DEFINITION OF STRATEGY
REASONS FOR STRATEGIC PLANNING
APPROACHES TO STRATEGIC MANAGEMENT:
THE ECONOMIC CRISIS/ TURBULENCE
STRATEGIC MANAGEMENT IN ECONOMIC TURBULENCE
Strategy is the plan to achieve a set goal; it creates a direction for the future of any organization. Strategic planning is very vital to the efficiency, effective running, growth, development and continuity of a firm. Various definitions, approaches and theories have been put forward by scholars to explain strategic management, all looking at the process of strategy at different angles, from two approaches, the emergent and the Prescriptive approaches, trying to propose superiority on either approaches. Some scholars like Porter even advocate other alternative to strategic management. The truth is that, there is no best approaches just a management effort to seek out the best way for survival in this changing and dynamic business world and now in this period of economic turbulence.
What is Strategy?
From the Greek word ‘strategos’ which means ‘what the general do’, the word strategy dates back to the 1960s where scholars differentiated the schools of thought which has been influencing business life since then. Various definitions have been given to the term ‘Strategy’, according to Johnson and Scholes, strategy is the direction and scope of an organization over the long-term which achieves advantages for the firm through its manipulation of resources within a changing business environment to satisfy stakeholders. James Quinn (1998) saw strategy as the pattern or plan that integrates a firm’s major goal, policies and action sequences into a cohesive whole. To organize and allocate the firm’s resources efficiently based on its internal strengths and weaknesses, predictive environmental changes and competitors. Kenneth Andrews (1998) explains corporate strategy as the pattern of decisions in a company that determines and reveals its objective, purpose or goal, produces the principal policies and plans to achieve those goals, and defines the range of business to be pursued.....; Lynch (2009), believes it’s the identification of the purpose of an organisation and the plans and actions to achieve that purpose. Porter (1996) says it’s about achieving competitive advantage through being different. Rowe et al. (1986) says it is the decision process that conjoins the internal capacity of the organization and the opportunities and threats from its business environment. And so on, the list of definitions is endless, but I believe that however strategic management is defined, the major issue is using available company resources to compliment the firm’s external business environment i.e. PESTLEC Model. Methods of approach may differ, but the end result for any firm should be same, to satisfy its stakeholders. The essence of strategic management is to address the over-all long term directions of the company, using SWOT analysis to create the appropriate strategy to cushion changes in the future of the business. Stoner identifies 5 stages of a logical decision making process; the investigative stages (gathering all relevant information on the situation of the business environment PESTLEC factors), alternative decision development stage, evaluation stage, selection stage, and implementation and follow-up stage. The whole framework of strategy management is integrating corporate objectives with management activities supported by efficient operation functions to achieve effective organizational growth and development at all times especially in these present tough turbulent economy. REASONS FOR STRATEGIC PLANNING