Developing a Flexible Approach towards Strategic Management in Todays Fast-Moving Global Business Environment - Coursework Example

The importance of developing a flexible approach towards strategic management is vital in today’s fast moving global business environment.” Critically evaluate this statement. Introduction The discipline of strategic management originated from the scholarly works of the 1950’s business movements although there had been numerous thinkers prior that, who had contributed essential literature on which the concept was construed (Chandler 1962). The most prominent pioneers in this right included Alfred D. Chandler, Igor An off, Philip Selznick and Peter Ducker. Alfred Chandler especially is reputed to have solely recognized the vital need for a business to coordinate all its aspects of management into a singular all-encompassing management strategy. According to Chandler (1962), most traditional business structures featured “separated functions of corporate management with minimal overall coordination if any”. It was therefore the first time that a “singular strategy” was figured important Chandler (1962). Since then, we have had a great and fundamental shift in the world’s economy such that the need for a singular strategic management approach has become more pressing than it ever was. Businesses have gained a high level of interactions, within their structures and even with other entities outside the business structures. Nations themselves are moving further to exact and receive influence form other nations around the globe, just as if there were no bounders between them. This phenomenon has been variously referred to as globalization. A market crush in America is enough to send a country in Sub-Saharan Africa into economic ruin. No business or economy can now survive in isolation. In this age, cross-border business, trade engagements and capital investments have become the norm. There are no barriers to the flow of goods, services and capital, especially now that the internet has become a commercial vehicle. In essence therefore, the concept of nurturing a singular strategic management approach for a company and its departments has further been amplified to include much more that the departments. Companies now have to formulate strategic management policies that transcend the barriers of regions, nations, languages and demographics. Simply said, companies have to develop global strategic management approaches (Wortzel 1997). Yet the complexity of instituting such a singular strategic management approach in a multinational firm, one that has a thousand branches in a hundred nations of the world, each featuring a complicated and unique environment, is not an easy task. That means that the strategic management approach must be adequately harnessed to accommodate the diverse environments, demands, changes and challenges in which the multinational operates. Shrewd managers in modern times have learnt how to formulate a singular strategic plan that comprehensive covers all their global exploits, yet that plan has in it the flexibility to adapt to assorted environments. This paper will endeavor to elaborate how modern business operations, especially those conducted on a global scale, rely on flexible approaches in strategic management. Without this vital ability to adapt to new changes and accommodate variations in strategic plans, no business can thrive in current international markets. In this conviction, the paper sets out a theoretical conception of contemporary strategic management in global-scale businesses. The need for flexible approach is then contextualized in this business setting, with a specific bias to current needs in profitable business operations. Finally, the paper also lists some example of situations in which flexibility could work against a business entity, just to ensure that managers do not overstretch their flexible approaches to infinitum. The paper uses numerous examples to illustrate the particular arguments in each section. To achieve such a grand ambition, the paper adopts the following thesis statement. Thesis Statement Modern global business operations are usually conducted in the speed of light, where circumstances can adjust in the flash of a second and ruin what had hitherto been a lucrative venture. Managers need to adopt a very flexible approach in their strategic planning to ensure that they accommodate all variables and unforeseen eventualities and still be able to make a profit. Strategic Management in Global Business Operations The simplest way we can define strategic management, for the purposes of this paper, is as the conduct formulating, implementing and systematically evaluating a set of cross-functional business decisions so as to enable a particular organization achieve its short-term and long-term objectives. This therefore entails the process of specifying an organizations vision, mission and objectives, developing precise policies to help attain those objectives and then planning on each step necessary in the attainment of the vision and mission. Once the ideal objective based plans and determined, the next step is to allocate adequate resources to the implementation of the policies and plans so determined. Some years ago, it was possible to formulate a company’s tradition or way of doing and then remain with that tradition for ages. Modern strategic management however, has become an ongoing process. Formulating a strategic plan is not enough to set a business on a course of success and to maintain it there forever. Markets are changing too fast, technologies developing by the day, political landscapes shifting far too frequently and consumers becoming too unpredictable. That is where we introduce the concept of flexibility into strategic management. A static strategic plan cannot work in modern markets, especially in international business ventures. In modern global entrepreneurships, strategic management has become an ongoing, daily modified engagement that seeks to foresee market changes, implement innovative exploits of these changes in time before other changes come around, evaluate each and every move based on its context and control the business from an on-the-spot approach. That means, modern globalized strategic management approaches have had to become flexible and non-static. In this age, strategic plans change immediately a competitor launches a new product, every moment that a new political climate is created, the moment a new technology is discovered, the moment a new opportunity presents itself. Economic activities are now adopting new strategies every morning, replacing the priorities by the hour and altering in different environments. Economic activities are being molded by the different social set ups they encounter during global expansions. That singular ability to adapt, to cope, and to flexibly accommodate modifications; is what defines successful international businesses today (Wortzel 1997). A good example is the American-Japanese competition in manufacturing industries. American corporations had assumed global supremacy by 1970’s. However, according to Lester (1989), most were formulated “on the basis of static strategic plans”. By the 1990’s the global supremacy of the American corporations met their biggest competitor in the global market. Japanese industries had gradually encroached into the world market. Surprisingly, it took less than ten years for Japan industries to became a dominant market player, edging out some traditionally monopoly global suppliers from America. From steel, ship building, watches, cameras, autos, electronics and such industrial products, the Japanese had threatened to surpass American and European multinationals. How did Japan manage such a feat? Simple, the ability to adapt to market needs, the ability to formulate global strategic plans that were flexible enough to fit into selected markets (Haley 2005, pp. 193-194). The y based their marketing strategies on lower cost infrastructure, innovative simplification of hitherto complicated technologies, cheap prices, economies of scale etc. the traditional hierarchical American corporate were static establishments built on traditions. Japanese firms came into the market with consensus approaches to strategic marketing. The results of employing such an approach were improved sales and market share. As Haley writes, “By the time American companies realized the growing need for strategic management flexibility, Japan had become a main market player that could never be dethroned”, (2005, pp. 193-194). To face up the challenge, traditional American brands were leased out to regional manufacturers and products were launched with a precise determination of the target market such as Asia, Africa, Europe and America. Market based flexibility, in short, was adopted. That represents how global business ventures have adapted into flexible strategic management approaches. The Need for Flexibility in Business You can seat back in Washington D.C. and hope to formulate strategic management policies for your global franchise that will be equally applicable in Haiti, in Croatia and in Uganda. Barbie Doll remains the single most successful child play toy the world has ever seen. Yet Barbie was outlawed in Saudi Arabia and nearby states despite being such a miraculous hit in Europe, America and Australia, simply because the strategic management approaches adopted were not flexible. The Barbie marketing strategy was insensitive to the Muslim markets and they dressed the girl, gave her a lifestyle that was completely discordant with the Muslim (Deresky 2005). Realizing this, the element of flexible strategic management came in and instead of selling Barbie in Muslim nations; the same product was repackaged into Fula Doll. Despite being a typical Barbie, Fula was dressed in a Hijab, had a praying mat and said her players instead of going out with her boyfriend’s (as Barbie did). Fula has been the single most successful Muslim baby doll in the world, just because it fell in sync with the target market. Deresky (2005) uses this example to illustrate how essential flexibility is in modern day global business operations. Global businesses ventures must manage their policies with respect to regions, nations, religions, governments, legal landscapes, economic environments and all the other differences that accrue from selling in the international markets (Deresky 2005). There will be different government regulations to consider, different cultures, different opportunities, different limitations, different challenges, different risks, different threats, different purchasing powers, different labor pools etc. All these can never be taken forgranted. The singular strategic plan you formulate must be flexible enough to accommodate the diverse markets in which the business will operate in across the world (Deresky 2005). Contemporary Business Needs Managers of modern international businesses require a thorough understanding of strategic management processes that must creatively be applied flexibly with appreciation practical aspects of the business environment. The strategic management approaches assumed falls into either industrial organization approach (mainly concerned with resource allocation, competitive rivalry and economies of scale) or the sociology approach (primarily concerned with human relations and interactions). These two approaches should be applied in complementing manner in a business’s strategic management (Root and Visudtibhan 1992). Managers need to empower their employees to take initiatives, to be innovative and productive in their responsibilities without having to refer to a manual of organization protocols. An organization’s values must accommodate variant environments that it has to set up shop across the globe. Finally, it is important to adopt both a centralized management system manning a decentralized authority structure such that the firm is centralized in operations while the firm offers each individual the autonomy to be the most productive possible in his or her settings (Rugman 2000). Modern global enterprises cannot remain competitive if their strategic planning is still budget-oriented or forecast-based. Traditional static approaches to planning are insufficient to help modern large corporations thrive, survive and prosper. What works rather, is strategic management approaches that clearly defines the objectives of the organization and then allows the same goals to be adopted in assorted internal and external circumstances, environments and challenges. That is why it has become very crucial to evaluate every strategy formulated so as to determine its progress or lack of towards the goals. Being flexible in strategic planning is essential since it will help implementers to adjust any plans that are not helping achieve the firm’s objectives (Wortzel 1991). A good strategic management process in contemporary global business ventures will thus begin with identification of the objectives and the mission for the firm. The second step is to scan the environment in which the business operations will be conducted. This second step will help in formulating flexible strategies that allow a firm to style up to contemporary markets. The strategic management plans are then implemented in the forth step, flexibly allowing the implementers to handle the process the best way possible without constrains of ‘what must be done how’ (Pascale 1990). Finally, as already stated the last stage must always entail evaluation of the strategic plans and how effective they are (Pascale 1990). The evaluation becomes useful in adjusting the plans towards optimizing gains, especially when the plans were initially flexible to accommodate such adjustments. This illustrates what modern global business need to succeed, and the flexibility of plans in strategic management. When Flexibility is Not Ideal The problem with every good thing when taken to the outer limits is that it yields delimiting consequences. While it is very essential to be flexible in strategic management, it is also essential that the management retains consistent policies, consistence goals, consistence evaluations processes, consistent implementation processes such that it has an identity and a benchmark on which to craft flexible strategic plans. Consistency determines how an organization’s management remains focused on the objectives and goals of the organization (Wortzel 1991). This means that the organization must remain stable and uncompromising on such issues as quality, customer service, corporate identity, operation efficiency protocols and human resource skills and expertise. Cash flow regulation and resource deployment constitutes some other factors that an organization should never compromise on in the name of being flexible. The need for flexible strategic plans does not preempt the need for planning and centralized coordination (Pascale 1990). Some of the most prominent limitations of flexible strategic management include institutions where that flexibility nurtures complacency and laziness instead of creativity, innovation and opportunity exploits. The act of adapting to market trends and being responsive to needs for change should also be maintained and not implemented as a one-time achievement , like is the trend with most enterprises (Root and Visudtibhan 1992). Conclusion The last quarter of the 20th Century has seen firms exploit the globalization effects maximally. Barriers to trade between nations and regions have been broken and business has extended their market reach to dynamic and unique territories. Pursuing global growth has become an essential parameter in remaining competitive in modern business circles. This has made the traditional static strategic management approaches irrelevant since a single business firm could today enter numerous distinct markets that do not resemble each other in any way. What is applicable in one area is not applicable in another. What is okay in one place may be wrong in another. As has been exemplified and discussed in this paper, there is need to maintain a singular goal-oriented strategic plan for the global enterprise while still allowing regional variations that help adapt the business in various environments. That is what flexibility in strategic management means. Without a question, that flexibility has become essential in remaining competitive, profitable and relevant in this new age (Rugman 2000). The competitive edge of most multinationals today is the ability to maintain focus and yet be flexible enough in strategic management as to accommodate new challenges, new opportunities and new business circumstances. That flexibility is essential in modern global business ventures, is no longer a contentious question. According to Rugman (2000), flexibility is a “cardinal requirement imposed on those who want to succeed in the overly competitive global market today”. Flexible strategic management allows employees the ability to continuously expand and better their capacity to be productive and profitable. It encourages continued learning and self improvement while also harnessing new patterns of thought, nurturing innovation and individual creativity (Buzzell and Gale 1987). Yet due to a centralized goal formulation, the flexibility in strategic management allows an organization to institute collective aspirations in all employees such that despite being locally feasible, they also visualize the whole picture that constitutes the overall goal of an organization. References Buzzell, R and Gale, B 1987, The PIMS Principles: Linking Strategy to Performance, Free Press, New York. Chandler, A 1962, Strategy and Structure: Chapters in the history of industrial enterprise, Doubleday, New York. Deresky, A 2005, International Management: Managing across Borders and Cultures, Prentice Hall, New York. Haley, U (ed) 2005, Strategic Management in the Asia Pacific: Harnessing Regional and Organizational Change for Competitive Advantage, Butterworth-Heinemann, Oxford, UK, pp. 193-194. Lester, R 1989, Made in America, MIT Commission on Industrial Productivity, Boston. Pascale, R 1990, Managing on the Edge, Simon and Schuster, New York. Root, L and Visudtibhan, A 1992, International Strategic Management: Challenges and Opportunities, Taylor & Francis, London. Rugman, A 2000, International Business: A Strategic Management approach, Prentice Hall, New York. Wortzel, H 1997, Strategic Management in a Global Economy, Wiley, New York. Wortzel, H 1991, Global Strategic Management: The Essentials, Wiley, New York. Read More