An industry-based view, illustrated by Porter (1980), decides firm strategy and performance. Sustainable competitive advantages can be discovered by industry analysis and by selecting from the generic strategies. The competitive strength and the firm’s ability can maintain positional advantages through the efficient and effective implementation of competitive strategy. Secondly, a resource-based view (RBV), was demonstrated by Barney (1991), advocates that firm-specific differences determine strategy and performance. RBV emphases internal resources and capabilities of organisations. RBV portraits companies as idiosyncratic bundles of resources and capabilities that are available for distribution by the organization’s business units. Heterogeneity in the resources and capabilities is the reason of variations in organization performance. Sustainable competitive advantage is not the result of correct position in the external environment but is derived from the organization’s internal resources, which are valuable, inimitable, rare, and nonsubstitutable. Industry-based view and resource-based view are complementary because they settle the relationship between Continue reading
Strategic Management Basics
Impacts of Strategic Change on Organziations
Businesses usually face the complicated process of alternating culture, leadership, values, and structure while executing strategic change. However, no matter how complex these means are, they are performed mainly to advance the company’s strategy to thrive in the future. In other words, strategic changes tend to be conducted in terms of meeting the latest trends in the industry to remain equal with rivaling businesses of a similar sphere. Thus, before implementing such alternation, it is vital to analyze the possible impacts on the other parts of the company operating. Firstly, it is significant to start changes when the business is thriving and not in a crisis. Specifically, any alternations take a considerable amount of effort and funds; hence it might be impossible to perform them with the deficiency of at least one factor. Every employee should be involved in the process of a proper transformation execution and not only top Continue reading
Competitive Strategies for Business
Competitive strategies are concerned with how a strategic business unit achieves competitive advantage in its domain of activity meanwhile competitive advantage is about how an strategic business units (SBU) creates value for its users both greater than the costs of supplying them and superior to that of rival SBUs. An SBU can have lower costs than its competitors or it can have products or services that are so exceptionally valuable to customers that it can charge higher prices than competitors. There are two basic criteria that can help in identifying appropriate SBUs: Market-based criteria and Capabilities-based criteria. For Market-based criteria, if the parts of an organization are targeting same types of customers through the same sorts of channels and facing similar competitors, they might he regarded as the same SBU. As for Capabilities-based criteria, if they have similar strategic capabilities then the parts of an organization should only be regarded Continue reading
The Driving Forces in an Organization
Every organization has different structure. Those structures created as achieved organization goal. There are things, situations, events etc. that occur within an organization that affect the way an organization operates, either in positive way or negative way. These things, situations, events that affect the way an organization operates are called driving forces. There are two kinds of driving forces as follows: 1. Internal Driving Forces Internal driving forces are those kinds of things, situations, and events etc. that occur within an organization and basically under the organizations control. Once again these internal driving forces can affect the organization in either a positive or negative way. For example, decreased job satisfaction may lead to increased absenteeism, more voluntary resignations and even strikes. In turn, such events will often lead to changes in management policies and practices. There are many kind of internal force drives. Some are explained here; 1.1 Strategic Sometimes Continue reading
Strategic Planning – Meaning, Process and Approaches
Strategic planning is the process of deciding on the goals of the organization, on changes in these goals, on the resources used to attain these seals, and on the policies that are to govern the acquisition, use and disposition of these resources. The word strategy is used here in its usual sense of deciding on how to combine and employ resources. Thus strategic planning is a process having to with the formulation of long-range, strategic, policy-type plans that change the character or direction of the organization. In an industrial company, this includes planning that affects the goals of the company, policies of all types (including policies as to management control and other processes); the acquisition and disposition of major facilities, divisions, or subsidiaries, the markets to be served and distribution channels for serving them; the organization-structure (as distinguished from individual personnel actions); research and development of new product lines (as Continue reading
The Effects of Organizational Culture on Strategic Management
Organizational culture is one of the important parts of the strategic thinking and it can impact on company’s employees, customers, suppliers and other different targets. The owner of the company can create their own strategy on the alignment of unique organizational culture with a competitive space. It also involves how organizational culture affects its strategic decision, options and actions. Culture of an organization refers to the unique configuration of norms, beliefs, ways of behaving and so on that characterize the manner in which groups and individuals combine to get things done. It also can define that the set of important assumptions that members of an organization share in common. There is other definition of the organizational culture involves assumptions, adaptations, perceptions and learning. Organizational culture have three layers. First layer includes artifacts and creations, such as annual report, a newsletter, wall dividers between workers and furnishings. Second layer includes values, Continue reading