A strategic management new approach defines the company strategic objectives from a new point of view. A traditional approach is nowadays is not suitable for certain types of organization (Hill, Jones &Schilling, 2014). Thus the requirement for the new approach for strategic management arose. This includes creating a mission statement for the organization, choosing or defining the organizational intermediate goals, recognizing the approaches or strategies to achieve goals, identifying the action plans to implement every strategy and in last monitoring the plan (De Wit & Meyer, 2010). The standard linear approach might not be useful for all organization. The reason behind it is the requirement of naturalistic planning procedure which allows flexibility in all activities and perspectives by organizations. Sometimes it is holistic for some companies.
Approaches towards strategic management are
A stakeholder approach is engaged to give a one-way strategic structure. It should be flexible for dealing with environmental trends and should be without the interference of managers to continuously adopt new strategic paradigms. The motive behind this approach is to break the traditional circle of:
A stakeholder is a process of managing strategic planning in an organization. But strategic planning concentrates on predicting the upcoming environmental trend and then creating plans for the organization to beat that position (Freeman, 2010). In opposite, strategic management is continuously developing a new plan and direction for the organization. This help in considering how the environmental effects can harm the firm as well as how the firm is affecting the environment. The concern for adopting stakeholder approach is also to create sustainability in the survival of the firm.
To create a position in a turbulent situation administration should coordinate a course for the firm, not simply advance current yield. According to Hanna & Rowley (2011) to effectively change course, management must have the help of the individuals who can influence the firm and see how the firm will influence others (as over the long haul they may make a receptive reaction). In this manner, understanding stakeholder approach is, no less than, a matter of accomplishing the company’s goals which is thus a matter of survival (Luoma-aho & Vos, 2010). The stakeholder approach does not depend on an over-riding administration objective for all choices. It gives no opponent to the conventional point of "maximizing shareholder wealth" despite what might be expected, a stakeholder approach rejects the general concept of expanding.
Coco-cola approach towards stakeholder:
They engage stakeholder through various ways of formal and informal meeting across the global Coco-cola system. They engage with various stakeholders through meetings with groups, suppliers, and consumers. At the world level, they are very active with multi-stakeholder initiatives like UN global compact, world forum which helps in addressing global challenges. By proactively cooperating with outer partner accomplices, they can distinguish and address issues by combining the expertise, information, and enthusiasm of numerous associations and people (Harrison, Bosse & Phillips, 2010). This approach encourages accomplish far more prominent positive effect on natural, social and different issues than by working alone.
Coco-cola engagement with Stakeholders:
The various ways in which Coco-cola is engaging with stakeholders are:
- Bottling partners: Everyday collaboration as business accomplices, joint undertakings, joint business arranging, the functional team on vital issues, Top-to-Top senior administration discussion, Global Environment Council.
- Consumers: hotlines, local websites, plant visits, explore, reviews, social channels, centre gatherings.
- Customers: regular visits, dedicated account teams, joint business planning, joint value creation initiatives, customer care centres, social media engagement, surveys;
- Communities: Community gatherings, site visit, partnership on general argument, sponsorships, classes in college and universities;
- Employees: engagement studies, senior official market information, corridor gatherings, representative correspondences, singular improvement designs, wellbeing and security interchanges projects, group and worker prosperity ventures, morals hotline.
- Governments and regulatory authorities: Foreign direct investment advisory board, reusing and improvement directives, chambers of commerce;
- Non-governmental organizations (NGOs): progressing discourse, organizations on regular issues, participations of business and industry affiliations;
- Shareowners and analysts: Annual general meeting of shareholders, quarterly budget report, webcasts, investor representation, newsletter and conversation with investors and accountants.
- Suppliers: joint venture creation activities, yearly provider meeting, Supplier Guiding Principles, creating affiliations.
Ford stakeholder approach:
Ford’s stakeholders are effectively approached through numerous corporate social responsibilities by various initiatives and programs.
Customer: Ford’s top-need priorities are its customers. The interests of this partner amass are superior quality products and administrations, particularly after-deals services. Customers are critical partners since they specifically decide the organization's incomes. Ford’s corporate social obligation endeavors for stakeholder bunch are product development for quality, mileage, and security, portage Smart Mobility, portage Driving Skills for Life program.
Employees: Ford positions its employees at second level priority. This group of stakeholder is keenly interested in career growth, the increment in wages, equivalent opportunities and treatment in the organization. They are the important part of stakeholder as they are mainly responsible for production activities and service capacity of the business. if a small deduction also occurs in employee stakeholder group then it directly leads to decline in company’s revenue and performance (Weiss, 2014). Ford has adopted some of the CSR initiatives like Sustainable workforce, online product training, global leadership development and programs for enhancing leadership.
The capability of an organization to focus on new forms of competitive advantage is termed as dynamic capabilities. The capability of a company to innovate competencies to achieve correspondence with the transforming environment for business is called as dynamic (Barreto, 2010). The main characteristics of being dynamic are:
- It needs innovation to be respondent to the situation in arose. Like correct time to make entry to the market.
- The timing is also vital for such cases.
- Moreover, when there changes in the area of technology, the character of competition perspective, the market is dynamic to be predictable then dynamic capabilities become important in competitive advantage (Parente, Baack & Hahn, 2011).
Dynamic capability is generally through a combination of a cluster of 3 major activities like recognition and evaluation of an opportunity, mobilization of resources to identify an opportunity as well as capturing value, and transformation. These practices are required by the firms to be stronger than others. It is also required to sustain a business in market development and technological change. Execution of these exercises draws on every one of the abilities and orders utilized as a part of the business organization all over the world (Katkalo, Pitelis & Teece, 2010). The Dynamic Capabilities Framework sorts out outfit disciplinary information to apply it to the errand of building solid upper hand at the venture level. It involves 3 steps to recognize dynamic capability.
Recognition and evaluation: It is a basic set of entrepreneurial set of abilities which includes exploring technological innovation, searching market, communicating with the customer, and also scanning other parts of the business system (Pitelis & Teece, 2010). It needs management to develop and evaluate hypothesis related to market and technological innovation because it includes identification of recent trend in the market.
Mobilization of resources: It includes seizing capabilities which include designing of business models to fulfill the demands of the customer and acquire value (Prange & Verdier, 2011). It needs access to capital and compulsory human resources. An employee motivation and incentive scheme for hem is also needed to perform to best in the area of operations. Companies which are successfully fulfilling these values are making high profits.
Transformation: It refers to renewing company internal structures and maintaining its importance to customers. This requires managers of the company to continuously improve, and amend organizational objective. It is also a key to create sustainable and technologically advanced growth.
Coco-cola capabilities are:
With a strong financial position, Coco-cola is proceeding towards developing international market on large scale. The money is used in investing for various purposes like developing infrastructure, employee training, and growing distribution channels. They use financial sources in implementing strategies of competitive advantage.
Coca-Cola proves be having an effective organizational capacity. It can employee 100 thousand employees at a time and offers the collection of more than 500 brands of soda pop in almost 200 nations around the globe (Gehani, 2016). Their items show up nearly in every eatery, stores, films halls, school and vending machines. Coca-Cola knows how to reduce the distance between the customer and their products.
Capabilities of Apple are:
Present Mp3 were of very old technology.
form an artistically interesting movable device which provides a simple boundary on an enhanced product expansion sequence; improving with special FairPlay DRM popular in the iTunes Music Store
port iTunes software to opponent Windows platform; increase keen on content dispersal with iTunes Music Store; altering corporation weight starting from workstations to customer electronics
command over transferrable digital music competitor marketplace; development to audio-visual competences (replay and disbursement)
Prevailing “smart phones” reserved a difficult edge too near toward their mobile phone origins.
Construct a software headset by an outsized display plus a spontaneous edge; encourage balancing asset formation of the App Store structure.
Improve telephonic competencies; go into the structured telephonic marketplace.
one of the corporations generating profits through smart phones (Hoog & Strzempka, 2011).
“netbooks” deliver an unproductive calculating involvement and “E-readers” are delivered incomplete functionality
Measure up the iPhone edge to deliver wealthier programme policy devoid of mobile functionality.
Encompass the “modest boundary” artistic to a computing stage.
Too early to calculate.
Accomplishing sustainability is the biggest target in the 21st century. So far businesses find trouble in revolving rhetoric interested in authenticity. Numerous companies have the deficiency in the structures, tools, and abilities to apply fully their purposes, plus reporting and evaluating presentation.
Inserting sustainable growth through either the community or else private sector is difficult as the concerns are cross-cutting plus the notion itself is generally challenged. A mass number of methodologies has been developed (Hallstedt, et al., 2010). They have in shared is that they pursue to:
- Incorporate societal, fiscal and ecological traits.
- A comprehensive method to shareholder participation and permission
- And an extended period opinion.
This chart explains the strategic approach to transforming sustainability:
It is significant to have the clear vision regarding sustainable development which suits in organizational main business, actions, and aims (Fooks, et al., 2011). Thorough understanding helps the organization to understand the key factors:
- Why should a business adopt a practical approach to define sustainability with main business?
- The risk associated with it for not fulfilling above approach.
- Better knowledge of benefits which an organization can achieve.
This procedure drive must deliberate the consequences for processes and essential actions, whether it may be providing products and amenities or deciding public policy.
Sustainable growth is an intricate idea aimed at several individuals and businesses. Consequently, it is of important value to spend some period inside to reach some kind of general understanding and linguistic roughly how the establishment takes sustainable development. Planning on conflicting issue, coordination for sustainability strategy, other strategic planning, and much more is a strategic challenge in sustainable development (Bonn & Fisher, 2011).
As with any other corporate strategy or planning process on a cross-cutting issue, coordinating a sustainability strategy with the range of other strategic and planning processes in any organization is a challenge. Creating a complete multi-dimensional sustainable development approach in a distinct file is the choice that many groups have a tendency to desire in creating their strategy.
Sustainable approaches by BAT
Sustainable agriculture: BAT experts contract with agriculturalists towards cultivating the crop inaccurate way. It also advises on water management, biodiversity, use of agrochemicals and pest management (Deyton, Sharfstein & Hamburg, 2010). BAT also supplies seeds to the farmer that are less harmful to nature. Bat is also providing ways to access sustainable farming technologies like fuel-efficient curing barns and advice on growing other crops as well.
Alternative crops: BAT promotes appropriate economically sustainable alternatives of tobacco growing. As alternative crops minimise the effect on the environmental harm caused by tobacco and also acts as a sustainable approach by BAT for the environment. Growing trade of tobacco crop is not a right option for any nation. So BAT is also ensuring economically viable alternatives for employees and farmers. The company also supports the initiative taken by FCTC group in developing guidelines for finding alternatives in tobacco growing.
Afforestation: BAT afforestation initiatives encourage tree plantation for making a sustainable source for woods for agricultural. This would act as an approach toward wood saved for tobacco curing. They are also aiming at the negligible use of natural forests for curing and directly contracting with farmers (British American tobacco, n.d). In 2012 there was progress in this target was achieved by 3%. And also 140 million trees were planted to absorb carbon dioxide emissions. The co emissions were half of annual CO emissions by leaf curing by farmers. Moreover, the potential of all trees planted was considerably greater.
Sustainability approaches by Honda
Honda has dynamically attempted to explain environmental problems. Honda established the low effluence CVCC engine that effectively decreased carbon monoxide, hydrocarbon and nitrogen oxide (NOx) discharges, although Honda is the world’s leading company to compete with U.S. Honda can adopt the above set procedure for achieving the strategic management. The Honda should identify the key issues present in environment due to company’s practices. Then Honda should develop some strategy like reducing pollutants from environment to lessen the harm caused by it. Thirdly, Honda should establish governance and accountability to check the plan is going according to strategy established or not. After deciding governance it should set its target plan and action to remove the harms or reduce the harm caused. In last monitoring and evaluating the set plans accordingly to achieve he target should be the main of the Honda. Honda is continuously changing its product life cycle to become more sustainable.
The above report defines the standard linear approach towards strategic management. The linear approach consists of 3 views towards growth of organization. The stakeholder approach is viable and applicable to organization for whom the stakeholders are of significant value. The benefits are involvement of stakeholder at every stage of organization growth. This is sometime difficult to implement due to change in preference and demand of customer according to trend. And a limitation of this approach is too much involvement of stakeholders effects the decision making of organization. The dynamic capability approach explains the significant capabilities of organization (Mitropoulos & Prevedouros, 2011). Its benefits are recognising own resources and capabilities lead an organization to success. This is difficult to adopt when organization is having limited resources to be use. And its imitation is greater reliability on organization which can be harmful in difficult time for a company to cope up. The last approach is sustainable approach which defines the importance of sustainability in an organization. Its benefits are huge as people are attracted towards more sustainable companies nowadays. The difficulty in applying this approach is needed to provide justification of every cost and activity to board. Its limitation is too much approaches for sustainability diverts the organization from main objective to sustainable development.
Barreto, I., 2010. Dynamic capabilities: A review of past research and an agenda for the future. Journal of management, 36(1), pp.256-280.
Bonn, I. and Fisher, J., 2011. Sustainability: the missing ingredient in strategy. Journal of business strategy, 32(1), pp.5-14.
British American tobacco, n.d., A sustainable approach, viewed on 27th august 2017, Available at <https://www.bat.com/group/sites/UK__9D9KCY.nsf/vwPagesWebLive/DO9DCFJG>.
De Wit, B. and Meyer, R., 2010. Strategy: Process, content, context. Cengage Learning EMEA., 160-175.
Deyton, L., Sharfstein, J. and Hamburg, M., 2010. Tobacco product regulation—a public health approach. New England Journal of Medicine, 362(19), pp.1753-1756.
Fooks, G.J., Gilmore, A.B., Smith, K.E., Collin, J., Holden, C. and Lee, K., 2011. Corporate social responsibility and access to policy élites: an analysis of tobacco industry documents. PLoS medicine, 8(8), pp. 1001076.
Freeman, R.E., 2010. Strategic management: A stakeholder approach. Cambridge university press.London.
Gehani, R.R., 2016. Corporate Brand Value Shifting from Identity to Innovation Capability: from Coca-Cola to Apple. Journal of technology management & innovation, 11(3), pp.11-20.
Hallstedt, S., Ny, H., Robèrt, K.H. and Broman, G., 2010. An approach to assessing sustainability integration in strategic decision systems for product development. Journal of Cleaner Production, 18(8), pp.703-712.
Hanna, S. and Rowley, J., 2011. Towards a strategic place brand-management model. Journal of Marketing Management, 27(5-6), pp.458-476.
Harrison, J.S., Bosse, D.A. and Phillips, R.A., 2010. Managing for stakeholders, stakeholder utility functions, and competitive advantage. Strategic Management Journal, 31(1), pp.58-74.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
Hoog, A. and Strzempka, K., 2011. iPhone and iOS forensics: Investigation, analysis and mobile security for Apple iPhone, iPad and iOS devices. Elsevier.
Katkalo, V.S., Pitelis, C.N. and Teece, D.J., 2010. Introduction: On the nature and scope of dynamic capabilities. Industrial and Corporate Change, 19(4), pp.1175-1186.
Luoma-aho, V. and Vos, M., 2010. Towards a more dynamic stakeholder model: acknowledging multiple issue arenas. Corporate Communications: An International Journal, 15(3), pp.315-331.
Mitropoulos, L.K. and Prevedouros, P.D., 2011. Sustainability framework for the life cycle assessment of light-duty vehicles. In ICCTP 2011: Towards Sustainable Transportation Systems pp. 4407-4419.
Parente, R.C., Baack, D.W. and Hahn, E.D., 2011. The effect of supply chain integration, modular production, and cultural distance on new product development: A dynamic capabilities approach. Journal of International Management, 17(4), pp.278-290.
Pitelis, C.N. and Teece, D.J., 2010. Cross-border market co-creation, dynamic capabilities and the entrepreneurial theory of the multinational enterprise. Industrial and Corporate Change, 19(4), pp.1247-1270.
Prange, C. and Verdier, S., 2011. Dynamic capabilities, internationalization processes and performance. Journal of World Business, 46(1), pp.126-133.
Weiss, J.W., 2014. Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.