Management Theory And Practice For Competitive Advantage

Role of Managers in Strategic Planning

Discuss about the Management Theory and Practice for Competitive Advantage.

This is the era of globalization and demands for competitive advantage from the organizations in order to sustain in the competitive market scenario. In this manner to get an advantage, organizations follow strategic planning made for the business growth of their individual organization. This strategic planning process and implementation is called organizational action. Managers of an organization also play their respective role in planning and implementing these strategies. In the past few decades the role of these middle managers has been the main concern of several studies. In this order many studies have claimed that middle manager have the potential of contributing a significant role in the strategic development planning of an organization. In organizational strategic action contribution of strategic choice and determinist theories is also discussed. This essay includes a brief discussion of the contribution made by the managers in strategic planning and also a comparative discussion of strategic choice and determinist theories. Also a thorough analysis of these two strategies, strategic choice and determinist theories is carried out in this essay to understand organizational action of an organization made to get a  competitive advantage. These both strategies have significant importance in developing the strategies for an organization and managers are the crucial components to implement the organizational action. 

The increasing globalization has made even the smaller companies to expand their business overseas. This expansion of such companies requires an extra strategic planning and effective implementation. This whole process of developing a strategic plan and its implementation is called organization’s action plan. Developing an effective and efficient organizational action requires significant contribution from the managers of organization as well as the strategic planning (Kalkan & Bozkurt, 2013). The key element strategic planning includes two major strategies to develop an organizational action plan. These are strategic choice and determinist theories which contribute in organizational action and managers plan a critical role in implementation of these theories (Harvey & Neil, 2017).

The role of leading groups and leaders of an organization influencing the organizational action by their decision making choices is described by the strategic choice theory. In the begging the organizational requirements were based on external environment only but the theory of strategic choice has provided an alternative to such requirements along with serving the internal environment of the organization which also influences the organization action. This theory involves the complete process of making decisions to choose one particular strategy among the various alternatives. There can be several methods of making the final decision for the choice of appropriate strategy (Ian & Trevor, 2005). This theory of strategic choice encourages the leaders and managers of the organization to consider both the external and internal environments for the selection of best strategy. Strategy making process involves the identification of problem in the beginning of the process then different solutions are shortlisted to make a preference list (Koeing, 2011). After this strategic choice theory is applied to make a decision for the selection of best solution from the available ones. Several parameter are considered in strategic choice theory, some of these parameters are as, feasibility, consensus, prudence, and acceptability. Sometimes this strategic choice theory is considered in bigger policies of an organization. This theory mainly focuses on the decision making process in a particular strategic planning situation irrespective of the timescale and substances of the situation. Also the approach is interactive as the theory is not designed to be used by only experts but used as a framework of communication for the people with different skills and from different backgrounds (Kealy, 2015). 

Comparative Discussion of Strategic Choice and Determinist Theories

In organizational action other determinist theories also play an important role in influencing the strategy development of for the company business. There are several determinist theories such as, resource dependency theory, institutional theory, and population ecology. These theories are the critical elements of an organizational action.

The resource dependency theory is a complete analysis of the influences made by the external sources on the behaviour of organization. This impact of external resources on the organizational behaviour is important for both the strategic and tactical management of the organization. Implications regarding recruitment of employees and board members, organization’s optimal division structure, contract structure, production strategies, and external links of the organizations are considered in this theory. The whole argument of the resource dependency theory can be summarised as resources are the critical elements an organization depends upon and these resources are the power of an organization. Resources are the most critical element of an organization and this increases the importance of dependency of an organization on its own resources. Theory states that the resources dependency and power of an organization are linked directly (Hillman et al., 2009). This makes power situational, rational, and potentially mutual. Dependency on resources is of more concern for an organization than other external factor like, finance, provide, and competition. It has been argued by the scholars that the commercializing theory, theory of resource dependency, is one of the main reasons for non-profit organizations. 

As similar to the external resource concern of the resource dependency theory, institutional theory has a concern for the making of better institutional environment. Organizations are the social structures having high resilience (Yeager et al., 2014). Cultural-cognitive, regulative elements, and normative, providing the meaning and stability to the social life, are the key elements of these social structures. This theory considers several processes which form structures that include the rules, routines, and schemes to provide the essential guidelines to have a better social behaviour within the organization (Nienhusser, 2008). Some other definitions given for institutional theory states that it is a theoretical posture widely accepted to emphasize the isomorphism, myths, and legitimacy (Radomska, 2014). Studies carried out on this particular perspective emphasize that imitation is the key insight of this theory. This theory is the basis of developing all the policies, rules, and schemes of an organization (Zayyan & Akintola, 2009). Managers implement this theory for this particular purpose but they consider other external and internal factor influencing the developing of such policies for the organization. There are substantial evidences that different economies react differently for same kind of problems or challenges. Institutional structure for a particular economic environment consists of different economic, social, and political factors (Fran & Colin, 2011).

Resource Dependency Theory

Another determinist theory for an organizational action is population ecology. This particular theory deals with the behaviour or interaction of species population of an organization (Jones III & Salimath, 2011). Population ecology of the company completes the organization. This population of an organization includes the employees, managers, and leaders of the organization. Making and maintaining a favourable environment for the implementation of organization action involves the participation of this theory significantly. This environment of an organization defines the working culture and behaviour of employees working in it (Fran & Colin, 2011). Therefore, the environmental behaviour of the organization also influences the strategic planning of the organization and makes it possible to implement the organizational action in an effective way.

Organizational action plan is developed by making all the strategic choices and using different determinist theories but implementation of such organizational action plan is not possible without the involvement of managers. Managers help leaders providing the essentials of these strategies and choice making processes. Managers come after the leaders in an organization or sometimes managers are the leaders to make decisions (Mutch et al., 2006). They play an important role in making decisions for the right choice of the strategy and its implementation method. Managers are underestimated for a long time but the globalization making the market scenario competitive has made it to realize the importance of these managers in getting an advantage of the competence in the competitive market (Buss & Kuyvenhofen, 2011). The following example can explain the role of a manager better than the theoretical framework. Let’s assume a construction company named Triangle Engineers. Company has an image in the market and wants to maintain this image for as longer as possible. For this, company has to take a competitive advantage and as more the capitalization of resources more would be the competitive advantage. To get this competitive advantage managers have to make decisions to take a full control over the resource dependency environment. This decision making role is the most critical one to define the company’s performance in the market. In the similar way for making schemers, riles and policies to create and control the organizational environment for a better social life managers has to take decisions. These policies are made to be acceptable by each employee of the organization therefore managers are the only source having a direct contact with the personal behaviour and expectations of the employees so they take decisions while making such policies (Chew et al., 2006). This whole agreement defines the critical role of managers which was underestimates for a long time in the absence of strategic choice theory. Therefore, implementation of strategic choice theory, defining manager’s role in an organization, increases its importance much more for the managers. 

Institutional Theory

This discussion has made a brief understanding of the organizational action. Hoe strategic choice theory and determinist theories contribute for the organizational action. Both the strategic choice theory and determinist theories contribute significantly and are linked with each other. The strategic choice theory is used to make decisions regarding selection of the strategies while determinist theories are the strategic theories used to develop different organizational elements to take a competitive advantage in the competitive market scenario. If a decision has to made for choosing the most compelling contribution between the contributions of strategic choice theory and determinist theories then definitely the strategic choice theory is most compelling one. This is because firstly the strategic choice theory is independent of the determinist theories and considers both the external and internal factor for making decision. This makes it more significant to use the theory in the wide range of decision making processes. Another reason is that it is a process of making decisions to get competitive advantage in the competitive market. This advantage of an organization in the competitive market influences the business growth and improves the market stand of the company. On the other hand determinist theories are the strategies followed to create a structure frame for the organization. The strategic choice theory influences the decision making process differently in different market scenarios. Market scenario influences the situation for which the decision is to be made and this situation will determine the strategic choice of decision. While making decisions generally external factor are considered but strategic choice considers the internal factors as well for making decision. This helps the organization to take external advantage as well as enhance the internal elements of the organizational environment. These wide benefits of the strategic choice theory make it more compelling than the determinist theories.

The above discussion concludes that the organizational action is a process or planning and implementation of the strategies made for the organization using strategic choice theory and other determinist theories. The discussion concludes that both the strategic choice theory and determinist theories have their individual significance for the implementation of organizational action. This discussion makes an understanding of the role of managers in organizational action and decision making process. And it is better to use strategic choice theory while making decisions for the selection of desired determinist theory for the respective strategy. The strategic choice theory is independent of determinist theories while the selection of determinist theories is made by using the strategic choice theory. Although managers make decisions, strategic choice influences these decisions. Therefore it can be concluded that the strategic choice theory is more compelling than the determinist theories and managers are the critical element of an organizational action. Role of mangers is realized due to the implementation of strategic choice making in an organizational action. This whole discussion made is easy to understand the role or contribution of strategic choice theory and determinist theories for the organizational action strategy to take a competitive advantage in the competitive market.  

References

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