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Alternative Approaches to Strategic Management Proof Reading Service
The term strategic management can be explained as a process which involves continuous planning, monitoring, analysis, and assessment all the aspects that are crucial for the attainment of the objectives and goals of the organization. Strategic management helps the business in identifying the issues or the future risks which can affect the performance of the business. In this report, the discussion has been done on the concept of strategic management and the different approaches to strategic management. Analysis of the three approaches has been done so as to analyze the success of the approach. The comparison has been done of these three approaches.
According to Anna (2015), strategic management is a crucial aspect which is responsible for the attainment of the objectives or the goals of the business. It results in a reduction of the risks which may arise in front of the business and deal with the issues affecting its performance. Various approaches too strategic management are applied by the different businesses which help in dealing with the variety of issues. In the words of Narayan (2012), different approaches to strategic management include the sociological approach and the industrial organizational approach. Business faces various issues which affect its performance and for dealing with these issues approaches to strategic management are applied. These issues include lack of strategic vision for the organization, lack of focus on the strategically important aspects of the business and lack of proper understanding of the changes taking place in the business environment. This report will discuss the approaches to strategic management and different aspects related to the approach. There are few shortcomings which need to be dealt and these shortcomings include consumption of excess time, complex in nature and difficulty in the implementation of the strategic approach. A variety of aspects related to these approaches will be discussed for the development of the knowledge of these approaches.
Approaches to Strategic Management
Strategic management is one of the most important elements for the business which helps in focusing on the objectives and goals of the business. Different approaches are available to strategic management and these approaches include sociological approach, stakeholder approach, dynamic capabilities, sustainable approach and the industrial organizational approach. Three of these approaches are explained as follows:
Stakeholder approach to strategic management
In the words of Thornock (2016), stakeholder approach to strategic management can be explained as the approach which considers the interest of the different stakeholders of the business so as to attain the objectives of the business. The focus of the stakeholder approach is over the formulation and implementation of the processes which helps in the satisfying the expectations and needs of the different individuals who have a substantial interest in the operations of business. These different stakeholders of business include employees, shareholders, suppliers, customers, communities, and management. According to Freeman & McVea (2016), the focus of the stakeholder approach is on the management of the business environment, the relationship of the business and promoting the shared interests in an active manner.
Benefits of stakeholder approach to strategic management
The intention of this approach is to provide or develop a single strategic framework which helps in developing flexible shifts. It is strategic management process which helps in analyzing the manner in which the business environment gets affected due to the activities of the business and the impact of business environment over the business and its performance (Freeman & McVea, 2016). Another benefit is of stakeholder approach is the enhancement in the survival of the business by achieving the objective of the business. Use of stakeholder approach to strategic management helps in encouraging management for the development of the strategies for the attainment of the success. This approach enhances the capabilities of the business by developing competitive advantage and providing win-win outcomes.
Implementation issues of stakeholder approach to strategic management
The issues which may arise during the implementation of stakeholder approach are resistance to the change by the stakeholders, conflicts between the interests of the different stakeholders, impact over the participation of the stakeholders and complexity in the capabilities of the managers (Ackermann & Eden, 2011).
Limitations of Stakeholder approach to strategic management
The process is time-consuming as the interests of the different stakeholders need to be considered. Different factors need to be considered by the company which reduces the efficiency of the company. It can also result in discouraging the investments of the business Freeman, et. al., 2010).
Dynamic capabilities approach to strategic management
In the words of Basu, et. al. (2013), dynamic capabilities approach to strategic management can be explained as the approach which is focused on the exploitation of the existing internal and external competencies of the business for the purpose of addressing the rapid changes taking place in the environment. The major focus of this approach is on the development of the capabilities of the management, functional and technological skills and development of the unique combinations for the business.
Benefits of Dynamic capabilities approach to strategic management
According to Inan & Bititci (2015), Dynamic capabilities approach to strategic management is helpful in the adaptation of the internal and external changes of the business environment for dealing with the issues in an effective manner. In the words of Pisano (2015), Dynamic capabilities approach can be used for the purpose of analyzing the difference in the level of companies. The focus of the business over the exploitation of the new possibilities is increased with the increase in the exploitation of the old certainties (Ahenkora & Adjei, 2012).
Implementation issues of Dynamic capabilities approach to strategic management
According to Feilera & Teece (2014), the implementation issue which can be faced during the implementation of Dynamic capabilities approach include the centralized or decentralized issue which creates an impact on the decision-making the process of the business. Poor global IT infrastructure may also act as a barrier and affect the implementation process of the dynamic capabilities approach.
Limitations of Dynamic capabilities approach to strategic management
According to Nedergaard & Jones (2011), the major limitations which can affect the Dynamic capabilities approach include lack of support from the resources and lack of effectiveness in using the resources. Changes in the business environment rapidly also act as a limitation. Another limitation of this approach is the decentralization in the business and non-availability of which negatively affects the business.
Sustainable approach to strategic management
The sustainable approach can be explained as the approach which is used by the company for the management of the resources in an effective manner for the enhancement in the performance of the business. In the words of Crabb (2012), the use of sustainable approach has helped the organizations in the development of the openness of the business towards the complexities and diversity which results in an enhancement in the performance of the business. This helps in dealing with the complex situations in a better manner. This approach to strategic management is focused towards the attainment of success in long run and development of market effectiveness (Crabb, 2012).
Benefits of Sustainable approach to strategic management
The advantages or benefits of a sustainable approach to strategic management can be an increase in the productivity and effectiveness by an enhancement in the management system adopted by the company. The analysis of the external and internal environment can be done in an easy manner by using sustainable approach (Radomska, 2015). It enhances the performance of the business as the resources are utilized in an effective manner by focusing on the future needs of the organization.
Implementation issues of Sustainable approach to strategic management
During the implementation of the sustainable approach to strategic management, various issues are being faced by the business. These issues create an impact on the performance of the business at large. Lack of motivation and support can also affect the implementation of the sustainable approach. The pressure on the management also affects the implementation of the approach. The reaction of the different stakeholders can be different which also affects the implementation and acts as an implementation issue.
Limitations of Sustainable approach to strategic management
The major limitations which can be faced include lack of active participation of the employees which affects the effectiveness of the business in the attainment of the objectives of the organization and rising negative consequences of mistakes in strategic planning also act as a limitation (Brandutan & Sarbu, 2012).
Examples of the approaches to strategic management
Different organizations adopt different approaches for the purpose of enhancement in the performance by managing the operations in a strategic manner. These approaches affect the effectiveness of the business. The selection of the approach to strategic management is dependent on the requirement of the business and the issues faced by the business.
The Coca-Cola Company is using stakeholder approach to strategic management for the purpose of management of the operations and achieving the objectives. Coca-Cola Company is offering a carbonated soft drink to its large customer base for the enhancement in the satisfaction level of the customers. It has started engaging the stakeholders for the purpose of continuous improvement in the performance of the company. The motive behind the implementation of this approach to strategic management is to address the challenges faced by Coca-Cola Company at the global level. It has placed its focus on engaging the different stakeholders including bottling partners, customers, communities, employees, government, suppliers and other stakeholders by adopting different strategies. It is used stakeholder approach as a sustainable strategy for ensuring the attainment of the objectives of the business. This approach is adopted for the purpose of achieving the positive impact on the different aspects of the business environment. For engaging the bottling partners it has started interacting with the partners on a day-to-day basis. For engaging the customers it has started conducting surveys and setting up customer care centers which provide support to the customers. For the engagement of the employees, it has started conducting engagement surveys and communication with the employees on regular basis. For involving the government and other regulatory bodies it is conducting meetings with these stakeholders and foreign investment advisory councils have been formed or constructed. The outcomes of these steps taken by Coca-Cola Company have shown that the efforts made by the company have attained the objectives decided by the company. The results of these efforts of Coca-Cola Company can be seen in the generation of trust and loyalty among the employees and the customers of the company. The rights of the human resource have been promoted from the steps taken by the company. Coca-Cola has adopted golden triangle approach for improving the relationship with the partners (The Coca-Cola Company, 2015).
Dynamic capabilities approach is a crucial approach to strategic management. The use of dynamic capabilities of Apple has resulted in helping the company in making changes as per the changing environment (Helfat, 2013). It has effectively utilized the resources available in an effective manner for the attainment of the objectives. The resources available with Apple have been used as strengths of the company which has contributed towards the improvement in the performance of the company. Dynamic capabilities of the company have ensured the success of the company in the changing business environment. Apple has analyzed the changing aspects of the business environment which are responsible for the enhancement in the performance of Apple and providing it a competitive advantage in this competitive business environment. It has effectively utilized the marketing technologically-based products for attracting the customers towards the products offered by it and developing the features of the products offered by it. All these strengths of Apple have helped in initiating a step towards the success and attainment of the objectives of the organization. Business and its operations need to be managed in a flexible manner so as to make sure that the changing aspects are effectively implemented by the business (Helfat, 2013).
Adidas has adopted a sustainable approach to strategic management so as to enhance the performance of the business. Adidas is making efforts for behaving like a sustainable company which is focusing on the prevention of the rights of the individual. Adidas has placed its focus on the meeting the expectations of the different stakeholders of the business for ensuring that these different stakeholders are satisfied with the services offered by the company. It is taking steps towards the attainment of the set objectives. It is operating at the global level and for the attainment of the objectives, huge efforts need to be made in the right direction. It has adopted values and provided rights to the different stakeholders so as to meet the expectations of these stakeholders. It has placed its focus on the various issues affecting the lives of the different stakeholders by violating the rights. The major focus of the company is on the issues related to waste, human rights violations, growing energy consumption, and pollution. It is vital to safeguard the interest of the different stakeholders for providing a safe and secure environment. It has set strategic priorities which it is planning to achieve by the end of 2020. These strategic priorities are targeting the issues or the problems faced by the different stakeholders. It has developed a holistic strategy which has helped in ensuring that the objectives are met (Adidas, 2017).
This report has discussed the concept of strategic management so as to develop the understanding of the concept. Three different approaches have been discussed in this report which has helped in the enhancement in the performance of the business. These three approaches to strategic management are the Sustainable approach, Dynamic capabilities approach and stakeholders approach. According to dynamic capabilities approach, the capabilities of the business are used in an effective manner for the attainment of the objectives of the business. And the focus is on the management of the operations in a flexible manner for achieving the targets. According to a sustainable approach to strategic management, the resources are utilized in an effective manner for ensuring that the resources are utilized in the most suitable manner. Another approach to strategic management is stakeholder approach in which the focus is on the fulfillment of the expectations of the various stakeholders who have a substantial interest in the operations of the business. These approaches have effectively enhanced the performance of the business by developing the capabilities of the business. All these aspects are crucial for the business as these aspects contribute towards the growth and development of the performance of the business. With the change in the business environment, the need arises to adopt strategies which help in developing the capabilities of the business by enhancing the performance for managing the operations in an effective manner. Different issues are being faced by the businesses in this changing world which has created an impact on the performance of the business.
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