The concept of corporate strategy battles with the perennial issue of determining the overall purpose and scope of an organisation. From a contemporary perspective, it involves the specification of long-term goals and objectives that will add value to the business and cope with the uncertainty of modern times. As a practice, it consists of adopting courses of action and allocating resources in ways necessary for carrying out the overall objectives. Widely recognized as the most principal theories for strategy development, the prescriptive and emergent approaches must be examined within the context of an increasingly dynamic, highly competitive and global business environment. Powerful external forces are driving organisations to reduce costs, enhance processes and identify new opportunities for growth. Many businesses are compelled to make dramatic improvements not only to compete and prosper but also merely to survive. This brings to the fore the importance of determining how effectively the prescriptive Continue reading
Strategic Management Concepts
Evolution of Corporate Governance in India
The focus has shifted to Corporate Governance (CG) time and again on account of repeat emergence of financial crises across the global, as well as frequent instances of financial reporting failures. In competitive markets, Corporate Governance is a reflection of market disciplines, and forms the cornerstone for efficient allocation of resources. CG enables managements to take decisions, while at the same time being accountable for the decisions taken. Securities and Exchange Board of India (SEBI) appointed the Committee on Corporate Governance in May, 1999 under the Chairmanship of Kumar Mangalam Birla, to promote and raise the standards of Corporate Governance, in the particular context of companies of the Committee included (i) to suggest measures to improve Corporate Governance in the listed companies, in areas such as continuous disclosure of material information, both financial and non financial, manner and frequency of such disclosures, and the responsibilities of independent Continue reading
Multidivisional Organizational Structure
In Multidivisional Organizational Structure, each business unit is placed in a self-contained division and supplied with all support functions. Thus each part essentially operates separately from the other parts of the company. The office of corporate headquarters is created to control and oversee the divisions. Headquarters also provides corporate support functions, such as finance and R&D. Divisional managers have operating responsibility; corporate managers have strategic responsibility. Each division is treated as a profit center and can adopt the structure and control systems that best serve its strategy. A multidivisional structure has several advantages. Enhanced corporate financial control is one advantage of the multidivisional structure. The profitability of the different divisions is very clear, allowing the corporate staff to readily determine the best resource allocation scheme. Enhanced strategic control is another benefit, because corporate staffs are freed from operating responsibilities, and can concentrate on corporate strategy. The structure overcomes limits to Continue reading
Stakeholder Expectations and Corporate Social Responsibility (CSR)
Stakeholders can be primary or secondary. Primary stakeholder groups comprise of employees, customers, investors, suppliers, government, and community with whom the corporation may have a formal, official or anybody who has claimed on the firm’s even though it is not significant. They consist of both internal and external stakeholder groups. Internal stakeholders comprise of employees and investors which are shareholder or bondholder, external stakeholders are the customers, communities, suppliers, government, and the environment which claimed on the firm’s if any damage occurs. Secondary stakeholders are media and special interest groups towards a firm where they didn’t have any contact with the firm, they just act like a spectators. Stakeholder theory has a number of strengths and weaknesses in its capacity to address issues of low-wage work. Classifying a group as a stakeholder has moral import and significant outcomes which means that the classifying the stakeholder can ensure that their problems Continue reading
Strategy Implementation
Business Strategy can be described as the plan which guides organizations in the selection and application of resources that will help them obtain a competitive advantage. It is more concerned with how a business competes in a particular market. It consists of strategic decisions about the choice of products, meeting the needs of customers, exploiting/creating opportunities, etc. In simple terms, it can be defined as a plan that says where a business/organization wants to go and how it envisages getting there. Often the difference between the market leaders and other players in the industry is the ability to execute strategy. Effective strategy implementation involves getting people’s buy in, choosing the right metrics and tracking performance on an ongoing basis. Much of strategy implementation involves managing change. So the behavioral issues involved, must not be overlooked. Effective strategy implementation allows the company to be more successful in pursuing a cost leader Continue reading
Importance of Change in an Organization
One can try to predict the future. However, predictions produce at best a blurred picture of what might be, not a blueprint of future events or circumstances. The effective and progressive management of change can assist in shaping a future which may better serve the enterprise’s survival prospects. Change will not disappear or dissipate. Technology, civilizations and creative thought will maintain their ever accelerating drive on-wards. Managers, and the enterprises they serve, be they public or private, service or manufacturing, will continue to be judged upon their ability to effectively and efficiently manage change. Unfortunately for the managers of the early twenty-first century, their ability to handle complex change situations will be judged over ever decreasing time scales. The pace of change has increased dramatically; mankind wandered the planet on foot for centuries before the invention of the wheel and its subsequent “technological convergence” with the ox and horse. In Continue reading