Crafting a strategy to stimulate the direction of a company encompasses addressing several elements.
BUSI770 – Discussion Reply – Ron BedardPlease provide a discussion reply to the following post considering the below instructions:
Discussion Reply: Setting Direction, Advantages / Disadvantages, and Decision Models You will reply to one of your classmate’s thread. Minimum of 250 words in the body
Minimum of 2 sources from the literature in addition to course texts
Current APA format must be used.
Content must include:
• Summary of the author’s Thread – no less than 125 words
• What you agreed with, did not agree with and why – no less than 125 words• Support your assertions with citations.
Post Information:
Setting Direction, Advantages/Disadvantages, and Decision Models Ron BedardLiberty University
Setting Direction, Advantages/Disadvantages, and Decision Models IntroductionAt its most basic form, the strategy encompasses the application of strength against ensuing weaknesses, effectively applying existing strengths to the most appealing and promising opportunities. That said, the discourse on strategy in businesses has broadened to encompass the potential strengths as advantages. This includes being a first mover on aspects such as products or markets (Rumelt, 2011). The business strategies encompass understanding the advantages of a venture based on prevailing or projected market conditions and should also be coherent enough to coordinate the requisite policies and actions toward their implementation. The conventional understanding of firms positions that the top management determines its direction and then cascades it down to the entire organization (Brady & Walsh, 2007). Despite instances of strategic direction being influenced by junior teams, the conventional approach is still largely practiced. There is a need for management teams to settle on a clear strategy, which then forms the basis for the organization\’s direction moving forward.
Process: Setting the Company\’s Direction with Strategy Crafting a strategy to stimulate the direction of a company encompasses addressing several elements. That includes how to attract and retain customers, compete effectively against rivals, and position a business in the marketplace in a way that increases the chances of capitalizing on emerging opportunities (Gamble et al., 2021). The formulation process encompasses management teams at all levels, even though the chief executive officer (CEO) will often operate as the strategic visionary and chief strategist who decides on key elements incorporated into the company\’s strategy. That said, it would be a grave mistake to perceive the task of formulating strategies as the preserve of the top management, since the more operations of a company there are, the more there is a need to delegate the authority of building strategies to down-the-line management teams (Gamble et al., 2021). Such managers often have a better command of the strategic issues relevant to the unit under their supervision, including the prevailing market conditions and consumer requirements, which are all essential considerations when settling on a strategy. Following the determination of the key elements that need to be considered in the strategy, the process progresses to the strategy-making hierarchy. The hierarchy comes about based on the diversity of a company\’s operations, whereby the more operations, the more points of strategic initiatives and the more management teams are involved in the strategy formulation process (Gamble et al., 2021).
For such an organization, a comprehensive strategy features four distinct strategic initiatives, with each undertaken at different levels of the organization.The corporate strategy features as the first type of strategic initiative; it is orchestrated by the top-most management, in most cases the CEO, and it establishes the overall plan for the management of businesses or departments within a diversified organization. It addresses questions such as capturing synergies across the departments or businesses, what businesses to invest or divest in, which markets to enter, and the approach to take for entering the markets (Gamble et al., 2021). The second initiative is the business strategy focused on obtaining competitive advantages in departments or single business units within a diversified company. Business unit heads play a significant role in formulating strategic decisions about the business units they lead. Importantly, in single-business companies, the corporate and business levels of strategy formulation hierarchy merge into one business strategy since the entire company comprises one distinct business. The third initiative is the functional-area strategies focused on outlining the processes that accrue to a business. For instance, a product development strategy would illustrate the preferred managerial game plan for creating new products that meet consumers\’ requirements. The business strategy and the functional-area strategies are closely interlinked (Gamble et al., 2015). To that effect, for the business strategy to be effective, a business\’s marketing strategy, product development strategy, finance strategy, customer service strategy, and human resource strategy, which are all components of the functional-area strategies, should be compatible and mutually reinforcing. Finally, there are the operating strategies concerned with the narrow strategic undertakings for the management of units such as plants and geographic units. They are limited in scope and play a crucial role in supporting the functional-area strategies and overall business strategy.
Strategic Thinking: Discussion of a Key Advantage or DisadvantageThe dynamism and uniqueness of challenges that contemporary businesses must overcome, such as technological advances that alter the alignment of most industries, call for proactiveness of management teams in devising appropriate ways to combat challenges. A key tool that would aid in developing suitable approaches to take advantage of emerging opportunities in the marketplace is strategic thinking. Strategic thinking is a complex process that entails the mental capacity of individuals to think creatively with a focus on accomplishing sustained success (Dushkov, 2018). As a synthetic process, strategic thinking seeks internal alignment and comprehends interdependencies. It is also systematic in its focus and calls on a capacity to comprehend and amalgamate ideas across levels and elements and align the strategies across horizontal and vertical organizational levels.
As such, a strategic thinker has the mental blueprint of the entire end-to-end systems of value creation and comprehends the inherent interdependencies between the systems.
Chiefly, the importance of strategic thinking can be understood by its role in helping organizations pinpoint and adopt the right strategies. Based on that understanding, it is evident that strategic thinking is the key to formulating good business strategies (Dionisio, 2017). Many advantages accrue to an organization by adopting a good strategy. The advantages emanate from the fact that other organizations likely do not have such a strategy, and often the other organizations do not expect other organizations to have such strategies (Rumelt, 2011). A good business strategy features coherence, coordinating actions, policies, and a clear framework for acquiring and allocating resources toward accomplishing set objectives. Interestingly, most organizations lack this and instead have several goals and initiatives meant to signify progress, but they lack a coherent approach to accomplish the goals other than trying harder and spending more. Consequently, good strategies that result from strategic thinking are integral to instituting sustainable competitive advantages and long-term business success.
Decision ModelDecision-making forms a key element of daily life for humans and is especially relevant to business executives as it is by their decisions that organizations succeed or fail. Owing to the importance of decision-making, it has resulted in the rationalization of the decision-making process. It has led to the development of the perception that decision-making is not a random process but one featuring key trends informed by the decision-making model of an individual. In my case, I have traditionally been a rational thinker whereby through my rational model of decision-making, I tend to rely extensively on facts, information, analysis, and structured procedures in my quest to arrive at suitable decisions. In my approach to making decisions, I first begin identifying and internalizing the problem I need to find a solution. I then determine possible solutions and conduct a gap analysis (Uzonwanne, 2016). I then gather the facts, opinions, and alternatives and choose the possible outcomes from the different available options. That process is followed by settling on the most suitable solution based on the prevailing conditions, which I then implement.
The appeal of my approach to decision-making is that it makes it possible for me to objectively settle on decisions based on facts, thus allowing me to make informed decisions. Strategic thinking is essential for charting the most suitable path for an organization to bring about sustained success, and a rational approach to decision-making is suitable in that process as it reduces the chances of errors. That is the case since it avoids instances where one might make uncalled-for assumptions, resulting in poor decisions. There are instances within the strategic thought process when decisions need to be made with scanty or minimal information. As such, strategic thinkers are always rational to an extent but not, and that is essential in a fast-paced environment in which there is little information to go by when making decisions, especially when developing new products or modernizing (Eisenhardt & Zbaracki, 1992). In such a case, my rational approach to decision-making would be a disadvantage, as it might preclude me from making timely decisions that might be the difference between taking advantage of a strategic opportunity and missing it.That then brings up the need to review alternative decision-making models in a quest to determine the most suited one for an effective strategic thinker. In that regard, strategic thinkers display a blend of rational decision-making and creative thinking (Ali et al., 2014). Rational decision-making is most suited for making strategic decisions in stable environments whereby future forecasts can be made with a relatively high level of accuracy. In such an environment, rational thought informs strategic decisions to retain competitiveness and institute a search for new opportunities. However, there is a case for bounded rationality in driving strategic thought, especially in uncertain environments. The case for such a type of decision-making is its allowance for creative thought, which is needed when confronted with uncertainties. Bounded rationality is a school of thought that ensued from a dissatisfaction with a comprehensively rational decision-making model (Jones, 1999). Certain elements of the model, such as the fact that the decision-maker\’s behavior is determined by the mix of incentives they are faced with when making decisions, make it appealing as a catalyst for strategic thought. Furthermore, those who display bounded rationality adjust their decisions instantly based on the dynamism of the situations they are confronted with, effectively making them serial maximizers of opportunities regardless of the situation. Thus, bounded rationality is a suitable decision-making model for fuelling sustained strategic thought, which is integral to the success of business organizations.ConclusionUtilizing organizational strategies to set the direction that an organization should take is essential for achieving organizational goals. In setting the direction, the four elements of strategy-making hierarchy including corporate strategy, business strategy, functional area strategies, and operational strategies. Crucially, strategic thought plays a central role in formulating such strategies, owing to its impact on influencing the formulation of good strategies. Strategic thought features a blend of rational and creative thinking to cater to different business situations, including stable and unstable ones. As such, rational thought proves useful in stimulating strategic thought only to a certain extent, beyond which bounded rationality would be ideal due to its emphasis on maximizing opportunities regardless of the prevailing conditions.
Annotated Bibliography
Brady, M., & Walsh, A. (2007). Setting Strategic Direction: A Top-Down or Bottom-Up Process? Business Strategy Series, 9(1), 5-11. https://doi.org/10.1108/17515630810850064The article delves into setting the strategic direction of a company to present a case for the bottom-up process of instituting strategic decisions within organizations. The article presents the conventional view of setting strategic directions whereby the top management charts the path that the organization will follow and cascades those decisions to the rest of the organization (Brady & Walsh, 2007). In instituting the decision, the view of customers and employees may be considered, but the process remains a quintessentially top-down approach to the formulation of organizational strategies.
That view is hinged on the existence of a charismatic leader who, through the force of their personality and leadership acumen, line up all stakeholders of an organization in one direction, and there are examples of such leaders, Steve Jobs being a case in point. That said, there are cases whereby new strategic directions in organizations were instituted not by the top management but by relatively junior teams, and the agent-based view of the world supports that (Brady & Walsh, 2007). The view posits that individuals control their destiny within certain constraints, and decisions made at the aggregate level are essentially a total of the decisions made at the agent level. There is thus a case for junior teams as drivers of strategic directions within organizations.The source is credible since it is peer-reviewed and is documented in the journal of business strategy series. Furthermore, the authors stand out as leading voices in the academic and professional field of strategic management, which further institutes the source\’s credibility. Its relevance in the discussion emanates from its core emphasis on the existence of change agents at all levels of organizations, including junior positions. For all change agents, so long as they are provided with an avenue, they can provide valuable insights on the suitable strategic direction that an organization should adopt.
Dionisio, M. (2017). Strategic Thinking: The Role in Successful Management. Journal of Management Research, 9(4), 44. https://doi.org/10.5296/jmr.v9i4.11448
The article seeks to distinguish strategic thinking and strategic planning concepts, which are often used interchangeably despite being distinct concepts. The article indicates that despite their distinctness, the two concepts are integral in aiding the strategic decision-making process in firms. According to Dionisio (2017), the importance of distinguishing the concepts is that there is a gap in the comprehension and implementation of strategic thought owing to the ambiguity in understanding its components on account of its being interchanged with strategic planning. Strategic planning is inherently rational and often perceived as a programmatic and analytical thought process, whereas strategic thinking is a spontaneous, creative, and often divergent thought process. As such, strategic thought can be understood as a key component for developing strategies featuring a mental, reflective, and issue-oriented process whose purpose is to develop new strategies that may be implemented before, after, or during the strategic planning phase.
The source is a peer-reviewed journal article published by the Macrothink Institute in the Journal of Management Research. The author, Dionisio, is a renowned academician at Coppead Graduate School of Business and a leading voice in the discipline of management research, which shows the credibility of the source. Its relevance in the discussion emanates from its in-depth analysis of the concept of strategic thinking (Dionisio, 2017). The article positions that the importance of strategic thinking can be understood by the role it plays in helping organizations pinpoint and adopt the right strategies. Based on that understanding, it is evident that strategic thinking is the key to formulating good business strategies essential for organizational success.
References
Ali, R., Mumtaz, R., Farooq Rehan, M., & Sajid, M. (2014). Strategic Thinking: Comparative Study on Rational Thinking and Creative Thinking. International Journal of Research in Social Sciences, 4(1), 1-15. https://doi.org/https://www.indianjournals.com/ijor.aspx?target=ijor:ijrss&volume=4&issue=1&article=034
Brady, M., & Walsh, A. (2007). Setting Strategic Direction: A Top-Down or Bottom-Up Process? Business Strategy Series, 9(1), 5-11. https://doi.org/10.1108/17515630810850064
Dionisio, M. (2017). Strategic Thinking: The Role in Successful Management. Journal of Management Research, 9(4), 44. https://doi.org/10.5296/jmr.v9i4.11448Dushkov, G. (2018). Strategic Thinking Key for Future Success in Organization. International Journal of Recent Scientific Research, 9(5), 1-4. https://doi.org/DOI: http://dx.doi.org/10.24327/ijrsr.2018.0905.2102
Eisenhardt, K., & Zbaracki, M. (1992). Strategic Decision Making. Strategic Management Journal, 13(S2), 17-37. https://doi.org/10.1002/smj.4250130904
Gamble, J., Thompson, A., & Peteraf, M. (2021). Essentials of strategic management: The Quest for Competitive Advantage (7th ed.). McGraw-Hill Education.Gamble, J., Thompson, A., & Peteraf, M. (2015). Essentials of strategic management: The Quest for Competitive Advantage (4th ed.). McGraw-Hill Education.Jones, B. (1999). Bounded Rationality. Annual Review of Political Science, 2(1), 297-321. https://doi.org/10.1146/annurev.polisci.2.1.297
Rumelt, R. (2011). Good Strategy, Bad Strategy by Richard Rumelt. Profile Books Ltd.Uzonwanne, F. (2016). Rational Model of Decision Making. Global Encyclopedia Of Public Administration, Public Policy, And Governance, 1-6. https://doi.org/10.1007/978-3-319-31816-5_2474-1.
Answer preview to crafting a strategy to stimulate the direction of a company encompasses addressing several elements.
APA
556 words