The Essay On Strategic Management Approaches Highlights Stakeholder, Sustainability, And Dynamic Capabilities.

The following research analysis is going to emphasize on the significance of three strategic management approaches namely stakeholder approach, sustainability approach, and dynamic capabilities.

Additionally, a comparative analysis based on viabilities, implementation issues and limitations among the three will be presented. For each strategy an example of an Australian company that avails the respective strategy will be provided to make the discussion more relevant.

Introduction to strategic management approach

The term strategic management approach is way too relevant to the current business trend of the dynamic global industry. The strategic management approach is a strategic organizational planning approach which involves deciding different management strategies and marketing determinations (Villar et. al. 2014).

However, the following research analysis is going to rivet the three significant strategic management approaches namely stakeholder approach, dynamic capabilities, and sustainability approach. Additionally, a comparative analysis based on the Viability, the suggested benefits, the implementation issues and the limitations of these three would be evaluated.

One of the most significant strategic management approaches which are applicable to more or less all the organizations throughout the globe is the stakeholder approach. Stakeholders can be any particular group or individual or another organization which can influence the sustainable development of the company via their separate contributions.

Sustainability approach is a special type of strategic management approach which emphasizes on the growth of the company by managing business ethics cum social responsibilities. It ensures the development of quality strategic management planning associated with the natural, the social and the organizational welfare policies of an organization. The sustainability approach was introduced in a report namely "Our Common Future" by a commission which was led by Dr. Gro. Harlem Brundtland.

The dynamic capability is a strategic management approach which concentrates on enriching technicality, infrastructure, and labors of a company. The dynamic capability strategic approach was introduced by a writer cum researcher Amy Shuen.

Three different leading international companies are chosen to make the research analysis even more legible and relevant to the global industry.

An organization develops effectual strategic management planning considering the different groups of stakeholders and their viewpoints. For example, Telstra Telecommunication is an Australia based telecommunication organization which incorporates stakeholder approach in their strategic management planning. However, the stakeholder management strategy can make the organization hold a healthy relationship with the stakeholders by emphasizing their point of views and interests (Cooper, 2017).

• The stakeholder management approach allows the company to accumulate needful information about different groups of stakeholders and inhibit this information while fabricating their strategic management planning. Consequently, the stakeholders feel appreciated and prioritized by the company and that can build up the wellbeing of the company among the stakeholders (Teece, 2014).
  
  
• Through the inhibition of relevant stakeholder approach, an organization can prosecute its relevant stakeholders effectively with the aim of accomplishing the desired outcome.
  
  
• The stakeholder strategic management approach has a great impact on cultivating the corporate social responsibilities of the company and thus it can enrich the society as well. The prime viewpoint of the stakeholder approach is that the business is not only about profitability and productivity but has constraints to its different stakeholders like the Government, consumers, employees, shareholders and non-governmental associations (Teece, 2014).
  
  
• The stakeholder approach has a great impact on risk management cum conflict management strategies of the company. Being a part of project management the stakeholder strategic management approach has been considered as an essential part of risk management by the project managers. Therefore, they develop the strategy in a way that can keep the content the stakeholders by fulfilling their expectations and thus can cut down the risks of having unsupportive impacts on the projects (Wellens and Jegers, 2014).
  
  
• The stakeholder approach can also contribute to the conflict management by accumulating adequate information about the target stakeholders of the company. The company can revise employment relationship, consumer relationship and shareholder relationship through the analysis of stakeholder approach.

The potential advantages of the stakeholder approach are the significant parts of internal stakeholders are the board of directors who are the skillful business leaders as well and are way too beneficial for the company. as a part of the stakeholder approach, they can offer their long-term experience and expertise by dint of which the organization can hold their sustainability in the long run. The management of the company can review different aspects of their strategic planning from stakeholder’s point of view and hence can find out potential lacks in their strategies. The stakeholder’s standpoints vary with the variations in their background and experience and hence the management can develop an environmental analysis through evaluating different stakeholder's viewpoint (Teece, 2014).

Though the stakeholder approach is way too beneficial for the organization there are certain obstacles that the company might come across while implementing the stakeholder approach. The common implementation issues of stakeholder approach are associated with:

• Frameworks, arrangements, commitment, and reporting.
• Promoting grievances.
• Active involvement of different stakeholder communities.
• Similar scopes.
• Wellbeing and security of the stakeholders.
• Employment and job creation.
• Consumer policies, employment relationship, and shareholder policies.
• Supply chains.
• Worker participation and trade unions.
• Training and improvement.
• Different legal and political complications (Freeman, 2010).

Most of the time the stakeholders got over-concerned about their self-interests leading them to take the interest of the organization for granted. Consequently, the growth of the company decelerated. The external stakeholders like the political deputies and the community groups not all time act as the best advantage of the company if the organization is not putting forth anything that helps the partner with their constituents (Teece, 2014). In most of the cases, the stakeholders keep their interest above the growth of the company resulting in reducing the productivity and profitability of the company. Brilliant entrepreneurial approach conceivably opposing partners prior to an issue begins, and afterward, they reform a relationship to take an impediment and make it preference (Freeman, 2010).

Overview of three approaches - stakeholder, sustainability, and dynamic capabilities

When it comes to evaluating the impact of the sustainability approach it can be said that the sustainability approach enables an organization to develop a business management strategy based on long-term stakeholder analysis. It emphasizes social, ethical, cultural, environmental and economic aspects of a particular strategic management agenda.  For example, British American Tobacco is a leading Australian tobacco company which emphasizes this particular strategy. The motive of the company behind focusing upon the sustainability approach is to fabricate a quality object that would try to put some positive impact on the future generations. The three core building blocks of this approach are social, environmental and economic approaches. The sustainability approach takes account into profit, planet, and people (Clayton and Radcliffe, 2015).

• Economic pillar: The core agenda of the economic pillar of the sustainability approach is to ensure the highest profitability of the company. Provided that the management should not fight and shy the other two essential pillars of sustainability approach for the sake of acquiring the highest profitability. The economic pillar emphasizes effectual risk management and concern factors, competitive strengths, opportunities, and threats (Teece, 2014).
  
  
• Environmental pillar: Environment is the foremost thing which is paid the prime attention to while highlighting the sustainability approach. There are certain parameters like reduction of carbon footprints, utilization of renewable resources, waste management, recycling and reusing which are taken into account in the environmental pillar (Teece, 2014).
  
  
• Social Pillar: The social pillar of the sustainability approach intensifies the business values and professional ethics of the company. It makes the organization develop a business strategy believing that being a corporate citizen it is their duty giving back to the society. The organization should always consider the wellbeing of their stakeholders, the society and the nation while developing their management strategy. The social pillar incorporates an organizational environmental strategy which treats all the employees impartially and contributes towards the betterment of the society (Cooperman, 2016).

The potential benefit of sustainability approach is that it contributes the social, the economical and the environmental policies of the company. The organisation could take eco-friendly approaches paying attention to this particular approach. Additionally, the company develop an impactful CSR policy based on the sustainability approach. It has a great impact on developing strategies considering professional ethics and core value system of the company.

There is a certain issue which an organization has to face while implementing the strategies based on the sustainability approach. The organization needs to keep up-grading their sustainability management strategy due to rapid climate change. A single sustainability strategy cannot serve the company in the long run leading to the implementation of this particular strategy even more entangled (Ayuso et al., 2014). The organization has to concentrate numerous factors like reducing hunger and malnutrition, making the rural people literate, reduction of poverty besides the cultural, environmental, economic and social aspects. On the other hand, it causes social conflicts and thus the entire social pillar of the sustainability approach got distorted if this particular approach is not managed effectively. The requirements of energy are probably going to remain neglected for a huge number of families except if huge advancement in guaranteeing access to present-day vitality administrations is accomplished (Bhamra and Lofthouse, 2016)

For the sake of proper environmental management the company sometimes ends up lowering their profitability. The organization needs to gather a lot of information in order to form an effectual sustainability approach. This process, therefore, takes a lot of time. The utilization of renewable resources and other ecological strategies sometimes increase the expenses of the company. The ecosystem cum biodiversity oriented strategy could bring unemployment for several workers who consecrated their entire lives for working in a single industry (Devika et. al.  2014).

The prime motto of dynamic capability strategic approach is intensifying the overall efficiency of an organization through enriching the infrastructure, the technologies and the workforce of the company. It is a direct strategic approach for improving the productivity of an organization. Wesfarmers Limited is an Australia based organization that utilized the dynamic capability approach. The dynamic capabilities strategic approach enables this company to increase its competitive strengths by emphasizing their potential organizational assets (Li and Liu, 2014).

• The dynamic capability approach is way too feasible in the sense that it the main three existing strengths such as resources, competitive forces, and infrastructure while developing strategies.
  
  
• The dynamic capability helps the managers by providing an overview regarding needful procedure paths beside making them aware of their current industrial status. As a result, they can develop a relevant management strategy (Bhamra and Lofthouse, 2016).
  
  
• It can enrich the decision-making process by providing adequate information associated with performance, process, productivity, and progress.
  
  
• It facilitates the purpose of a certain long-term organizational goal by providing a consistent framework that can revise both the practical knowledge as well as the existing working procedure.
  
  
• The dynamic capability strategic approach addresses the current trend of the global industry and thus can add up dynamic in the strategic management planning.
  
  
• The managers of the company can enhance the compatibility of their employees with the modern business trend considering the dynamic capability approach.
  
  
• The organization can improvise their existing infrastructure cum technologies and can incorporate modernized and digitalized manufacturing focusing upon dynamic capability approach.
  
  
• The dynamic capability approach enables the company to revise, to reform and to reconfigure their existing organizational skills. Therefore, the company can covert their weakness into strengths besides enriching the competitive strengths by dint of the dynamic capability strategic approach.
  
  
• The dynamic capability strategic approach makes the organization capable of enhancing the net expertise of their workforce. Installation of new technologies and different relevant training sessions can enhance the expertise of the employees.
  
  
• It helps the management in understanding their current industrial status cum their economic status on the basis of the global economy. Therefore, they can reform their strategic planning accordingly (Teece, 2014).

The potential benefit of dynamic capability strategic approach is that it enables the company to develop management strategies considering the market trend. The organization can incorporate necessary technical up-gradations and modernized approaches considering this particular approach. Apart from that, it can accelerate the sustainable growth of the organization by adding value to the infrastructure of the company. The management can enrich the compatibility of their strategic management planning focusing upon the dynamic capability strategic approach.

Examples of Australian companies utilizing respective strategies

The most challenging part of implementing dynamic capability approach is to reconfigure the existing working procedure. The entire workforce cum the management got very much familiar conventional working culture. Therefore it would be quite difficult for them to adopt the reformed system. Employee resistance is the next big challenge in the way of the implementation of dynamic capability strategic approach. The employees are very much used to with the conventional working process and hence the incorporation of the new process can be a cause of employee discontent. The installation of modernized technologies and digitalization costs a lot of expenses for the company. In order to implement dynamic capability strategic approach, the management needs to form step by step strategies. Lack of efficient strategies sometimes cases internal conflicts between the management and the workforce (Schilke, 2014).

There are certain factors like technical adaptability, potential rivals and market demands that are needed to taken account while considering this approach. If a company does not have proper technical fitness the entire strategy will fall flat for them. Adaptability is the foremost factor in implementing this particular strategy. If the workforce cannot be able to adopt the reconfigured working process the company would be running in loss even spending a lot of money. Without having adequate resources an organization cannot implement the dynamic strategic management approach. The company should have enough technical, infrastructural and human resources in order to implement the strategies based on dynamic capability approach (Helfat and Peteraf, 2015).

Conclusion:

From the above comparative research analysis, it could be concluded that the strategic management approach is one of the core parts of developing effectual management strategies. It is a consistent process through which the management of an organization can prepare, monitor, implement and evaluate their strategic management planning. The prime goal of strategic management planning is to meet the long-term organizational goal with the highest accuracy besides intensifying the competitive strengths of the company. On the other hand, this particular planning assessment approach is very significant for an organization because it enables the company fulfilling consumers demand very efficiently. Additionally, an effectual strategic management approach can cultivate the overall organizational structure of a company through incorporating rapid innovations, modernized technicality, digitalization, impactful decision-making process, effective communication, and competitive leadership management. The mentionable fact in this context is that the strategic management planning enables the company taking cross-functional management decisions before applying them. The management gets to know about the competitive strengths and weaknesses through evaluating their strategic management approach and can prepare the strategic management planning according. However, the three strategic management approaches presented in this research paper have their own significance in fabricating, reforming, revising and reconfiguring the existing organizational structure. All the strategic management approach helps the organizations to hold their compatibility with the global industry in the long run.

References:

Ayuso, S., Rodríguez, M.A., García-Castro, R. and Ariño, M.A., 2014. Maximizing stakeholders’ interests: An empirical analysis of the stakeholder approach to corporate governance. Business & society, 53(3), pp.414-439.

Bhamra, T. and Lofthouse, V., 2016. Design for sustainability: a practical approach. Routledge. Referenced at: < https://www.routledge.com/Design-for-Sustainability-A-Practical-Approach/Bhamra-Lofthouse/p/book/9780566087042>

Clayton, T. and Radcliffe, N., 2015. Sustainability: a systems approach. Routledge. Reference at: < https://www.routledge.com/Sustainability-A-Systems-Approach/Clayton-Radcliffe/p/book/9781853833199>

Cooper, S., 2017. Corporate social performance: A stakeholder approach. Routledge. Reference at < https://www.routledge.com/Corporate-Social-Performance-A-Stakeholder-Approach/Cooper/p/book/9780754641742>

Cooperman, E., 2016. Managing Financial Institutions: A Sustainability Approach. Taylor & Francis.

Devika, K., Jafarian, A. and Nourbakhsh, V., 2014. Designing a sustainable closed-loop supply chain network based on triple bottom line approach: A comparison of metaheuristics hybridization techniques. European Journal of Operational Research, 235(3), pp.594-615.

Freeman, R.E., 2010. Strategic management: A stakeholder approach. Cambridge university press.

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.

Li, D.Y. and Liu, J., 2014. Dynamic capabilities, environmental dynamism, and competitive advantage: Evidence from China. Journal of Business Research, 67(1), pp.2793-2799.

Schilke, O., 2014. On the contingent value of dynamic capabilities for competitive advantage: The nonlinear moderating effect of environmental dynamism. Strategic management journal, 35(2), pp.179-203.

Teece, D.J., 2014. A dynamic capabilities-based entrepreneurial theory of the multinational enterprise. Journal of International Business Studies, 45(1), pp.8-37.

Teece, D.J., 2014. A dynamic capabilities-based entrepreneurial theory of the multinational enterprise. Journal of International Business Studies, 45(1), pp.8-37.

Villar, C., Alegre, J. and Pla-Barber, J., 2014. Exploring the role of knowledge management practices on exports: A dynamic capabilities view. International Business Review, 23(1), pp.38-44.

Wellens, L. and Jegers, M., 2014. Effective governance in nonprofit organizations: A literature based multiple stakeholder approach. European Management Journal, 32(2), pp.223-243.