Strategic management is an essential tool for the success of organizations in today’s markets scenarios which are ever changing and risky. Therefore, the purpose of strategic management is associated with an organization’s goals and objectives accomplishment. However, organizations should ensure effective strategic management process where careful collaboration, effective planning and the mindful implementation of the planning occurs: hence leading to smooth functioning and success of organizations business activities. There are different approaches to strategic management which include the sociological approach, industrial-organizational approach, and organizational change approach.
Business is faced with several issues that create barriers or affect their overall performance in the context of achieving their goal and objectives and in order to solve these issues, approaches to strategic management are applied by organizations. Some of the issues could be a lack of strategic focus or vision of the critically important aspects that define the success of a business in the long run. Additionally, a lack of identification or proper understanding of the changes taking place within a business environment, such as a change in government policies, consumer taste and preferences and technological change. These three approaches to strategic management will be discussed in depth in the context perspective while identifying the shortcoming and benefits which have an impact on an organization choose to use any of the three approaches
Strategic management is crucial to the success of organizations achieving their capability to accomplish their goal and objectives in the long run. However, for organizations to accomplish their goals and objective, it depends entirely on the appropriate selection and implementation of a strategic management approach. Moreover, it also depends on the skills, knowledge and experience of the management team. Therefore, in regards to this perspective, the three different strategic management approaches include:
This strategic management approach is basically based on the critical economic theory that’s strategically tailored in solving issues such as allocation of an organization’s resources, competitive rivalry within an organization’s business environment and the economies of scale. According to David and David (2017) the effective implementations and use of industrial-organizational approach will play a big role in assisting an organization to cope and survive volatile markets it is based in. Additionally, they also mentioned that through this strategic management approach, organizations are in a better position to understand their industrial relationship with other business organizations. The main assumption in this context is that organizations the main agenda is to maximize profits and gain a bigger chunk of the market share, through strategic business activities while maintain and observing the policies, standards and laws within the region, international and within their business-oriented market Durand, et al.2017. Nevertheless, Industrial-organizational approach also emphasizes that organizations can achieve a competitive advantage within a particular industry through cost-effectiveness of the daily business activities and maximizing the profitability scale
Competitor prediction- The industrial organization strategic management approach enables firms to identify the extents of the competitive advantage their rival firm has. through the use of competitive analysis tools such as tools such as game theory, otherwise called the intuitive choice hypothesis, comprises of a limited measure of players (the opposition) and a constrained measure of choices they can make. Utilizing numerical networks and tree charts, a firm can survey its best course of action, by reproducing its rivals’ decisions and conceivable results of those decisions
Decision making-This strategic approach allows the top executive and management team to make crucial decisions that would define key changes essential to the organization’s achievements capability. Such a scenario is where the management team decides how much product to sell, the price of the product, the distribution channel and so on. (Paauwe and Boon 2018)
Cost-effectiveness -Through this strategic approach, the management team is able to identify areas where there need to minimize operational cost and directing those to areas where its needed more or for future use. This reduces significant chances of waste, therefore, contributing to profit maximization in the long run
Complex -Industrial-organizational strategic management approach requires extensive research and analysis on a very business environment that’s ever-changing and continuously risky. This requires skilled personnel who are able to analyze the markets as well as study their rival’s business models and strategies. This is the essential component of this approach assist goal is to determine exploitable weakness to use against them, therefore gaining a competitive advantage.
Rapid changes in the business environment- today’s business environments has grown to be more complex and riskier making them volatile in nature. The framework used to design and implement the industrial-organizational approach will be affected from time to time making it un-efficient unless it is updated on regular interval
possibility of time consumption-Volatility of the business environment may cause an avoidable delay during the conduction of the relevant research on business rivals. Moreover, a rapid change in the business environment will require a redo for the strategic framework or regular updates before implementations This may further lead to delays in the achievement of intended goals and objectives
The main implementation issue to the complexity of the process of the strategic management approach which requires a skilled, knowledgeable and experienced management team.Moreovoer, today’s business environments has grown to be more complex and riskier making them volatile in nature. The framework used to design and implement the industrial-organizational approach will be affected from time to time making it un-efficient unless it is updated on regular interval
The strategic domain for this strategic management approach is somehow can act as a complement to the industrial-organizational approach in achieving competitive advantage and gaining market share which in turn leads to increased profits. This is due to the fact that the sociological approach is entirely based on Consumer satisfaction and management. A consumer is strategically important to the existence and success of an organization. They are the center of all business organizations goals and objectives definition. It’s essential for organizations to study the patterns and behaviors of consumers towards their products and services. Therefore, according to Booth (2015). This strategic management approach theme is based on the context that organizations will always try to consider the interest of their consumers and solve any gaps available. This approach is further based on a phycological point of view where it strongly considers human behavior as the main element that assists organizations to manage their business activities in the long run. Moreover, organizations or companies are part of societies and have a strong impact on their building blocks, therefore in order to achieve success organizations must act on society norms (Karepova, et al.2015)
Improves products service delivery-Through this approach an organization are entirely focused on improving the products service delivery for the core purpose of ensuring the consumers and clients can receive the best services that their rivals in a similar market
Effective understanding of the consumer behavior—Extensive research is always conducted through the sociological approach to strategic management which is essential in determining the consumer behavior from time to time. This allows and organizations to identify common trends within a demographic and tailor their products and services to target specific markets
Decision making-This strategic approach allows the top executive and management team to make crucial decisions that would define key changes essential to the organization’s achievements capability. Such a scenario is where the management team decides how much product to sell, the price of the product, the distribution channel and so on.
Effective lean management techniques -Through this strategic approach, the management team is able to identify areas where there need to minimize operational cost and directing those to areas where it’s needed more or for future use. This reduces significant chances of waste, therefore, contributing to profit maximization in the long run
Improve consumer relations-This strategic management approaches creates a channel where consumers and an organization can interact in relation to the products and service delivery and air any grievances or recommendations which are considered for increased consumer retention
Complex -This strategic management approach requires extensive research and analysis on a very business environment that’s ever-changing and continuously risky. This requires skilled personnel who are able to analyze the markets as well as study their rival’s business models and strategies. This is an essential component of this approach assist goal is to determine exploitable weakness to use against them, therefore gaining a competitive advantage.
Rapid changes in the business environment- today business environments has grown to be more complex and riskier making them volatile in nature. The framework used to design and implement the sociological approach will be affected from time to time making it inefficient unless it is updated on a regular interval
Conflict with stakeholders- In any case, sociological approach to strategic management is, for the most part, accentuated on the connection between the organization and the consumers. It is also crucial to note that originations individuals have known stakeholders whose role is crucial to the organizational success. However, their interests may not align with the strategic approach which would initiate organizational issues affecting the successful implementation of the strategic approach in the long run
The emphasis of the strategic management approach is the quality of the relationship between n organization and its customers in order to provide quality services improving their loyalty to the brand of the organization. However, an organization has stakeholders whom interest may not align with the goals and objectives of the strategic approach which will ultimately affect the organizations’ ability to maintain good behavior with both the consumers and the stakeholders causing organizational problems in the long run.
The organizational change approach is embraced by the business associations to get a few enhancements on some troublesome circumstances. This specific approach of strategic management utilizes distinctive procedures of social science illustrating that this approach behave in a manner similar to a change management approach .This indicates that this particular approach acts like a change management approach (Cameron and Green 2015). However, this approach has also some limitations. Engert and Baumgartner (2016) expressed that the organizational change approach of strategic management is utilized by the organizations during the season of bringing some change in a precise way. It has been speculated for a while that the strategic management approach in context brings sudden change, however this is not the case as Chen and Lieberman (2015) illustrate that it can only create essential opportunities in the long run.
Increase in operations effectiveness -Through the organizational change approach to strategic management, managers and the top executives are able to identify operational areas within the organizations that are lacking in quality or has several barriers that are affecting quality process conduction. Therefore, the implementation of policies and strategic frameworks through the process will increase the operational effectiveness in these areas in the long run (Rosemann and vom Brocke 2015)
Effective lean management techniques -Through this strategic approach, the management team is able to identify areas where there need to minimize operational cost and directing those to areas where it’s needed more or for future use. This reduces significant chances of waste, therefore, contributing to profit maximization in the long run
Effective Decision making-This strategic approach allows the top executive and management team to make crucial decisions that would define key changes essential to the organization’s achievements capability. Such a scenario is where the management team decide what significant change can be made or improved which would affect basic crucial decisions such as; how much product to sell, the price of the product, the distribution channel etc. (Collings, et al. 2018, p 6-9)
Time consumption–Time consumption is adamant in regards to organizational change strategic approach, as it takes a long time for a significant change to occur and take effect,this may lead to further utilization of resources affecting the profitability maximization scale (Pearlson, et al. 2016)
Non-independent- It evident from the above text that the strategic approach takes a long time to implement change significantly although there are minor errors. Therefore, this also implies that this strategy has to be used with other strategic approaches such as collaborative approach and cultural approach to significantly affect change within the scheduled timeline
The main implementation issue is the time consumptions and the non-independence of the strategic approach. organizations that utilize this approach will have to take a while before a significant change occur. Moreover, its strategically focused on key small areas nits as an organization as a whole, despite this, its Non-independent nature requires the assistance of other strategic management approaches. This does not actually mean that organizational approach is bad, it’s still effective but with its own pace and setting (Wheelen, et al. 2017, p 127)
Conclusion
In conclusion, it has been distinguished that vital strategic management approaches are essential for each business association. The key strategic management approaches help the organizations in improving their execution standard. This study has distinguished essentially three prevalent key strategic management approaches and these are – sociological approach, industrial-organizational approach, and organizational change approach. According to the discourse in the study, industrial-organizational encourages the organizations to accomplish economies of scale, effective utilization of resources and survive in competitive markets in the long run. The sociological approach generates a better relationship with the society and the other methodology that is organizational change approach is effective during the change within the companies. However, from the above report, it very well may be said that the strategic management approaches like, sociological approach, industrial-organizational approach and organizational change approach are useful for enhancing the execution of the business organizations. Be that as it may, every one of the key strategic approaches has a few constraints. If by chance that a comparison is made among these three vital strategic approaches, at that point it tends to be recognized that the industrial-organizational approach is more compelling than the other key strategic approaches (Formentini and Taticchi 2016). This is on the grounds that, on account of the industrial-organizational approach, the organization can enhance the general execution level.
Reference
Booth, S.A., 2015. Crisis management strategy: Competition and change in modern enterprises. (pp. 24-39). Routledge.
Cameron, E. and Green, M., 2015. Making sense of change management: A complete guide to the models, tools and techniques of organizational change.3 (pp. 122-156). Kogan Page Publishers.
Chen, C.M., Delmas, M.A. and Lieberman, M.B., 2015. Production frontier methodologies and efficiency as a performance measure in strategic management research. Strategic Management Journal, 36(1), pp.19-36.
Collings, D.G., Wood, G.T. and Szamosi, L.T., 2018. Human resource management: A critical approach. In Human Resource Management (pp. 1-23). Routledge.
David, F.R. and David, F.R., 2017. Strategic management: A competitive advantage approach. (pp. 49-73). Pearson.
Durand, R., Grant, R.M. and Madsen, T.L., 2017. The expanding domain of strategic management research and the quest for integration. Strategic Management Journal, 38(1), pp.4-16.
Engert, S., Rauter, R. and Baumgartner, R.J., 2016. Exploring the integration of corporate sustainability into strategic management: A literature review.Journal of Cleaner Production, 112, pp.2833-2850.
Formentini, M. and Taticchi, P., 2016. Corporate sustainability approaches and governance mechanisms in sustainable supply chain management. Journal of Cleaner Production, 112, pp.1920-1933.
Karepova, S.G., Karabulatova, I.S., Novikov, V.S., Klemovitsky, S.V., Stratan, D.I. and Perova, A.E., 2015. New approaches to the development of methodology of strategic community planning. Mediterranean Journal of Social Sciences, 6(3 S6), p.357
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