Strategic management is the process regulated and formatted by the top level management in accordance with the policies and the rules of the top level management. These are developed in order to acquire the market share as well as to attain the goals and the objectives in the target market. The strategies developed and adopted by the management are the tools through which the efficiency could easily be enhanced in order to attain the desired goals and the objectives for the organization. Apart from these, there are certain actions which are implemented by the top level management on behalf of the directors and the organizational owners in order to attain the better and effective outcomes. For implementation of the tools and the techniques, organization is required to analyze the internal and external environment. This will help the management to adopt certain crucial set of strategies through which organization could be able to extract the effective results from the implementation of the advanced strategies and tools. While implementing the strategies within the organizational environment, it is required to analyze the basic principles of strategic management through which the desired goals could be attained easily. These principles are:
- Development of unique image in the target market;
- Setting the hierarchy of the activities in an appropriate manner with the motive to enhance the organizational efficiency as well as to attain the growth objective;
- All the activities must be done in relation with the strategies set up by the organization and along with this, it is necessary for the organization to direct the efforts of the employees in the strategic mission of the organization.
Various approaches and tools are available in the business environment in order to obtain the desired outcomes. These approaches assist the management to perform the strategic management process in an effective manner in the organization. All these approaches have unique capabilities and efficiencies and in order to obtain the accurate results, it is required to identify the size, type and nature of the business organization through which the activities could be performed in the appropriate manner. Following are three major approaches of strategic management through which the organizational workings could easily be managed.
1. Stakeholder Approach to Strategic Management
It is the approach which helps the management to focus over the stakeholders of the organization to identify their requirement with the motive of accomplishment of the goals in an effective manner. Stakeholders are the essential element of the organization and these are the people or group of people interlinked with the organizational activities with certain objectives. Some of the stakeholders for an organization are customers, directors, employees, suppliers, etc. In this approach, management evaluates the requirements of the customers and selects the most appropriate strategies in order to fulfil them. This is the process which identifies the requirements of the customers and organization produces the same sort of products and services in relevance with the standards and the policies of the organization. This approach also helps the organization to develop or adopt certain set of strategies through which effective relationship amongst the stakeholders and the organization. With the help of positive relationship amongst the stakeholders, organization will be able to gain the effective and desired outcomes along with the attainment of satisfaction level from the employees. Employees should be given appropriate training and learning sessions in order to describe them the importance of the stakeholder approach along with the motive behind the adaptation of the approach. This will help the organization to increase the effectiveness of the organization along with increasing the efficiency of the organization. Along with the increase in the efficiency of the organization and the employees, it will also help the organization to generate various ways to increase the income through which the opportunities of growth and expansion could be increased accordingly. Following are certain ways through which the stakeholder approach could easily be implemented:
- Identification of stakeholder: Initial step of implementing the stakeholder approach is the identification of the crucial stakeholders for the organization. This will help the organization to increase its efficiency through developing the relationship amongst those stakeholders. Functionalities of the organization will be performed in an effective manner along with the attainment of the desired outcomes.
- Accurate description of stakes: This step will help the organization to identify the share of the stakeholders and with this; importance of the stakeholders will be identified. It will provide the clear description to the management in relevance with the importance of the stakeholders through which the allocation of the tasks could be done in an effective manner.
- Claim consideration: This step will help the organization to identify some crucial attributes within the workplace which could affect the performance of the organization in positive as well as in negative manner. Urgency, power and legitimacy are some of the attributes which could affect the organizational performance. Legitimacy refers that the functionalities of the organization should be performed on the basis of the laws, regulations and the policies because non-fulfilment of these attributes could extract negative situations for the organization. Power defines the authority of each stakeholder which should be considered on the priority basis in order to increase the opportunities for the organization in relevance with the attainment of the desired goals and the objectives. Further, urgency includes the critical issues faced by the stakeholders due to any reason should be entertained on above of all functions. This will help the organization to develop a positive image in the stakeholders mind-sets which will lead the organization to attain its goals and the objectives in an appropriate manner.
- Opportunities estimation: This step will help the organization to recognize the threats and the risks involved in the procedure of the organization which could affect the stakeholders.
- Responsibilities towards stakeholders: Organization needs to share the all relevant information to its stakeholders and taking approval is on crucial decisions are also necessary. This helps the organization to develop a positive and important position in the stakeholders.
- Implementation of the strategies: While implementing the strategies, all of the above aspects should be considered accordingly and this also helps them to increase the efficiency in relevance with gaining the desired outcomes. Implementation of the strategies should also be relevant with the interest of the stakeholders and the corporate social responsibilities.
Along with the fulfilment of all the above objectives, it is required to identify the basic requirements of the internal stakeholders of the organization. Further, adaptation of the advanced strategies such as integrated communication plan is necessary in order to communicate with the stakeholders in an appropriate manner.
For example, Coca-Cola Company uses the stakeholder approach in order to increase their efficiency along with increasing their revenues and the profitability. This approach has helped the organization to build its effective image in the competitive business environment along with gaining the competitive advantage. Along with these benefits, stakeholder approach has also helped the organization to provide unique benefits to its stakeholders. Further, management of the organization has also adopted the golden triangle partnership approach in relevance with increasing the efficiency of the organization through fulfilling the corporate social responsibilities in order to attain the desired goals and the objectives. This approach includes covering the elements such as social, public, civil and private along with their needs and requirements. Apart from this activity, this approach also includes the practice of partnership in relevance with the improving the conditions of remote and under developed sectors. Stakeholder approach also helps the Coca-Cola to build an effective image in the local stakeholders and amongst the community through executing the projects such as SWPP (Source Water Protection Plans). For building up the interest of the stakeholders towards the company, management has adopted the customer feedback strategy under which customers are asked about the quality of the product, price of the product and regarding the other attributes. This helps the organization to adopt certain strategies to increase the effectiveness of their products and services along with gaining the adequate competitive advantage in the target market.
2. Dynamic Capabilities Approach to Strategic Management
This approach describe that the organization should perform its functions with the available resources in an effective manner. Along with this, organizational internal capabilities are also identified in relevance with the dynamic business environment. With the help of available resources and the capabilities, organization needs to face all types of situations in relevance with the attainment of the desired objectives. This approach includes mainly three attributes which could help the organization to become capable enough to deal with challenging working environmental conditions. First attribute is increasing the employees capabilities through providing them appropriate training sessions. Second attribute is integration of the advanced assets to the workplace in order to uplift the performance and for facing all types of situations. The last attribute is re-utilization of the available resources and the assets which are already used for accomplishment of tasks. Following are the stages involved in this approach:
- Learning: This is the initial stage of the dynamic capabilities approach and it evaluates various sources and methods through which employees’ capabilities could be increased for meeting up with the dynamic business environmental conditions. Advanced measures may include the training and development sessions, interactive sessions and the counselling sessions.
- New assets: In order to increase the organizational efficiency, management is required to execute the market analysis and the competitive analysis regularly in order to identify the current market trends and requirements. This helps the organization to adopt and implement certain assets to the organization in relevance with upliftment of the organizational performance as compared to its competitors.
- Available resources: Business environment is known for its fluctuations, dynamic environment and for unique types of challenges. In order to compete with all these factors, management of the organization requires updating its resources along with identifying the appropriate utilization of the available resources.
- Co-specialization: This is the step under which organization performs its functionalities within a given period of time along with optimum utilization of the available resources with the organization.
For example, technology giants like IBM, Apple INC. and various other software developing companies use this approach in order to attain its goals and the objectives. With the help of this approach, these companies have developed its adequate image in the target market along with gaining adequate level of competitive advantage. Apple INC. is known as the leader in the mobile phone manufacturing company across the globe and the major reason behind the success of the organization is optimum utilization of the available resources along with the adaptation of unique and advanced strategies for increasing its employees’ performance.
3. Sustainable Development Approach to Strategic Management
Sustainable development refers to the attainment of the goals and the objectives along with fulfilment of economic conditions, social responsibilities and environmental conditions. This procedure of attainment of the desired goals describes the utilization of available resources within the specified period of time along with fulfilling the requirement of all relevant factors. Gaining the sustainable development is an indicator for the long run survival in the competitive business environment without affecting the natural and other resources in negative manner. The basic elements of the sustainable approach are economy, environment and the social responsibility. All three factors plays crucial role in order to increase the performance of the organization along with the development of an effective image in the dynamic business environment. Over-utilization of the available resources will provide short term benefits to the business organization while optimum utilization will help them to attain the long run objectives.
Governments of various countries has taken the initiative for preventing the natural resources and for the same, they had built certain policies and the laws. These needs to follow by the organizations and all the requirement of these policies should be considered appropriately in order to avoid the chances of glitches in the performance of the organization.
Adobe Systems is a multinational software developing company and it uses this approach in order to attain its desired goals. They had identified and invested certain unique ways to lower down the emission of the carbon from the organizational functionalities. Along with this, it has also helped the organization to re-utilize the available resources within the certain period of time for attaining the goals and the objectives.