Strategic Management, Research Paper Example
Words: 2114Research Paper
The process of strategic management entails the analyses, decisions, and actions that an organization must carry out in order to create and sustain their competitive advantages (Dess, Lumpkin, & Eisner, 2010). Defined in its most expansive context, entrepreneurship simply means creating something new and of value. In the specific context of corporate management, the definition of entrepreneurship is the creation of new value by an existing organization or new venture that involves the assumption of risk (Dess, Lumpkin, & Eisner, 2010). Competitive dynamics is the “intense rivalry, involving actions and responses, among similar competitors vying for the same customers in a marketplace” and denotes the competitive dynamics within industries that has the potential to alter a company’s strategy (Dess, Lumpkin, & Eisner, 2010, p.294). Within the existing hierarchical structure of an industry, new entrants may be forced to change their strategies or develop new ones to survive competitive challenges by incumbent rivals (Dess, Lumpkin, & Eisner, 2010). This paper will examine the concepts of entrepreneurial strategy and competitive dynamics, both as individual and team concepts, within the business environment and present a plan of mentoring, training, following, implementing, and incorporating this action in recognition of a potential business opportunity and evaluating changes in the business environment, such as a new technology, sociocultural trends, or shifts in consumer demand, that can be exploited (Dess, Lumpkin, & Eisner, 2010).
Even though entrepreneurial activity is usually associated with start-up companies, new value can be created in many different contexts including:
- Start-up ventures
- Major corporations
- Family-owned businesses
- Non-profit organizations
- Established institutions (Dess, Lumpkin, & Eisner, 2010)
The major explanation for this diversity is the stage of economic development, as indicated by several recent studies, which confirm that during the last two decades, the development of new technologies and emergence of new business models has enabled the shift from large corporations to small and new ventures and entrepreneurship contributes to economic performance by introducing innovation, enhancing rivalry and creating competition (Acs & Amorós, 2008). The subsidiary’s external environment consists essentially of three sets of actors, which are local customers for its products and services, local suppliers of components and services, and local competitors, both indigenous companies and other subsidiaries, and other external entities that are not local, such as customers in other markets (Birkenshaw, Hood, & Young, 2005). Although each organization’s strategic planning model will vary, all versions of strategic plans inevitably include the same basic eight elements, which are: vision statement, mission statement, core values, critical issues, goals, strategies, objectives, and a method for measuring success (McNamara, n.d.). Invariably, anyone in a management position will, at some point, be presented with the task of conceiving a strategic plan and one of the most important elements in planning is to segment the work into manageable increments to get the work done in stages to avoid overwhelming conditions. Summarily, the basic purpose of strategic planning is to determine what an organization’s long or short term goals are, how they plan on achieving those goals, and how they will know if they have been successful with specific emphasis is placed on the entire business (McNamara, n.d.).
Managerial efficiency refers to the ratio of results to resources. The higher this proportion, the more efficient the manager is. Efficient management means supervisory personnel are able to minimize the cost of the resources used to attain performance. Managerial effectiveness refers to the accomplishment of specific organizational goals and objectives. Organizations that use their resources to achieve long- term goals are being effective and the closer an organization comes to achieving its strategic goals, the more effective it is. An organization can be efficient, but not meet their goals effectively or be effective without being efficient (Brown, 2011).
Strategies should not be developed singularly, but within the complexities of the environments they will be used in so that they will be responsive to the external business environment (Thomas, 2007). If strategies are not developed in this manner, the business could become obsolete, so, to avoid such strategic mistakes, firms must become knowledgeable about the business environment (Thomas, 2007). To analyze current trends, many firms use various forecasting models, environmental scanning, and environmental monitoring, which are important in detecting key trends and events (Thomas, 2007). Managers also must aggressively gather and distribute competitor information gained from these three activities used to develop forecasts and scenarios to minimize present and future threats as well as to exploit opportunities (Thomas, 2007). Strategic planning at the installation level, as well as the program and service levels are critical management processes because programs that are well organized, incrementally developed, and effectively implemented reflect the competencies and abilities of the management team to successfully orchestrate and implement strategic planning models (Gary, Kunc, Morecroft, & Rockart, 2008). The absence of a coordinated strategic action plan causes many installations to base their programs, operations, services, and facilities on unreasonable interpretations of objectives that are not pertinent to current data or base plans that align with their operating conditions (Gary, Kunc, Morecroft, & Rockart, 2008). Unsuccessful plans are often based on a “one-shot, meet-the-regulatory-requirement effort” instead of strategies based on ongoing processes and are symptomatic of unproductive or poorly considered planning efforts, which often result in projects that are rejected by validation studies (Gary, Kunc, Morecroft, & Rockart, 2008).
Three key factors include creating a common vision, which gives direction, focus, and commitment to the employees, developing a model for change, and rewarding changes made according to the model (Dess, Lumpkin, & Eisner, 2010). Organizational changes often starts in one unit or subculture of an organization and people tend to behave in ways that provide rewards or reinforcement, so it is important to keep employees motivated through bonuses and incentives for making the necessary changes (Brown, 2011). Tools for change are vital because they provide the employees with information to make the changes, support and collaboration from necessary departments, and the resources required to implement the changes (Brown, 2011). There has been a profound change in business school thinking away from a concentration on big business and the rise of the multi-divisional firm towards a greater focus on the entrepreneur and entrepreneurship as legitimate areas of study. Although strategic planning information is vital for making budgeting decisions, the chief function of the strategic plan is to guide the agency’s management activities, provide employees with a shared purpose and motivation through clear articulation of the values and goals of the corporation, and present a means of communicating with people inside and outside the agency (Grant, 2010). A concise strategic plan will allow the reader to easily understand:
- The overall mission, including the activities of the highest priority activities and its primary customers (Grant, 2010).
- The bureau’s operating environment and organizational factors (Grant, 2010).
- Specifies the statewide results, outcomes, and goals necessary to carry out its mission (Grant, 2010)
- Established objectives the agency can measure to determine the overall progress to achieving the goals (Grant, 2010)
- Specifications regarding how the agency will measure progress during the planning period (Grant, 2010)
- Strategies the agency intends to use in pursuit of the objectives (Grant, 2010)
- Exact measures of the additional resources the company will need to successfully implement the indicated strategies (Grant, 2010)
In general, the act of planning helps make sure organizations remain relevant and that they are able to properly respond to the needs of the communities they are intended to serve while contributing to the growth and stability and growth of the corporation at large (McKay, 2001). In addition, planning provides a foundation from which the company can measure their progress and assess the resulting impact of the changes being facilitated, encourage program development, and allows the company to orderly and systematically determine their future endeavors (McKay, 2001). From a managerial perspective, planning enables the setting of policies and goals that will guide the business and provide a clear focus executive and senior staff members can use for program implementation and agency management (McKay, 2001). In most cases that detail failing entrepreneurial strategic plans, they fail because they are inconsistent in their focus and scope, do not fully address vital sustainability issues, and do not fully account for the competitive dynamics of the industry, which prevents the plan from being effective in successfully achieving the intended goals (Lachman, Pint, Cecchine, & Colloton, 2009). In order to address the issues of inconsistence, Army installations have begun to create installation sustainability plans (ISPs), which establish long term goals that address the mission, community, and environmental issues developed through a strategic planning process (Lachman, Pint, Cecchine, & Colloton, 2009). This allows the strategic plan to effectively function as a management tool, which is important to allowing agencies to be flexible in their management regimes ad to assist in identifying and achieving agency goals and objectives (Thomas, 2007). Overall, strategic planning is intended to be “…a long-term, future-oriented process of assessment, goal setting, and decision-making that maps an explicit path between the present and a vision of the future – usually three to five years” (Thomas, 2007).
The new competitive landscape for today’s businesses is quickly changing and transforming the industry, which is why idea innovation is clearly needed to overcome the strong and overly disciplinary focus of traditional business regimes (Thomas, 2007). Entrepreneurial strategies and competitive dynamics analyses allows businesses to exert better management and control over the image they project to the world, which makes it possible for them to attract the most profitable investors, clientele, and talent so that they can successfully compete in global markets for the swiftly depleting allotment of available resources (Berthon, Holbrook, Hulbert, & Pitt, 2007). This enables strategic management to serve as a form of preemptive management and control, providing a universal definition of the city’s image for a global forum. Competitive dynamic analysis is used for reactive and proactive purposes in international mediation to ease the process of accession to the various international or other multilateral organizations to repair reputations damaged by legacies of hard power, or to downplay unfavorable international media attention (Berthon, Holbrook, Hulbert, & Pitt, 2007). In domestic contexts, entrepreneurial pursuits are used to manage public opinion by encouraging positive perceptions of international decisions. Providing professional development and technical assistance to all staff members as a means to increase their level of performance, professional standards, performance management, ongoing continuing professional development (CPD) is also a part of competitive dynamics because it helps ensure that the staff and the company remain competitive.
Examination of the concepts of entrepreneurial strategy and competitive dynamics, both as individual and team concepts, within the business environment helps managerial staff present a plan of mentoring, training, following, implementing, and incorporating this action in response to potential business opportunities and necessary changes in the business environment, such as a new technology, sociocultural trends, or shifts in consumer demand, that can be exploited (Dess, Lumpkin, & Eisner, 2010). Although the strategic plan has unparalleled significance in aligning the functions of the company by providing a steadfast definition of the organization’s values, it is also a powerful tool for merging the community vision and mission with those of the company (McKay, 2001). This provide a consensus on why the organization exists, what goals or outcomes it seeks to achieve, what it stands for, and whom it serves (McKay, 2001), which reaffirms the overall relevance of the company within the organization and the community as a whole . In addition, specific mandates that indicate what personnel must or must not do based on its articles of incorporation or bylaws are clearly defined, which reaffirms the company’s mission, vision, and core values (McKay, 2001).
Acs, Z.J. & Amorós, J.E. (2008). Entrepreneurship and Competitiveness Dynamics in Latin America. Jena Economic Research Papers, 059.
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Brown, D.R. (2011). An Experiential Approach to Organization Development. (8th Ed.). New Jersey: Pearson Education.
Dess, G. G., Lumpkin, G. T., & Eisner, A. B. (2010). Strategic management creating competitive advantages, (5th Ed.). New York, NY: McGraw-Hill/Irwin
Gary, M.S., Kunc, M., Morecroft, J.D.W. & Rockart, S.F. (2008, Winter). System dynamics and strategy. Wiley InterScience, System Dynamics Review, 24(4), 407–429. (10.1002/sdr.402)
Grant, R.M. (2010). Contemporary strategy analysis instructors’ guide: An overview. (7th Ed.). Retrieved from www.contemporarystrategyanalysis.com
McKay, E.G. (2001). Strategic planning: A ten-step guide. MOSAICA. Retrieved from http://siteresources.worldbank.org/INTAFRREGTOPTEIA/Resources/mosaica_10_steps.pdf
McNamara, C. (n.d.). Basic overview of various strategic planning models. Free Management Library. Retrieved from http://managementhelp.org/strategicplanning/models.htm
Lachman, B.E., Pint, E.M., Cecchine, G. & Colloton, K. (2009). Developing Headquarters Guidance for Army Installation Sustainability Plans in 2007. RAND Corporation. Retrieved from http://www.rand.org/pubs/monographs/2009/RAND_MG837.pdf
Thomas, H. (2007). An analysis of the environment and competitive dynamics of management education. Journal of Management Development, 26(1), 9-21.
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