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Strategy Driven Organizational Performance and Change

Strategy Types and Viewpoints

1/2/2016

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Introduction  
Generally, strategy refers to how - means by which - a given objective will be achieved. Strategy in the general sense is concerned with the relationships between ends and means; that is, between the results we seek and the resources at our disposal. ​Strategy is concerned with formulating and then carrying out courses of action intended to attain particular objectives by mobilizing organization's resources - deploying the resources at the organization's disposal. Tactics is concerned with formulating and then carrying out courses of action intended to attain particular objectives by employing (utilizing) the mobilized and deployed resources deployed from implementing the strategy. 

Strategy as Layered Concept or Types
The term "strategy" is an overloaded and varied concept; essentially, when people use the word “strategy” in a business setting, they are expressing concerns/interest in one of a layered concept that exists at least three (3) levels such as corporate strategy, business and competitive strategy, and functional strategy. 

  1. Corporate Strategy - Corporate” strategy is concerned with the direction and scope of the organization in the long-term, Corporate strategy provides long range guidance for the whole organization by the choice of answers to the question - what business should we be in?. Corporate strategy defines the markets and the businesses in which a company will operate. Corporate strategy is typically decided in the context of defining the comp[any's mission and vision, that is, saying what the company does, why it exists, and what it is intended to become. Corporate level strategy is about positioning the organization in order to achieve intended business goals. The positioning may be for growth after successful introduction, stability during the maturity stage of life cycle or exiting a declining business. ​
  2. Competitive/Business Strategy - Business strategy is concerned with decisions on the products and services that should be offered in the markets in the scope of the business context established by the corporate strategy. Competitive strategy is concerned with gaining sustainable advantage to successfully compete. it involves answers to the question, how do we compete in this business?This interpretation is consistent with all usage of the term in areas such as game plays/theory (i.e., in chess, football, soccer, etc.), military strategy, business competitive strategy, personal growth/development strategy, etc.  Competitive strategy defines for a given business the basis on which it will compete. Competitive strategy hinges on a company's capabilities, strengths, and weaknesses in relation to market characteristics and the corresponding capabilities, strengths and weaknesses of its competitors.
  3. Function Strategy - Functional strategies are concerned with how the functional areas defined by the Operations Strategy design contribute to business strategy.  Functional strategy  define where the functions of a business make long-term plans which support the competitive strategy being pursued by the business strategy. Functional strategies specify outcomes to be achieved from the daily operations of specific departments or functions. A Functional Strategy, for any business, large or small, focuses (the achievement of a goal) on the skills and abilities of individual departments and their employees. Functional strategies are concerned with how the functional areas defined by the Operations Strategy design contribute to business strategy.  Functional strategy  define where the functions of a business make long-term plans which support the competitive strategy being pursued by the business strategy. Functional strategies specify outcomes to be achieved from the daily operations of specific departments or functions. A Functional Strategy, for any business, large or small, focuses (the achievement of a goal) on the skills and abilities of individual departments and their employees.
  4. Operations Strategy  - Operations strategy binds the various operations decisions and actions in functional areas into a cohesive consistent response to competitive forces by linking firm/organization policies, programs, systems, and actions into a systematic response to the competitive/strategic priorities chosen and communicated by the corporate or business strategy. Operations strategy is the collective concrete actions chosen, mandated, or stimulated by corporate strategy. Operations strategy defines how an entire business will allocate its resources to support operations and its strategic goals. Operations strategies focus on maximizing the efficiency and effectiveness of production while minimizing operating costs.
​
​The term "strategy" is an overloaded in everyday business conversations, because most people including professional practitioners do not bother to explicitly establish their point of view into what is essentially a layered concept that exists at least three (3) levels such as corporate strategy, business and competitive strategy, and functional strategy.
 Essentially, business strategy enacts corporate strategy and defines how the business and its members should evolve in order to achieve long-term success.

Strategy Viewpoints
The concept of viewpoint is a device that helps in developing a robust and successful strategy by enabling  approaches to highlighting problems that would undermine an intended strategy at implementation and execution. The viewpoints or approaches as proposed by Mintzburg include:

  1. Plan - This is a device to help brainstorming options and planning how to deliver them. This may be general or detailed, formal or informal (in the mind). As a plan, strategy is conceived in advance, has a purpose and is thoughtful to some degree. This is deliberate and planned strategy which is a result of the rational planning approach of strategy development. The rational planning approach (e.g., Ansoff, 1979) defines an objective in advance, describes "where we are now," and uses a prescriptive approach in which "the three (3) core areas - strategic analysis, strategy development, and strategy implementation - are linked together sequentially" (Lynch, 2000; 24).
  2. Perspective - This defines an orientation  - patterns of thinking - that shapes an organization's perspective on vision and direction - a view of what the company or organization is to become - and the things the organization is able to do well. Mintzburg points out that strategy as a perspective is the same as "Strategy as a Plan" but without the formal planning. In this view, many people in the organization have the same orientation or perspective when they make strategic decisions.
  3. Pattern - A "realized pattern" of organizational behavior emerging as strategy. This comprises the decisions and actions over time that may be consistent or inconsistent but represents an emergent strategy. Emergent strategy is realized pattern (behavior) that was not expressly intended or planned that emerged from execution. It is a set of actions, or behavior, consistent over time, “a realized pattern that was not expressly intended” in the original planning of strategy. An emergent strategy develops when an organization takes a series of actions that with time turn into a consistent pattern of behavior, regardless of specific intentions. It consists of the moves made and approaches taken by management to produce successful performance of the organization in successfully competing against rivals. For example, the day-to-day decisions and actions in areas such as enter new business to diversify, extending geographically to grow, efforts to integrate forwards or backwards, efforts to broaden or narrow product/services, actions to capitalize on new opportunities, and actions to respond to changing industry conditions i.e., shifting demand patterns, new airport regulations, entry of new competitors. A consistent pattern of decisions may be the result of an explicit and written strategy or it may be result from organizational culture, or it may result from the influence of one or more leaders. An inconsistent pattern of decisions also represents a sort of strategy - a non-strategy, perhaps, but a strategy that governs decisions. So, in a sense, every organization has a strategy; they all make strategic decisions or non-decisions that are also decisions. 
  4. Position - We may view a position taken by the organization that reflects decisions to offer particular products and services in particular markets as a strategy relative to the environment. 
  5. Ploy - This is a deliberate exercise and device that can help the organization explore the possible future scenarios in which competition will occur. 

Decision makers or managers start with a given perspective, conclude that it calls for a certain position, and sets about achieving it by way of a carefully crafted plan. Over time things change; a pattern of decisions and actions marks movement from starting point to destination end-point (goal). This pattern of decisions and actions is called "realized pattern" or "emergent" strategy. The actual strategy of an organization is the combination of the executed parts of deliberate strategy and emergent strategy.

Roles/Functions of strategy
Strategy in a business organization is about how the organization seeks to survive and prosper within its environment over the long-term. ​Strategy provides an organization with an offensive device to compete against competitors and guides their actions when faced with a range of choices. Strategy plays a number/variety of roles in organization's success, including:


  1. Preparing an organization for the future - This does not necessarily imply long-term planning or planning in general; it does imply forward-looking, which helps organization anticipate future needs. Strategy shapes the future so the organization can position itself to win in both the short- and long-term.
  2. Distinguishing an organization from others - This implies focus on the organization's unique assets (capabilities/competencies) and features, and exploiting them in a meaningful way to gain advantage.
  3. Providing an organization with some stability - This implies the organization transformation or change is guided by strategy so it is not caught in constant flux or reorientation which would cause it to drift.
  4. Serving as a common frame of reference - This implies strategy offers an organization a common point of reference even in rapidly changing circumstances. This makes it possible for people in the organization to have a shared understanding and know what assumptions, ideas or plans they are going to deviate from.
  5. Support for internal and external alignment - This implies strategy provides an overarching and integrative framework for the most important internal and external factors to be taken into account by management, thus helping to align the organization both internally as well as with its external environment.
  6. Guides organizational action - The reason for having a strategy is to give direction and meaning to the things that an organization does. 

Strategy is a significant determinant on a company's success or failure, in addition to the significance of competence of its managerial leadership. 

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    I am a computer scientist interested in modeling complex business systems, and strategic management processes to drive analysis and evaluation of strategic decision making and decisions. Specifically, I am interested in the use of modeling to improve organization managers shared understanding of strategy and its influence of organizational behavior and change. And how this understanding informs management's decisions and actions in effectively managing strategy formulation, implementation and execution,

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  • EDGLABS Home
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    • Strategic Management >
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