Alternative Approaches To Strategic Management Essay

Linear Approach

Discuss about the Alternative Approaches to Strategic Management.

Strategic management refers to the formulation and implementation of significant goals and initiatives by an organisation’s executive management team on behalf of the shareholders. These decisions are often based on the consideration of the available resources and evaluation of all internal and external environment factors that affect the business operations. Strategic management provides organisations the overall direction and involves the specification of the entity’s goals, designing of plans to achieve the objectives, and development of various policies. The strategic management process also entails allocation of allocating resources to attain the objectives (Rialp, Rialp, and Knight 2014). Academicians and practicing managers have over time developed a number of models and frameworks to help in the strategic decision-making processes. The models work differently in varied context, complex environments, and competitive dynamics. It is important to note at this state that strategic management is not static, but is rather dynamic. As a result, most of the models that have been developed over time include a feedback channel to help managers monitor the implementation of the strategies, hence, base their future decision on such findings (Hitt, Ireland, and Hoskisson 2012).

One of the current strategic management models is the linear approach. The standard liner approach entails planned determination of initiatives, goals, and the allocation of resources along the lines of an all-encompassing strategy. The strategy often focuses on long term perspectives of the business, and emphasis is laid on managers exchanging information back and forth to make sure that all departments within the business follow the same strategic approach (Morecroft 2015). Scholars indicate that the approach is the most consistent with most strategic planning approaches and is likely to have an impact in the long planning horizon of the firm. One of the limitations, however, is that the strategist who uses the approach often deals with the environment as opposed to the specific issues that the business faces. That has led to the adoption and use of three main strategic approaches, which deal with the problem at hand and not just the business environment. These include the stakeholder approach, dynamic capabilities, and sustainable model (Kapferer 2012). The next sections of this essay discuss the three approaches and gives clear examples of their application. Finally the last section of the paper discusses the availability of each of the three strategies, suggests the benefits of each, looks at the implementation issues, and the limitations associated with the use of the three approaches.

Strategic management has long been attributed with numerous competitive advantages, especially in congested markets. It is for the same reasons that strategic management has invented several approaches to ensuring that the practice takes both a business and socio-corporate effect. This is to imply that strategic management strives to ensure that enough revenue is generated from a given investment. On the other hand, socio-corporate virtue ought to be promoted by the same practice increasing product preference in the market. One of the main approaches used by firms includes the stakeholder approach which has come with a number of factors (Oliver and Holzinger 2008).

Stakeholder Approach

The term stakeholder in a business entity implies to all those individuals who directly or indirectly affect the operations of the involved firm. These would mainly include the employees, the management, investment partners, consumers or customers and sometimes, competitors. For any management to be considered strategic, all of the above stakeholders should be well accounted for. Stakeholders approach to strategic management come with numerous incentives to a firm given that motivation levels and working conditions are ever conducive. This is to imply that profits take an upward curve in the performance graph as reflected in financial statements (Reed, et al. 2009).

The objectives of strategic management using stakeholder approach tend to be all-inclusive as well as comprehensive. In most instances, stakeholder approach ensures that there is minimal resistance from all stakeholders as all of their prime needs are highly prioritized. For instance, dividends are equitably shared among investment partners leaving a minimal room for complains on unattended shares. From another angle, employees are perfectly fitted into the involved firm’s objective drive by ensuring that their wages are timely met and added incentives fairly distributed. With such an approach, it would be very rare to have internal and external resistance inhibiting revenue generation (Harrison, Bosse, and Phillips 2010).

It would also be of essence to note that in stakeholder approach policies are jointly enacted by all of the involved parties. Whenever there is a change that has been deemed necessary for implementation, a joint meeting is conducted with all stakeholders’ representation present to ensure that the process is comprehensive and transparent. In such a management environment, it is expected that all of the requirements agreed upon in the meeting should be met amicably within the shortest time period. All of the barriers to the implementation of a policy are tabled during the joint meeting to avoid instances of delays. It should also be wise to acknowledge that a highly structured communication flow is developed for the management to be efficient (Jamali 2008).

In most organizations, the diversity in capability tends to be a vital element of management. This depends highly on the nature of operations that the firm is engaged in especially when it comes to complex and huge projects (Wu, et al. 2012). Logically, organizations include teamwork as one of the main channels of accomplishing both simple and complicated tasks. When an assignment is conducted individually, in most cases, there are numerous cases of irregularities in terms of unattended elements and mishandled requirements. It is for this main reason that organization adopts a dynamic capability approach to strategic management (Lee, et al. 2012). Nevertheless, there are two main factors that necessitate a dynamic capability approach.

To begin with, a dynamic capability approach ensures that employees work at their best in terms of their skills. The competency is optimized by aligning their trained knowledge with a task at hand. For a teamwork assignment, this approach becomes most effective when individuals are expected to submit their scheduled modules (Beske 2012). The main hurdle in this approach tends to be that ability to map one’s capability to the requirements of a given task. Aside from that, it would be very true to mention that this approach to strategic management especially in the production arena or department of a firm (Rodriguez, Ricart, and Sanchez 2002).

Dynamic Capability Approach

Addressing the above from another angle, optimizing competency with respect to dynamic capability tends to be a motivational attribute in strategic management. This would be well explained by the fact that one assumes the responsibility of a task with full intention of submitting a quality assignment. From a personal point of view, any individual feels at ease working with less pressure on an area they are vast in. In turn, this intrinsically motivates an employee who works hard to ensure that they submit an assigned task to the best of their ability. In the business world, having quality submissions for assignments to employees is one of the main driving factors to success (Ambrosini and Bowman 2009).

From a conclusive point of view, a dynamic capabilities approach becomes more effective when the management is able to integrate all of its expertise from different employees. It would be a very futile process if a firm has rich-skilled employee base yet it is unable to maximize on such resource. Therefore, strategic management ensures that dynamic capabilities are well incorporated into the firm’s goals and objectives for a successful venture. If a management would incorporate this approach and fail to have a complete integrating platform, then the entire approach would ever be faulty (Augier and Teece 2009).

Given the statistics of organization management, it is estimated that a substantial number of both regional and global firms use the above approach for their strategic management. In simple terms, sustainable approach is a method of management where relevance describes the structure of operations. In other terms, the management approach used perfectly fits the operations of the firm regardless of the latter’s nature. This would imply that the involved firm’s management does not take a particular direction in terms of adhering to a particular management approach (Sala, Farioli, and Zamagni 2013). There are some firms which prefer dynamic capabilities approach to stakeholder approach. However, with the described management approach in practice, any management platform is used where necessary. This approach tends to be effective with respect to some vital underlying factors (Gupta and Kumar 2013).

First and foremost, sustainable approach in strategic management focuses (primarily) on the results. The sustainability effect of the management practice ensures that assignments are always submitted in time with minimal errors. In general terms, any sustainable approach adopted for strategic management depicts a typical modern management which operates in rapidly changing market or environment (Hall and Wagner 2012). Just like any market, it would be very true to note that consumer needs keep on changing from time to time. It is for this reason that sustainability approach is mostly preferred over other management approaches (Castiaux 2012).

It would also be of essence to note that sustainability approach assumes the role of one fit all for most organizations. This is to state that this approach would be used for any firm irrespective of the nature of its operation. Sustainability approach ensures that an organization stays in business for as long as it meets the demands of the market. This would include incorporating any management approach that would fit onto the operations of the involved firm (Hall and Wagner 2012). It would also be of essence to note that this approach can integrate other approaches using some of their vital elements for a given operation. For instance, having a task that requires specific expertise would be well managed by dynamic capabilities approach. The same task would also play an effective role in ensuring that the firm accrues as much revenue from the market as possible. In such a phenomenon, the stakeholder approach is used to sensitize on the importance of the task and its meaning to the firm (Wheelen and Hunger 2011.).

Availability and Benefits of the Approaches

FiberTech uses the stakeholder approach strategic management in its Light Wave Cable project. The first step when using the strategy is to identify and classify the stakeholders of the project. The next step is to determine the role, power, interest, and influence of each of the stakeholders. That helps management indentify the key stakeholders in the project. In the formulation of the strategies for the implementation of the project the managers base their decisions on the needs, interest, and aspirations of the most important stakeholders in the project. That helps minimise the risk of the project encountering competing goals and maximises the resources required to successfully complete the undertaking (Jamali 2008).

If the firm was to use the dynamic approach, the managers would focus on the changing aspects of the project. At each stage they would have to come up with an idea of how to implement the changes that take place throughout the process. The dynamic approach is best suited for a highly changing business environment is it ensures that the managers incorporate the changing elements of their environment as they progress with the implementation of the project. On the other hand, if the firm was to use the sustainable approach the aim would be to ensure that the project lasts for a long time and remains relevant in the long-term future. The first stage in the implementation of the sustainable approach is to forecast the future needs and trends of the business environment. That helps the managers form a basis for their project and determines what clients or stakeholders will require in the unforeseen future period (Hall and Wagner 2012; Jamali 2008).

Conclusions

Several scholars argue that the stakeholder approach is only applicable in short term projects, which at achieving specific goals. That is because the approach targets the most crucial stakeholders in a project. The managers of the firm use the interests, expectations, and goals the most crucial stakeholders after an analysis of all the parties involved in the execution of the project, to determine next course of action in the implementation process (Oliver and Holzinger 2008).

The dynamic capabilities approach is considered a valid model to use in an extremely dynamic environment. That is the case because the approach aims at maximising the capabilities of the employees and managers in a project. The idea is to equip them with the latest competences required to compete fairly with other major players in the industry. Proponents of the dynamic capabilities argue that the aim of the business is to create additional value. Therefore, for the firm to ensure continued competitiveness, the managers must adopt a flexible approach to the business so that it adapts to the changing nature of its competitive environment (Hall and Wagner 2012).

The stainable approach is based on the need for the form to accept that the business environment is part of the natural and social systems. That means that for the firm to survive into the long-term unforeseen future, the managers must respect members of the social and natural environment in which it operates. Academicians and scholars agree that the approach is valid in projects that the firm intends to continue operating in the long-term future (Sala, Farioli, and Zamagni 2013).

Implementation Issues

There are suggested benefits for each of the approaches discusses in this paper, Fir the stakeholder approach open of the main benefits is that the enhances objectivity in the attainment of a project’s goals. Anther benefit is that it is economic in the sense that the firm does not waste resources implementing interests of stakeholders who will not influence the project in the first place. The dynamic capabilities model is said to be flexible and efficient in terms of skill and competency development in the firm. Finally, the sustainable approach makes it easy for the firm to survive and remain relevant in the business in the long-term future (Sala, Farioli, and Zamagni 2013).

The main implementation issue faced in the execution of the three approaches is the dynamic nature ft he business environment, it is difficult to predict accurately the future occurrences within the business world. As a result, mangers need to take the time and research thoroughly to determine the best and most effective approach and one that they can implement without many uncertainties in the future (Hall and Wagner 2012; Oliver and Holzinger 2008).

Each of the three approaches has some limitations. The main limitation of using the stakeholder approach is that it is difficult to compromise or balance stakeholders’ interest against one another. By assuming that some of the stakeholders are important than others, the approach fails to implement some crucial strategist that would help steer the firm foreword. The dynamic capabilities approach is considered to be expensive by some managers as they have to constantly review the business trends and revise their existing strategies (Hall and Wagner 2012). Finally, the sustainable approach is costly and time consuming, which limits its application in most businesses. However, it is important to note that from the analysis in this essay, the sustainable approach to strategic management is the most effective for use if the firm intends to remain relevant for a long-time in the future (Oliver and Holzinger 2008).

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