Exploring Strategic Management Approaches

What is Strategic Management?

What Is The Methods Communicating Strategy In Companies?

In the current world of business, management presents many challenges that result from both the internal and external environment that can be addressed by those traditional forms of management, therefore, led to the development of strategic management approaches (Wolf & Gonclaves 2017, pp.79). Strategy refers to the formulation and implementation process of a plan; therefore, Strategic management refers to the dynamic formulation and implantation of a plan to achieve a specific goal taking into account all the internal and external constraints.  Strategic management designed by executives helps various organizations in achieving pre-determined objectives while addressing the anticipated changes and challenges during the implementations of the plan.

Strategic management focuses on the top management while the operational management focuses on the functional management. In strategic management, policies are being formulated for the entire organization, while in operational management policies are being formulated according to the departments (Keshyarz, Farahani & Saldehi 2017, pp. 79). The strategic management policies tend to be long-term while the policies of the operational management tend to be short term for the current solutions. In strategic management decisions such as expansion and addition of more products and service can be made while such decisions cannot be made in the operational management.

There are many alternatives to strategic management since organizations differ from one another regarding the degree of formalization in the process of making decisions, regarding the managerial power and the nature of the environment from highly complex to simple establishment (Johnsen 2016, p.339).These strategic approaches include stakeholders approach, Suitability Approach, Entrepreneurship Opportunity Approach, Dynamic Approach, Formal Structured Approach.  The paper will explore the three approaches that are Stakeholder theory    Entrepreneurship opportunity and Formal, structured Approach, taking into account the viability, the benefits, the implementations issues and the limitations of each approach.

Stakeholder theory is an alternative strategic management theory that promotes ethical, practical, effective and efficient way on how to control and manage all those people that directly affect and get affected by the performance of an organization (Anagnostopoulos 2011, p.256). The theory was developed and popularized by Freeman the stakeholder theory encompasses the following, customer, employees, shareholders, suppliers and local communities. Stakeholder approach was used by Canadian environmentalists when they organized campaign against logging by MacMillan Bloedel Company.

The viability of stakeholder theory is that it advocates for fair treatment for all the stakeholders in the success or failure of an organization sole depend on the inputs provided by everyone (Mainardes,Raposo & Alves 2012,p.181). The management system does not rely on the one objective since every shareholder objectives must be maximized, unlike the traditional organization management that focused majorly on the suppliers and customers.

Strategic vs Operational Management

Results into the building of better relationship through engagements of all the stakeholders: The relationship constructed is always characterized by trust and corporation that always lead to better results to all the stakeholders.

Stakeholder strategic management ensures that every resource is placed to where it is needed through the mapping of the stakeholder’s location, needs, and preferences. This allows effective allocation of resource and service. Stakeholder strategic management allows for diverse ideas from all the stakeholders hence provide a base for better decisions regarding the company positioning.

The implementation of the stakeholder theory is on three major levels that are: that intellectual level, the process level, and the transactional level. The reasonable level aims at identifying who the stakeholders are within the organization and their perceived stakes and always have four steps(Adrot & Moriceau 2013,p.32). The four steps are developing the stakeholder map, chart of specific stakeholders, identification of their stakes and power preparation versus stake grid. The process level focuses on the process of the organization and how it wants to manage the relationship with all the stakeholders, and finally, the transactional level looks at the” bargains” between the organization and the stakeholders: how the organization interact with the stakeholders

Stakeholder strategic management has one major limitation: the uncertainty and unpredictability. The stakeholder management system is flawed because of inability to account for “managerial sin”(Soloducho-Pelc 2013,p.53). The managerial sin is the point whereby a manager can never be responsible for a decision since all the stakeholder’s views must be taken into account before a step is taken towards achieving a particular objective.  And in situations where the manger’s decision coincided with the stakeholder’s views, then the following views prevail. Generally, the process delays decision-making process making the organizations be hard to manage.

The stakeholder strategic management organizations are more prone to misconduct than any other non-shareholders organizations.  However much the shareholders have no broad legal power to initiate corporate action against any misconduct, the decision makings on the management structure lie upon the board of directors hence affect the management decisions on rectifying any misconduct.

Shareholder strategic management lacks cohesive, powerful interests unions that play major roles in advocating for the rights such as those found in non-shareholder. This makes the strategy to have difficulty in protecting them from the management misconducts.

Entrepreneurship refers to the dynamic process of creating incremental wealth. Thus Entrepreneur opportunistic is a strategic approach that aims at increasing the profit of an organization through utilizing any available opportunity (Urbaniec 2018,p. 1776). The approach was adopted from business headed by a family that managed to thrive against all the odds.  The entrepreneurs always make assumptions about the future and make the best decision in the best interest of the business. The basic features of entrepreneur approach are: the approach focus on capitalizing more on the available opportunities than solving problems, therefore the most important objective is expansion. There are centralized decision-making process and power that lies on the head of the family. Example of Entrepreneurship Opportunity application is when the Sony Corporation chairman of AkioMorita insisted on production of Walkman mini-cassette even after being advised that it was viable, and made a roaring success.

Strategic Management Approaches

The entrepreneurship opportunity approach is viable in organizations since organizations with 0nly strategic management and lack entrepreneurship spirit failure are inevitable. The entrepreneurial spirit helps organizations to innovate, and expand in all aspects of management.  (Jiani, Xiaohu & Ying 2017, p. 1211)Additionally, the approach is also viable with a high stake of the outcome on the key strategists, since they are in better position to drive the organizations from front sidelining the views of the stakeholders. Such strategic always have very vision level about the organization future and high risk bearing profile of the organization. The entrepreneur is also committed to the opportunity that is about pursuit as the entrepreneur is always action oriented. Therefore the entrepreneur is capable of committing and committing the actions whenever perceived that is no, longer viable.

The most basic Suggested benefits of entrepreneur opportunity are that the made decisions always defy the basic principles of the management textbook of being an organizer to an innovator. The approach is motivated hence leading an organization to be more innovative than ever as employees are offered vast room for creativity (Jingyuan &de Pablos 2011, p.43). This leads to solid growth and expansions. The focal point of this strategy is to offer the customer an excellent, great position along estimations that are extremely regarded by the customers .This could be, for example, a quality organization where the undertaking plans to offer the market the best quality appeared differently about its opponents.

The partition ability of organization is generally embedded in the business thought of the undertaking or a particular progression. A simple stumble of business visionaries is being excited for their new contemplations, rejecting the market, and fails to assess if there is a targeted gathering for the new things or organizations (Jingyuan & de Pablos 2011, p.49). The typical limitations of the entrepreneurship opportunity approach is that is always full of the future assumptions that are still uncertain, hence the risk is always too much. The entrepreneurship approach uses differentiation to create a market segment and identify market gaps that need to be addressed to fulfill the consumer’s experience. The implementation issues in the entrepreneurship opportunist approach are that the entrepreneurs never go back and always out to make a proof of a concept. 

There is always a high probability of developing more entrepreneurial and inventive thinking, especially in large organizations. This stands in wonder from the conventional key organization approach, which usually focuses administrative organization and spotlights on ordinary business. (Jiani, Xiaohu & Ying 2017, p. 1219) Nature and utilizing “hunches” are basic parts of the entrepreneur’s method change, regardless of the way that they should be supplemented by the adroit use of crucial organization instruments. It is similarly generally perceived that fitting organizing has its positive implications for successful execution. As necessities are, orchestrating supplements and overhauls entrepreneurial direct.

Stakeholder Theory

Most of the entrepreneurs always think of confusion and disorganization as there are always vast and conflicting ideas and viewpoints. The world of confusion among the entrepreneurs always makes it difficult for them to move forward. The uncertainty of the future results makes the entrepreneurship approach of strategic management to be riskier in investing as all the capital might be lost due to lack of managerial skills from the entrepreneurship that specializes on innovative ideas only. The entrepreneurship approaches of strategic management focus more on the available opportunity without taking into account of the available resources such as capital, human power, hence faces numerous challenges in the future when the required resources are inadequate.

The formal, structured approach is a strategic method of planning activities in a formal way to achieve the organizational objectives. To achieve the organizational goals, there must be clear-cut planning elaborating all the steps taken during the implementation process (Chandra 2018, p.1). The formal approach strategic management requires knowledge and skills on particular topics or business on discussions and always follows three stages:  diagnostic, direction and implementation.

Formal structure approach enables long-term setting of organizational goals that ensure that the organization stays focused on the long-term objectives even after achievement of short-term achievements (Chandra 2018, p.13). Formal strategic planning procedures help in making the top managers in being the same page during planning. The formal strategic meetings bring together all the top managers to pay attention to the important issues to address any challenges facing the organization. The formal structure of strategic planning helps organizations to effectively deal with the different groups without biases hence maintaining the mutual understanding of all the stakeholders.

Help in assigning accountabilities within policies that control the acquisition and resource allocations to ensure that the need of the customers and the stakeholder are fulfilled. The formal approach enters into an implementation process after proper assessment of the project viability creating more chances of success, since all the challenges have been predicted and possible solutions lay down(Chandra 2018,p.23).The formal structural approach of strategic management provides a clear written framework for decision making in the organization. This framework helps the managers and the employees to have a single direction that guides all operations that is beneficial to the whole organization since all the employees conform to the top manager’s decisions.

 Finally, the strategic approach does not only provide the future destination of an organization but also provide an opportunity to evaluate the already made steps hence creating a feeling of motivation to the implementers.

Entrepreneurship Opportunity Approach

The formal structure approach needs a commitment from all the top managers to ensure achievements of the organization’s objectives. The stakeholders must have a feeling that the efforts pumped and all the contributions will result in satisfactory (Moriceu 2017, p.174). The formal structure approach of strategic management always insists on systematic, incremental steps of doing things and decisions are made depending on the current situations.  Therefore, since the decision making is systematical nature, there is no integrative decision-making.

The formal structural approach of strategic planning is costly regarding all the meetings held by top managers, cost of facilitation, wear and tear to confirm the viability among others, and at some point, the cost might overweigh the received benefits.

The need to incorporate all members in the formal structural approach of strategic management can be interpreted as the need to close down the business entirely during the process or to ask inappropriate staff to participate. This eventually results in either confusion or resentment.

The Formal Structured Approach of strategic management impedes flexibility of an organization; hence it is very impossible for utilization of unexpected opportunities that might be beneficial to the organization in the short run. This because the operations and the activities of such organizations are well structured and waving away from them is perceived as unprofessional behavior.

Another way that flexibility can be blocked is through a top-notch course of action and blend of the procedure inside the affiliation. An affiliation that is all around agreed with its approach has kept an eye on its structure, board, staffing, and execution and reward systems. This course of action ensures that the whole affiliation is pulling the right way, yet can block the affiliation’s adaptability(Gongia 2012,p.52). Again, there are groupings of more present approaches to manage framework headway used as a piece of the separate division that build method and address the issues of definitive adaptability. Finally, the formal, structured Approach of Strategic management is always designed for long-term benefit; hence it makes it difficult for the organization to evaluate the short-term before the full achievement of the goals.

Conclusion

Strategic management is the most preferred way of organizational management in the current era of business. The system outweighs the traditional management system since it takes into account all the process of production from the raw material, workers, customers, suppliers, and any other stakeholder that is directly or indirectly affect and get affected by the success of the organization. Any business that does not the strategic management is bound to fail or perform poorly since it will be unable to overcome the current managerial challenges.  Strategic management is subdivided into different approaches that allow each organization to choose the best that suits the operations and one that will realize maximum yield. Among the approaches are Formal Structured Approach, Entrepreneurship Opportunity Approach, Stakeholder Approach, and Suitable Approach among others. 

Formal Structured Approach

The stakeholder approach to management entails the inclusion of every person that is affected and affects the business. The entrepreneurship opportunity approach entails the urge of the business operator to capture every available chance to make expansion and profit while the Formal Structured strategic of management entails the participation of only the top managers that formulate well-structured plan to be followed till the achievement of the objectives. Every approach has advantages that make it suitable for the chosen organization and at the same time poses limitations that make it impracticable in other organizations. Therefore, to realize maximum profits and efficient operations, it is upon the stakeholders to define and come up with the best approach to be adopted that will ensure that all the internal and external forces of the business are well regulated.

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