Strategic Management and Contemporary Business - Term Paper Example

TABLE OF CONTENTS 1.0 Introduction 2 2.0 Strategy Development Process 3 3.0 The Prescriptive Strategy 4 4.0 The Emergent Strategy 4 5.0 Strategic Management and Contemporary Business, A literature review 6 6.0 Conclusion 7 7.0 References 8 1.0 Introduction This report has been prepared with reference to academic literature available on the field of strategy development, where the report focus on the appropriateness of definition and explanation of Emergent Strategic Management as defined by Lynch, 2009 p52 and the role which this strategic management approach has on contemporary business along with suitable organizational examples to support the same. The report initially focuses on strategy development process where a clear distinction is made as per academic literature review on Rational Analytical View and Emergent Strategic View. Both these views seem to be not mutually exclusive to one another and its impact and importance to contemporary business are highlighted by brief organizational examples. The report then moves to focus on the Prescriptive Strategy view with a contrast on Emergent Strategy view to highlight the correctness and appropriateness of explanations and guidance provided on both the views. The report finally highlights a literature review on the role of strategic management approach to contemporary business where different arguable researches and explanations provided by various academic writers are analyzed and their impact and importance to contemporary business is explained in a synchronized manner to provide readers a comprehensive understanding of the topic. Finally the report is concluded to throw light on the theoretical and practical understanding of the entire report under study. 2.0 Strategy Development Process Strategies play a vital role in determining the success or failure of any action in an organizational context. Organizations develop strategies in different process considering various micro and macro factors influencing their work organization and further involve itself in a continuous process of strategy development. However it is to be noted that strategies do not always develop in a logical and sequential manner of analysis, choice and action (Kotler, 1995). There are two broad explanations of strategy development as shown from the literature review of its development process which has been discussed in a brief manner as under. The conventional explanation of strategy development is the rational analytic view. Here organizations tend to formulate strategies through rational and analytic approach which are typically led by the top executives or managers. This process follows a liner sequence during the development of strategy. Firstly, the strategic position is analyzed as per general environmental conditions prevailing during the time of inception of strategies then various options are weighed and choices are developed accordingly and finally structure, changes and process procedures are put in place to ensure an effective implementation of the developed strategy. Often formal strategic planning systems play a significant role in the analysis and formulation of a strategy. In this view the strategies developed are intended as per desired objective or in other words the products are developed as per the deliberate choices (Lowe & Jones, 2004). For example, Google smart phones were developed as per Rational- Analytic view where the company considering the huge demand of android smart phones developed a new windows cell phones which advanced features and characteristics of MS-dos. Further choices were made between windows software and android and IOS software to finally decide upon the best suited software for such mobile phones. An alternative broad explanation of how strategies are developed is the emergent strategy view. In this approach strategies are not often developed as per intention or planned activities with a common objective but instead tend to develop in an organizational context over a duration of time as a result of ad hoc activities which can be incremental or even accidental actions. Good ideas and opportunities often emerge from practical experience and exposure to day-to-day activities at the bottom of the organization, rather than coming from the top management or executives and formal strategic planning as in case of Analytical approach. Even the best laid plans may require to be abandoned or curtail on a complete basis as a result of new opportunities which arise and organizations tend to learn from the market place. It is to be noted that this two views of strategy development process are not mutually exclusive to one another. Intended or analytic strategies can often succeed in stable or constant markets where there is little space for surprises. Moreover an organizations key stakeholder which include employees, regulators, share holders, customers, owners and so on will typically want to see the evidence of deliberative strategy making. It is rarely acceptable to digest that everything is just emergent. However, it is important to know that deliberative strategy making has its own importance and significance to contemporary business world but it is wise to be open to the possibilities of emergence (Mansfield & Fourie, 2004). Moreover, strategic choices need not always come about as a result of simple rational analysis. It is a comprehensive process where even culture and political processes can also play a vital role in driving important changes in the strategy development process. To further better understand the development process let us have a look at the literature review on the same and understand a comparative contrast between various strategies and their implementation along with how strategic management approach is appropriate to contemporary business. 3.0 The Prescriptive Strategy As per Lynch a Prescriptive Strategy is one where the main action plan or objective has already been defined in advance and the main elements are developed much earlier than the strategy commences. The prescriptive strategy involves a tight supervision of all the planning process which is usually headed by the top executives (Pearce & Robinson, 2003). For example, in an organizational context the top management initially expresses its requirements and issues in broad to the lower level management which are then curved into consolidated action plans during the course of strategy implementation process. The head quarters through careful analysis looks upon the required resources and how the same are distributed among the business. Thus, it can be implied that a prescriptive strategy is one which is developed in a liner fashion where everything is known from the start to go to the final desired outcome or objective. Prescriptive strategy development process is thus preplanned with a deliberative or desired outcome. The approach allows a complete overview of the organization with a possibility to compare its objectives along with a clear picture to the top executives to select different choices which the company can use with regards to its available resources. The organization is characterized with an added advantage of observing the agreed plan as the same is implemented and further evaluate its progress as per the desired result (Robert, 2000). On the other hand now let us look at a different approach to strategy development which is the Emergent strategy to understand and contrast the same with Prescriptive strategy. 4.0 The Emergent Strategy View According to Lynch, an Emergent strategy is one which is developed during the course of its life as and when the strategy proceeds and whose final objective is unclear. This strategy holds a long time arguable debate with different authors expressing different views however the very fact of the existence of Emergent Strategy cannot be denied as the same is an integral part of organizational strategy development process (Hamel, 2006). An emergent strategy is one which emerges of its own on a continuous basis and adapts itself to the environmental and human needs (Frery, 2006). This is one of the fundamental aspect of emergent strategy however, it is to be noted that there are number of variations possible as the same in contrast to prescriptive or rationale approach are not planned steps and are developed during the proceeds of a strategy. The emergent strategy development process unlike the prescriptive strategy does not follow a Top-Down schema indeed the same follows a bottom-top structure and are developed and constructed from the ideas and opinions which comes directly from the reality market. The participative management approach integrates important tools with the management system control which eventually lays the foundation for the emergence of a new strategy. Emergent strategy as seen from organizational history and framework along with a lot of literature review conducted on the same ensures that the same is more open to environmental changes (Ehler & Lazenby, 2010). During the revision of the strategy the same allows to completely alter the course of the strategy in a judicial manner or in a more radical approach to design the strategy so as to enable an organization to take advantage of an opportunity in a more comprehensive manner as the same is developed in day to day decision makings of running the business at the tactical and routine level of the organization. For example, Sam Walton the founder of Walmart focused on building his stores which were close to its first store in the rural settings rather than in big population cities as the same was easier for him to have a more systematic control and management over its stores. He followed a winning strategy as there was less competition and people in the countryside would not come to miles to get the discounted stocks and items. Thus we see this is an emergent strategy as the same was developed during the problem facing conditions and it is good when it is hard to predict the market trend particularly in an unstable market condition. Further in an organizational context this is the case which holds good to most of the companies. Emergent strategies are thus one where there are no final objectives or desired planning process and they are more like a series of experimental approach and discussion which is developed as the strategy goes ahead. The development and implementation of the emergent approach are hence not distinct both these stages work together (Coulter, 2002). The process is more of a circular structure as the strategy evolves from the background and knowledge of the company experiences and further objectives are discussed with varying arguments on different issues concerning the strategy development process from the members of the team. If the strategy works the same is implemented for a longer span otherwise the members look upon a different compromise on the same. The most beneficial advantage of Emergent approach with regards to today’s contemporary business are that these strategy evolve on a continuous basis and follows a flexible approach than a rigid approach as in case of Rational analytical view, which are developed over time as per the available resources, policies and market expectation and trends. Further emergent strategy are very efficient in a fast moving dynamic environment which is the general characteristic to today’s environment and allows a constant development of the company as the strategy proceeds with refined implementation of the strategy and respond accordingly to market conditions (Johnson, Scholes & Whittington, 2008). The fact to work is a day by day approach which allows optimal culture to emerge instead of following an artificial planned process. 5.0 Strategic Management and Contemporary Business, A literature review Mintzberg and Waters were the first to lay emphasis on the terminology of deliberative and emergent strategies. The term deliberative and emergent strategies and its importance had already been explained in the upper part of the discussion. Mintzberg further argues reiterated by Broadhust et. al (2001), that much of the conventional strategy literature is concentrated or focused on the realization of explicit intentions and hence on its implementation processes, largely to the exclusion of emergent. With regards to today’s competitive environment and conditions it is rightly said by Beason and Davis, 2000 that processes cannot be fully controlled and planned and hence the requirement of emergent strategy is of significant importance in a contemporary business. Lowe and Jones (2004) further advocates that the outcomes of an emergent approach is a combination both reflective which are conscious elements and un-reflexive which are unconscious elements. This approach signifies the importance of adapting to human and market needs and continuing to develop over time. The more intuitive, emergent strategy approach centre’s around the development of a strategy with regards to today’s contemporary business which interacts with the external environment and internal competence of an organization (Marlow, 2000). Hench, 1999 has rightly advocated that Emergent organizational system strategies are different from planning and control system as the same rely on different views on a global basis and apply different theories of organizational changes suggesting different means of organizing the required varied tasks of management and further emphasis on different tasks of strategy. The more precise move in literature is towards advocating emergent strategic management process which shows that there is a very tenuous relationship with the organizational performance at the emergent strategy level. However, deliberative management approach still poses a tangible link to the organizational performance and desired outcomes of increased productivity to which the organizational are ultimately concerned with. Emergent strategic management approach can however be closely linked to the organizational performance in seeking future activities and grabbing future external opportunities as due to rapid changing environment. For example considering the marketing events the trends in the clothing world which had been fashionable a year ago may be outdated today. Technological, social, economic and political changes had made today’s environment much more competitive and strategic management along with emergent strategies help organizations to gain a competitive edge in context to contemporary business (Lynch, 2009). Emergent strategies help organizations in making a unique combination of abilities and resources such as product innovations, technology, cultural aspects and employees skills and motivation to deliver a unique blend of comprehensive management strategy which sets it apart from its rivals and competitors to gain an extra edge over the competitors with regards to contemporary business and its long term sustainable growth. Organizations in a rapid changing environment are more confronted on two conflicting ideas. Firstly, to adapt to the changing environment to ensure exploration of new ideas and processes and develop new innovative products and services accordingly and secondly organizations need to be stable in maintaining and exploiting their core competencies to operate in the existing working environment (Mintzberg, Lampel, Quinn & Ghoshal, 2003). Thus, we actually lie between the prescriptive and emergent approaches of strategy development with significant contributions from same to the success and failure of contemporary business. 6.0 Conclusion This report looks to provide a complete understanding of the strategy development process and focuses on the various academic literature available in the field of strategy development. The report has been designed to provide an understanding on the rational analytical view and emergent strategy view along with a discussion on prescriptive strategy with brief organizational to provide readers with a better understanding of the topic. Further the report highlight the importance of strategic management approach in context to today’s contemporary business and also highlight the academic literature available on the same to bring to a conclusion of importance of emergent strategy in contemporary business. An academic discussion on the difference between prescriptive strategy and emergent strategy further has thrown light on the importance of both this views in contemporary business with a linkage of the same to organizational success and increased productivity which organizations tend to look at through the use of various management strategies. The report has been prepared to provide both theoretical and practical understanding of the topic under study to ensure valuable information and knowledge to its readers. 7.0 References Beeson I, Davis C (2000). Emergence and accomplishment in organizational change. J. Organ. Change Manage., 13(2): 178-189. Broadhurst A, Paterson A, Ledgerwood G (2001). Emergent strategies and entrepreneurial managers in public and mixed-mode enterprises: The evolution of community/business resource centres in South-east England. J. Small Bus. Enterp. Dev., 8(1): 63-75. Coulter M (2002). Strategic Management in Action New Jersey, NJ: Prentice Hall. Ehlers T, Lazenby K (2010). Strategic Management: South African concepts and cases. Pretoria: Van Schaik. Frery, F., (2006). The Fundamental Dimensions of Strategy, MIT Sloan Management Review, Fall Hench TJ (1999). The history of Herman Miller, Inc. and the nature of emergence. J. Manage. Hist., 5(6): 362-379. Hamel G (2006). Strategy as revolution. Harv. Bus. Rev, 74(4): 69-82. Johnson, G., Scholes, K., Whittington, R., (2008). Exploring Corporate Strategy Text & Cases, 8th Edition, Prentice Hall, London. Kotler P, (1995). Strategic marketing for educational institutions. 2nd ed. Englewood Cliffs, N.J: Prentice-Hall. Lowe A, Jones A (2004). Emergent strategy and the measurement of performance: The formulation of performance indicators at the micro level. Organ. Stud., 25(8): 1313-1337. Louw L, Venter P (2006). Strategic management: winning in the South African workplace. Cape Town, CT: Oxford University Press. Lynch, R., (2009). Strategic Management, 5th Edition, Pearson Educational Limited, Essex. Marlow S (2000). Investigating the use of emergent strategic human resource management activity in the small firm. J. Small Bus. Enterp. Dev., 7(2): 135-148. Mintzberg H, Waters JA (1985). ‘Of strategies, deliberate and emergent’. Strateg. Manage. J., 6: 257–272. Mintzberg, H., Lampel, J., Quinn, JB., Ghoshal, S., (2003). The Strategy Process Concepts Contexts Cases, 4th Edition, Prentice Hall, New Jersey. Mansfield GM, Fourie LCH (2004). Strategy and business models – strange bedfellows? A case for convergence and its evolution into strategic architecture. South Afr. J. Bus. Manage., 35(1): 35-44. Pearce JA, Robinson RB (2003). Strategic management: formulation, implementation and control. 8th ed. New York, NY: McGraw-Hill. Robert M (2000). The power of strategic thinking. New York, NY: McGraw-Hill. Read More