The Diamond E-framework is a model that can be used to conduct effective strategy formulation. It provides the ingredients required to formulate a complete strategy. These ingredients are classified into four groups as shown in the table below:
The above components have been discussed using cases from three articles:
Case one: Case one: Souza, I. D., Kauffeld, R., & Oss, D. V. (2017). Strategy + Business. (86), 1-12. Retrieved April 18, 2017
Case two: Case Two: Leinwand, P., & Mainard, C. (2016). Strategy+Business. 1-10. Retrieved April 18, 2017
Case Three: Case three: Favaro, K. (2016). Stategy+Business. (84), 1-3. Retrieved April 18, 2017
Management choices refer to the requirements of the managers of the organization on the type of strategies to be implemented. They are the standards and level of performance expected by the management through the introduction of procedures.
According to case one, managers should be able to cultivate collective mastery. A lot of bureaucracy in strategy formulation should be avoided, as it makes the process slow and unbecoming, (Souza, Kauffeld, & Oss, 2017). There should be a free information flow between the specialists, employees and the management of the enterprise.
Case one also recommends that managers should be able to aim higher so as to come up with a comprehensive strategy, a company must formulate important objectives, (Souza, Kauffeld, & Oss, 2017). The managers are always dedicated to ensuring that the mission of the business is maintained. Management preference is, therefore, supreme in determining the best strategies to implement.
This is an essential element of the diamond e-template. The organization has a structure, leadership styles, and culture that it needs to protect.
In case one by Souza, Kauffeld & Oss (2017), it is recommended that the managers should align the organization structure to the strategy. Organization structure is an essential determinant of successful implementation of policy, (Bamberger, Biron & Meshoulam, 2014). If the managers prefer to maintain the structure of the organization, then the strategies implemented would be those that tend not to interfere with this structure.
Also, case one demonstrates that an enterprise should be able to transcend every possible barrier. The organization should be able to transcend the obstacles that may be caused by structural complexities and cultural values so as to formulate a complete strategy, (Souza, Kauffeld, & Oss, 2017)
In case two, it is recommended that the manager should put the organization culture to work. Culture dictates motivation of employees towards proper performance, (Wheelen & Hunger, 2011). Cultures also enable employees to align their capacities towards achieving the set goals adequately
Resources refer to the wealth and strengths of the organization. Resources contribute to the organization’s critical capabilities.
In case one, the magazine stresses on being ambidextrous. This is possessing the required skills and capabilities to execute a particular strategy.
Organizations should align their strategy to their capacities and embrace simplicity. This ensures that simplicity is maintained, (Souza, Kauffeld, & Oss, 2017). A lot of bureaucracy in strategy implementation should be avoided, (Helfat & Winter, 2011). Strategic plans should be kept as simple as possible.
Case one also stresses on clarifying the roles of every party. A business should clearly state the roles of every participant in the policy formulation, (Souza, Kauffeld, & Oss, 2017). The employees who would participate in the strategy implementation process must have the right skills to perform particular tasks assigned to them, (Augier & Teece, 2009).
According to Case one, the organization should also aim at cutting costs so as to grow stronger. For a company to successfully execute its strategies, it must commit the right amount of funds to the whole process, (Leinwand & Mainard, 2016). Enterprises should spend more on what matters most to them.
In the article by Souza, Kauffeld & Oss (2017), building on critical capabilities has been elevated as a major ingredient of a proper strategy. The organization must have the necessary resources and unique skills so as to operate efficiently.
The magazine has also proposed that an organization must be ambidextrous. It must have the skills required for successfully executing the strategy.
Case two highlights, shaping the future as an ingredient of a complete strategy. For a company to shape its future, it must concentrate on and continuously improve on its distinct capacities, (Leinwand & Mainard, 2016). This ensures that it remains stable amid disruptions.
Translation of the strategic into every day is another element of a complete strategy. This is stated in case two. However, a company should concentrate on a few chosen abilities rather than devote themselves to a range of activities, (Leinwand & Mainard, 2016).
In case three, Favaro (2016), recommends that an organization should identify the type of business to practice. In policy formulation, a company should determine the appropriate business to involve in. This can be done through conducting TQM, (Augier & Teece, 2009). The unique capabilities should be carefully monitored so as to determine the skills available in the firm.
Case three states that a company must determine how the type of business conducted can add value. A company should evaluate its unique capabilities so as to perform a business activity that values additive, (Favaro, 2016). The employees of the firm should be equipped with the unique abilities to conduct the chosen objectives.
Additionally, case three requires that a manager should consider the differentiating capabilities of the enterprise. Capabilities can be viewed regarding resources, qualified staff or committed employees, (Favaro, 2016). For an organization to successfully implement its strategies, it must concentrate on its unique capabilities, (Helfat & Winter, 2011).
The environment refers to where the business operates. Organizations interact with both external and internal environment. Some of the stakeholders in the internal environment include employees, management, suppliers, and marketers. The organization structure and culture are also major constituents of the internal environment.
In Case one by Souza, Kauffeld, & Oss, (2017), the writer insists that the organization must be able to transcend to the possible barriers that may be imposed to it by the operating environment. The ability of the functional departments to work together towards a common goal is a determinant of strategic success.
Organizations should Shape their value chain and external players: Companies must evaluate their external market participants. These may include the suppliers, marketers, and distributors, (Souza, Kauffeld, & Oss, 2017). Companies cannot work in isolation, (Nath, Nachiappan & Ramanathan, 2010). They must interact with the environment
In case three, a company should identify its target customers and their value proposition. Whenever a company is formulating its competitive strategies, it must be able to foresee its expected customers, (Favaro, 2016). It should use its unique capabilities to deliver to the customers’ expectations.
The ingredients derived from the three cases above actually match. This is because they both rotate around the provisions of the diamond e-framework. Case one provides a vast range of ingredients that can be used to demonstrate all the elements of the framework, (Souza, Kauffeld, & Oss, 2017). However, case two concentrates mostly on resources and critical capabilities. Case three provides five primary ingredients that have been classified in the diamonds model, (Favaro, 2016). However, the three cases do not provide adequate information on strategy formulation. This is because they have limited their scope on the diamond e-framework and did not go beyond the framework. This makes them susceptible to the weaknesses of the structure.
The three Articles provide a complete overview of the diamond e-model. They are therefore adequate in assessing the ingredients of a perfect business strategy.
Case one does not add significant value to the model. It just complies with the requirements. However, some critical complements have been posed by case two and three.
Case two has brought out the issue of total quality management, which was an entirely unexpected concept in the framework. TQM is always used by firms to reduce their operational costs, (Rothaermel, 2015). The diamond e-framework states that a company must have the required resources as a primary ingredient of a complete strategy. However, it does not explain how the organization can manage its resources so as to reduce operational costs. This has been demonstrated in case two.
Case three also provides a complement that should be incorporated in the model. This is the issue of unique capabilities. Organizations must not just concentrate on having the right resources, (Helfat & Winter, 2011). It should conduct a thorough evaluation to identify its unique strengths and capitalize on them.
A significant question arises in case two. This is about total quality management. Should the company concentrate on minimizing costs or expanding on its strategies? Strategy formulation requires that organizations have a real capital base. Decreasing costs may, therefore, make the company unable to execute appropriate strategies. It may also require the services of a quality management expert which may be expensive.
It does not provide for uncertainty: The framework rotates around four elements- organization, management, resources, and the environment. These features only work in the short run, (Bamberger, Biron & Meshoulam, 2014). However, long-term decisions involving a lot of certainties cannot be predicted using the model. For example, issues that may arise more than twenty years after the strategy is formulated cannot be vividly foreseen.
The framework does not address some non-market issues: Changes caused by some contingencies, for example, accidents that may be caused by emergencies like fire are not evaluated by the framework.
Adaptability to evolution: It is an old structure which does not take into account development of businesses, (Augier & Teece, 2009). For example, evolution has resulted in more complex business structures which are difficult to evaluate using the model.
The major advantage of the Diamond E-model is that it provides a framework which can be used to evaluate business strategies. To illustrate this, it vividly contains the ingredients that can be used in strategy formulation on the environment, management preferences, resources, and the operating environment.
Planning for resources: Planning is critical in ensuring business plans are successfully implemented. The company must make sure it has the right amount of finance and workers to execute the strategy, (Rothaermel, 2015). In planning, the capabilities and resources available in the firm should be recognized. This is in line with the requirements of the above cases which elevate skills as a major constituent of a complete strategy.
Communicating: The manager must communicate the changes to the employees and other stakeholders involved. In delivering the strategies, the managers should keep the plans simple to understand as required by case one, (Teece, 2010). Communication enables the management to assess the capabilities available in the firm, (Alkhafaji, 2011). This is in line with the propositions of the above cases, which outline unique skills as a significant element of a complete strategy.
Integration: Before executing the changes in the organization, managers should involve the subordinates in discussing the plans, (Johnson, Scholes & Whittington, 2008). The staff members must be aware of the changes and how they will influence their wellbeing. This also ensures that the resources available are monitored and appropriate adjustments made to suit the capabilities.
Motivation: The manager should motivate the employees to execute the changes proposed. This weakens the forces against change, (Rothaermel, 2015). Motivation enables the stakeholders to concentrate on their key capabilities. This is a major constituent of a complete strategy as given by case one and two.
Workload Management: The employees may take some time to adopt the new policies. The managers may be forced to train the employees so as to adapt effectively, (Wheelen & Hunger, 2011). The managers should, therefore, remove any bureaucracies in the process of strategic development so as to ensure a smooth transition.
Evaluation: The manager should monitor the transition process to ensure that the strategy is effectively adopted, (Teece, 2010). This should be done in comparison with the strengths of the firm and the resources available.
Strategy evaluation is the process of monitoring the performance of a strategy formulated by a firm. It aims at determining the success of a strategy, (Porter, 2008). This can be done as follows:
Reviewing the basis of the policy: The manager should examine the internal strengths and weaknesses of the firm. It should also monitor the opportunities and threats that the company may be exposed to, (Freeman, 2010). This enables it to identify the reasons as to why the strategy did not perform well.
Measuring performance: This is the process of comparing the planned activities and the results with the expected results, (Hill, Jones & Schilling, 2014). This enables the company to identify the variations from the expected level of performance.
Taking corrective actions: From the results of variance analysis, the management can take remedial action, (Alkhafaji, 2011). If there are negative results, then the manager should formulate an improved strategy.
Freeman (2010), suggests that a manager should follow the following steps to form an adjusted plan:
|
Step |
Explanation |
|
Gather information |
To understand why the strategy failed. |
|
Critical analysis |
To determine validity and resources available |
|
Evaluate the options |
To form proposals for adjustment, based on available resources and management preference. |
|
Prepare a set of proposals |
To determine what to adjust, in line with the prevailing environmental factors and remedies available |
|
Meet with subordinates |
To discuss the plans. |
|
Consensus |
Agree on the adjustments. |
|
Finalize. |
Documentation of the recommended adjustment. |
By doing this assignment, I have gained critical knowledge on strategy, strategic planning and the applications of the diamond e-template.
I have learned that the diamond e-framework is an essential template in strategy formulation. For example, it enables the managers to plan effectively for resources, evaluate the operating environment, determine the management preferences and consider the organization structure and culture so as to formulate a complete strategy, (Nath, Nachiappan & Ramanathan, 2010).
I have also learned that in developing a strategic plan, proper communication must be installed. For example, the plan should be discussed with the subordinates so as to ensure they don’t oppose it.
Also, I have gained knowledge on Strategy. For example, proper strategy formulation enables the organization to be more competitive as compared to its rivals. Organizations should ensure they use all the appropriate ingredients provided in the diamond e-framework when formulating their strategies, (Kristal, Huang & Roth, 2010).
References:
Alkhafaji, A. F. (2011). Strategic Management: Formulation, Implementation, and Control in a
Dynamic Environment. Development and Learning in Organizations: An International
Journal, 25(2).
Augier, M., & Teece, D. J. (2009). Dynamic Capabilities and the Role of Managers in Business
Strategy and Economic Performance. Organization Science, 20(2), 410-421.
Bamberger, P. A., Biron, M., & Meshoulam, I. (2014). Human Resource Strategy: Formulation,
Implementation, and Impact. Routledge.
Favaro, K. (2016). Stategy+Business. (84), 1-3. Retrieved April 18, 2017
Freeman, R. E. (2010). Strategic Management: A Stakeholder Approach. Cambridge University
Press.
Helfat, C. E., & Winter, S. G. (2011). Untangling Dynamic and Operational Capabilities: Strategy
For the (N) Ever?Changing World. Strategic Management Journal, 32(11), 1243-1250.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic Management: Theory: An Integrated
Approach. Cengage Learning.
Johnson, G., Scholes, K., & Whittington, R. (2008). Exploring Corporate Strategy: Text & Cases.
Pearson Education.
Kristal, M. M., Huang, X., & Roth, A. V. (2010). The Effect of an Ambidextrous Supply Chain
Strategy on Combinative Competitive Capabilities and Business Performance. Journal of
Operations Management, 28(5), 415-429.
Leinwand, P., & Mainard, C. (2016). Strategy+Business. 1-10. Retrieved April 18, 2017
Nath, P., Nachiappan, S., & Ramanathan, R. (2010). The Impact of Marketing Capability,
Operations Capability and Diversification Strategy on Performance: A Resource-Based
View. Industrial Marketing Management, 39(2), 317-329.
Porter, M. E. (2008). Competitive Strategy: Techniques for Analyzing Industries and Competitors.
Simon and Schuster.
Rothaermel, F. T. (2015). Strategic Management. New York, NY: Mcgraw-Hill.
Souza, I. D., Kauffeld, R., & Oss, D. V. (2017). Strategy + Business. (86), 1-12. Retrieved April 18, 2017
Teece, D. J. (2010). Business Models, Business Strategy and Innovation. Long Range Planning,
43(2), 172-194.
Wheelen, T. L., & Hunger, J. D. (2011). Concepts in Strategic Management and Business Policy.
Pearson Education India.
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