Organizations nowadays look towards strategic thinking as a substitute for traditional directions of strategic management which is focused on strategic planning. Strategic thinking has become an important key to success to every organization and became the major pathway that management must pass through, so as to face the challenges of modern day environment. Globalization had brought a lot of impacts on organizations. Those impacts made organizations particularly the Small and Medium Sized Enterprises SMEs to be aware of any changes that are happening everyday. The main reason for doing so, is to be able to compete with each other and in order to keep surviving in the business area. Organizations also need to adopt a good strategy to give satisfaction to its internal environment such as suppliers and employees of the organization, so organizations could never stand without having strategic thinking which helps to predict the present situation of the Continue reading
Strategic Management Concepts
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
Market Activated Corporate Strategy (MACS) Framework
Market Activated Corporate Strategy (MACS) Framework was developed in the late 1980s. But it wasn’t developed at once. There were several predecessors to this framework. Once of the first can be the BCG Growth-Share Matrix. This matrix represents the market growth rate and the relative market share, and according to the level, the business units were divided into 4 categories. It was used very often before, but over the time more comprehensive tools were designed, to eliminate the weaknesses of BCG Matrix, like the fact that is takes into consideration only two factors, avoiding many many others that have a huge impact on profitability. BCG Matrix also assumes the independence of each business unit, therefore it leads to underestimation of the interconnection that often exists (as “Dogs”, for example, sometimes help in gaining competitive advantage) Another predecessor is the old nine-box matrix, developed by McKinsey. It covers industry attractiveness and 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
Benchmarking as a Strategic Business Tool
Benchmarking is the process of continuously measuring and comparing the business processes against comparable process of the leading organization to obtain the information that will help the organization to identify and implement improvement programs. Benchmarking as a tool stems from the early 1980s when organisational specialists from Xerox were discussing the big performance gaps between Xerox and its competitors. These specialists found two major applications for the process. First, benchmarking can be used to understand competitors and any other organisation by isolating and analyzing common functions and comparing the company’s own practices with them. Second, benchmarking can be used to compare the details of processes used in design, manufacture, marketing and services, as opposed to just the ï¬nished result In simple words, benchmarking is an approach of setting goals and measuring productivity based on best industry practices. It developed out of need to have information against which performances can Continue reading