The resource based view is defined as a business management tool utilized to know the strategic resources available to firm. The basic principle of the resource based value is that the basis for a competitive advantage of a company lies primarily in the application of the group of valuable resources at the firm’s disposal. In order to change a short-run competitive advantage into a maintained competitive advantage requires that these resources are heterogeneous in nature and not perfectly mobile. In other words, this will change into valuable resources that either perfectly imitable or substitutable without great effort. If these conditions are remained, the company’s group of resources can help the firm sustaining above average returns. The recent dominant view of corporate strategy – Resource Based Theory or Resource Based View (RBV) of company – is based on the theory of economic rent and the view of the company as Continue reading
Strategic Management Concepts
Business Reconstruction
In the case of business reconstruction, a new company (hereinafter referred to as ‘transferee company’) is formed, the existing company (hereinafter referred to as transferor company’) is dissolved by passing a special resolution for members voluntary winding up and authorizing the liquidator to transfer the undertaking, business, assets and liabilities of the transferor company to the transferee company. The old company goes into liquidation and its shareholders, instead of being repaid their capital are issued and allotted equivalent shares in the new company. Consequently, the same shareholders carry on almost the same undertaking or enterprise in the name of a new company. Halsbury’s Laws of England defines business reconstruction thus: “While an undertaking being carried on by a company is in substance transferred, not to an outsider, but to another company consisting substantially of the same shareholders with a view to its being continued by the transferee company, there is Continue reading
The Impact of Organizational Culture on Business Strategy
Organizational culture is an essential aspect to a company that can influence the strategy of the organization. Organizational culture can define as one organization share their own traditions, values, policies and attitudes during their daily operation. Organizational culture is a basement of company strategy. Company can achieve their business goal very easily if they put organizational culture into their business vision and mission; make sure the culture can match with company strategy, in this way company culture can push their business keep going. Each of organization has their unique culture which the company can benefit from it. The culture can give a large effect to employees, even the company’s customers. As long as staffs know about the culture of company, they know the core business of the organizational hence the strategies they make will surround the organizational culture and that will not deviate their organizational goal. On the other hand, Continue reading
Most Important Strategic Options in Business
Based on a careful analysis of the external and internal business environment and the company’s profile, various strategic options are available for a business. An analysis of the external environment of business might involve the use of industry analysis, PEST or an equivalent, and also Porter’s five force analysis, which would help to identify the opportunities and threats that may exist for the business. For the internal analysis a company would carry out a resource audit, examining physical, human, and financial resources together with intangibles such as brands, patents, etc and would then look at its value chain as a means of assessing the efficiency and effectiveness of all aspects of its operation. Any element of the value chain is capable of adding or destroying value. The aim of the internal analysis is to identify the company’s strengths and weaknesses and as a result the company should be able to Continue reading
Need of Corporate Vision Statements
A corporate entity needs a vision because “where there is no vision, the people perish”(Proverb 29:18). This quotation from the holy writ aptly captures the essence of vision both at individuals and corporate level. Vision is important in that it guides and perpetuates corporate existence. Vision is viewed as a mental picture of a compelling future situation. It originates from creative imagination, the act or power of perceiving imaginative mental images or foresightedness. Corporate vision could be thought of as related to intuition. This is, however, not to eliminate other sources of corporate vision. Corporate vision can be associated with external agencies imposition of strategy or vision and, they can be deliberately formulated as part of strategic planning process. Notwithstanding the process leading to the emergency of vision, from strategic management perspectives, corporate vision creates a picture of a company’s destination and provides a rational for going there – Somewhat Continue reading
Organizational Development Through Management by Objectives (MBO)
Management by Objectives (MBO) program begins with the top management providing clear statement of organizational purpose or mission so that individual member can align their goals with critical organizational objectives. This statement can then serve as a guide for developing long range goals and strategic planning. Departmental and individual goals can then be derived from organizational goals. Organizational Development through MBO approach generally involve the following stages: Formulating Long Range Goals: Guided by the organization’s mission statement, senior management defines critical long term objectives and determine how available resources will be used to accomplish these goals. This process then leads to strategic planning activities which describe how the organization will cope with its changing environment. Developing Specific Objectives: In this step, broad organizational objectives are translated into specific measurable outcomes with clearly stated time-frames Although organizational objectives may include areas such as profitability, market share, and quality, Continue reading