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Strategic management refers to the process of implementing strategic activities in the organization to improve its efficiency. The planning process is initiated in the organization with respect to certain strategies and procedures so that the mission statement made by the company is achieved (Helfat and Peteraf 2015). The linear model of strategic management is the process under which the top management of the organization forms and implements plans so that viable goals are achieved. The approach assumes that the future will become sustainable with the formulation such policies. But still, by looking at the linear it can be noticed that there are a few drawbacks to every approach used in an organization. Some of the organizations find it difficult to align the interest of stakeholders with the objective of the organization. This resulted in depletion in the financial growth of the organization. The report provides a brief analysis of various strategic management approaches used in an organization to provide benefits to the stakeholders of the organization. It also provides examples of companies using such approaches and limitation of these approaches (Hill, Jones, and Schilling 2014). The details of the management approaches are discussed below.
Strategic management can be defined as a process of managing activities of the organization in such a way that it provides a strategy to the organization on the path of which organization can run and gain success. It is a continuous process with the effect of which activities are implemented and appraisal is done. Further there are many approaches to strategic management which assist the company; and take care of the interest of the organization along with its stakeholders (Kindström, Kowalkowski, and Sandberg 2013). Some of these approaches are discussed below:
Managing the interest of the stakeholder is a critical concept which needs to have complied with every company existing in the global environment. Stakeholder management approach refers to the approach in which the organization holds its activities in accordance with the interest of stakeholders. Keeping in mind the stake which the stakeholders hold, the company carries on their activities in such a way that it does not disturb and revoke the interest of stakeholder of the organization (Kor, and Mesko 2013). Stakeholder of a particular organization refers to a person who is connected with the activities of the organization; along with which the changes held in the organization affect their share. Some of the stakeholders of an organization are suppliers, shareholders, prospective buyers, government, employees etc. These are those people whose share will get affected by change in activities of the business. So, the company shall initiate activities with a view that the interest of stakeholders is not breached (Lozano 2015).
Further, the initial step of the stakeholder approach is the process of identification of the stakeholders of the organization. There are many people connected with the activities and decisions of the organization but, the management needs to find out the people who are affected with the working of the organization and have the power to affect the decision-making process. The management also needs to prioritize their stakeholders, like the holders who have more shares in power, shall be classified separately and entertained accordingly (Nieves, and Haller 2014).
Additionally, it shall be noted that the company Xerox uses the stakeholder management approach in their organization system to enhance their capabilities. The company believes that the stakeholder approach helps them to understand better their relationship with their stakeholders. For their customer, the company organized the Sustainability forum so that awareness regarding the best customer redressal practices is done (Wheelen and Hunger 2017). Also for the shareholders of the organization, the company small group meetings with the potential investors and they also initiate one on one meeting with their employees and customers so that efficiency is engraved and issue are sought. For the community (who are also the stakeholders of the organization) the company worked in such a way that hey provided training services to the student to make them capable of working in the global world. This process initiated in development of the whole community (Xerox 2008).
Thus, in this way, the stakeholder engagement approach helps the organization to upraise their efficiency in the organization system.
Dynamic capabilities refer to the capabilities of an organization to perform and develop activities of the organization in such a way that all the resources are adequately utilized. This model of strategic management focuses on the resources of an organization, that they are used wisely or not. The resources of an organization help them to generate greater returns for the organization, therefore, the management invest in acquiring assets for the organization as they increase efficiency. Provided to the before mentioned statement, efficiency in an organization is only achieved when the resources are adequately utilized. Thus, the dynamic capabilities approach helps the organization the importance of an organization and use them optimally so that success of an organization is achieved (Teece 2014).
The basic idea of the dynamic capabilities approach is that the organization should use the resources in such a way that short-term benefits to the organization is received; further, they are converted in long-term competitive advantage as well. The resource-based approach helps the organization focus on their consistent growth in the competitive market as well (Weiss 2014). It helps the manager to understand the capabilities of the organization and resources available to them which they can optimally use. Thus, the manager develops strategies to adequately use the resources available to them and create a competitive edge in the market. Also, it includes the firm's ability to understand the external environment and use their resources in such a way that benefits are achieved by the organization. Further, the dynamic capabilities approach requires the assistance of the employees to understand the information, then plan and execute according to the function required by the organization (Grant 2016). Further, the stages of dynamic capabilities approach are discussed below:
Learning: Learning is the initial stage of this approach which involves the purpose that the employees of the organization shall learn and adapt the changes happening in the organization. They shall reorganize their daily routine to that communication gap is reduced and issues can be solved successfully.
New Assets: this step states that the performance of an organization is determined by the changes in the routines of the employees of the organization. This will further result in linking the customers and optimizing the resources adequately (Epstein, and Buhovac 2014).
Transformation of resources available: this step states that in the fast-changing environment, the organization also needs to implement changes in their organization culture so that the resources are adequately optimized and organization achieves competence in the market. Thus, this step aims to mold the given resources in such a way that objective of the organization is achieved.
Co-specialization: this phase states that with time if the organizations continually use the resources adequately, then it becomes a habit of the company to achieve competence in the market. Thus the company receives specialization in ding certain repeated tasks; due to this they continue to achieve their respective targets (Engert, Rauter, and Baumgartner 2016).
This approach further acted as an advantage for the company IBM to improve their capabilities. The company IBM is truly a technological innovator company; they used their internal and external resources to initiate output for the organization. IBM used their innovative technology and successfully transmitted it to the customers, with this effect the customer gained satisfaction from the products and the company achieved their respective targets (Eccles, Ioannou, and Serafeim 2014). As the company successfully used their resources and developed IT-based software in the market, due to which the gained the competitive edge in the market initiating success for the company (Helfat 2013).
Sustainability refers to the process of taking care of the environment in such a way that the resources are left for use by future generations. The process of sustainable management includes the way of managing and utilized the resources optimally that they are spared for the future generation as well. The companies shall take care of the society and environment while conducting the business activities. Thus, in this way only resources can be saved. Also, the approach provides various benefits to the organization that they start using resources optimally and wastage is reduced. The process of application sustainable activities in an organization is called sustained management (Beske, Land and Seuring 2014).
This type of approach is the need of current era as by looking at the environment it can be noticed that companies nowadays are over utilizing the resources and polluting the environment which adversely affecting the environment and the society (Beske and Seuring 2014). Thus, the company shall aim to fulfill the corporate social responsibility in order to maintain a sustainable growth of the business. Talking about the company which uses this approach in their organization system gain optimum benefits in the market as well. For instance, the company Coca-Cola has now started using water amount in their product efficiently. The company has reduced the water consumption by 20% and ore concerning towards the eater management activities as they can see the need for drinking water. Complying with the corporate social responsibility the company is receiving efficiency in their work as well (Helfat 2013).
Thus, in the limelight of above events, it shall be noticed that the strategic management approaches adequately assist an organization to work properly and gain success in the external market. Further, it makes the companies aware regarding their responsibilities towards environment and society. Apart from that, there are various aspects in which such approaches halt the growth of an organization. Thus, these approaches shall be used sufficiently in the right direction so that organizational object is fulfilled along with sustainability. Thus, it is a duty of a company existing in the global market that they shall comply with such strategic management approaches and align the interest of stakeholders with their goals.
To the companies using such approaches, it shall be recommended that in today's era competition is tough and every organization is aiming high to get success. So, to fulfill their personal objective they shall try to provide greater satisfaction to customers by improving the quality of their resources and concerning the management approaches. Further, they shall not only focus on sustainability approaches but they shall also keep in mind their mission and vision statement so that both objectives are fulfilled.
Baumgartner, R.J., 2014. Managing corporate sustainability and CSR: A conceptual framework combining values, strategies and instruments contributing to sustainable development. Corporate Social Responsibility and Environmental Management, 21(5), pp.258-271.
Beske, P. and Seuring, S., 2014. Putting sustainability into supply chain management. Supply Chain Management: an international journal, 19(3), pp.322-331.
Beske, P., Land, A. and Seuring, S., 2014. Sustainable supply chain management practices and dynamic capabilities in the food industry: A critical analysis of the literature. International Journal of Production Economics, 152, pp.131-143.
Eccles, R.G., Ioannou, I. and Serafeim, G., 2014. The impact of corporate sustainability on organizational processes and performance. Management Science, 60(11), pp.2835-2857.
Engert, S., Rauter, R. and Baumgartner, R.J., 2016. Exploring the integration of corporate sustainability into strategic management: a literature review. Journal of cleaner production, 112, pp.2833-2850.
Epstein, M.J. and Buhovac, A.R., 2014. Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. Berrett-Koehler Publishers.
Grant, R.M., 2016. Contemporary Strategy Analysis. John Wiley & Sons.
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 Peteraf, M.A., 2015. Managerial cognitive capabilities and the microfoundations of dynamic capabilities. Strategic Management Journal, 36(6), pp.831-850.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
Kindström, D., Kowalkowski, C. and Sandberg, E., 2013. Enabling service innovation: A dynamic capabilities approach. Journal of business research, 66(8), pp.1063-1073.
Kor, Y.Y. and Mesko, A., 2013. Dynamic managerial capabilities: Configuration and orchestration of top executives' capabilities and the firm's dominant logic. Strategic Management Journal, 34(2), pp.233-244.
Lozano, R., 2015. A holistic perspective on corporate sustainability drivers. Corporate Social Responsibility and Environmental Management, 22(1), pp.32-44.
Nieves, J. and Haller, S., 2014. Building dynamic capabilities through knowledge resources. Tourism Management, 40, pp.224-232.
Slack, N., 2015. Operations strategy. John Wiley & Sons, Ltd.
Tantalo, C. and Priem, R.L., 2016. Value creation through stakeholder synergy. Strategic Management Journal, 37(2), pp.314-329.
Teece, D.J., 2014. A dynamic capabilities-based entrepreneurial theory of the multinational enterprise. Journal of International Business Studies, 45(1), pp.8-37.
Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.
Wheelen, T.L. and Hunger, J.D., 2017. Strategic management and business policy. pearson.
Xerox., 2008. Our Commitment to Global Citizenship. Viewed on September 16, 2017 from https://www.xerox.com/Static_HTML/citizenshipreport/2008/stakeholder-page1-1.html
Strategic management refers to the process of implementing strategic activities in the organization to improve its efficiency. The planning process is initiated in the organization with respect to certain strategies and procedures so that the mission statement made by the company is achieved (Helfat and Peteraf 2015). The linear model of strategic management is the process under which the top management of the organization forms and implements plans so that viable goals are achieved. The approach assumes that the future will become sustainable with the formulation such policies. But still, by looking at the linear it can be noticed that there are a few drawbacks to every approach used in an organization. Some of the organizations find it difficult to align the interest of stakeholders with the objective of the organization. This resulted in depletion in the financial growth of the organization. The report provides a brief analysis of various strategic management approaches used in an organization to provide benefits to the stakeholders of the organization. It also provides examples of companies using such approaches and limitation of these approaches (Hill, Jones, and Schilling 2014). The details of the management approaches are discussed below.
Strategic management can be defined as a process of managing activities of the organization in such a way that it provides a strategy to the organization on the path of which organization can run and gain success. It is a continuous process with the effect of which activities are implemented and appraisal is done. Further there are many approaches to strategic management which assist the company; and take care of the interest of the organization along with its stakeholders (Kindström, Kowalkowski, and Sandberg 2013). Some of these approaches are discussed below:
Managing the interest of the stakeholder is a critical concept which needs to have complied with every company existing in the global environment. Stakeholder management approach refers to the approach in which the organization holds its activities in accordance with the interest of stakeholders. Keeping in mind the stake which the stakeholders hold, the company carries on their activities in such a way that it does not disturb and revoke the interest of stakeholder of the organization (Kor, and Mesko 2013). Stakeholder of a particular organization refers to a person who is connected with the activities of the organization; along with which the changes held in the organization affect their share. Some of the stakeholders of an organization are suppliers, shareholders, prospective buyers, government, employees etc. These are those people whose share will get affected by change in activities of the business. So, the company shall initiate activities with a view that the interest of stakeholders is not breached (Lozano 2015).
Further, the initial step of the stakeholder approach is the process of identification of the stakeholders of the organization. There are many people connected with the activities and decisions of the organization but, the management needs to find out the people who are affected with the working of the organization and have the power to affect the decision-making process. The management also needs to prioritize their stakeholders, like the holders who have more shares in power, shall be classified separately and entertained accordingly (Nieves, and Haller 2014).
Additionally, it shall be noted that the company Xerox uses the stakeholder management approach in their organization system to enhance their capabilities. The company believes that the stakeholder approach helps them to understand better their relationship with their stakeholders. For their customer, the company organized the Sustainability forum so that awareness regarding the best customer redressal practices is done (Wheelen and Hunger 2017). Also for the shareholders of the organization, the company small group meetings with the potential investors and they also initiate one on one meeting with their employees and customers so that efficiency is engraved and issue are sought. For the community (who are also the stakeholders of the organization) the company worked in such a way that hey provided training services to the student to make them capable of working in the global world. This process initiated in development of the whole community (Xerox 2008).
Thus, in this way, the stakeholder engagement approach helps the organization to upraise their efficiency in the organization system.
Dynamic capabilities refer to the capabilities of an organization to perform and develop activities of the organization in such a way that all the resources are adequately utilized. This model of strategic management focuses on the resources of an organization, that they are used wisely or not. The resources of an organization help them to generate greater returns for the organization, therefore, the management invest in acquiring assets for the organization as they increase efficiency. Provided to the before mentioned statement, efficiency in an organization is only achieved when the resources are adequately utilized. Thus, the dynamic capabilities approach helps the organization the importance of an organization and use them optimally so that success of an organization is achieved (Teece 2014).
The basic idea of the dynamic capabilities approach is that the organization should use the resources in such a way that short-term benefits to the organization is received; further, they are converted in long-term competitive advantage as well. The resource-based approach helps the organization focus on their consistent growth in the competitive market as well (Weiss 2014). It helps the manager to understand the capabilities of the organization and resources available to them which they can optimally use. Thus, the manager develops strategies to adequately use the resources available to them and create a competitive edge in the market. Also, it includes the firm's ability to understand the external environment and use their resources in such a way that benefits are achieved by the organization. Further, the dynamic capabilities approach requires the assistance of the employees to understand the information, then plan and execute according to the function required by the organization (Grant 2016). Further, the stages of dynamic capabilities approach are discussed below:
Learning: Learning is the initial stage of this approach which involves the purpose that the employees of the organization shall learn and adapt the changes happening in the organization. They shall reorganize their daily routine to that communication gap is reduced and issues can be solved successfully.
New Assets: this step states that the performance of an organization is determined by the changes in the routines of the employees of the organization. This will further result in linking the customers and optimizing the resources adequately (Epstein, and Buhovac 2014).
Transformation of resources available: this step states that in the fast-changing environment, the organization also needs to implement changes in their organization culture so that the resources are adequately optimized and organization achieves competence in the market. Thus, this step aims to mold the given resources in such a way that objective of the organization is achieved.
Co-specialization: this phase states that with time if the organizations continually use the resources adequately, then it becomes a habit of the company to achieve competence in the market. Thus the company receives specialization in ding certain repeated tasks; due to this they continue to achieve their respective targets (Engert, Rauter, and Baumgartner 2016).
This approach further acted as an advantage for the company IBM to improve their capabilities. The company IBM is truly a technological innovator company; they used their internal and external resources to initiate output for the organization. IBM used their innovative technology and successfully transmitted it to the customers, with this effect the customer gained satisfaction from the products and the company achieved their respective targets (Eccles, Ioannou, and Serafeim 2014). As the company successfully used their resources and developed IT-based software in the market, due to which the gained the competitive edge in the market initiating success for the company (Helfat 2013).
Sustainability refers to the process of taking care of the environment in such a way that the resources are left for use by future generations. The process of sustainable management includes the way of managing and utilized the resources optimally that they are spared for the future generation as well. The companies shall take care of the society and environment while conducting the business activities. Thus, in this way only resources can be saved. Also, the approach provides various benefits to the organization that they start using resources optimally and wastage is reduced. The process of application sustainable activities in an organization is called sustained management (Beske, Land and Seuring 2014).
This type of approach is the need of current era as by looking at the environment it can be noticed that companies nowadays are over utilizing the resources and polluting the environment which adversely affecting the environment and the society (Beske and Seuring 2014). Thus, the company shall aim to fulfill the corporate social responsibility in order to maintain a sustainable growth of the business. Talking about the company which uses this approach in their organization system gain optimum benefits in the market as well. For instance, the company Coca-Cola has now started using water amount in their product efficiently. The company has reduced the water consumption by 20% and ore concerning towards the eater management activities as they can see the need for drinking water. Complying with the corporate social responsibility the company is receiving efficiency in their work as well (Helfat 2013).
Thus, in the limelight of above events, it shall be noticed that the strategic management approaches adequately assist an organization to work properly and gain success in the external market. Further, it makes the companies aware regarding their responsibilities towards environment and society. Apart from that, there are various aspects in which such approaches halt the growth of an organization. Thus, these approaches shall be used sufficiently in the right direction so that organizational object is fulfilled along with sustainability. Thus, it is a duty of a company existing in the global market that they shall comply with such strategic management approaches and align the interest of stakeholders with their goals.
To the companies using such approaches, it shall be recommended that in today's era competition is tough and every organization is aiming high to get success. So, to fulfill their personal objective they shall try to provide greater satisfaction to customers by improving the quality of their resources and concerning the management approaches. Further, they shall not only focus on sustainability approaches but they shall also keep in mind their mission and vision statement so that both objectives are fulfilled.
Baumgartner, R.J., 2014. Managing corporate sustainability and CSR: A conceptual framework combining values, strategies and instruments contributing to sustainable development. Corporate Social Responsibility and Environmental Management, 21(5), pp.258-271.
Beske, P. and Seuring, S., 2014. Putting sustainability into supply chain management. Supply Chain Management: an international journal, 19(3), pp.322-331.
Beske, P., Land, A. and Seuring, S., 2014. Sustainable supply chain management practices and dynamic capabilities in the food industry: A critical analysis of the literature. International Journal of Production Economics, 152, pp.131-143.
Eccles, R.G., Ioannou, I. and Serafeim, G., 2014. The impact of corporate sustainability on organizational processes and performance. Management Science, 60(11), pp.2835-2857.
Engert, S., Rauter, R. and Baumgartner, R.J., 2016. Exploring the integration of corporate sustainability into strategic management: a literature review. Journal of cleaner production, 112, pp.2833-2850.
Epstein, M.J. and Buhovac, A.R., 2014. Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. Berrett-Koehler Publishers.
Grant, R.M., 2016. Contemporary Strategy Analysis. John Wiley & Sons.
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 Peteraf, M.A., 2015. Managerial cognitive capabilities and the microfoundations of dynamic capabilities. Strategic Management Journal, 36(6), pp.831-850.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
Kindström, D., Kowalkowski, C. and Sandberg, E., 2013. Enabling service innovation: A dynamic capabilities approach. Journal of business research, 66(8), pp.1063-1073.
Kor, Y.Y. and Mesko, A., 2013. Dynamic managerial capabilities: Configuration and orchestration of top executives' capabilities and the firm's dominant logic. Strategic Management Journal, 34(2), pp.233-244.
Lozano, R., 2015. A holistic perspective on corporate sustainability drivers. Corporate Social Responsibility and Environmental Management, 22(1), pp.32-44.
Nieves, J. and Haller, S., 2014. Building dynamic capabilities through knowledge resources. Tourism Management, 40, pp.224-232.
Slack, N., 2015. Operations strategy. John Wiley & Sons, Ltd.
Tantalo, C. and Priem, R.L., 2016. Value creation through stakeholder synergy. Strategic Management Journal, 37(2), pp.314-329.
Teece, D.J., 2014. A dynamic capabilities-based entrepreneurial theory of the multinational enterprise. Journal of International Business Studies, 45(1), pp.8-37.
Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.
Wheelen, T.L. and Hunger, J.D., 2017. Strategic management and business policy. pearson.
Xerox., 2008. Our Commitment to Global Citizenship. Viewed on September 16, 2017 from https://www.xerox.com/Static_HTML/citizenshipreport/2008/stakeholder-page1-1.html
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