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This approach focuses on the flow of information between different levels in the organization. This approach is useful so that a continuous flow of information can be done in organization. Top level passes the expectations, decisions, and policies to the lower level whereas lower level passes their problems and suggestions to the top-level management. It is rightly said that when each level in the organization behaviour collect and pass only useful information then the strategy formulation will be successful. In this approach, strategy usually made for higher level in order to deliver the expectations to the lower level. Today’s business organization is so complex and rapid changing. In this case, it is required by the organizations to maintain a continuous flow of information and ideas to be passed (Wheelen, Hunger, Hoffman and Bamford, 2017).
The hierarchical approach is usually found in large organizations in which focus in given on the corporate level strategies in order to identify the industries in which the highly diversified organization should compete. In every identified industry, manager makes the business level strategies that will help the organization to compete with those (Haines, 2016). After the formulation of business level strategies, the managers on the divisional level will implement the same at the function level (purchasing department, marketing department, sales department, or design). In addition, it is required by all the levels to interact with each other time-to-time. However, lack of communication in different hierarchy becomes obstacle in achievement of strategic objective. There are situations when lower level is required to communicate the top level quickly. It is not possible for those employees to follow a proper chain. In this case, organizations are required to operate a direct route for communication in case of emergency (Hill, Jones and Schilling, 2014).
Hamel and Markides developed the revolutionary approach in 1990s. It stated that the strategic formulation should be innovation-driven, organic, part planning as well as part trial and error. It stated that until successful approach is not identified, some part of the strategy could be planned while some can be trial and error. Planning is a necessary component in this process because without it, further course of action cannot be taken in organizations. It helps the organization in eliminating the undesirable options and only keeps the important structure and information. By taking this approach, organization can further conduct the controlled trials in order to identify the innovative and successful strategies (Karami, 2016).
In this regard, Markides suggested that a revolutionary approach of strategy formulation should provide the detail of customers as well as the target customer that should be consider by the organization. Besides describing the customers, it should also explain the offering and benefits that are required to offer the customer that in turn help in creating value for the product. In order to answer these questions, there should be some specific and innovative strategies needs to be taken in order to serve the customer in best possible manner. In addition, support of employees is also important to bring the planning into action (Morden, 2016). Therefore, it is essential to make employees understand the purpose of the organization. Employee benefits of the organisation also required to understand how an organization is required to react to its external environment. In this regard, he stated that strategic thinking is an important indicator in bring creative and successful strategy (Rothaermel, 2015).
In the limelight of above discussion, it can be concluded that it is proper planning is an important part of organization. There are different levels in the organization from where continuous flow of information is essential. Today’s business organization is too complex that requires the continuous communication between lower and upper level. In bog organizations, it becomes a necessity to maintain continuous flow of information among each department. Top-level management make the policies and pass those to the middle level. Afterwards, suggestions are provided to the lower level to bring those policies into action. In order to implement the successful strategies in the organization, proper planning is necessary. Besides this, an organization should understand the needs of the customer and offer the valuable products to them.
1. Haines, S. (2016) The systems thinking approach to strategic planning and management. United Kingdom: CRC Press.
2. Hill, C.W., Jones, G.R. and Schilling, M.A. (2014) Strategic management: theory: an integrated approach. Boston: Cengage Learning.
3. Karami, A. (2016) Strategy formulation in entrepreneurial firms. United Kingdom: Routledge.
4. Morden, T. (2016) Principles of strategic management. United Kingdom: Routledge.
5. Rothaermel, F.T. (2015) Strategic management. United States: McGraw-Hill Education.
6. Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E. (2017) Strategic management andbusiness decision makingpolicy. New Jersey: Pearson.