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Stratergy in business

Extracts from this document...

Introduction

INTRODUCTION: According to Lewis (1999), " the term strategy derives from the Greek word 'strategos', meaning 'the art of the general'. Chandler (1962) defines strategy as " the determination of the basic long term goals and objectives of the enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals". Strategy can be viewed as the identification of ends and the means to achieve those ends, thus providing the foundation for approaches to strategic management. According to Mintzberg (1994), " strategy is a plan, ploy, pattern, position, and perspective; strategy is a process of sensing, analysing, choosing and acting." The strategy formulation has to complement the environment of operation and the available resources. Sustainable, superior Financial performance According to Stacey (1998), " strategy can be seen as the matching of the resources and activities of an organisation to the environment in which it operates." Strategic decisions are normally about trying to achieve advantage for the organisation over competition. Strategy is the pattern or plan that integrates an organization's major goals, policies, and action sequences into a cohesive whole. A strategy allocates an organization's resources into a unique and viable posture based on relative internal strength's and weaknesses, anticipated changes in the external environment. According to Scholes (2002), " strategic decisions are likely to be concerned with the scope of the organisation". Strategy can either be imposed, realised, unrealised, intended, or as an outcome of cultural and political process. Intended strategy is an expression of desired strategic direction deliberately formulated or planned by managers. Realised strategies are the ones that are actually practised in the organisation. In many organisations, which attempt to formulate strategies in such systematic way, the intended strategies do not become realised. Strategies could also be imposed on the organisations by external agencies such as government policies and economic factors. Strategy can be regarded as the long-term direction of the organisation, which develops over time, and finally it can be seen as the outcome of cultural and political process. ...read more.

Middle

A major element of the organisation's external environmental analyses was a set of forecasts made about future conditions. Thus Ackoff (1983) comments 'predict and prepare' became the motto of this school of thought. The propositions of the planning school look attractive on paper. The major flaws in the school propositions are termed as 'seven deadly Sins of planning'. The process that was originally formulated by the top executives was taken over by the lower level staff. The planning staffs cut the executives out of the strategy development process making them obsolete. Little emphasis is given on the true insights of the strategy. There is too much of planning and very little action. Kiechel (1984) concluded that only 10% of formulated strategies actually got implemented. The system gets highly bureaucratic. The executives whose mandate is to implement strategy had very little role in designing the strategy. There is an inappropriate use of planning tools. There is very little emphasis on developing strategic alternatives, leading to default adoption of strategy rather than by choice. The cultural requirement is unfocussed. There is too much reliance on single point forecasting. (Wilson, 1994). The entire system is highly formalised it is not possible to formalise creative thinking. As Lorange (1980) comments, " because analysis is not synthesis, strategic planning has never been strategy making. Analysis may precede and support synthesis, by providing certain necessary inputs. Analysis may follow and elaborate synthesis, by decomposing and formalising its consequences. But analysis cannot substitute for synthesis." Thus planning rather than providing new strategies, cannot proceed with out their prior existence. Both the design school and the planning schools put no limits on the strategies that were possible in any given situation. The positioning school on the other hand argued that only a few key strategies as positions in the economic marketplace are desirable in any given industry. Cost Strategy Differentiation Broad Market Narrow Positioning in simple terms is 'being at the right time at the right place. ...read more.

Conclusion

7. Hill T, Westbrook R, " SWOT Analysis: Its Time For A Product Recall." Long Range Planning, 1997. 8. Johnson G, Scholes K, "Exploring Corporate Strategy" 6th edition, FT Prentice Hall, London, 2002. 9. Johnson G, Scholes K, "Exploring Corporate Strategy" 5th edition, Prentice Hall, London, 1997. 10. Katz RL, " Concepts And Cases in Corporate Strategy", Eagle Wood Cliffs, Prentice Hall, New Jersey, 1970. 11. Levy D, " Chaos Theory And Strategy: Theory, Application And Managerial Implications", Strategic Management Journal, 1994. 12. Lewis G, Morkel K, Hubbard G, Davenport C, Stockport G, "Strategic Management" 2nd edition, Prentice Hall, NSW Australia. 13. Lewis S, " Microsoft Corporation", in International Directory of Company Histories, ed. Paula Kepos, Michigan, St. James Press, 1992. 14. Lorange P, " Corporate Planning", An Executive View Point, Eagle Wood Cliffs, Prentice Hall, New Jersey, 1980. 15. Mintzberg H, " Opening Up The Definition Of Strategy", In Quinn B, Mintzberg H, Robert J, " The Strategy Process" Prentice Hall, Eagle Wood Cliffs, NJ, 1999. 16. Miller D, " The Generic Strategy Trap", Journal Of business Strategy, January- February 1992. 17. Prahalad CK, Bettis RA, " The Dominant Logic: A New Linkage Between Diversity And Performance", Strategic Management Journal, 1986. 18. Quinn JB, "Managing Strategic Change" SLOAN Management Review, (summer 1980b-3-20). 19. Snodgrass CR, "Cultural Influences On Strategic Control Systems Requirements", University of Pittsburgh, Graduate School Of Business, 1984. 20. Senge P, " The Fifth Discipline: The Art And Practise Of The Learning Organisation, Doubleday/Century, 1990. 21. Stacey R, "Managing Chaos" Dynamic Business Strategies In Unpredicted World, Kogan Page, 1992. 22. Sleznick, P, " Leadership In Administration: A Sociological Interpretation, Ivanston, IL: Row, Peterson, 1957. 23. Stevenson H, Gumpert D, " The Heart of Entrepreneurship", Harvard Business Review, March-April, 1985. 24. Sookun M, Lecture Notes, Dated 9th July 2003. 25. Wilson I, "Strategic Planning Isn't Dead- It Changed" Long Range Planning, 27, 4, Aug 1994: 12- 24. 26. Wright P, Pringle C, Kroll M, " Strategic Management Text And Cases", Needham Heights, MA: Allyn And Bacon, 1992. 27. http://www.quickmba.com/strategy/global/ 28. http://www.globalfuture.com/planning1. ...read more.

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