Strategic Management
Strategic management is the set of managerial and strategic decision-making processes that promote sustainable human development with supportive strategies, policies, laws and procedures, educated and skilled workforce to provide the foundation to plan, implement and review the organization's strategies and sustainable growth. The primary focus of the strategic management is on solutions to reduce/eliminate the risks associated with failure in the context of organizational transformation and change through improved strategic issues and problem analysis, decision-making, and monitoring and control of the results of strategic management processes.
Strategic management is the set of managerial and strategic decision-making processes that promote sustainable human development with supportive strategies, policies, laws and procedures, educated and skilled workforce to provide the foundation to plan, implement and review the organization's strategies and sustainable growth. The primary focus of the strategic management is on solutions to reduce/eliminate the risks associated with failure in the context of organizational transformation and change through improved strategic issues and problem analysis, decision-making, and monitoring and control of the results of strategic management processes.
Strategy Formulation & Evaluation
Strategy formulation is one of the co-incident processes of strategy management, and involves the definition of corporate strategy, and generation of competitive strategies and options that if followed would lead to achieving the corporate objectives. The corporate strategy/options (decision choices) frame and guide the decisions and choices that a company’s corporate executives, functions, and staff make every day including how they run operations, what they buy, what markets they enter, how they measure success, etc. The business strategy options drive functional strategies - i.e., the decisions that business unit management teams, functions, and staff make every day including pricing, R&D, who should be the customer, what should be the value proposition, where to manufacture, etc. Strategy formulation is primarily an intellectual and creative act involving the analysis of known strategic problems identified and defined through diagnosis of strategic issues and events. It is entrepreneurial in nature and requires great deal of analysis, judgment, and innovation.
Successful strategy formulation produces a clear set of recommendations, with supporting justifications, that revise as necessary the mission and strategic objectives of the organization, and supply the strategies (strategic options) for accomplishing them. Selecting a given approach from "approaches" (or means) among all options and choices that can be made at a given point in time; that "approach" becomes the "strategy". Every decision, every action taken from then on, will be based on (or aligned with) the "strategy".
Strategy Formulation Process Model
The formulation process involves a number of steps, two of which must be performed constantly, namely: environmental scanning, and continuous implementation. The formulation steps include:
Strategic choice refers to the decision-making process of selecting one option for implementation. Strategic decision-making is an ongoing cognitive process whose outcomes are usually contingent on the behavior of other actors (individuals or organizations) affected by the decision’s outcomes. These recursive relationships between decisions, decision outcomes, and effects of other actors' behavior make strategic decisions messier and complex. Strategic decisions are among the main means through which management choices are actually realized.
Modeling Strategy Formulation Output/Results
The strategy formulation model is a network model of options (decision points) in domains such as marketing, resource capability, and strategy implementation that are grouped together into strategic options designed to reach desired objectives goals (targets) and inform strategic decision and choices. A strategic option is a set of of related options that form a potentially strategy. An option is a course of action that it appears possible to take; the simplest form of choice is therefore between taking an option or not taking it - doing it or not doing it. In modeling the results/output of strategy formulation, we are trying to modify the current objectives and strategies in ways to make the organization more successful. The options network defines a behavioral view of strategy formulation. It is an intentional prescriptive model based on a strategic goal dependency relations model that defines various options including possibly options about product and services and about market segments - defined by both customer need and geography. There may also be options on what resources and capacities are needed and how to build these implementation options. Indicators of what's possible and what is required may well follow from the results of a strategic assessment. The formulation model is a prescriptive model that informs answers to corporate strategy questions such as:
In addition, the model informs answers to business/competitive strategy questions such as:
Strategy Evaluation & Analysis
Strategy evaluation and analysis takes into account the related risks across each alternative in order to determine whether the potential returns are commensurate with the associated risks that each alternative brings. Strategic risk is a function of how poorly a strategy will perform if the “wrong” scenario occurs. Strategy evaluation involves appraisal of the more fundamental factors and trends that govern the success of a strategy in the chosen field of endeavor. It involves testing of a strategy/strategic options for critical flaws with respect to potential failure patterns as categorized by the following criteria:
The strategy performance evaluation informs answers to these questions:
The whole point about strategy is that the critical factors determining quality of long-term results are often not directly observable or simply measured; and by the time strategic opportunities/threats do directly affect operating results, it may well be too late for an effective response. The strategic options resulting from the strategy formulation are evaluated to assess their likelihood of success.
Strategy formulation is one of the co-incident processes of strategy management, and involves the definition of corporate strategy, and generation of competitive strategies and options that if followed would lead to achieving the corporate objectives. The corporate strategy/options (decision choices) frame and guide the decisions and choices that a company’s corporate executives, functions, and staff make every day including how they run operations, what they buy, what markets they enter, how they measure success, etc. The business strategy options drive functional strategies - i.e., the decisions that business unit management teams, functions, and staff make every day including pricing, R&D, who should be the customer, what should be the value proposition, where to manufacture, etc. Strategy formulation is primarily an intellectual and creative act involving the analysis of known strategic problems identified and defined through diagnosis of strategic issues and events. It is entrepreneurial in nature and requires great deal of analysis, judgment, and innovation.
Successful strategy formulation produces a clear set of recommendations, with supporting justifications, that revise as necessary the mission and strategic objectives of the organization, and supply the strategies (strategic options) for accomplishing them. Selecting a given approach from "approaches" (or means) among all options and choices that can be made at a given point in time; that "approach" becomes the "strategy". Every decision, every action taken from then on, will be based on (or aligned with) the "strategy".
Strategy Formulation Process Model
The formulation process involves a number of steps, two of which must be performed constantly, namely: environmental scanning, and continuous implementation. The formulation steps include:
- Vision and Mission Formulation - This involves the identification and formulation of the organization's vision which sets out the reasons for the organization's existence and the "ideal" state that the organization aims to achieve; the mission identifies and formulates major goals and performance objectives.
- Environmental scanning - This involves analyzing the organization's external/internal environments to identify any opportunities and/or threats; and continuous monitoring of environments conditions for changes in environments' factors that may affect your organizations performance. The environmental scan can be performed within the framework of the Five Forces Model and SWOT Model, analyzes information about the external environment PESTEL factors, the industry, and internal environment factors.
- Values Assessment - Every organization has values, and these values should be coherent with the strategy. Values assessment involves looking into the personal values of the members of the organization, organization values, and the organization's operating philosophy.
- Strategic Options - This involves analyzing strategic issues and formulating the problem (expressed in terms of basic question) that must be addressed by options that provide creative alternatives to achieving the mission and vision.
- Strategic Choice - Selection of strategic options that look at (1) offering quality products and services that customers will need in the future, (2) taking advantage of new technology, (3) being prepared for future environmental factors or calamities, (4) responding to possible new substitutes or the predatory actions of rivals, (5) anticipating future needs before competitors do.
Strategic choice refers to the decision-making process of selecting one option for implementation. Strategic decision-making is an ongoing cognitive process whose outcomes are usually contingent on the behavior of other actors (individuals or organizations) affected by the decision’s outcomes. These recursive relationships between decisions, decision outcomes, and effects of other actors' behavior make strategic decisions messier and complex. Strategic decisions are among the main means through which management choices are actually realized.
Modeling Strategy Formulation Output/Results
The strategy formulation model is a network model of options (decision points) in domains such as marketing, resource capability, and strategy implementation that are grouped together into strategic options designed to reach desired objectives goals (targets) and inform strategic decision and choices. A strategic option is a set of of related options that form a potentially strategy. An option is a course of action that it appears possible to take; the simplest form of choice is therefore between taking an option or not taking it - doing it or not doing it. In modeling the results/output of strategy formulation, we are trying to modify the current objectives and strategies in ways to make the organization more successful. The options network defines a behavioral view of strategy formulation. It is an intentional prescriptive model based on a strategic goal dependency relations model that defines various options including possibly options about product and services and about market segments - defined by both customer need and geography. There may also be options on what resources and capacities are needed and how to build these implementation options. Indicators of what's possible and what is required may well follow from the results of a strategic assessment. The formulation model is a prescriptive model that informs answers to corporate strategy questions such as:
- What business should the organization be in?
- What should be the organization’s comparative advantage in adding value to its individual businesses?
- What should be the capabilities that distinguish the organization?
In addition, the model informs answers to business/competitive strategy questions such as:
- Who should be the customers that define the target market?
- What should be the value proposition that differentiates the products and services offered to those customers?
- What should be the capabilities that make our business better than any other in delivering that value proposition?
Strategy Evaluation & Analysis
Strategy evaluation and analysis takes into account the related risks across each alternative in order to determine whether the potential returns are commensurate with the associated risks that each alternative brings. Strategic risk is a function of how poorly a strategy will perform if the “wrong” scenario occurs. Strategy evaluation involves appraisal of the more fundamental factors and trends that govern the success of a strategy in the chosen field of endeavor. It involves testing of a strategy/strategic options for critical flaws with respect to potential failure patterns as categorized by the following criteria:
- Consistency - The strategy must not represent mutually inconsistent goals and policies.
- Consonance - The strategy must represent adaptive response to the external environment and to the critical changes occurring within it.
- Advantage - The strategy must provide for the creation and/or maintenance of a competitive advantage in the selected areas of activity.
- Feasibility . The strategy must neither overtax available resources not create unsolvable sub-problems.
The strategy performance evaluation informs answers to these questions:
- Are the objectives of the business appropriate?
- Are the major policies and plans appropriate?
- Do the results obtained to date confirm/refute critical assumptions on which the strategy rests?
The whole point about strategy is that the critical factors determining quality of long-term results are often not directly observable or simply measured; and by the time strategic opportunities/threats do directly affect operating results, it may well be too late for an effective response. The strategic options resulting from the strategy formulation are evaluated to assess their likelihood of success.
Strategy Implementation
Strategy implementation is the process of aligning strategic choices resulting from strategy formulation with organizational methods (functional strategies) that realize those strategic choices. It provides the connecting loop between formulation and execution and control. Strategy implementation consists of all the decisions and activities under taken at all levels in the organization required to produce strategic assets (as outputs) that close the implementation gap (difference between the development capacity the strategy calls for, and the current endowment of resources, policies, and governance mechanisms), and can be deployed into operations to successfully turn the formulated corporate and business strategies into reality.
Successful strategy implementation is, key for any organization's survival; and involves the development of policies, procedures and practices that aim at moving the organization towards its strategic objectives and goals. These strategic decisions are the main means through which management choices are actually realized, and they are long-term in their impact and effect, and change the direction of the whole business organization.
Operations Strategy Design and Plans
In order to deliver value strategies have to be implemented and executed; effective development methods assure that properly formulated strategies can be successfully implemented and executed. Operations strategies refer to the methods companies use to reach their strategic objectives. Operations strategy focuses on how to best enable and implement the organization's strategy. The task of operations strategy is to design and develop the "Operating Model", which is the joint configuration of resources and processes such that its resulting competencies are aligned with the organization's desired competitive position. It inextricably connects the interplay between strategic management activities (i.e., making decisions, allocating resources, and directing activities of the workforce) with focus on how to best enable and implement the organization's strategy, and operations management activities (i.e., making decisions, allocating resources, and directing activities of the workforce) with focus on providing the best match of supply with demand in creating and delivering value to customers while meeting stakeholders' expectation.
Developing operations strategies enables organizations to examine and implement effective operating systems that facilitate efficient use of resources, personnel, and work processes.Operations strategy binds the various operations decisions and actions into a cohesive consistent response to competitive forces by linking form policies, programs, systems, and actions into a systematic response to the competitive/strategic priorities chosen and communicated by the corporate or business strategy. The operations strategy is translated into operations plans that set out the objectives, functions, priorities, and obligations of each operation, process or function/department of an entity. The aim of these plans is to direct the organization and ensure operational control. The contents of operational plans are directed at explaining actions or programs that will be needed to achieve or implement parts of that strategy. Operations plans set out the objectives, functions, priorities, and obligations of each functional area (i.e., operation, process or marketing, etc.) of an entity.
Strategy Implementation Process
The strategy implementation process is an organization change process that is defined by activities in the following areas of concern that need to be addressed in order to achieve successful strategy implementation and business transformation.
Strategy implementation process/program is an enterprise-wide initiative for a major change, initiated by top management and leadership team. It typically covers a span of 1-3 years and often involves major changes in organization behavior (institutional arrangements), culture, talent, and knowledge. The output of strategy implementation is a plan that defines - who is involved in/required to implement the strategy, where the implementation is located, when the implementation taks start and end, and how - the detail specification of the actions/activities involves in the implementation.
Strategy Implementation Models
Strategy implementation model aligns formulated strategies with organizational methods (functional strategies) that realize those strategies; and are coordinated by the Operating Strategy. The strategy implementation model is an actionable decision-action graph that extends the strategic choices resulting from the strategy formulation by adding planned set of courses of action which are mapped to patterns of organizational behavior expressed in terms of functional strategies for various organization functional areas.
Strategy Implementation Evaluation Method
The implementation evaluation methods provide intuitive and model-driven approaches to validate the alignment of organizational structures with selected strategies; alignment of culture in support of the strategy and the functional strategies responsibility for implementing the actions connected with the selected business strategy; and acquiring, mobilizing and focusing resources to accomplish the tasks necessary to achieving the strategic objectives.
Strategy implementation evaluation ensures that all key supporting elements of the business systems including Measures and Rewards, Structures and Processes, Culture and People are aligned behind the chosen strategies and hinged on the mission, vision, values and critical success factors (CSF) of the organization. The evaluation methods also support users in analyzing the challenges facing the organization and how they are reflected in the factors that influence strategy implementation success/failure.
Strategy implementation is the process of aligning strategic choices resulting from strategy formulation with organizational methods (functional strategies) that realize those strategic choices. It provides the connecting loop between formulation and execution and control. Strategy implementation consists of all the decisions and activities under taken at all levels in the organization required to produce strategic assets (as outputs) that close the implementation gap (difference between the development capacity the strategy calls for, and the current endowment of resources, policies, and governance mechanisms), and can be deployed into operations to successfully turn the formulated corporate and business strategies into reality.
Successful strategy implementation is, key for any organization's survival; and involves the development of policies, procedures and practices that aim at moving the organization towards its strategic objectives and goals. These strategic decisions are the main means through which management choices are actually realized, and they are long-term in their impact and effect, and change the direction of the whole business organization.
Operations Strategy Design and Plans
In order to deliver value strategies have to be implemented and executed; effective development methods assure that properly formulated strategies can be successfully implemented and executed. Operations strategies refer to the methods companies use to reach their strategic objectives. Operations strategy focuses on how to best enable and implement the organization's strategy. The task of operations strategy is to design and develop the "Operating Model", which is the joint configuration of resources and processes such that its resulting competencies are aligned with the organization's desired competitive position. It inextricably connects the interplay between strategic management activities (i.e., making decisions, allocating resources, and directing activities of the workforce) with focus on how to best enable and implement the organization's strategy, and operations management activities (i.e., making decisions, allocating resources, and directing activities of the workforce) with focus on providing the best match of supply with demand in creating and delivering value to customers while meeting stakeholders' expectation.
Developing operations strategies enables organizations to examine and implement effective operating systems that facilitate efficient use of resources, personnel, and work processes.Operations strategy binds the various operations decisions and actions into a cohesive consistent response to competitive forces by linking form policies, programs, systems, and actions into a systematic response to the competitive/strategic priorities chosen and communicated by the corporate or business strategy. The operations strategy is translated into operations plans that set out the objectives, functions, priorities, and obligations of each operation, process or function/department of an entity. The aim of these plans is to direct the organization and ensure operational control. The contents of operational plans are directed at explaining actions or programs that will be needed to achieve or implement parts of that strategy. Operations plans set out the objectives, functions, priorities, and obligations of each functional area (i.e., operation, process or marketing, etc.) of an entity.
Strategy Implementation Process
The strategy implementation process is an organization change process that is defined by activities in the following areas of concern that need to be addressed in order to achieve successful strategy implementation and business transformation.
- Clarifying the chosen strategy's impact on each part of the organization and planning the change.
- Communicating and engaging people into the change vision.
- Selecting the right metrics.
- Aligning performance appraisal and reward systems.
- Building coalitions.
- Defining Capacity Development gap - (Talent, Institutional Arrangements, Accountability, Leadership, and Knowledge) - The implementation involves gap analysis through assessment of the organization's strengths and weaknesses to determine the current state of the organization's capacity development, and the capacity development needed to achieve the strategic goals and objectives. Capacity Development assessment methods involve the analysis of desired capacities against existing capacity; this results in identification and definition of capacity needed to achieve the strategic objectives and vision.
- Building Capabilities for process design..
- Leadership Development - Aligning leadership behavior with the strategy.
- Building the culture that supports the strategy.
- Monitoring the progress of strategy implementation.
Strategy implementation process/program is an enterprise-wide initiative for a major change, initiated by top management and leadership team. It typically covers a span of 1-3 years and often involves major changes in organization behavior (institutional arrangements), culture, talent, and knowledge. The output of strategy implementation is a plan that defines - who is involved in/required to implement the strategy, where the implementation is located, when the implementation taks start and end, and how - the detail specification of the actions/activities involves in the implementation.
Strategy Implementation Models
Strategy implementation model aligns formulated strategies with organizational methods (functional strategies) that realize those strategies; and are coordinated by the Operating Strategy. The strategy implementation model is an actionable decision-action graph that extends the strategic choices resulting from the strategy formulation by adding planned set of courses of action which are mapped to patterns of organizational behavior expressed in terms of functional strategies for various organization functional areas.
Strategy Implementation Evaluation Method
The implementation evaluation methods provide intuitive and model-driven approaches to validate the alignment of organizational structures with selected strategies; alignment of culture in support of the strategy and the functional strategies responsibility for implementing the actions connected with the selected business strategy; and acquiring, mobilizing and focusing resources to accomplish the tasks necessary to achieving the strategic objectives.
Strategy implementation evaluation ensures that all key supporting elements of the business systems including Measures and Rewards, Structures and Processes, Culture and People are aligned behind the chosen strategies and hinged on the mission, vision, values and critical success factors (CSF) of the organization. The evaluation methods also support users in analyzing the challenges facing the organization and how they are reflected in the factors that influence strategy implementation success/failure.
Effective Strategy Execution & Control
Strategy execution is one of the three (3) co-incident determinants of the strategic management process including strategy formulation and implementation. It involves the decisions and activities undertaken, at all levels in the organization (from top management through middle management to the front-line managers and workers) including the continuous process of mobilizing organization resources to execute actions that change the organization from a current-state to a new future state with enhanced organizational and institutional strengths which in turn contribute to improvements in the creation and delivery of value to customers. The actual strategy of an organization emerges from execution - the thousands of decisions made every day by employees acting according to information they may have and their own self-interest as influenced by organizational culture.
Strategy execution is about decision-making - timeliness and speed of management decisions - on the prioritization, and continuous allocation of resources to perform selected organization methods/actions e.g., marketing campaigns, product development, etc., strategic initiatives and projects, and individual employee capability development. Timeliness and speed relates to "when" and how quickly the decision is made rather than how much time the decision maker has, to make the decisions. For example, the timing of the decision to enter a market (or in war to engage an enemy) is critical to whether you are successful or not. A lot of strategies fail at execution because of this, even though from a process standpoint they have done everything right. Strategic decisions are among the main means through which management choices are actually realized.
Strategy Execution Systems and Building Blocks
Strategy execution systems are socio-technical systems that provide the platform to integrate the following organizational behavior:
The strategy execution system provides support for the cognitive structure within which strategic decision making takes place in the organization. The system supports strategy execution decisions and activities that may include big strategic decisions like new products launch, to week-in, week-out decisions about marketing, procurement, and customer service as well as the thousands of day-to-day decisions on resource allocation, job prioritization and interfacing with customers to quickly respond to new opportunities and threats while coordinating with other parts of the organization on an ongoing basis.
Strategy Execution Monitoring and Control
Controlling strategy execution is done through regular strategy execution review meetings using periodic (often monthly or weekly) progress reports or dashboards for executives and managers. Monitoring progress creates feedback about the performance of the strategy and its execution allowing organizations to make adjustments accordingly. Controlling the strategy and execution involves planning the execution, monitoring it's progress and behavior, and taking action to adjust the execution when needed.
The Strategy Execution Control System defines the performance measures relevant and necessary to inform management decisions on strategy execution - when its necessary to adapt or change a strategy. The strategy control system fosters, supports, measures, and controls the strategy and its execution. Effective strategy control requires frequent monitoring of the progress of the strategy and its execution to assess whether the planned results are being achieved. The performance measurement system models provide a management accounting and control mechanism that focuses management attention on the organization's behavior strategically, in changing and/or adapting to its direction to changes in environmental factors; and operationally, in the optimized utilization of organization resources in their task of enhancing both customer value and shareholders/owners value.
Strategic Execution Evaluation & Analysis
The strategy execution model can be simulated to facilitate evaluation and analysis aimed at improving the management and the workforce understanding of the impact of the factors that influence the success or failure of strategy execution on the various strategic options/choices to inform management's decisions.. Strategy execution simulation provides additional source of feed forward information that allows management to assess whether the overall strategy should be changed in light of unfolding events and results associated with incremental steps, and actions that implement the overall strategy. The strategy execution simulation and evaluation methods provide the mechanisms to improve the chances of successful execution through better management of the factors that influence execution failure/success resulting in improving the likelihood of successful execution.
Benefits of Strategy Execution Simulation
The following are some examples of the benefits of strategy execution simulation:
Strategy execution is one of the three (3) co-incident determinants of the strategic management process including strategy formulation and implementation. It involves the decisions and activities undertaken, at all levels in the organization (from top management through middle management to the front-line managers and workers) including the continuous process of mobilizing organization resources to execute actions that change the organization from a current-state to a new future state with enhanced organizational and institutional strengths which in turn contribute to improvements in the creation and delivery of value to customers. The actual strategy of an organization emerges from execution - the thousands of decisions made every day by employees acting according to information they may have and their own self-interest as influenced by organizational culture.
Strategy execution is about decision-making - timeliness and speed of management decisions - on the prioritization, and continuous allocation of resources to perform selected organization methods/actions e.g., marketing campaigns, product development, etc., strategic initiatives and projects, and individual employee capability development. Timeliness and speed relates to "when" and how quickly the decision is made rather than how much time the decision maker has, to make the decisions. For example, the timing of the decision to enter a market (or in war to engage an enemy) is critical to whether you are successful or not. A lot of strategies fail at execution because of this, even though from a process standpoint they have done everything right. Strategic decisions are among the main means through which management choices are actually realized.
Strategy Execution Systems and Building Blocks
Strategy execution systems are socio-technical systems that provide the platform to integrate the following organizational behavior:
- Operations management decision-making processes
- Actions taken as a result of strategic decisions
- Monitoring/observing the outputs and outcomes of strategic actions
- Diagnosing the patterns of organizational behavior effected by organization outputs.
- Timely response to any identified opportunities and/or threats to the mission, strategic objectives and goals.
The strategy execution system provides support for the cognitive structure within which strategic decision making takes place in the organization. The system supports strategy execution decisions and activities that may include big strategic decisions like new products launch, to week-in, week-out decisions about marketing, procurement, and customer service as well as the thousands of day-to-day decisions on resource allocation, job prioritization and interfacing with customers to quickly respond to new opportunities and threats while coordinating with other parts of the organization on an ongoing basis.
Strategy Execution Monitoring and Control
Controlling strategy execution is done through regular strategy execution review meetings using periodic (often monthly or weekly) progress reports or dashboards for executives and managers. Monitoring progress creates feedback about the performance of the strategy and its execution allowing organizations to make adjustments accordingly. Controlling the strategy and execution involves planning the execution, monitoring it's progress and behavior, and taking action to adjust the execution when needed.
The Strategy Execution Control System defines the performance measures relevant and necessary to inform management decisions on strategy execution - when its necessary to adapt or change a strategy. The strategy control system fosters, supports, measures, and controls the strategy and its execution. Effective strategy control requires frequent monitoring of the progress of the strategy and its execution to assess whether the planned results are being achieved. The performance measurement system models provide a management accounting and control mechanism that focuses management attention on the organization's behavior strategically, in changing and/or adapting to its direction to changes in environmental factors; and operationally, in the optimized utilization of organization resources in their task of enhancing both customer value and shareholders/owners value.
Strategic Execution Evaluation & Analysis
The strategy execution model can be simulated to facilitate evaluation and analysis aimed at improving the management and the workforce understanding of the impact of the factors that influence the success or failure of strategy execution on the various strategic options/choices to inform management's decisions.. Strategy execution simulation provides additional source of feed forward information that allows management to assess whether the overall strategy should be changed in light of unfolding events and results associated with incremental steps, and actions that implement the overall strategy. The strategy execution simulation and evaluation methods provide the mechanisms to improve the chances of successful execution through better management of the factors that influence execution failure/success resulting in improving the likelihood of successful execution.
Benefits of Strategy Execution Simulation
The following are some examples of the benefits of strategy execution simulation:
- Improving Strategic Decision - Reducing the incidence of bad decisions and the viability of strategic decisions by improving decision makers' knowledge about external environment factors and possible reactions of environment actors (stakeholders) such as customers, competitors, and broader public (i.e., society, regulators, community, investors - the world). .
- Improving managers' capacity to overcome the cognitive burden associated with the inter-relationships among strategic choices. For example, the strategic decision to enter a new market will require major allocation of resources across different parts of the organization such as marketing, finance, operations, etc.
- Improving managers' understanding in that their choice of assumptions is arbitrary and might not accord with reality, and exposing strategic decisions that logically flow from bad or erroneous assumptions to risk of leading to bad or poor decisions.
- Improving managers' awareness of individual differences in strategic choices due to differences beliefs and assumptions leading to better negotiated strategic decisions.
- Reducing Chances of Bad Decisions -The nature of strategic decisions makes it possible for example, for decision makers e.g., managers within an organization, to have widely varying and incorrect beliefs about environmental factors such as market facts, for example Customers’ utility for a product/service, and managers’ perceptions of the customers’ perceptions of quality for that product/service to be inversely related. These beliefs influence the choice of assumptions underlying the manager’s strategic decisions and determine decision success/failure. Most managers don’t understand that their choice of assumptions is arbitrary influenced by their beliefs and that they might not accord with reality so strategic decisions logically flowing from bad/erroneous assumptions can lead to bad/poor decisions which can in turn lead to poor/bad decisions and ultimately to strategies failing at execution.
