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The Linear Model of Strategic Management

Question:

Discuss About The Business Innovation Corporate Sustainability?

Strategic management is the process of implementation and formulation of major goals and initiative aimed at the top level management of the organization. These are the management actions which the top management takes on behalf of the owners of the company and their motive behind such actions is to formulate efficiency in the internal and external environment of the organization (Mithas, Ramasubbu, and Sambamurthy2011). Michael Porter identified three basic principles to determine the strategic management, these principles are:

  • Creation of unique and valuable position in the market.
  • Compromise activities to archive satisfaction and determine activities which shall not be done.
  • Creation of profit by aligning the company's activities with a strategic mission.

The linear model of this approach focuses on the planning process and achieving goals as per the strategy defined. Further talking about the strategic management, there are a few limitations which the business faces like the process of strategy initiate a direction in which the company has to run. Irrespective of the chances which a company receives in their way or shortcomings they have to move to the same path. Also, the fact is that the growth is not definite, as there are many fluctuations present in the environment (Slack 2015). Further, the report provides an overview of the different strategic management approaches, its explanations and implication in different companies.

There are numerous theories defined which assist the process of strategic management in an organization. Depending upon the size and the type of business activity which they conduct, the management theories are applied in an organization (O’Riordan, and Fairbrass 2014). Thus the below mentioned are a few approaches to the strategic management which a business shall apply in order to sufficiently manage its workings.

The stakeholder management approach is the strategy which helps the management to focus on the requirements and services attained by the stakeholders of the organization. It is a critical aspect which initiates success of an organization by delivering products and services according to the aspiration of the stakeholders. Stakeholder is a term which includes all the people connected with the activities held in an organization. It includes creditors, debtors, shareholders, prospective customers, suppliers etc. An effective stakeholder management system develops positive relationship with the management with the stakeholders of the organization by initiating appropriate activities to generate greater satisfaction (LawTearcher 2017). The process is planned and implemented considering certain rules and principles defined according to the interest of stakeholders.  Further there is an interdependent relation between the organization and stakeholders. This process initiates autonomy in the hand of stakeholders. The theory can be looked in a way that if the management will work by considering the interest off stakeholder, then subsequently the stakeholders will perceive more from the organization. Thus, this process will result in generation of greater income for the organization as there is increase in satisfaction level as well (Noland, and Phillips 2010). Further the stakeholder theory is implemented in six following ways:

  • Identification of stakeholder: according to Carroll, the beginning of this process should be with identification of prospective stakeholders. With identification it will begin easier for the company to develop relationship with them and initiate activities accordingly.
  • A Clear description of stakes: under this process the management needs to ascertain the share which is held by the different stakeholder groups of the organization.
  • Consideration of claims: under this process, the company shall aim to comply with the legitimacy, power and urgency attributes in their organization. Legitimacy refers to the process in which the company shall abide the laws defined to maintain the interest of stakeholder. Power refers to the authority which the stakeholders receive to take actions. Urgency refers to the critical issues shall be entertained on a prior basis which is related to stakeholders interest (Mundy 2010).
  • Estimation of opportunities: under this process the organization shall evaluate the opportunity and risks where hindrance of stakeholders can affect the growth of the organization.
  • Responsibilities to stakeholder: it includes the ethical obligation of the company to share the information with stakeholder which requires their approval.
  • Implementation of stakeholder beneficial strategies and actions: considering all the above aspects the management shall initiate activities concerning the interest of stakeholders. They shall also fulfill the corporate social responsibility of the company.

Different Approaches to Strategic Management

The organization shall prioritize the interest of stakeholders and shall establish a definite communication plan to make them trust the company (Wilden, et. al., 2013).

One of the companies which use the stakeholder approach in their management is Coca-Cola Company. The company efficiently uses this approach to initiate business suitability in their organization. Keeping the interest of stakeholders laid in their business the company coca cola initiated various activities in their business process like they applied golden triangle partnership approach in their firm. This approach involved spanning the social, civil, public and private sector; also they embraced the practice of partnership by collectively work on the sectors which were isolated and under-noticed (Crane, and Matten 2016). In another way they initiated the SWPP (Source Water Protection Plans) so as to provide benefits to the local stakeholders and community members' who are connected with the company. The company coca cola conducted a stakeholder engagement session under which all the stakeholders were welcomed and conversation of held with them. The factors which disturb their interest was talked and other social issues were overlooked which can positively affect the growth of the company. Coca-cola also welcomed the suggestions and feedback. Thus, the company initiated the stakeholder approach in this way (Armstrong, and Taylor 2014).

Dynamic capabilities are the capability of an organization to integrate and initiate activities by efficiently using all the resources available to them. This concept basically puts emphasis on the capabilities of an organization to perform efficiently, and the ways in which the management shall work so that the resources are utilized optimally. The theory regards the guidelines which the senior management of the organization shall apply with them to continue their activities towards achievement of organizational objective. Further the theory includes three capabilities which are mandatory for an organization to inherit to meet challenges. First is the ability of employees to learn and adapt changes, other is integration of new assets of an organization so that company process is initiated. Lastly, the transformation and reuse of assets utilized earlier (Helfat, and Winter 2011). Further the stages in dynamic capabilities are discussed below:

Learning: it is the first stage of the dynamic capabilities approach under which the employees of the management are required to re schedule their routine; and initiate interaction and communication in a way which leads to solution of various problem of the organization. Change in employee's routine will lead to reorganization of various functions of the organization; also it will reduce the dysfunctioning of the organization by initiating communication. Human resource is the most important asset of the organization who carry on business activities, thus if the internal sources are alliance and co-ordinated with each other, then subsequently positive efficiency is transformed.

Stakeholder Management Approach

New Assets: this phase states that the assets present in an organization create and increases the prevailing efficiency in an organization. Thus, implying to the case quality performance in an organization is initiated only when assets of the organization are adequately informed and used to drive efficiency (Pierce, and Aguinis 2013).

Transformation of available resources: the fact shall be understood that in fluctuating market, an organization can only achieve success when they configure all the assets available to them and drive it in the correct direction to achieve success. The external and internal factors shall be aligned together so that the objective of the organization is achieved.

Co specialization: development of the capabilities of an organization within time is called co-specialization. Like, if the organization optimally uses all the resources available t them, and if they continue to use the resources in this way only, then co specialization will be created.

Further discussing the examples of dynamic capabilities, the companies like apple and IBM uses this type of approach to sustain in the market and provide a good impression in front of customers. Talking about apple, the company has obtained optimum resources which are required to initiate differentiated products in the environment. And the best thing is that the company adequately uses such resources to drive best benefits to the company along with customers. The company is not signified as a technological leader but it is a master in marketing technology-based product differentially. By impressively featuring the products the customers get attracted and the success is derived. Thus, in this way the company Apple optimally uses their available resources and initiates success (Helfat 2013).

Sustainable development refers to the process under which the management focuses on the process of developing their organization sustainably. Sustainability refers to the process of growth by using the resources available to them in an adequate manner and not harassing them. If sustainable development is made then it can be said that the organization can easily think of surviving in long run. Further, there are three aspects of sustainability which are the environment, need to the present ad the future generation (Schaltegger, Lüdeke-Freund, and Hansen 2012). Thus the fact shall be considered that if an organization aggressively uses the resources available to an organization then ultimately one day all of them will end resulting to which, it will become tough for the future generation to survive. In accordance with which the government of countries adopted the method of corporate social responsibility under which the companies have to think of the environment and nature in which they are prevailing and act accordingly. Their activities should not disturb the natural activities of the environments, also all the companies shall aim to sustain the natural resources available to them (Collins, and Kearins2010).

Dynamic Capabilities Approach

The manager of the organization shall plan sustainably concerning major factors which affect the growth of the organization. Like, they shall use light which involves less electricity and emit less carbon so that global warming activities are reduced. Also, it is their corporate social responsibility to abide the social norms created by the government. Thus, the fact of sustainable management that shall be considered is that, in order to succeed with the mission such type of management, the manager shall look after the activities which degrade the condition of the environment; also they shall adopt sustainable activities to assist the future generation (Pearlson, Saunders, and Galletta 2016).

Further talking about the services model that should be initiated in an organization with respect to sustainable approach is that with the changing industrial functioning organization also should replenish the resources available to them use it in a sustainable manner. Firstly the managers have to analyze the relation of the company with the customers and prioritize this aspect also apart from selling process. This will initiate a fundamental change in the organization culture and will initiate better efficiency of the organization. Further, they shall initiate to recycle the waste available to them and drive energy out of it (Jacobs, Chase, and Lummus 2011).

Talking about the company which uses the sustainable approach to flourish the market share is the Starbucks Company; the company initiated their stakeholders to invest in their project of ethically sourcing coffee beans so that rich and pure coffee is supplied to all. Thus, in this way, a sustainable approach in the management process is initiated by the organization. The suppliers and the local community of the organization were involved in this activity which resulted in sustainable farming coffee beans due to which Starbucks goal of ethically sourcing 100% pure coffee was implemented (Walker, Damanpour, and Devece 2010). Thus with this effect, organic products were supplied to the customers by the company initiating sustainable development for them.

Another example of the company which strategically used the sustainable development approach and achieved success is Adobe Company. The software company aimed to reduce the carbon emission and use efficiently use renewable resources. Thus, due to this reason, an identified image of the company was created in the market (Bonn, and Fisher 2011).

The initial problem in conducting the stakeholder approach is that the company faces problems in determining the stakeholders of the organization. They face difficulty in analyzing the people who are actually connected and affected with the working of the organization and who all are not. Apart from this, the problem arises when the interest of the stakeholder is measured in monetary terms. Like, the share of suppliers and localities is a major concern for the company because if the autonomy is given to them then it will become difficult for the company to take actions and carry on business activities (Willard 2012). 

Sustainable Development Approach

Another limitation in dynamic capabilities approach is that the companies using this approach usually harass the resources available to them in order to gain the competitive advantage in the organization. They do not understand the difference between using optimally and using excessively. Thus resulting to which in order to gain competence resources are used in greater amount and wastage is instigated.

Problem with the sustainable approach is that, although the approach is a part of the business management project but many times it becomes difficult for the organization to align the interest of the corporate with sustainable environmental activities due to which firm faces managing issues (Asif, et. al., 2011).

Conclusion

In the limelight of above mention events, the facts that shall be taken into consideration is that with the use of strategic management approaches an organization can work effectively to sustain their growth in the market. Apart from that, the process helps the organization to gain the trust of its shareholder, due to which goodwill of the company is created in the market. But there are some limitations of the approaches which act as a barrier to the growth of the organization. Thus, as the work strategic management suggests that the company should strategically use the resources and approaches and drive maximum benefits out of it.

From the above analysis, it is recommended o he firms using such approach that, the main purpose of an organization to sustain in the environment is to earn a profit. Although fulfilling the corporate social responsibility is one of the major aspects which the companies shall comply in their course of action but it is not their core business activity. Thus, while performing such business actions, the companies shall always prioritize their business activities and work accordingly. Also, they shall keep in mind the mission and vision of their respective organizations.

References

Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management practice. Kogan Page Publishers.

Asif, M., Searcy, C., Garvare, R. and Ahmad, N., 2011. Including sustainability in business excellence models. Total Quality Management & Business Excellence, 22(7), pp.773-786.

Bonn, I. and Fisher, J., 2011. Sustainability: the missing ingredient in strategy. Journal of business strategy, 32(1), pp.5-14.

Collins, E.M. and Kearins, K., 2010. Delivering on sustainability's global and local orientation. Academy of Management Learning & Education, 9(3), pp.499-506.

Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.

Helfat, C., 2013. How Apple and IBM Learned to Change With the Times. Viewed on September 16, 2017 from https://www.usnews.com/opinion/blogs/economic-intelligence/2013/07/02/apple-and-ibm-show-the-power-of-dynamic-capabilities

Helfat, C.E. and Winter, S.G., 2011. Untangling dynamic and operational capabilities: Strategy for the (N) ever?changing world. Strategic management journal, 32(11), pp.1243-1250.

Jacobs, F.R., Chase, R.B. and Lummus, R.R., 2011. Operations and supply chain management (Vol. 567). McGraw-Hill Irwin.

LawTearcher., 2017. Stakeholder Approach. Viewed on September 16, 2017 from < https://www.lawteacher.net/free-law-essays/finance-law/stakeholder-approach.php>

Mithas, S., Ramasubbu, N. and Sambamurthy, V., 2011. How information management capability influences firm performance. MIS quarterly, pp.237-256.

Mundy, J., 2010. Creating dynamic tensions through a balanced use of management control systems. Accounting, Organizations and society, 35(5), pp.499-523.

Noland, J. and Phillips, R., 2010. Stakeholder engagement, discourse ethics and strategic management. International Journal of Management Reviews, 12(1), pp.39-49.

O’Riordan, L. and Fairbrass, J., 2014. Managing CSR stakeholder engagement: A new conceptual framework. Journal of Business Ethics, 125(1), pp.121-145.

Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and Using Information Systems, Binder Ready Version: A Strategic Approach. John Wiley & Sons.

Pierce, J.R. and Aguinis, H., 2013. The too-much-of-a-good-thing effect in management. Journal of Management, 39(2), pp.313-338.

Schaltegger, S., Lüdeke-Freund, F. and Hansen, E.G., 2012. Business cases for sustainability: the role of business model innovation for corporate sustainability. International Journal of Innovation and Sustainable Development, 6(2), pp.95-119.

Slack, N., 2015. Operations strategy. John Wiley & Sons, Ltd.

Walker, R.M., Damanpour, F. and Devece, C.A., 2010. Management innovation and organizational performance: The mediating effect of performance management. Journal of Public Administration Research and Theory, 21(2), pp.367-386.

Wilden, R., Gudergan, S.P., Nielsen, B.B. and Lings, I., 2013. Dynamic capabilities and performance: strategy, structure and environment. Long Range Planning, 46(1), pp.72-96.

Willard, B., 2012. The new sustainability advantage: seven business case benefits of a triple bottom line. New Society Publishers.

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