Strategic Management And Business Analysis

Stakeholders Approach

Discuss about the Strategic Management and Business Analysis.

To many the term strategic management is not a new term and concept. The term was first perceived in 1970s where it meant that a staff of strategic planners who were more or less planners of strategic programs. Strategy greatly proliferates in discussion to how business is conducted. Scholars and consultants such as (Morden, 2007) argue that setting up of a strategic management process means that a firm has a competitive strategy or a broad formula which makes them compete with what are the goals, policies and what should be done to achieve this issues. Williamson (2004) in his book declared that strategy in deed has several meaning, all which have a great significance. He indicated that strategic management is a plan, pattern, position and perspective in one footnote. Recent studies done by (Jeffs, 2008) show that strategy is a pattern of policies, purpose, actions, decisions, programs or resource allocation which effectively shows what an organization does and the reasons behind their action. On current linear approach it tends to work similar the traditional setting which works on satisfying the business stakeholders firms rather than strategically coming up with effective measures.

Our main focus will be on three different approaches to strategic management which include: stakeholders approach, dynamic capabilities and the sustainability approach.

Stakeholders approach in regards to strategic management emerged in mid-1980. The main motive behind stakeholder’s management was mainly to try and develop a framework which was responsive to managers concerns who were always buffeted by the unresent levels of environmental turbulence and changes. Since, traditional frameworks failed to assist managers in developing new strategies and creating new opportunities they had to seek a new method which could help them in dealing with the issue. Hence, this meant a new conceptual framework was needed for the firm and the stakeholders approach was seen as the effective way to deal with this challenge (Wheelen & Hunger, 2008). Thus, the purpose of stakeholder’s management was seen as a devise method which aims at managing myriad groups and relationship leading to a strategic fashion.

The primary idea behind the development of the stakeholders approach in regards to strategic management is for managers to formulate and implement processes which satisfy the stakeholders in business. Hence, the main task is mainly to process via management and integration of relationships and interest of employees, customers, communities, and shareholders in a method that ensures there is long term success in the firm. Hence, the stakeholders approach mainly emphasizes on the active management of business environment, relationship and promotion of mutual interest.

Dynamic Capabilities

Suggestions by (Dess & Miller, 2013) is that in stakeholder approach we tend to redraw a picture of the firm along lines. The lines act as a representation of the good or ill myriad groups who have staked in the business. Compared to the traditional approach where they concentrate mostly on stakeholders, the stakeholders approach tends to be effective due to its relative stability to the various environments. As an example in Ford Motor Company the external customers would always be the buyers of their automobiles. Thus, as a managing project director in Ford Company using external customers tend to be a strategic method which relates to the stakeholder approach.

Dynamic capabilities mainly works on the paradigm of how competitive advantage is attained and held. Therefore, it aims at ensuring that firms restore their resources based strategy in attempt to try and accumulate valuable technological assets as well as employment on aggressive intellectual property. In addition most winners in the global marketplace have been organizations that have demonstrated the aspect of timely responsiveness as well as flexibility in product innovation, along with other requirements of management capability and effective coordination of the internal and external competences (Sadler, 2013). In general, the above discussion is what is perceived by most managers as the aspect of dynamic capabilities.

Dynamic capabilities as a strategic factor in competitive advantage emphasizes on two aspects. First, there is the shifting of characters in the environment, secondly, there is the emphasis on key role of strategic management through proper adaptation, integration and re-configuration of the internal and external skills in the organization resources and function competencies towards the changing environment (Hamermesh, 2013).

Many managers have observed that dynamic capabilities approach offers coherent framework which tend to integrate the existing conceptual and empirical knowledge to full facilitation prescription. Therefore, dynamic capabilities work as root stem to competitive advantage allowing high performance in routines that operate in the firm, there are also that embed the business process and conditioned by its history. Therefore, the use of dynamic capabilities tends to provide an emerging paradigm for the modern firms which tends to draw different disciplines and advancements which helps a lot of industries globally (Sadler, 2013). A good example of a firm which has effectively used dynamic capabilities in regards to their business is the McDonalds Chain of Restaurant. Here, the firm has been able to develop their own dynamic ways such as price reduction and product diversification so as to remain on the top notch of the food industry.

Sustainability Approach

The sustainability factor has moved from the margins to the actual mainstream. Sustainability has increased the pre-occupies of governments as a result of greater awareness which leads to threats of the government national and collective sustainability. Prior to research on sustainability approach in regards to strategic management, it has been able to address the emergence of sustainable control systems through developing focus on the impacts of financial and non-financial performance on the dedicated systems of controls for sustainability (Jeffs, 2008). It’s surprising that little is known about management control system and sustainability approach method.

Sustainability approach tends to create long term shareholders value via embracing the opportunities and management of risk which result from an organizations economy, environment and even social responsibilities. Hence, this approach tends to effectively meet the needs of the organizations and that of the shareholders ensuring that they sustain, protect and enhance social, environmental and economic resources that meets the future needs (Williamson, 2004). The sustainability approach as part of strategic management tends to connect to a wide range of areas including business strategy, operation management, economics, finance, accounting, ethics, environmental science and the social psychology. Therefore, sustainability is an important lexicon within a business practice as a result of the elements that are purposed to be achieved.

Jeyarathnam (2008) regards sustainability approach as means of achieving organizational visions and missions. Thus, it’s regarded as an application approach that is based on skills, tools, knowledge and techniques which works to achieve the following issues:

• Allowing firms to understand probable outcome of controls and other mitigations which include strategies of dealing with the impediments.
• There is also creation of criteria which includes the implementation of crisis and emergency response, continuity response and the recovery response canons.
• Removal of impediments that could deter the attainment of organizational goals and objectives.
• It also works on provision of context which the organization addresses its activities, products as well as services.
• Sustainability approach also ensures that staff and management have a clear understanding of their roles both during normal duties and when major disruptions occur.
• The sustainability approach also tends to provide a clear understanding of the accountability standards in instances where there is emergency and maintain that the understanding remains relevant.

Based on the above discussion for business to maintain good corporate governance principles they need to follow the correct management practices, which works greatly with the sustainability approach.

Conclusion

The above discussion has provided an in-depth analysis of the three strategic methods of management. Below, we will discuss on viability, benefits, implementation issues and limitations.

Viability

For the stakeholders approach to be viable, there should be optimal viable version of approach where employees have a co-equal status similar to stakeholders and shareholders. Hence, firms using the stakeholders approach need are restricted to customers, suppliers and the lenders. On the other hand, the dynamic capabilities approach viability mainly comes from the adequacy of skills in the organization (Jeffs, 2008). Lastly, sustainability approach viability depends on the good corporate governance which is available in organization.

Benefits

The primary benefit that arise as a result of these strategic management approaches is that firms are able to attain growth. Hence, making these approach a necessary component of business planning and management cycles over the organization and the integral part of any management risk process (Morden, 2007).

Implementation Issues

The greatest implementation issue that arises with these three methods of management is the issue of serving the interest of a range of group instead of satisfying the whole team. Such a challenge makes it hard for firms to effectively implement the approaches due to the conflicting view of benefiting from the new strategic process (Lynch, 2008).

Limitations

The greatest limitation is that the firm must face suppliers, governments, customers and their alliance when they aim at changing their management approach (Jeyarathnam, 2008). This may have negative limitations on the firm. In addition, the reaction by competitors, leaders and time may tend to act as a limitation to an organization.

References

Morden, T. (2007). Principles of strategic management. Aldershot, England, Ashgate. 

Williamson, D. (2004). Strategic management and business analysis. Amsterdam, Butterworth-Heineman.

Lynch, R. L., & Lynch, R. L. (2008). Strategic management. Harlow, Financial Times Prentice Hall.

Jeyarathnam, M. (2008). Strategic management. Mumbai, Himalaya Pub. House. 

Hamermesh, R. G. (2013). Strategic management. New York, Wiley.

Subba Rao, P. (2010). Strategic management. Mumbai [India], Himalaya Pub. House. 

Jeffs, C. (2008). Strategic management. Los Angeles, SAGE. 

Sadler, P. (2013). Strategic management. Sterling, VA, Kogan Page. 

Dess, G. G., & Miller, A. (2013). Strategic management. New York, McGraw-Hill.

Wheelen, T. L., & Hunger, J. D. (2008). Strategic management and business policy: entering 21st century global society. Reading, Mass, Addison-Wesley.