Prescriptive and Emergent Strategy - the UK Economy - Case Study Example

Prescriptive and Emergent Strategy Name Course: Tutor: Institution: Date: Introduction Over the years, strategic management concepts in business have evolved. In this regard, the concept evolved to incorporate various inter-related but independent components such as strategic planning, management, and evaluation. Although related, the three components operate under distinct principles based on the contextual business environments and business competition standards. Strategic planning incorporates the process of developing working framework for corporations in order to enhance efficiency and increased profitability. Traditionally, organizations adopted the prescriptive strategic planning approach. However, changing market environments and needs necessitated the need for strategy changes in the market to enhance increased flexibility and efficiency in the market. Consequently, organizations resulted to the adoption of new strategic planning measures such as emergent strategies in strategic planning. The United Kingdom (UK) economy experienced increased market challenges because of the 2007 world financial crisis. In this case, general earnings the economy reduced leading to consumers behaviour change. In an analysis on the UK market struggle in the post financial crisis period, Sharma (2013, p.222) established that consumer spending behaviours changed in the economy resulting to reduced spending on luxury and secondary needs due to decreased household earnings of more than 6% in the UK. Consequently, as the study notes, organizational profits in the economy significantly declined. However, in the recent past, the economic situation has changed. In this regard, gradual economic development and increased earnings have reverted consumers buying behaviour into increased spending. As a result, organizations in the market have experienced increased profits. This essay seeks to establish the role of strategic planning in enhancing increased organizational performance for corporations in the UK market. In essence, the review seeks to establish the significance, merits, and implications of strategic planning in the wake of improved customer spending in the economy. Finally, besides offering a summary conclusion, the review offers recommendations on best practices in strategic planning. Prescriptive Strategies Strategic planning, as Simerson (2011, p.25) argues, is a process through which, organizations enhance increased performance through the adoption of proactive measures. In this regard, involved organizations partake in the planning. In this case, the organizations develop objectives and goals that ought to be achieved in the long run. This form of strategic planning is categorized as prescriptive strategies. In this form of strategic planning, organizational management develops a series of objectives and milestones for achievement. As such, organizational performance and success is hedged on the achievement of these goals and objectives. Consequently, organizational resources are developed and geared towards the attainment of the set goals. Ciavarella (2003, p.338) conducted a study to evaluate the merits and implications of prescriptive strategic planning. The study evaluated the gains and success factors enhanced by such a planning strategy. In its analysis, the study established that prescriptive strategic planning enhanced increased organizational efficiency and reduced confusion and duplication of efforts. The study revealed that organizations adopting this management strategy, recorded increased performance and increase success levels probabilities as compared to organizations that failed to apply the concept. Consequently, the study concluded that prescriptive strategic planning facilitated increased organizational efficiency, reduced costs of production as well as increased profit margins. Therefore, in its recommendations, it advocated for the application of this strategy in organizations regardless of the organizational size and capital base. Nevertheless, prescriptive strategic planning has its shortcoming in the essence that it lacks enough flexibility in application. The demerits of the application of this strategy can be evidenced in the eventual organizational downfall for multinational corporations evidenced in USA and UK. To this effect, Yeoh (2010, p.43) conducted a study to evaluate the causes for multinational organizations downfall in the world financial crisis period. The study sought to establish a relationship between organizational strategies in the pre financial crisis and the eventual collapse. This followed the increased argument that the financial and economic crisis. As such, the study adapted a hypothesis that the crisis and eventual organizational failures emanated from the strategic planning approaches used. In its evaluation, the study evaluated strategic planning approaches by corporations operating in the UK and USA economies. In its findings, it established that the majority of the organizations adopted the prescriptive strategic planning approaches; as such, most of the organizations had strategic plans stretching to up to five years. In this case, as the study established, the strategies were hedged on forecasts carried out at the onset of the planning period. In this regard, the organizations relied on available information of the historical and current market information to formulate demand projections on the economic performance. On one hand, the study established that the assumption adopted by prescriptive strategic planning, highly contributed into the eventual organizational failures in the financial crisis period. In this case, the approach adopts the assumption that the market is predictable and that stakeholders adopt rational decisions. As such, the approach reviews past and present market information to formulate projections. However, the market in its highly dynamic approach adopts random and unprecedented changes, such as the housing bubble in USA that was unforeseen. Thus, the study established that inappropriate forecasting technique in the strategic approach used led to increased market failure. In addition, Saad (2001, p.392) developed an argument that prescriptive strategic planning is hedged on long-term goals that are not flexible enough in the short run. Consequently, although the financial crisis signs were eminent, organizations could not realign their operations and goals in the short run, that creating a market and approach discrepancies in a majority of the organizations. In the current UK economic situation, the economy is rising after the financial crisis downfall. In this case, the profit margins remain significantly low with high costs of production. Thus, organizations should adopt strategies allowing for increased efficiency as well as reducing confusion. In this regard, the economy requires the application of the prescriptive strategic planning approach. However, the economy is drastically changing. Williams (2005, p.107) argues that a developing economy has no definite structures for adoption. As such, the economy adopts models at random in a bid to test on their merits and limitations. This amounts to benchmarking criteria to a low for maximum growth. To this effect, organizations operating in this environment need flexible approaches to allow for increased adaptation to a changing environment. In this case, the application of the prescriptive strategic planning approach in the economy would be inappropriate. Emergent Strategies Besides the adoption of prescriptive strategic planning approach, dynamic environments demanded the application of alternative approaches in strategic planning. This argument is evidenced by a study developed by Gärdenfors, Woleński and Placek (2002, p.10)on the need for alternative strategic planning strategies. The study sought to establish existing strategic management gaps. In its hypothesis, the study argued that in order to enhance increased efficiency, it was imperative to apply alternative measures. As such, the study argued that there existed gaps in the strategic management principles. In its analysis, the study findings supported the hypothesis. In this regard, the study established that prescriptive strategic planning approach lacked the necessary flexibility in a dynamic market environment. Consequently, it advocated for the development of alternative approaches. It is based on the rationale that emergent strategic planning approach was developed. The emergent strategic planning approach adopted a deviating approach in its application. In this case, the approach sought to remedy the inflexibility limitation in strategic planning. As such, the approach adopted divergent approaches. On one hand, the strategy is not hedged on fixed organizational goals and objectives. Instead, the study hedges its performance on the development and achievement of short-term goals based on emerging market issues. Thus, the strategy execution is based on a short-term basis. Moreover, its application is hedged on emerging market development issues. As such, organizational objectives could be changed randomly based on market changing dynamics. The application of this approach can be cited in the case of the electronics industry. In this industry, the market is highly dynamic with no definite long-term tastes and preferences. Moreover, the production and supply chain management dynamics negate the role of long-term forecasting. To prove the viability of the application of the emergent strategic planning approach, Finnegan, Galliers and Powell (2003, p.184) conducted a study to evaluate the merits and impacts of its application in the electronics industry. The study sought to evaluate if the application of the emergent strategic approach had implications in its success. In its analysis, the study revealed that the application of emergent strategies enhanced increased market competitiveness. The study revealed that the industry relied on projects to develop and innovate new products. As such, the projects with their shorter lifespan necessitated and benefited most from the development of a project based short-term goals. Consequently, the study concluded that the overall industry analysis was based o subsequent project success. Thus, short-term goals on projects resulted to the overall organizational and industry success in the long run. In support of the application of emergent strategies, Baird, Kristal and Reeve (2011, p.790) argued that short-term goals not only allowed for increased creativity, but also increased innovation. In this case, the author argued that the use of projects as the basis of performance and success basis in the long run, enhance innovation. As such, projects were established ad run on the market need basis. Consequently, this facilitated increased market competitiveness through market up to date status retention. In this case, the application of the emergent strategies in the UK market would be a viable strategic application alternative. On one hand, its application would ensure increased conformance to dynamic market needs. As a re-emerging economy, the UK market is bound to change and experience increased changing preferences and needs. Consequently, it is imperative for organizations to employ strategies that allow for organizational flexibility allowing for congruence with the market dynamics. However, Downie, Koestner, Horberg and Haga (2006, p.518) note that the application of this strategy in an economy risks the loss of long-term objectivity in organizations that risk reduced economic development in the respective markets. Recommendations The above analysis of strategic planning approaches raises an application concern. On one hand, the application of the prescriptive approach in management enhances increased focus and market efficiency in the UK market facilitating increased profit margins. Moreover, such an application enhances the development of long-term attainable goals through which organizational performances are evaluated against. In this regard, the execution of a prescriptive strategic planning approach surpasses the need for planning to include the development of performance evaluation tool. As such, corporations operating in the UK market need the application of these tools in order to continuously establish performance against the rate of economic development. However, as evidenced its application lacks flexibility. Consequently, in acknowledgement of the strategy weakness and recognition of its merits, this essay recommends the blending of the application of both the prescriptive and emergent strategic planning strategies. Through the adoption of an emergent approach, organizations would successfully establish flexible operational strategies. As already established, emergent strategies are hedged on short-term achievements and as such best fit in project management. In this regard, this essay recommends the application of the strategy in projects management. In particular, the essay advocates for partitioning in the organizational strategic planning function. Such, corporations should develop both short term and long term strategic plans. In this regard, the short-term strategies should form the organizational, operational frameworks. As Chathoth and Olsen (2002, p.7) in an evaluation of the hotel industry notes, the realization short-term operational goals facilitate the overall attainment of organizational success. Further, the author notes that flexible operational strategies allow for the realization of long term fixed objectives. This argument can be referenced to a study developed by, Baird, Kristal and Reeve (2011, p.790) among multinational corporations in the global market. In this regard, the study sought to establish a relationship between organizational success and the adoption of both long term and short term operational strategies. In its analysis, the study revealed that organizations with flexible short-term operational strategies exhibited increased success levels than peers that adopted one between the two strategic approaches. In this regard, it is apparent that organizational success and performance is based on the adoption of a combination of both strategic measures. Thus, organizations seeking to increase their performance while flexibly adjusting to dynamic market conditions have to adopt a blend between the prescriptive and emergent strategic planning approach. Consequently, based on these analyses, this essay recommends that, for increased efficiency and performance in the UK market, organizations have to apply a blend of the two approaches as discussed. The need for the adoption and reliance on strategic planning tools to enhance increased success is imperative. As established, the adoption of these approaches enhances increased market performance. Therefore, this strategic management concept remains relevant in the market into the near future Conclusion In summary, this essay develops and establishes key issues in strategic planning strategies. On one hand, the essay establishes that strategic planning can be broadly categorized into two broach approaches, the prescriptive and emergent approaches. On one hand, while the prescriptive approach is hedged on long-term goals attainment, the emergent approach is hedged on short-term goals attainment in a dynamic environment. The essay establishes that the prescriptive strategic planning approach relies on market forecasting to develop market estimates and forecasts to develop goals and objectives. In this regard, the study establishes that the adoption of this strategy enhances organizational focusing reduced production costs and increased efficiency. With respect to increased organizational focusing, the essay established that, through prescriptive strategic planning, organizational resources are proactively assigned to their respective activities. Thus, such resources, through prior se and allocation determination channel efforts towards the achievement of such respective goals. Moreover, in regard to increased efficiency, prescriptive planning enhances reduced confusion and duplication of efforts thus stimulating increased production efficiency and reduced cost of production. To this effect, the study concludes that the application of this strategic management approach in the re-emerging UK market will facilitate increased efficiency and reduced production costs. However, the essay notes that the application of this approach would result to organizational market inflexibility, thus reducing success and profitability rates. On the other hand, the essay reviews the application of the emergent strategic planning approach. In this regard, it reveals that the approach was developed in order to remedy the inflexibility challenge experienced under the prescriptive strategic planning approach. In this regard, the study establishes that the adoption of this strategy stimulates increased flexibility. In particular, it establishes that the strategy is best fitting for the management of organizational project run in the short run period. Concerning its application, the essay reveals that it best fits for its rationale of enhanced flexibility in a highly volatile UK market. However, its demerit on lack of a clear focus negates its absolute application in the market. Consequently, based on the established challenges for both the prescriptive and emergent strategic planning approaches, the essay recommends the adoption and implementation of a blend of both strategies. Conclusively, this essay establishes that, upon the application of these two strategies, the market is bound to develop. References Baird, K., Kristal, J.H. & Reeve, R. 2011, "The relationships between organizational culture, total quality management practices and operational performance", International Journal of Operations & Production Management, vol. 31, no. 7, pp. 789-814. Chathoth, P.K. & Olsen, M.D. 2002, "Organisational Leadership and Strategy in the Hospitality Industry", Journal of Services Research, vol. 2, no. 1, pp. 5-29. Ciavarella, M.A. 2003, "The Adoption of High-Involvement Practices and Processes in Emergent and Developing Firms: A Descriptive and Prescriptive Approach", Human resource management, vol. 42, no. 4, pp. 337-356. Downie, M., Koestner, R., Horberg, E. & Haga, S. 2006, "Exploring the Relation of Independent and Interdependent Self-Construals to Why and How People Pursue Personal Goals", The Journal of social psychology, vol. 146, no. 5, pp. 517-31. Finnegan, P., Galliers, R.D. & Powell, P. 2003, "Systems Planning in Business-to-Business Electronic Commerce Environments", Information Technology and Management, vol. 4, no. 2-3, pp. 183-198. Gärdenfors, P, Woleński, J & Placek, K 2002, In the scope of logic, methodology and philosophy of science: 2, Kluwer Publishers, Dordrecht. Saad, G.H. 2001, "Strategic performance evaluation: Descriptive and prescriptive analysis", Industrial Management + Data Systems, vol. 101, no. 8, pp. 390-399. Sharma, S. D. 2013, Global Financial Contagion: Building a Resilient World Economy after the Subprime Crisis, Cambridge University Press, London. Simerson, B. K. 2011, Strategic Planning: A Practical Guide to Strategy Formulation and Execution. Santa Barbara, Calif: Praeger. Williams, C.C. 2005, "The Market Illusion: Re-reading Work in Advanced Economies", the International Journal of Sociology and Social Policy, vol. 25, no. 10, pp. 106-118. Yeoh, P. 2010, "Causes of the global financial crisis: Learning from the competing insights", International Journal of Disclosure and Governance, vol. 7, no. 1, pp. 42-69. Read More