the actual scenario that surrounds a given organisation. It is considered as a group aided management approach where the manager of the organisation using this approach have a better of the whole situation that works to surround an organisation based on how perfect the organisation is in the different viewpoints. However, this approach has the problems which are associated with the business in management for others; the organisation point of view of perspective is dependent on a single point of view. Such often result in a situation where the manager of the organisation relying on the approach does not have a full view of the scenario. SRI argued that managers needed to understand the concerns of shareholders, employees, customers, suppliers, lenders and society, in order to develop objectives that stakeholders would support. This support was necessary for long term success. Therefore, management should actively explore its relationships with all stakeholders in order to develop business strategies. For the most part these developments had a relatively small impact on the management theories of the time.  This theory has been useful in offering directions and helping managers to understand change and critically analyse the problems to find new opportunities amidst the crisis. This approach offers all the business stakeholders to air their opinions and views in addressing certain crucial needs (McGuinness and Morgan, 2000). Thus, the participating stakeholders can influence the outcome through involvement in the management processes of risk assessment, flood management strategies, and implementation of ideas. The business utilising this strategy have experienced plan sustainability, productive decisions, flexibility in decision making, resistance to turbulence, and ease of idea implementation (Ansoff, Kipley, Lewis, Helm-Stevens, and Ansoff, 2019). The major drawback to this theory is the fact that a given amount of bias is directed to the stakeholders leading to the violation of the moral and ethical codes. Many companies are starting to withdraw from this approach claiming that it’s imperfect and ambiguous.

The approach of dynamic capabilities

As some of the authors on this topic indicate, the discipline of strategic management evolves in the direction of a comprehensive and systematic approach of dynamic capabilities. The firm uses the dynamic capabilities to build and integrate both the internal and external sources found in its immediate environment (Teece, Pisano and Shuen, 1997). An example of such a firm is the Kenchic broilers company. This approach has successfully transformed this business from a local restaurant to international outlets through a dynamic capabilities approach. The origin of the proactive capability approach was initially created to answer specific questions in sustainable business management. Authors such as Teece have gone further to explain how different firms are good at creating wealth and build their competitive advantage during changing times (Teece, Pisano and Shuen, 1997). The genesis of this approach occurred during the analysis of Penrose and the growth theory, as stated in Teece’s research work. The outcome is the configuration of the shape of the rapidly changing environment as a result of competition (Pettigrew, Thomas, and Whittington, 2001). These capabilities are directly rooted creatively in the acts of the entrepreneur as portrayed in routines such as choice of investment, business trajectory analysis, and product development processes. The major criticism with this approach is that it experiences tautology which refers to mixed use of terminologies, lack of alignment, and consistency. This renders the theory weak due to a lack of meeting and maintaining the conditions of scientific theories. 2007. A dynamic strategic plan allows for an organisation’s strategic plans to be flexible enough to evolve with the ability to incorporate unexpected opportunities instead of assuming a static environment. It is critical in the development of the development and planning of the key goals in a manner which changes with the changing needs of an organisation.

Conclusion

All the alternative strategies have a common goal of ensuring that the strengths and weaknesses of the organisation (internal resources), matches the threats and opportunities (external sources of the environment). The top managers and directors of an organisation have to keenly choose the best approach to use by evaluating the position of the organisation in the current market.

References

Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R., and Ansoff, R., 2019. From Strategic Planning to Strategic Management. In Implanting Strategic Management (pp. 41-52). Palgrave Macmillan, Cham.

Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

Hubbard, G., Rice, J., and Galvin, P., 2014. Strategic management. Pearson Australia.

McGuinness, T., and Morgan, R.E., 2000. Strategy, dynamic capabilities, and complex science: management rhetoric vs. reality. Strategic Change, 9(4), p.209.

Pettigrew, A.M., Thomas, H. and Whittington, R. eds., 2001. Handbook of strategy and management. Sage.

Radomska, J., 2015. The concept of sustainable strategy implementation. Sustainability, 7(12), pp.15847-15856.

Teece, D.J., Pisano, G., and Shuen, A., 1997. Dynamic capabilities and strategic management. Strategic management journal, 18(7), pp.509-533.