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INTRODUCTION

Strategy determines the long-term direction of the organisation and comprises a

decision-making process and a management role. It enhances organisation

effectiveness by providing satisfaction to the personnel of the organisation. Business

strategy is a plan that integrates an organization’s major goals, policies, and action

sequence into a cohesive whole. Strategies provide the framework for plans by

guiding operating decisions and often pre-deciding them. If strategies are developed

carefully and understood properly by managers, they provide more consistent

framework for operational planning. If this consistency exists and applied, there

would be deployment of organisational resources in those areas where they find better

use.

The concept of strategy first has to perform the function of reconstructing the

variables involved, namely identifying those that appear to have some impact in a

particular space-time context. In other words, the concept of strategy includes the ex-

post synthesis of the complexity of firm-environment relationships (Anderson, 1982;

Venkatraman and Camillus, 1984; Camerer, 1985); its role involves the reconstruction

of meanings, an aspect that is increasingly attracting attention (Pennings, 1985), such

as design, luck, opportunism and judgement.

Strategies focus on course of activities by specifying what activities are to be

undertaken for achieving organisational objectives. They make the organisational

objectives more comprehensive and specific. Strategies ensure organisational


effectiveness in several ways. The conception of effectiveness is that the organisation

is able to achieve its objectives within the given resources. Therefore, it is not only

necessary that resources are put to the best of their efficiency but also that they are put

in a way which ensures their maximum contribution to organisational objectives. This

can be achieved by taking strategic management, which states the objective of the

organisation in the context of given resources. Each resource of the organisation has a

specific use at a particular time. Thus, strategies ensure that resources are put in action

in a way in which these have been specified. Organisation will achieve effectiveness,

if it is done efficiently.
LITERATURE REVIEW

Human nature insists on a definition for every concept and strategy can be defined as

a set of guidelines to deal with a situation. The purpose of formulating a strategy is to

ensure that basic objectives of the organization are achieved, through a unified,

comprehensive and integrated procedure (Glueck, 1980:9). Many authors have

discussed about strategy and its establishment and according to Mintzberg, there are

five definitions of strategy; plan, ploy, pattern, position, and perspective.

Strategy as plan, deals with how an organization seeks to establish direction.

Managers formulate strategies in order to initiate the organization to follow a course

of action that is agreed upon. As ploy, organizations attempt to process a formation to

counter threats and employ resources to gain competitive advantage. Strategy

concentrates on action, and as a pattern, introduces the concept of achieving

consistency in the behaviour of the organization. As position, it influences to explore

the various competitive environments, enabling the organization to survive against

hostile competition and uncertainty. Strategy as a perspective, introduces that all

strategies are abstractions and diffuses the view about intention and behaviour in a

collective context.

Strategy is just not ideas of how to tackle competition or a market, it is rather

an instrument used by the organization for collective consideration and action. A lot of

emphasis needs to be focussed to analyze social forces and structures as a basis for

understanding effective command styles and motivational stimuli (Von Clausewitz,


1976:8). Given that strategy determines the direction and action concentration of the

organization, its concoction should comprise of three essential elements; goals or

objectives to be achieved, policies guiding or limiting action, programs that are to

accomplish the defined goals within the limits set (Quinn, 1980). Key concepts

support the development of effective strategies, which provide balance, structure, and

focus. Prediction of the defined ways in which all intruding forces could interact with

each other, be altered by nature, or be tailored by the imaginations and determined

counteractions of intelligent opponents (Braybrooke and Lindblom, 1963). Strategy

deals with instability, as well as the unknown, therefore, the core is to build up a

stance strong enough, to withstand and achieve the goals in spite of unforeseeable

external forces affecting the organization.

Studies have not recommended various key criteria for evaluating a strategy

(Tilles, 1963; Christensen et al., 1978). These include the transparency, motivational

impact, internal stability, compatibility with the environment, suitability in light of

resources, degree of risk, complement personal values of key figures, time horizon,

and workability. Clearly, other factors contribute towards achieving goals and

objectives; such as luck, vast resources, fitting implementation and competitor’s error.

Furthermore, the moment at which a strategy is formulated, one cannot draw on to the

reason for success because the outcome is still unknown (Quinn, 1980). An

organization’s strategic model can be summarized as the future policies of the

business that will prepare it to perform in the future. Clayton Christensen and Michael

Overdorf (2000) emphasized the need to consider resources, processes, and values in

an existing organization in comparison to the challenge of needed change.


It can be distinguished that the interpretative approach and the policy-making

approaches, which look at strategy "as being" or "as wishing to be" (Andrews, 1971,

p. 16), or can differentiate a descriptive as opposed to an evaluative tone. Four main

meanings of the term strategy are thus identified by a typology (appendix A), which

apparently does not incorporate all the possible meanings but comprises some of the

more accepted ones. The descriptive/interpretative approach is the most inclusive

approach, assigning strategy’s general meaning to the specificity or exclusivity

actually achieved by the firm, without any further attributes. Strategy is the logic of

the firm's behaviour or, in brief, the reason of the firm. As Mintzberg puts it

(Mintzberg, 1978; Mintzberg and Waters, 1985), we are presuming the meaning of the

"stream of actions", i.e. adopting an interpretative approach.

The evaluative/interpretative approach is a narrower approach, attributing to

strategy’s meaning of a "superior specificity" as actually followed, considering the

value of its distinctiveness. The exclusivity of the firm is still considered from an

external or "objective" standpoint. An evaluation of the degree of reliability and fit

between firm-system and environment-system is thus introduced (Coda, 1983, 1984;

Miles and Snow, 1984; Venkatraman and Camillus, 1984), and the dominance or the

degree of control and success of the firm's behaviour is evaluated with reference to

the sustainable nature of its principal management. The descriptive/policy-making

approach compared to the first approach, is too a narrower approach. It interprets the

meaning of strategy in terms of the intended uniqueness or the future project planned

by the firm, to be pursued. The specificity of the firm can be considered, from an

internal or "subjective" point of view. The firm's uniqueness is also considered

without indication to the equilibrium. The evaluative/policy-making approach is a


narrow approach followed by the business that interprets strategy in terms of the

superior distinctiveness. The aspect of the organization is still judged in a "subjective"

perspective. The evaluation of the degree of external and internal rationality is

introduced (Venkatraman and Camillus, 1984), as a situation for the completion of the

"winning" strategies intended.

Henry Mintzberg has suggested Ten Schools of Thought model as a

framework for strategic management; The Design School – this school identifies

strategy formation as a process of conception approach. Its approach is clear and

unique formulation in a deliberate process; The Planning School – his school perceive

strategy formation as a formal process; The Positioning School – this school identifies

strategy formation as an analytical process, placing the organization within the

context of its industry and how the organization can develop its strategic positioning

within the industry; The Entrepreneurial School – this school refer to strategy

formation as a visionary process; The Cognitive School – this school sees strategy

formation as a mental process; The Learning School – this school sees strategy

formation as an emergent process; The Power School – this school sees strategy

formation as a process of negotiation; The Cultural School – this school specifies

strategy formation as a collective process; The Environmental School – this school

perceive strategy formation as a reactive process; The Configuration School – this

school sees strategy formation as a process of transformation.

Some of the schools clearly are aspects or stages of the strategy formation

process. Dealing with complexity in one process may seem overcoming. Strategy

formation is judgemental designing, perceptive visioning, and evolving learning; it is


about transformation as well as continuation. Strategy formation must involve

individual cognition and social interaction, cooperative as well as conflictive. There

must be a balance in between the processes and must be in response to the

environment (appendix B).


ANALYSIS

Strategy in turn is a term that people define in one way band often draw on to in

another, without realizing any difference. A business strategy formulation generates

the critical issue of how to achieve the targets set by the organization. A strategy is an

instrument in achieving the targets and the result are the objectives. An organization

blends in various components in order to successfully implement a strategy; such as

deliberate and purposeful actions, shared learning of the organization including

internal activities, and reactions to unforeseen developments (Mintzberg, 1990).

Planned strategies are likely to encounter alteration as market conditions vary over

time. Future business situations are suitably uncertain and impulsive, which leads to

the decision being taken at the moment. Therefore, it can be held that strategy

formulation involves developing an intended strategy and a reactive strategy; linking

the organization’s business approaches. In brief, strategies are fashioned to

accommodate the varying environment, enhancing the organizations competitiveness.

Organizations prepare strategies at three distinct levels (appendix C);

operating strategy, which is accountable for strategies on basic operating units;

functional strategy, specified to functional units of a business; corporate strategy,

approach to all of the organization’s processes. Operating strategy relate to managing

frontline business units – such as sales, distribution, plants, and successful execution

of considerable operating tasks – such as inventory control, maintenance, advertising

campaigns. These strategies articulate the short – term achievements of the

organization, and are undertaken by front – line managers. Functional strategies are
developed for administering functional processes or activities within an organization –

such as marketing, production, finance. These strategies aim for medium – term goals

to be achieved by the business. Functional strategies support and leverage the overall

core business components. Corporate strategies apprehend the intentions of the

organization to establish them self in the industry, and correlate the actions and

approaches followed by the organization to enhance their performance. These

strategies are crafted by top – level managers, who take upon these long – term goals

of the organization to be achieved.

While evaluating the implementation of the organization’s strategy, the present

competitive scope within the industry needs to be considered. Perceptive

comprehension of an organization’s resource capabilities and deficiencies, its market

opportunities, and the external threats to its future welfare is fundamental to a

proficient strategy. Therefore, the business needs to assess the organization’s strengths

and weaknesses, and its external opportunities and strengths, known as the SWOT

analysis (appendix D). This analysis enables the organization to generate a strategy

that aim to produce in sync the business’s resource potential and its external

condition.

Business strategies are developed to attain competitive advantage, the edge

over competitors. There are several methods to competitive advantage, the basic being

providing superior value to the customers. An organization’s competitive strategy

consists of initiatives and approaches undertaken by the business. Competitive

strategy deals exclusively towards accomplishing business targets by endowing with

superior value to customers. Michael E. Porter tailored an approach for competitive


strategy, which are divided into five distinct approaches (appendix E): cost leadership

– lowest cost producer and provider for customers; differentiation – originating a

product different from rivals; focused cost leadership – concentration on a narrow

market by offering lower cost than competitors; focused differentiation –

concentration on a narrow market by offering tailored product to a niche; best cost

provider – incorporating best value with lowest cost to customers.


CONCLUSION

An organization’s strategy is the heart and soul of managing the business. Among all

the paths and actions that can be exercised to focus on the markets and customer

needs, a strategy is a managerial preference among alternatives to apprehend the

opportunities the market has to offer and dominate the industry with a competitive

approach. In my opinion, to craft a business strategy, managers need to incorporate

clarity in their approach. The inclusion of luck and opportunism is veritably required

for a strategy to be executed properly.


RECOMMENDATION

CHANGE YOUR STRATEGY AS NEEDED

IBM long pursued adaptation. It served overseas markets by establishing a mini-IBM

in each target country that performed a complete set of business activities and adapted

to local differences as necessary. But when IBM realized that country – to – country

adaptation had significantly curtailed opportunities to gain international scale

economies, it aggregated the countries into regions to improve coordination and thus

scale.

CONSIDER INTERGRATING TWO STRATEGIES

Indian IT company, Tata Consultancy Services has traditionally emphasized arbitrage

– exporting software services to markets with higher labour costs. But it has begun

augmenting this strategy with aggregation – building a new, coherent global delivery

structure comprising three kinds of software development centres. Global centres,

located mostly in India, serve large customers and possess breadth and depth of skill

as well as coding and quality control processes. Regional centres, in Brazil and

Hungary have select capabilities and emphasize addressing language and cultural

challenges. Near shore centres, such as in Phoenix and Boston focus on building

customer comfort through proximity.


Procter & Gamble (P&G) balances aggregation and adaptation. It created global

business units (GBUs) that retain ultimate profit responsibility but sell through market

development organization (MDOs) aggregated up to the regional level. To manage

tensions between GBUs and MDOs, P&G allows room for differences across business

units and markets. For example, its pharmaceutical division, with distinct distribution

channels, is not part of the MDO structure. And in emerging markets, where marker

development challenges loom large, country managers still have profit responsibility.

Protocols determine how different decisions are made, and by whom – the GBUs or

MDOs.

EXPLORE EXTERNAL INTEGRATIVE MECHANISMS

IBM is in joint venture in advanced semiconductor research, development, and

manufacturing; links to Linux and other open innovation efforts; and some

outsourcing of hardware to contract manufacturers. It has also forged a relationship

with Lenovo, the Chinese PC manufacturer, in personal computers.

The company Banglalink was previously known as Sheba Telecom. It not only

changed its name but also restructured its system. The company designed an

integrated business strategy by incorporating internal management system with a

focus to the external environment. For their expansion strategy, they followed vertical

integration i.e. using HR (human resource) policy as a base of their business strategy.

They enhanced their HR inventory by recruiting a good number of intelligent and

promising youngsters from various academic institutions and as well as from their
competitors. They provided very lucrative compensation package together with a

clear career path. Basically, these were the ground work for their promotional

activities. Side by side they developed new products to attract the customers.

A competency cannot be a sustainable competitive advantage if the competitors can

copy it easily. Competitive advantage is a company’s ability to perform in one or

more ways that competitors cannot or will not match. Michael Porter urged

companies to build a sustainable competitive advantage (Porter, 1980). But in real

world few competitive advantages are sustainable. At best they may be leverage able.

A leverage able advantage is one that a company can use as a springboard to new

advantages.

the concept of strategy as fit – the notion that a successful strategy is one that is

adapted to meet the characteristics of the firm’s environment and its internal resources

and capabilities.

By the early years of the new decade the need for a change in firms’ strategy priorities

was evident. Two key problems faced senior managers. First, the gains from cost

cutting and corporate restructuring – the low-hanging fruit on the tree of profit – had

been picked. Second, the unremitting quest for shareholder value had unforeseen and

undesired consequences for many companies.


The responses to these problems – in terms of strategic management – were twofold:

first, a “back to basics” movement in which companies have refocused their strategies

upon the fundamental sources of profitability; second, an emphasis on accessing more

complex and difficult to reach sources of competitive advantage.


BIBLIOGRAPHY
APPENDIX

A.

B.

Environmental
School

Cultural School

Positioning Planning
Cognitive School Design School
School School

Learning School

Power School
Configuration School
Entrepreneurial
School

C. SWOT

C. Pyramid

D. Matrix