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Strategy
Many definitions of strategy have been given by different scholars over the past few decades. According to Johnson and Scholes, “strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations” (Johnson & Scholes, 2009, pp.878).
In simple words, it can be said, that strategy is basically planing how a business organization can create value for its stakeholders in the future. Henry Mintzberg views strategy in five ways, i.e., as plan, ploy, pattern, position, and perspective, along with their interrelationship (Mintzberg, 1987). While johnson and Scholes view strategy as a tool for creating value, Mintzberg divides the term in five parts and explains how it works.
Formulation and Implementation
Many different strategic tools have been formulated in the last century by business giants belonging to different industries. These tools have been designed so that the strategy can be successfully implemented in a corporation.
Many internal and external factors are taken into consideration before a strategic change can be introduced because it is necessary to prepare for the outcome of the change to avoid shock. Some of the more popular tools of strategy in business include Scenario planning, PESTLE analysis, SWOT analysis, Porter’s Five Forces, etc. All these tools have been used by many business corporations, big and small, all over the world to introduce strategic change in their organizations in order to create more value for the stakeholders.
Influence of Strategic Implementation on Managerial decisions
Once a strategy has been identified by the organization, the second step is to successfully implement it in an organization. It is then the job of the manager to make sure that the implementation is smooth.
While strategic planning aims at establishing objectives for the organization to achieve in the future, strategic management aims at “leading, driving, and helping people, those inside the organization and those outside (also involved in its development), to focus on the organization’s identity and image, to question its worth in a new environment, to fix its longer term growth, while using its present capacity and fostering its potential for development” (Tabatoni, Davies, & Barblan, 2010, pp.5).
The selection of the central strategy has a significant effect on the decisions of functional area manager within a company because it is their job to make appropriate decision which will lead to the strategic goal. The functional area managers are required to provide an environment where the growth of strategies is possible and this is motive behind the decisions made by them (Mintzberg, 1987).
Strategic Implementation and Transnational Business Organizations
The implementation and formulation of strategy is much related to the transnational business organizations since they have to deal a number of difference environments at the same time. As mentioned above, an organization is affected by both, internal and external factors.
If a strategy is successful in one environment, it will not necessarily yield the same result in a different environment. Therefore, transnational business organizations have to be very careful when implementing strategies and must consider the changes that need to be made according to the cultural differences in their surroundings. According to Sako (1992), the social rules and systems of governance under which transnational organizations work, have a significant effect on the outcomes of the choices made by the managers.
On the other hand, Williamson believes that the social agencies exploit their business partners whenever they get an opportunity (Williamson, 1975), which may disturb the smooth flow of strategic implementation in an organization. All these constraints affect the transnational business organization and need to be handled carefully by the managers using strategic tools
References
Johnson, G., & Scholes, K. (2009). Exploring Corporate Strategy. New Delhi: India Binding House.
Mintzberg, H. (1987). The strategy concept I: Five P’s for strategy. CMR , 11-24.
Sako, M. (1992). Prices, Quality and Trust: Inter-firm relations in Britain and Japan. Cambridge: Cambridge University Press.
Tabatoni, P., Davies, J., & Barblan, A. (2010). Strategic Management and Universities’ Institutional Development. Retrieved from European University Association: https://eua.eu/
Williamson, O. (1975). Markets and Hierarchies: Analysis and Antitrust Implications. New York: Free Press.
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