Discuss about the Organizational Resources and Capabilities Tools.
An analytical approach is a form of corporate strategy, also referred to as rational approach which depends on the development of a chronological system of steps or procedures. In other words, this stratagem involves a systematic linear thinking and ought to be combined with an emergent approach to be effective. An emergent strategy, on the other hand, is a type of organizational strategy which relies primarily on instinctual thinking, leadership, and erudition. It is seen as a fragment of management and again should be combined with an analytical approach for it to be successful. This paper aims at analyzing the advantages and disadvantages of planned or analytical and emergent approaches to strategy. To bring this concept out successfully, I will embed my arguments in Makkah Construction & Development Company, one of the best performing corporations in the Middle East headquartered in Saudi Arabia.
As Macredie, (2008) points out an analytical strategy involves a clearly enunciated vision and concomitant plans with a presence of proper control mechanisms to execute them in a stable foreseeable or manageable environment. From this argument, it is evident that there are three characteristics of an analytical strategy. A typical company often has a precise mission which is articulated in an unambiguous manner to keep all stakeholders on the same page. Since its inception in June 1989, Makkah Construction & Development Company has had the purpose of operating predominantly within the Real Estate Sector concentrating entirely on Diversified Real Estate Activities and emerge the market-leader in this particular sector. Moreover, there exists a mutual organizational intention among various stakeholders at every level. All employees in Makkah Construction and Development (4100) are committed to achieving the company’s set goals and objectives. These shared-intentions as Heisig, (2002) supports, should be accomplished regardless of any environmental force. Various team players in our firm of interest place quality above every other aspect, sometimes at the expense of earnings. In analytical approach, managers execute a strategy, state it precisely and endeavor for its viability in the competitive environment without considering any external factor compelling them to alter their plan. In other words, it is non-responsive to external influencers such as government policies, changes in customer choice or emergence of new technology. However, it is clear that this phenomenon cannot be applicable in the modern business environment considering various factors such as competition, national financial crises, and other adverse economic conditions. In short, organizations usually operate in an environmental setting with various influencers which they have no control over, and as such, purely analytical approach is not logical (Kevrekidis, Frantzeskakis, & Carretero-Gonza?lez, 2008).
Vision can deliver a holistic view of organization’s path, with opportunity for adaptation that is the final vision can come up in the course of the journey itself (Kelly & Booth, 2004). In an emergent strategy, stakeholders’ feedback and comments are welcome on firm’s previous undertakings, threats, and opportunities and hence the organization’s vision is refurbished and developed again. Besides, in emergent approach, flexibility to an adaptation of external business influencers and distortion of threats into opportunities are fundamental. We can, therefore, take this as a bottom-up strategy, an essential constituent of the analytical approach since it ensures that information from all aspects of the company is incorporated in the decision-making process (International Symposium on Environmentally Conscious Design and Inverse Manufacturing, & Umeda, 2012). In Makkah Construction & Development Company, for instance, information in various departments flows freely, and managers make decisions by putting into consideration all inputs.
In analytical approach, formal plans and precise intentions are pre-determined before starting the journey, and the business strives to achieve its purpose without considering the impact of external environmental factors. On the other hand, in emergent strategy, businesses are adaptable to emerging threats and opportunities, and it is quite responsive to external inputs. For a planned approach to be successful, the business must operate in a perfectly predictable environment where it has full control over. Organizations which advocate for an emergent approach anticipates for significant changes in the future of the business, and as such, they are flexible enough to adapt to new operation mechanisms depending on the prevailing business environment. The rational strategy assumes a controllable and predictable environment which as (Swayne, Duncan, & Ginter, 2008) say is almost impossible to have in the modern high-tech and ever-changing business world. In emergent approach, business activities need to be conducted consistently over time with a significant view of what is transpiring in the external environment of the firm. Implemented strategies should be open, responsive, and flexible to adjustments in the course of the business life. The rational approach, on the other hand, is non-responsive and strategies advocated for tend to be rigid and only focusing on what the organization has control over (Ginter, Duncan, & Swayne, 2013).
I was working as a BGDM (Business Growth and Development Manager) in Alinma Bank Stock Company when the regional government instructed them to execute rigorous preventive measures to alleviate the impact of the 2010 credit-crisis exposure. The company’s vision was at a very high echelon, and the business opportunities and threats seemed unknown and as such as we progressed we considered input from our environments, for instance, Bank’s stakeholders and government regulatory bodies. We later used their feedback and input to formulate our vision in the course of the journey. Had we opted for an analytical approach, it would have failed, because we did not have any clue about the external business factors. Besides, the course of the ground situation was unpredictable, and as well we had no hint on the best measures to implement and circumvent the impact of credit crisis in our business. Both external (cyber-attack and government monitoring) and internal factors (readiness of the bank staff and anxiety of possible job loss) challenged us. The staff members advocated for a planned approach where decision-making process could not require any external input and the business could thrive without considering the impact of external influencers. We first motivated them and promised them any strategy that the management will make will not affect their privileges neither will it influence their occupation rights. After that, we gathered their feedback, arranged workshops to brainstorm on the jeopardizing issue of credit-crisis, and we unanimously turned this threat into an opportunity, and our Programme was recommended by the already motivated staff.
A pragmatic strategy requires a company to combine both analytical approach and emergent approach at the same time. Leaders at this point are able to establish a vision to direct their subjects and initiate a path to accomplish the business goals. It is of paramount importance for the implemented strategy to be highly sensitive and responsive to the external influencers in the course of the journey. We can argue that both stratagems have some concomitant drawbacks but their significance in the journey to succeed cannot be underestimated. However, it depends on the situation at hand and the business domain too (Siim, & Mokre, 2013).
In a manufacturing company such as aircraft and automobiles industries or even in insurance or banking domain, planned approach is applicable since these sectors function in a Bureaucratic structure where Standard Operating Processes are adhered consistently with a diminutive scope of invention. Once an analytical approach is executed, people follow unquestionably the laid down mandates and rigorous supervision implemented to accomplish the pre-determined objectives, and they are not hindered by any external factor (Roberts, 2015).
Emergent strategy is being enhanced as time elapses is in association with and accommodating the varying authenticity. Pavarini, & Autumn School Correlated Electrons. (2013) maintain that it is a front-line tactic as it tends to resolve definite problems. In this contemporary unpredictable, swiftly-evolving, boundary-less business environment, it is essential for organizations to be more responsive to attain the competitive-edge over contestants in the industry. This aspect makes emergent strategy more practical and advantageous in a slow-growth market as well.
References
Ginter, P. M., Duncan, W. J., & Swayne, L. E. (2013). Strategic management of health care organizations. San Francisco, CA: Jossey-Bass, Wiley.
Heisig, G. (2002). Planning stability in material requirements planning systems. Berlin: Springer.
International Symposium on Environmentally Conscious Design and Inverse Manufacturing, & Umeda, Y. (2012). Design for innovative value towards a sustainable society: Proceedings of EcoDesign 2011: 7th International Symposium on Environmentally Conscious Design and Inverse Manufacturing. Dordrecht: Springer.
Kelly, L., & Booth, C. (2004). Dictionary of strategy: Strategic management A-Z. Thousand Oaks, Calif: Sage Publications.
Kevrekidis, P. G., Frantzeskakis, D. J., & Carretero-Gonza?lez, R. (2008). Emergent nonlinear phenomena in Bose-Einstein condensates: Theory and experiment. Berlin: Springer.
Macredie, R. (2008). Modelling for added value. London: Springer.
Pavarini, E., & Autumn School Correlated Electrons. (2013). Emergent phenomena in correlated matter: Autumn School organized by the Forschungszentrum Ju?lich and the German Research School for Simulation Sciences at Forschungszentrum Ju?lich 23-27 September 2013 ; lecture notes of the Autumn School Correlated Electrons 2013. Ju?lich: Forschungszentrum Ju?lich, Inst. for Advanced Simulation.
Roberts, A. J. (2015). Model emergent dynamics in complex systems.
Siim, B., & Mokre, M. (2013). Negotiating gender and diversity in an emergent European public sphere.
Swayne, L. E., Duncan, W. J., & Ginter, P. M. (2008). Strategic management of health care organizations. San Francisco, CA: Jossey-Bass.
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