Analysis of the different approaches
Analyse Strategic Management Approach.
Strategic management is mainly based on the management of the resources of the organization for the purpose of achieving the goals and the objectives. This process further involves the outlining of the strategies that need to be developed for the successful management of the organizations. The objectives related to strategy implementation are mainly based on the business culture, the competencies of the employees and the skills. The structure of the company is also related to the achievement of the various stated objectives. The organizations need to manage the strategies and change them on a regular basis so that they are able to operate in the changing business environment (Hill, Jones and Schilling 2014).
The upper level management is mainly responsible for the formulation of various strategies that are related to the achievement of the objectives. The employees need to be dedicated to the strategy which are based on the ideas and the actions that are suggested by the lower level employees. The strategic management process further leads to the successful communication of the objectives and goals of the organizations among the employees and the managers. The strategic management based process of the organization is related different approaches that are used by the organizations. The three strategic management approaches that will be discussed and analysed in the report are, the stakeholder approach, the dynamic capabilities approach and the sustainable approach (Wheelen et al. 2017).
The report will be based on the analysis of these three approaches to strategic management. The ways by which these approaches have been used in the modern organizations are also analysed in the report. This analysis is further based on the examples of three different organizations which have used these approaches in the practical field for the management of the strategies.
The three approaches to strategic management that have been chosen for the analysis are, the stakeholder approach, dynamic capabilities approach and sustainable approach.
Stakeholder Approach – The stakeholder approach in management mainly suggests that the managers of the organizations need to implement the various processes that are able to satisfy the needs of the stakeholders so that the long-term success can be ensured. The organization can take advantage of the imperfections in the market with respect to the degree of the participation of various groups (Meyer, Neck and Meeks 2017). This approach further emphasizes on the active management of business environment, promotion of shared interests and the relationships. This approach mainly arises from the stakeholder theory which is a counterpart of the dominant way by which the business organization can be understood. The values of the firm can be reinforced by the implementation of the stakeholder approach and the competitive advantage can be created in the process (Morschett, Schramm-Klein and Zentes 2015).
The stakeholder approach to strategic management is mainly based on the ways by which the various stakeholders of the company are managed based on the strategic goals that are set by the managers. The stakeholders of the company are important for its successful operations in the business environment. The shareholders are considered to be the largest stakeholders of the organizations in the modern business environment (Frynas and Mellahi 2015). According to the stakeholder approach of strategic management the decisions taken by the organization are guided by the concerns for interests of various groups other than the shareholders which are, the employees, the suppliers and the customers of the organizations. The stakeholder approach of strategic management has been introduced with the help of the stakeholder theory (Durand, Grant and Madsen 2017).
Dynamic capabilities Approach – The dynamic capability approach is mainly based on the capability of the organization to adapt to the resource base in a purposeful manner. The term dynamic capabilities are further related to the ability of the firms to react in an adequate and timely manner to the external changes that require the combination of the multiple capabilities. The concept of dynamic capabilities is similar to the operational capabilities that are possessed by the modern organizations. The framework related to dynamic capabilities has been designed by Amy Shuen, who is a researcher and writer of the strategies that are based on the success of the business (Chen, Delmas and Lieberman 2015).
The major assumption that has been made in this framework is based on the creation of the short-term competitive positions which can be further developed into the long-term competitive advantages of the firms. The view of the dynamic capabilities of the firm is based on issue which is related to the competitive survival of the firms to change the contemporary conditions of business. The improved Dynamic Capabilities framework is focussed on the ability of the firm to reconfigure the capabilities based on the technological changes in the business environment (Baumgartner and Rauter 2017).
The dynamic capabilities of the firm are thereby based on the analysis of the sources related to the creation of wealth and the capturing by the firms. This approach further analyses the firm-level strategies which can be used for safeguarding and sustaining the competitive advantage of the firms. The approach of dynamic capabilities to the strategic management is quite promising in terms of the future potential of research which is an aid to the management related to the gaining of competitive advantage in the business environment which is increasingly demanding in nature (Karadag 2015). The global approach of competitive battles in the high-technology industries are based on the information services and the modern technologies that are used by the modern business organizations. This approach of strategic management helps the firms to achieve the new types of competitive advantage. This helps the firms to create a unique position in the market.
Sustainable Approach – The sustainable approach to strategic management is mainly based on the various principles and practices that are related to sustainability in the organizational strategies. The sustainable strategy is based on the development and integration of a detailed vision based on sustainability into the long-term plans of the organization. The execution of sustainable strategy is a complex process which is mainly based on the sustainable development of the organization in the industry in which it operates. This further leads to the increase in the productivity of the organizations and effectiveness of the organizational processes also increase in the process (Hubbard, Rice and Galvin 2014).
The concept of sustainability is a holistic perspective of the development of the organization based on the integration of organizational goals. The idea related to sustainability has been implemented by many other organizations so that the long-term strategy can be formulated based on the expectations of the external environment. Sustainable approach of the strategic management has thereby led to the reduction of risks based on the realization of strategies. The concept of sustainability is however still quite rare for the organizations which operate in the modern business environment. The sustainability based approach to management helps in bringing discipline in the strategic management process of the organizations (Simon, Fischbach and Schoder 2014).
The first aspect of the organization that is associated with the sustainable approach of strategic management is related to the corporate values that are followed by the organizations. The second aspect is based on the area of the employees which is quite significant related to the necessity of providing attention to the objectives that have been accomplished by the company. The sustainable approach is based on the organizational outcome rather than the financial outcome. The employees of the organizations are also involved in the process of decision-making when the sustainable approach of strategic management is used. The third aspect is based on the link that is established between the employees and the resources of the company (Sakas, Vlachos and Nasiopoulos 2014). The attitudes that are depicted by the managers towards the execution of sustainable strategy is important in the execution. The fourth aspect is based on the association of sustainability with strategic level and it encompasses the strategic goals and the strategy itself.
The example of an organization which has used the stakeholder approach of strategic management is Starbucks. The strategies that have been formulated by Starbucks is based on the inputs that are provided by the stakeholders or the customers of the company. The feedback that has been gathered by the company has been used for the purpose of deciding the ways of coffee purchasing. The Guidelines and Program based approach is innovative in nature and has helped the company to decide the products which they wish to supply to the customers. The company has gathered feedback from the customers and other stakeholders and the products have been made according to their choices (Starbucks Coffee Company. 2018). The Coffee Sourcing Guidelines approach was launched in the year 2001. The guidelines were mainly based on providing an encouragement based on the sustainable approach towards the production of the high quality coffee. The company has thereby come a long way in the various steps that have been taken based on processes of producing coffee and other coffee based products for the purpose of creating a loyal customer base. The business practices of the company are mainly based on the long standing guiding based principles that have been developed by the company (Kenworthy and Verbeke 2015). Starbucks has been also acknowledged as a leader in the industry of specialty coffee. The main aim of the company is not only to be known for its high standards of coffee production, the company has also tried to provide advantages to the farmers and the growers. The farmers are also considered to be major stakeholders of the company. The organization has always encouraged the local farmers to take part in the various organizational processes. This approach of stakeholder engagement has been viable for the increase of the revenues of Starbucks in the market (Andreeva and Kianto 2016). The stakeholders are also satisfied by the importance that has been provided to them by the company. The major benefits of this approach to Starbucks will be the formation of a loyal customer base of the company in all parts of the world. The issues that can be faced by the company related to the implementation of this approach is based on the hindrance or resistance that can be provided by the employees regarding the implementation of new strategies. The global organization will further need to take care of the capabilities of the company to implement the strategies in all the operations at the same time (Popkova et al. 2015).
The dynamic capabilities are an important part of the successful operations of a firm in the modern business environment. The capabilities of an organization are able to provide the strength to operate in the changing business environment. One such example is Apple. The company has been known in the market for its growth in the last few years of its operations in the market. The financial strength of Apple has been the major part of the dynamic capability of the company. This has provided the company with a cushion which has provided the capability to operate in an effective manner in the organizational environment (Apple. 2018). The strong financial back up of the company has been the major reason behind its ability to provide the best services to the customers and creating a highly skilled and qualified team. The dynamic capabilities of the company have thereby been used in the strategy formation of Apple. The company has developed strategies based on its capabilities to successfully implement these strategies in the organizational processes. The huge investments that are made by Apple in the research based activities have been facilitated by the dynamic capabilities that have been possessed by the company (Apple. 2018). The dynamic capabilities approach has been quite successful for the proper operations of Apple in the technology industry (Guerras-Martín, Madhok and Montoro-Sánchez 2014). The company has been able to create a different position by the huge investments that have been made in the research and development based capabilities of the company. The main benefits that can be realized by Apple with the help of this approach is based on the capability of the company to invest more in the various activities for the purpose of creating a competitive advantage in the industry. The major limitation or issue can be the extensive usage of capital for research activities which can cause immense pressure on the financial health of the company in the future (Dagnino, King and Tienari 2017).
The example of an organization which has used by sustainable approach to strategic management in an effective manner is Ikea. The company has recently announced its new sustainability based strategy which is quite ambitious in nature. The organization has been able to make sustainability an integral part of its operations in the whole world. The three major areas which have been focussed under the sustainability strategy of Ikea are, planet, people and positive. The company has thereby formed strategies which are based on the offering of high quality products to the customers (IKEA. 2018). Ikea further aims at becoming resource and energy independent. This includes the production of renewable energy and the consumption of this energy in the buildings and stores of the Ikea group. The organization has also been taking the lead in the creation of a better life for people and the communities. This also includes the development of the better places of work in the entire supply chain of the company. This also includes the focus which is based on the compliance of the sustainability based activities. The shared values of the company are also taken into consideration in the sustainable strategy of
Ikea (IKEA. 2018). The company has also tried to go beyond the reach of its supply chain for the purpose if achieving the shared values. The usage of the sustainability approach has been quite successful for Ikea in the past and is likely to provide more benefits to the company in its future operations as well. The company has been able to strengthen its sustainable position in the industry with the help of the various strategies that have been formulated for ensuring the sustainable operations of Ikea. The limitations or issues in the implementation of these strategies can be the lack of participation from the various employees of the company. The shared values need to be thereby implemented in a successful manner (Sakas, Vlachos and Nasiopoulos 2014).
Conclusion
The report can be concluded by stating the different approaches to the strategic management can be implemented based on the needs and the demands of the companies. The different types of companies aim at using different strategies which are related to their objectives in the market and the ways by which they wish to operate. The analysis has shown that Starbucks has implemented the stakeholder approach for the purpose of strategic management. On the other hand, Apple has used the dynamic capabilities approach for managing the strategy. Ikea has used the sustainable approach to create its position in the market.
References
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