Background
Discuss about the Strategic Management Entrepreneurial Opportunistic Approach.
Many businesses in the recent past have been keen on strategic management. The top management work towards business mission using the strategies. Also, other managers in different departments emphasize on product strategies. As such, it is true to deduce that strategies in the business entail ranging from research and development to sourcing raw material and offering the service or product in the market (Hitt, Ireland, and Hoskisson, 2012). Currently, it is too obvious for any organization to plan without strategies and the planners have turned out strategists. Ideally, the focus of managers has changed. Unlike before where managers dwelled more on the technicalities of planning stages, today they show more interest in the substantive issues leading to the stability of organizations for a long duration. This means a lot of transformation has occurred in the methods of planning in a businesses and has sure been felt in the environment, especially in large enterprises (Schot and Geels 2008, p. 537-554). The business have been making gradual steps in coping up with competitive environment and emerging technologies instead which an appropriate entrepreneurial style. Basically, they have been incorporating activities in that of course are well thought business strategies coherently, consistently and fast enough. In a sum, strategic management refers to the process that a business sets long term goals and objectives, depending on where the business owners plans to put the company in coming years. For example, an organization may decide to create strategic goals to be known internationally, identify new markets, franchising the company and being unique from its competitors (Barney and Hesterly, 2010). Some of the strategic management approaches that an organization can incorporate include, Entrepreneurial opportunistic approach, Formal structured approach, and Adaptive approach.
The entrepreneurial opportunistic approach is an approach that is used by business that are managed by heads of family and is common for by putting the organization at the front against all environmental odds. In reality opportunistic is perceived with a negative notion where an opportunistic person cannot be trusted. Nonetheless, entrepreneurs are supposed to seize opportunities and adjust with the current economy besides expound on their business opportunities (Carsrud and Brännback, 2011, 9-26). That is by rising and leveraging on different market trends and the behavior in consumers. Which means there is no harm when an entrepreneur is an opportunist as they have to generate income all round; to the investors and themselves(Harris andSapienza, 2009, p. 417)
Entrepreneurial Opportunistic Approach
There are a number of examples across the continent which have used Entrepreneurial Opportunistic Approach and improved their growth. The management of Reliance Industries, Dhirubi Ambani acknowledged the business opportunity in India, which apparently was not yet identified earlier. The fabric prices was too high but still saw the market perform extremely well. From this idea, the chairman introduced a couple of projects with similar approach and to date, the company, Reliance is one of the top private companies in India. Similarly, the Hero group of Ludhiana has benefited from the approach in strategic management. In particular, the organization increased four more stroke motorcycle in its products as a section of its personal transport. This was not very lucrative as such but the chief executive officer of the company was sure human beings in future are bound to use motor cycles and not sophisticated means like scooter for personal transport. With rising costs and speed during transportation, motor bikes have highly placed to be ahead of scooters. The automotive company is today is doing well in the sale of motorcycles and is probably the best brand in two-wheelers
Entrepreneurial Opportunistic Approach is beneficial to business that their main strategists have very high expectation in the results achieved at the end of the strategy. The strategists are capable at the top without necessarily relying on other stakeholder of the company (Frese and Gielnik, 2014, p. 413). However, the strategists must be aspired enough, possess high level of vision in regard to the future and be willing to take risks. The main advantage of the approach is that, the decision that are made cover beyond the rules in management guidelines. This is why organizations with entrepreneurial opportunist approach in strategic management do better compared to other organization that rely on the usual management. Several illustration from different examples confirm the manner businesses have improved by using the approach(Allen, 2015).
The implementation issues in Entrepreneurial Opportunistic Approach involve the key characteristics of strategy making in the approach. One, the target in this approach is purely to capitalize the available opportunities instead of problem solving. The business continuously seeks for more opportunities in its surrounding in all possible ways, weather formally of not. Secondly, decision making is left for the entrepreneur who is guaranteed all the freedom. This objective is influences the next implication issue depending on the decisions made by the entrepreneur. The decisions are made according to the environmental uncertainty, thus guide the organization to progress and even better as long as the factors around can favor it.Also, the ultimate decision for this approach is for the business to grow and expand, increase in its assets, and improve the more market share(Lado, Dant and Tekleab, 2008, p. 401-423).
Example
Entrepreneurial Opportunistic Approach has specifically one main limitation. That is, in case the strategists are not focused towards a particular vision to establish a completely unique and new idea, then it means then it means themselves and the business are likely to fail. A good illustration where this has been observed is, in Sunrise Company that joined a different market of toilet soap market back in 80`s. none of the organizations achieved due to high competition threat by other related industries, more so, Hindustan Lever. Also, another company that failed was Suraj Automobiles that came up with motorbikes that used diesel to reduce on the costs on fuel for riders, all this cases, with others in different industries imply, entrepreneurial approach cannot fit every entrepreneur.
This type of approach is strategic management is about planning the activities of the organization in a formal manner. The baseline for the managers is to meet all the goals for the business, which means the program necessitates the best planning and require implementation.Roy and Suciu, 2014, p. 1583). By formal, the meaning derived is, the extent to which duties in the organization, and actions to the organizations strategic planning are set during planning. Besides, actions by employees are directed by the procedures. These activities are the discussions that demands for strategic decisions. Notably, strategic planning in formal approach is delegated to expert personnel who possess skills and knowledge in the targeted fields. The decisions also rely on main purpose of the business, values practiced at the top management and the organization’s SWOT analysis, meaning strength, weakness, opportunities and threats (Ontañón, S. and Plaza, 2010, p.257-271).
Many business, workplaces and even institutions apply the forma approach in strategic management. In institutions for example, the type of strategic approach must be formal. No decision for example at the university can be made without consultation at the board rooms. Every decision made touches on all stakeholders and cannot be left upon one person or a selected group of individuals. .
The significance of formal approach relies on the type of organization. As well, the styles of management, nature of the surrounding, and the process of production and finally the reason for planning the system are inclusive. The basic significance is, formal approach solicits sufficient information which is important during decision making, say in complicated incidents. In addition, the approach unites the managers in responding to issues within the organization. In many of the organizations, leaders at the top are aware about the problems that the company could be experiencing but they handle the issues in an ad hoc meeting (Adner et al., 2009, p. 201-208). This means, some of them are left out due to unavailability or the usual daily routine, and getting time to discuss the issues may a distracting factor from their duties. Thus, formal approach aligns the best procedure for all the activities. Additionally, formal approach ensures a balanced strategic planning. Both the minorities and seniors participate in the discussion(Beierle, 2010). Formal strategies control the discussions and includes every head in the organization. The possibility of only a limited group of people deliberating the process is also avoided.
Benefits
The process of making forming strategy using the formal approach depends on different factors that at the end impact of the strategy. A different issues is, the approach includes an approach that is systematic to providing solutions and procedural steps to compare the costs and advantage in every stage. Moreover, formal approach is quite comprehensive to conclude on combined decisions and strategies. The sum of information for the process is in bulk, and all this must be collected, discussed and prioritized depending on the best for the future of the organization (Kuntz et al., 2013). The few strategies that are decided upon in formal approach are put into actions and business plans during the process. The amount of data required to feed the process of strategic thinking is a lot less than most managers believe. They collect the data, lay them out clearly before you, discuss their importance for future performance of the organization, and the strategic possibilities will emerge with almost crystal clarity. Finally, there is the monitoring of plan implementation.
One problem that is associated with formal approach in strategic management is, the decision process becomes slow and long. Since the structure is formal, every step must be followed accordingly to the last stage to conclude, and this means the managers and workers need to plan and conduct regular meetings as decisions are often altered too. Unusual decisions are not easy to form (Lunenburg, 2010).
This method of strategic management is reactive and attempts to create assimilation of changes in the context of decision making and its elements. These are, environmental factors that impact widely on strategic decision. The key characteristic of adaptive approach is that, the approach is basically used in for solving organizational issues instead of seeking new opportunities (Rondinelli, 2013). The organization adapts a process to overcome the threats in the environment. Secondly, decision are made in sequences and in many steps. One activity at a time is necessary depending on changes in the environment. The main reason is to let the activities remain relevant to different decision to most important issues. As well, the effort during decision-making is enhanced by the organization`s stakeholders and other groups with the aim of protecting their interest(Marchau, 2008, p. 419). Therefore, the final decision is likely to favour one side. The fourth feature explains, the effect of integration is rarely felt because the process of making decisions is incremental and fragmented.
Implementation issues
A good illustration where adaptive approach is implied is in India. In India, many businesses that belong to the public have adopted the adaptive approach during decision making since power is distributed differently in the management of organization and the government`s ministries. Few private business also follow this approach when they cannot predict the possible future occurrences and according to the vision of the organization. The Glen Canyon Dam Environmental Impact Statement involved the use of adaptive approach to replace all other alternatives and got implemented by the relevant authorities. The method, built the efforts of Glen Canyon Environmental Studies which researched on the environment that best suits the dam operations. The approach advises the government, for example concerning the relevant resources (Wheelen, 2017). It also lists a set of guidelines that are used in evaluating the goal related activities.
The approach is of benefit to those organizations that tent to play the role of followers instead of the role of leaders in the industry that is targeted. As the business entrepreneurs believe, adaptive approach protects them from risks considering the strategic decisions rely on merely factors of the environment. Unless the environment factors are less dynamic, then the approach is able to yield results for the organization (Williams, 2011, p. 1347). Similarly, globalization, emerging technological advancement and more openness of organization merged to open the business environment and give the managers the task to be vibrant in their management and activities. Looking at the numbers, the volatility of business operating margins has gone up and the elongation between big enterprises and small businesses has been narrowed. The leadership in the market also has is better. Data from the recent studies confirm most companies have been challenged by adaptive approach and fall among the top three.
The implication issues in this context revolve around in what, when and how the organization tends to carry on with the process. `What` implementation issue is, an adaptive strategy that selects the ideas with an advantage as long as it is temporary. In the ever changing environments, the approach keeps experimenting and adjusting to the factors. An adaptive approach also works better when the environment of the business is not very easy to determine, shape and when the advantage may seize(Narendra and Annaswamy, 2012). Lastly, `how`, in the implementation means strategizing using adaptive approach demands process where the organization experts watches and responds to the changes in the environment.
Limitation
Adaptive approach has one main limitation. The process of adapting to the environment continues and keeps changing day in and out. This means the adaptive model is only positive when the change in environment at different times favors the business(Guerci, 2010, p. 1365-1370). By favoring it, the business is able to adopt to the approach. Consider, when the changes in the environment are too quick, the approach may not work because a business can only adopt one change at a time which takes time to pick up (Wise et al., 2014, p. 327). The approach is perhaps not recommended in the modern world of globalization where the business intents to invest sufficiently.
Conclusion.
In conclusion, the report has discussed the different approaches to strategic management. Ideally, the approaches are many in number but the report focuses in specific three; those are entrepreneurial opportunist approach, formal approach and adaptive approach. Summarily, the three approaches serve different purpose work for different entrepreneur. In entrepreneur opportunists approach, the entrepreneur makes the strategic decision when he is such an opportunist. The formal approach follows set of guidelines and procedure to make decisions whereas the adaptive approach require the organization to adopt to certain situation, which are environmental conditions. For every approach, the report has covered additional concerns to ensure an elaborate discussion of the strategic approaches. These has included; the viability of the approaches, the benefits an organization yields form the approach, example where the approach has been implied and implementation issues as well limitations of the approaches. The viability hassuggested what is entailed in the approaches since they are all different. The benefits which are also the suitability of the approaches are positive attributes acquired by the business and in, which the report illustrates the benefits matter as long as the business achieves its ultimate goal and purpose. Finally, implementation issues discussed are the matter concerned with the approach for implementation and limitation have talked about the shortcomings of the approaches. It is important to note, all the three approaches work well to some entrepreneurs while others do not. This is determined by the activities of the organization, most importantly, the aims and objectives as laid down by management.
References
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