Different approaches of strategic management
The strategic management systems of organizations are aimed at maintaining the proficiency of the business operations through continuous planning, monitoring and assessment. The formulation of different strategies while analyzing the situation of the business has helped in maintaining the sustainable approach of the firm. On the other hand, the application of the understanding of the dynamic capabilities of the business helps the business in chalking down the progression plan as per the objectives of organizational sustenance in the competitive markets.
The approaches that will be considered as a part of the report are stakeholder approach, dynamic capabilities and the sustainable approach. The Stakeholder approach of the organization depends on the concerns that are faced by the same while evaluating the interests of the stakeholders and thereby ensure that the organization keeps the promises in order to facilitate the smooth operations of the business. Dynamic capabilities of the organization clearly demonstrate the capability of the firm to identify, integrate and build on the diverse internal and external competencies in order to address the changing business environment of the firm. The sustainable approach of the organization aims at retaining the sustenance while operating as per the objective of the business expansion and growth through multiplying the social capital of the same. The purpose of undertaking the research is to identify the different approaches and thereby assess the diverse benefits and issues that are forwarded by the approaches.
The different strategic management approaches helps to ensuring the efficacy of the functions as per the objectives of the business operations. The application of different approaches in the model of the business assists organizations in enhancing the operations, which will be helping the organization in maintaining the proficiency of the functions as per the objectives of the business. In this section, the Stakeholder approach, Dynamic capabilities and the sustainable approach of the business is discussed.
The stakeholder approach of organizations relates to the different strategies that are undertaken by the management of the organization in order to satisfy the needs of the stakeholders. The approach helps organizations in gaining over the trust of the stakeholders, which contributes to the smooth functioning of the systems of the business while operating in the globalized markets. Alyami and Rezgui (2012) stated that the stakeholder approach of the organizations adds to collaborative functioning of the organization through encouraging the involvement of the chief stakeholders in the profitability of the business venture. Collaborative functioning of the stakeholders clearly provides the organization with an opportunity of understanding the imperfections in the market and thereby develops their processes in order to gain a competitive advantage. The stakeholder approach of the organization utilizes the stakeholder theory in order to undertake active management and thereby promote shared interests as per the stakeholder concerns of the business.
The application of the Stakeholder approach in IBM’s organizational context has helped the business in adding up to its competitive advantage while operating in the diverse markets. The Innovative approach of the organization is backed by its motive of adhering to the needs of the community stakeholders (Kolk 2016). Moreover, the organization aimed at maintaining strong relations with the stakeholders (suppliers, distributors, Government and the promotional agencies) through assessment of the needs of the same. It has helped the organization in enhancing the productivity through collaborative actions of the stakeholders of the business. The gradual development of the organizational status has assisted the organizational goals of long- term sustainability of the firm. The objective of valuing the sentiments of the chief stakeholders of the venture has helped in satisfying the needs of the same while operating in the diverse offshore markets. The strategic approach of adhering to the needs of the stakeholders has facilitated in upholding the sustainability of the business.
Stakeholder approach
The dynamic capabilities are concerned with the development of organizational strategies in order to support the management teams. It facilitates the model of the business through the identification of resource allocation and other aspects that supports the organizational sustenance. The approach enumerates the study of the radical discontinuous change that might be undertaken by the organization to adhere to the standards and competitive advantage of the business. Bocken et al. (2013) stated that the identification of the different competencies that are faced by the organization while undertaking the operations and the strategic positioning of the assets helps in enhancing the performance of the business. The dynamic capabilities of the organization differs from the operational capabilities as it emphasizes mainly on the different aspects of creating and modifying its resource base in order to sustain in the diverse competitive markets (Alyami and Rezgui 2012). The proactive coordination of the management of the organizat5ion and the employees in enhancing their capabilities to learn and build on the strategic assets helps in maintaining with the objective of the dynamic capabilities. On the other hand, the innovations in the organization like the implementation of advanced technologies and the reallocation and reconfiguration of the existing assets helps the organization in maintaining their standards while operating as per the dynamic approach of the business to sustain.
Amazon clearly implemented the dynamic approach in their processes where the organization identified the different competencies that are faced by the same. The organization thereby implemented automation of the processes in order to cope up with the market competition. The approach undertaken by the organization involved different functions of the management relating to learning, transformation of the existing assets and the co- specialization, which supported the smooth performance of the asset allocation and strategic positioning in the business model (Wilden et al. 2013). The identification of the capabilities of the organization in dynamically adapting to the environmental changes is based on coordinative and integrative aspects of the business.
The sustainable approach of the organization is aimed at maintaining the sustainability of the business while operating in the competitive markets. The sustainability of the organizations is dependent on different variables like corporate governance, social sustainability, environmental sustainability and economic sustainability. The governance structure that is followed by the businesses helps in the identification of the approach that is being implemented by the organization in order to undertake the smooth functioning of the venture. Chien and Tsai (2012) stated that the processes that are planned by the management of the organization adversely affects the sustainability options of the business. Therefore, the decisions that are taken and the policies formed by the business mostly affects the proper functioning of the operations as per the sustainability is concerned. Social and Environmental sustainability of organizations can be taken as the responsibility of the organization in relation to their profit making objectives. The long term objectives of the organization are supported through the proper functioning of the environmental and societal concerns of the business. The economic sustainability of the organization helps the same in maintaining their smooth performance in order to sustain through financial stability and growth. However, one of the major concerns of the business are based on the different aspects of the stakeholder dealings. Building on the stakeholder relations will be helping the organizations in maintaining the proficiency of the functions as per the objectives o the business progression.
Dynamic capabilities
Woolworths follows the sustainable approach of the business undertakings as the company concentrated on maintaining a transparency in the operations of the venture. It has helped the business in maintaining strong relationship with the stakeholders, which permits the smooth functioning of the business venture (Boons and Lüdeke-Freund 2013). On the other hand, the continuous innovative approach of the business has helped the same in upholding a competitive edge in the operating markets, which adds on to the sustainability of the business undertakings.
The stakeholder approach of the organization aims at satisfying the needs of the stakeholders in order to redeem their trust and loyalty to the business operations. It helps the organizations in maintaining the proficiency of the functions through integration and coordination. The different stakeholders (internal and external) adds their value to the smooth functioning of the business processes which helps in upholding the sustenance of the business processes while operating as per the needs of sustaining in the competitive markets (Wilden et al. 2013). On the other hand, the stakeholders of the business helps the management of the same in anticipating different risks that might be faced by the organization while operating as per the objectives of sustainability. The engagement of the stakeholders in the business helps the same in identifying the core issues. Moreover, the identification of the core issues by the management of the organization will be helping the businesses in maintaining the smooth functioning of the business.
The dynamic capabilities of the organization aim at maintaining the competitive advantage of the businesses through advancements in learning and transformation of the key assets as per the needs of the organization to cope up with the dynamic changes in the market environment. The approach helps the businesses in maintaining the proficiency of the processes and interlinking the same with the chief objectives of sustainability. Kindström, Kowalkowski and Sandberg (2013) stated the competitive advantage of the organizations are based on the assessment of the market environment, which helps the businesses in optimizing the resource allocation and the processes as per the needs of the business to sustain in the offshore markets. Therefore, the dynamic capabilities of the organization help in inducing a competitive edge in the organizational performance to promote sustenance of the venture.
Corporate governance and the other social and environmental responsibilities assist the sustainable approach of the organization, which supports the sustenance of the businesses in the competitive markets. The long term planning of the organization supports the profitability and sustenance of the business while operating in the competitive markets (Lin and Wu 2014). Moreover, innovative measures that are planned by the businesses are assisted by the sustainable approach, which helps the organizations in coping up with the economic needs of the same. Costa and Menichini (2013) stated that the sustainable approach of the organization is supported by the decision making and the transparency which helps the firm in holding strong bonds with the stakeholders. Therefore, the sustainable4 appr5oach of the organization helps in improving the situation of the business and thereby gain a competitive edge over the existing players.
Sustainable approach
Over representation of the interests of the stakeholders affects the proper functioning of the business while operating in the international scenario. Balzarova and Castka (2012) stated that the excessive involvement of the stakeholders in the processes of the business affects the profitability of the business. For an instance, an organization is planning to implement a change in the processes that are undertaken by the same, however, the over involvement of the stakeholders in the implementation procedure affects the performance of the business. It affects the desired outcome on which the business focuses for enhancing the market opportunities for sustenance and growth. The consent of the stakeholders is required by the business in order to bring in changes in the systems (Hörisch, Freeman and Schaltegger 2014). Therefore, the smooth functioning of the business is dependent on the consent of the stakeholders, which affects the progression of the business due to lack of proper decision making systems.
The implementation issues that might be faced by the organization while applying the approach is due to the lack of sufficient resources, which affects the performance of the business venture as per the objectives. De Brucker, Macharis and Verbeke (2013) stated that the lack of financial and other capabilities of the organization while implementing new learning and reconfiguring processes might affect the application of the approach as per their needs. Therefore, the implementation of the dynamic capability approach of the organization is based on the identification of the resource needs and the capabilities of the organization that would be helping the business to cope up with the urgency for change as per the dynamic modification in the market.
The issues in implementing the sustainable approach are due to the requirement of huge financial funds in the organizations. The measures that are enumerated in the sustainable approach are relatively costlier to implement. The processes that are required to be adhered by the organization while considering the Environmental and social concerns requires huge financial funding (Helfat and Peteraf 2015). On the other hand, the implementation of transparency in the operations might go against the principles of the organization, as it requires the business to exhibit their financial situation and their trade secrets to the stakeholders. It might affect the sentiments of the hierarchy of the organization, which affects the implementation process of the approach in the organizational context.
The stakeholder approach is dependent on the identification of the steps that might be devised by the organization in order to satisfy the interests of the stakeholders of the venture. However, in this connection the organizational performance is limited by the concerns and the interests of the stakeholders which constrains the decision making properties of the business. It affects the proper functioning of the business’ innovative systems that affects the desired growth in the highly competitive markets. Keupp, Palmié and Gassmann (2012) stated that the identification of the interest of the stakeholders will be helping organizations in designing the proficiency of the functions as per the objectives. However, Priem, Li and Carr (2012) argued that the over representation of the interests of the stakeholders and thereby constraining the functions that would have helped in enhancing the position of the venture in the market affects the sustainability of the business in the competitive markets. Therefore, the over estimation of the interests of the stakeholders clearly affects the smooth operations of the venture while operating in the competitive markets.
The dynamic capabilities of the organization help the business in maintaining the proficiency so that the venture might cope up with the dynamic changes in the market. However, a limitation constrains the functions of the business while applying the approach. The organizational knowledge of capabilities and contingencies are limited to the assumptions that are undertaken by the board members (Hair et al. 2012). The irrelevance of the assumptions with the reality affects the organizational capabilities of undertaking modifications and reconfigurations in order to gain a competitive advantage. On the other hand, the lack of proper knowledge of the trends in the business markets and the competencies that might be faced by the firm affects the organizational capabilities largely.
The sustainable approach of the organization is mainly based on the long term objectives of the business. However, it negates the short term profitability of the firm, which might cause delay in the production process and thereby restrict profitability of the business. Eriksson et al. (2015) stated that every company is subjected to the short term objectives of profit making, however, the introduction of the sustainable approach affected the functioning of the business.
Conclusions
Therefore, from the above analysis it can be stated that the different approaches the management of the organizations utilizes supports sustainability of the venture. The research enumerates three different approaches, namely- Stakeholder approach, Dynamic capabilities and the Sustainable approach. It also enumerated the different benefits, issues and limitations that are faced by the organization while implementing the approaches in the processes. The identification of different approaches and the applicability of the same in the organizational context helps in maintaining the efficacy of the operations as per the objectives of the same. Approach of the leaders facilitates the strategic operating systems of the business in order to support the sustainability of the same. Continuous planning and management through assessments of the business positions helps the organization in identifying the different issues that are faced by the same.
References
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