- Historical perspective of strategic management
- Approaches of strategic management
- Strategic formulation by Primack Company
- Methods of evaluating organization strategy
- Strategic methods of Primack Company
Strategic management which is also known as the institutional management refers to the technique of evaluating and implementing the decisions which will make the business organisation or a company to gain its long term goals. The strategic management involves the art of planning of the business to attain the highest level performance. The strategically management is aimed at building the best business structure.
The strategic management policies are aimed at getting the objectives of the business and trying to find the ways of achieving the objectives in question. Consequently the amount of resources which can be used to gain the objectives is also taken in to considerations. On the other hand it can be regarded as the process which tries to bring out the company’s vision and missions and the methods of laying down the plans to fit the company policies which involves the company programs and projects. The business management strategies are usually aimed at getting the available resources so as to implement and execute the policies and the plans of the company (David, F, 1989).
The business strategic management policies can be used to make the strategic planning of any company. Consequently proper planning leads to the best attainment of the available company objectives. Usually the strategic management can be regarded as one level of managerial performance activity of any organisation. The strategic management is meant in giving the general direction of the company or the established enterprise.
In any business company the strategic management is generally correlated with the strategic alignment which involves the relationship between the company and the working environment respectively. This can be regarded as the strategic consistence of any organisation. There is usually strategic consistency if the activities of the company are consistent in regard to the goals and objectives of the organisation (Lamb, Robert, Boyden, 1984).
The strategic management is not a static activity but a continuous process that tries to analyse and at the same time tries to dictate the learning of the business organisation. The business strategic management is also aimed at tracing the competing organisations and asset the specific strategies to encounter the competitions. These strategic management goals are usually accessed after the period of one year to see whether the goals have been obtained or not.
The outcome of the goals usually determines the next move to be carried by the company. This alternative moves includes the moves to change to a new strategy aimed at implementing the business goals. The new strategies may involve the use of the new technology, changing the working environment and at the same time changing the financial and political environments for the aim of maximising the profits while reducing the inputs (Chaffe, E, 1985).
Primack Company is one of the companies with outstanding strategic management policies which were started with the aim of acting as the legal consulting company. This company is generally a consultant company which falls under the legal industries. It is located at Silver Springs. As a result of the well established strategic policies of this company, Primack Company has recorded o the average annual sales of $76000. It has the strategy of competing with the related companies. This paper tries to bring out the strategic management of the Primack Company. At the same time this paper will analyse the factors which has lad to the success of the Primack Company in general by basing the arguments on the management theories.
Historical perspective of strategic management
Strategic management which is considered as a management discipline started in the year of 1950s with it’s profound effect in the 1960s.Many influencing powers of the strategic management includes Chandler, Selznic, and Ansoof. Alfered Chandler had seen the reality of the management aspects.Initially many functions of management functions were not coordinated at all. The interactions between two departments in one organisation were handled by two managers. Chandler was mostly interested on getting the long term goal of the future. Chandler tried to convince the public that the best option was to take a long term goal while the business is focussing to the future.
And hence a long term strategy was the solution of giving a company or an organisation a concrete structure. Consequently on the year of 1957, Philip Selznic brought the principle of matching the external and the internal environments.This concept has been regarded as the origin of the present SWOT analysis technique. Igor Ansoff by following the works of Chandler, he developed a strategy which was based on the market and the product development respectively.
He argued the management field should use the strategies to enable it to get the best future opportunities and at the same time be able to overcome the challenges. In the year of 1985, Ellen Chaffee wrote what he taught was the main elements of strategic management ((Rehfeld, J, E, 1994).According to him strategic management involves the methods of adapting to the business environment so to maximise the output but at the same reduce the expenses.
Approaches of strategic management
In the business world, there occur two main approaches towards the strategic management. The involved approaches have been found to act in the opposite sides but they also serve as the complement of the other. The approaches involved are the industrial organisational approach and the sociological approach.
Industrial Organisational Approach
This approach is generally based on the economic principles which usually deal with the issues involving the allocation of the business resources and the competition rivalries between the organisations which produce the same products. This approach contains the assumptions which are related with the behaviour of the stake holders of the organisations and the assumptions of profit increments (Traverso, D, 2000).
This approach deals mainly with the human interactions and the assumptions are generally bounded by rationality. The strategy is aimed at having the behaviour which is satisfactory to the organisation. Moreover the profit sub optimality is required to enable the company to learn smoothly for example the Google Company operates based on this approach (Rehfeld, J, E, 1994).
The strategic management method can be divided into two categories such as the bottom-up and the top-down or all of the methods. The bottom-up method is where the employees give the working proposals to their managers who in turn channel the proposals to all members in that organisation.
This method can be accomplished by the use of the capital financing techniques. In this case the proposals are analysed by the use of financial methods such as return on investment method and the cost-benefit method. This method may lead to the cost over estimation or the cost under estimations. In the top-down approach the chief executive officer who is assisted by the strategic planning team will give the direction of the company in the management strategies. But the usage of the collaborative technique of strategic management is of much importance now days.
The strategic management of any company is composed of three processes. This process includes the strategy formulation, Strategy implementation and strategic evaluation.
Strategic formulation by Primack Company
The Primack Company has the organisation culture which enables the company to have a collective responsibility of formulating the strategies which are workable in nature. The formulation of the strategies should be based on the internal and the external conditions. To be able to formulate the strategic policies, the company self analysis and the competition analysis should be taken in mind. The micro and micro environment has been taken in consideration while formulating the Primack company strategies (Braxill, Mark &Eckardt, Ralph, 2009).
The strategies formulated are either long term or short term strategies. The statements which are involved in giving the roles of the organisation in the society have to be taken into considerations. The objective of the Primack Company has been drawn to the highest level. This includes the strategic plans which evaluate the methods of achieving the objectives of the company. The steps involved in the formulation of the company strategies includes the step of knowing the current position of the company, the needed direction of the company and at the long land determining the procedures to be used so as to get the required goals.
Strategic implementation by Primack Company
The implementation of the strategies which have been formulated by the company management involves the first step which is concerned with the finance management. The management allocates the sufficient financial resources which consequently are used in the personnel management, operational support and the improved technology provisions. The Primack Company has established a specialised organisational hierarchy which consists of a chain of personnel’s who are involved in the provision of commands at different levels.
Moreover the Primack Company has established an alternative structure which is different from other organisations such as the establishments of the functional teams which have different roles. The responsibilities of each worker have been well defined. There is no anybody who plays the roles of another one.this has been seen as one of the strategies which is used to eradicate the confusions which may arise in some companies.
For any organisation to become successful, the managing process should be systematic in nature. The Primack Company has been involved in the monitoring process whereby the obtained goals are analysed and then compared with other successful companies in the world. To implement a certain strategic policy the resources should be used by training some workers on the developmental principles. Many complications have been seen to evolve in the implementation of the strategies by the involved companies. The problems involved include the human relations complication between the managerial personalities and the lower chambered members.
The Poor Communications between the Staff and the Employer
These problems have consequently led to the complications in the marketing strategies such the inability to produce the new products which can suit the new market demands. The Primack Company which is considered as one of the organisations which has the effective management has consequently tried to implement its plans without following the strategies of their competitors (Hamel, G & Prahalad, C.K, 1990).In any organisation which has the successful strategy implementation, it has high level of consistence in the hierarchal levels of management.
Strategic evaluation by Primack Company
The strategic evaluation in any company involves the process of analysing the effectiveness of the strategy which was formulated initially. The strengths and the weakness of the strategy is analysed by using the strategic evaluation such as the SWOT analysis technique respectively.
Methods of evaluating organization strategies
According to Johnson and scholes (1991), there are three basic models which can be used to evaluate the success of the organization strategy. In relation to their arguments the strategies are usually evaluated in relation to three criteria which include the suitability of the strategy, the feasibility of the strategy and the acceptability of the strategy.
Suitability of the strategy
The suitability of the strategy mainly involves the considerations on the overall performance of that strategy in place. The revaluation her involves the analysis to find whether the strategy shall be able to solve the problems or on the other hand be able to address the strategic issues in consideration by the organization (Juran, J, M, 1992).While considering the suitability of the strategy the economic effectiveness has to be taken into consideration. Moreover it shall be established whether the strategy shall be able to work in different environments. The techniques which are commonly used in the evaluation of the strategies include the ranking method, decision tree and the what-if analysis method.
Feasibility of the strategy
This is usually related with the financial resources which are required in the implementation of the business strategy involved. The resources of the strategy include the time used, the finances, number of people involved and the extent of the information technology employed respectively(Davidow,W&Uttal,B,1990). Some of the techniques which are used to measure the feasibility of the strategy include the cash flow method, Break-even technique and the resource deployment analysis.
Acceptability of the strategy
The acceptability of the given strategy usually involves the expectations of the business stakeholders such as the employees, customers and the shareholders. The expectations of the stakeholders can be categorized as return, risk and the stakeholders complain after the outcomes of the business strategy (Waccker, W&Taylor, J, 1997). The returns involve the benefits and profits which are got by the share holders.
These returns involves the financial and the non financial benefits, for instance the share holders expects the increase of their profits and the employees expects the increase of their salaries and the customers expects the improvement of the services respectively. The risk of a strategic policy involves the possibility of the failure of the strategy. The consequence of the risk may be the loose of the financial and the non financial resources respectively.
The stakeholder reactions involve the tendency of the stakeholders to oppose the views of the employees and the customers. Moreover the workers may start to oppose some policies such as the outsourcing policies with the view that it may lead to the loose of their jobs. At the same time the customers may support the merger of the companies and form the joint ventures so as to improve the quality of the goods and services at large. The acceptability of the involved strategy can be measured by using the What-if analysis and the stakeholder mapping.
Strategic methods of Primack Company
Strategy is a scope of a company over a long period of time, which gives that organization an advantage over the other related companies having the same challenging factors such as environment and market demands. Thus the Primack business strategies are aimed at giving the direction, the market scope, analyzing the resources and making the company perform better.Consequently the strategy is analyzed by tracing it s strength and pin pointing the external and internal factors affecting the performance of each company. David, F (1989) argues that environmental factors, determines the direction of the consultation outsourcing in companies.
Primack Company has become so successful because of various factors which include the general business structure, human resources, marketing and financial status of those companies. This has been attributed by the management organization cultures which promotes the training of their employees.Well business plan is one of the vital factor in the out sourcing industry.
The companies should recruit the experienced personnel for the production and marketing.Some financial may influence the success of the consultation companies. The financial factors include the poor cash flow, poor pricing strategies and lack of enough finances (Collins, James & Porras, 1994). Marketing factors has influenced the success of most of the consultation legal companies. This includes a tendency of responding to the competition from other consultation companies.
Human resources factors also influence the growth of the consultation out sourcing companies; this includes proper delegation of the company authority and hiring people with skills and experience. According to Kim, S (2002) Strategic management is a fundamental factor in consultation companies. The strategic management policies which have been generally used by the Primack company ranges from the strategic planning, organizing and staffing, directing and controlling, financial management, outsourcing, and strategic decisions making.
Due to the fact that the business environment has a lot of competition, the budget forecast planning methods are not so vital for the growing companies such as the Primack company which is a large company with a lot of customers involved in the legal consultation matters. The firm has generally involved itself in the constant strategic management which has proved to be defining machinery.
The strategic planning which is constantly employed in the Primack company is used to define the objectives of the company and at the same time it is used to access the external and internal conditions which may be used to formulate, implement and evaluate the strategies so as to come up with the appropriate adjustments which can make the company or the organization to remain in the best performing track (Berry, L, 1995). The following diagrammatical representation shows the strategic planning process which has been adopted by the Primack Company.
Mission & Objectives ⇒ Environmental Scanning ⇒ Strategy Formulation ⇒ Strategy Implementation ⇒ Evaluation & Control
Organising and Staffing
The method used in the organization and staffing generally varies from one company to the other. The Primack Company has a unique method which has been adopted in the staffing strategies. While the company is staffing the competition between the companies producing the same products should be put in mind (Kingman Brundage, 1993). The staff members should be having a lot of experience related to the working environment.
The Primack Company has consequently opted to start the training their staff members whom they recruit. Sometimes the company has done what is commonly known as outsourcing in other countries as the staffs are set in the less expensive countries. The staffs are organized in a manner that follows the hierarchy of management. The authority is delegated from the above most personnel’s to the lowest end.
Financial management For any company, the sound and outstanding financial management is the core strategy which promotes the sound business successes(Sewell &Brown P,1990). The managerial positions which are in charge of the financial strategies gives the employees in the organization to get the aimed goals the operation of the finances should be kept in track so as to avoid the unnecessary losses.
The main aim in any successful organization is to have the cost reduction and at the same time increasing the price of the commodity.this combination of these principles leads to a successful financial management and the increase of the working capita respectively (Pine, J & Gilmore J, 1997). The cost and the available capital should have a balance for the business to continue moving in the best direction. The working capital is usually determined by the cash and the usage efficiency in general.
Marketing strategies The marketing strategies are one of the vital forces in any company. The Primack Company as a well organized marketing strategies. This marketing strategy serves as the marketing plan foundation. For instance the marketing strategies is aimed at using the low inputs to attract more customers hence maximize the profits. The organization is aimed at establishing a positive relationship with the customers who leads to the increase in the consumer purchase.
The strategies involved in this case include the tactics which are aimed at making the outstanding marketing plan. Usually the marketing plans are used to determine the marketing objectives respectively (Reichheld, F, 1996). The marketing strategies involve the marketing goals, the marketing policies such as the advertisements, Internet marketing, and the outsourcing strategies. The marketing strategies which are successful should be interactive in nature. At the same time they should be dynamic in nature.
Reasons of failing strategic management in companies Most of the companies have failed to formulate the workable management strategies. There are so many reasons behind this trend. This includes the failure of the organizations to understand the customer’s demands.
For instance the customers have different product preference which has not been noticed due to the poor market research by some companies. Moreover some organizations have poor environmental adjustments respectively. Some companies have got the tendency of failing to coordinate the roles between the employees and the managerial section. The senior management has at the same time failed to have commitments. Moreover the poor communication networks in the external and internal section has been regarded as the major hindrance of the strategic management (Gronroos, C, 1994).
Conclusions The strategic management is one of the areas which have the greatest influence in the success of any organization. The strategic management involves the strategies which are aimed at giving the company the competition advantage. These strategies includes the planning strategies, Organisation and staffing strategies, Directing and controlling strategy., outsourcing strategy, marketing strategy, merging and acquisition strategies. The Primack Company has been pointed out as one of the successful company. This has been attributed as a result of establishing workable strategies. It is essential to analyse the strategy before it is put in place. The factors to be considered include the suitability of the strategy, the feasibility of the strategy and the acceptability of the strategy respectively.
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